[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
            EXAMINING TSA'S CADRE OF CRIMINAL INVESTIGATORS

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                        TRANSPORTATION SECURITY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 28, 2014

                               __________

                           Serial No. 113-48

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13


                                     

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                     COMMITTEE ON HOMELAND SECURITY

                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Paul C. Broun, Georgia               Yvette D. Clarke, New York
Candice S. Miller, Michigan, Vice    Brian Higgins, New York
    Chair                            Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania         William R. Keating, Massachusetts
Jeff Duncan, South Carolina          Ron Barber, Arizona
Tom Marino, Pennsylvania             Dondald M. Payne, Jr., New Jersey
Jason Chaffetz, Utah                 Beto O'Rourke, Texas
Steven M. Palazzo, Mississippi       Tulsi Gabbard, Hawaii
Lou Barletta, Pennsylvania           Filemon Vela, Texas
Richard Hudson, North Carolina       Steven A. Horsford, Nevada
Steve Daines, Montana                Eric Swalwell, California
Susan W. Brooks, Indiana
Scott Perry, Pennsylvania
Mark Sanford, South Carolina
Vacancy
                        Vacancy, Chief of Staff
          Michael Geffroy, Deputy Chief of Staff/Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

                SUBCOMMITTEE ON TRANSPORTATION SECURITY

                Richard Hudson, North Carolina, Chairman
Mike Rogers, Alabama, Vice Chair     Cedric L. Richmond, Louisiana
Candice S. Miller, Michigan          Sheila Jackson Lee, Texas
Susan W. Brooks, Indiana             Eric Swalwell, California
Mark Sanford, South Carolina         Bennie G. Thompson, Mississippi 
Michael T. McCaul, Texas (ex             (ex officio)
    officio)
               Amanda Parikh, Subcommittee Staff Director
                    Dennis Terry, Subcommittee Clerk
         Brian Turbyfill, Minority Subcommittee Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Richard Hudson, a Representative in Congress From 
  the State of North Carolina, and Chairman, Subcommittee on 
  Transportation Security........................................     1
The Honorable Cedric L. Richmond, a Representative in Congress 
  From the State of Louisiana, and Ranking Member, Subcommittee 
  on Transportation Security:
  Oral Statement.................................................    20
  Prepared Statement.............................................     3
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................     3

                               Witnesses

Mr. Roderick Allison, Assistant Administrator, Office of 
  Inspection, Transportation Security Administration, U.S. 
  Department of Homeland Security:
  Oral Statement.................................................     4
  Joint Prepared Statement.......................................     6
Ms. Karen Shelton Waters, Assistant Administrator, Office of 
  Human Capital, Transportation Security Administration, U.S. 
  Department of Homeland Security:
  Oral Statement.................................................     8
  Joint Prepared Statement.......................................     6
Ms. Anne L. Richards, Assistant Inspector General, Office of 
  Audits, U.S. Department of Homeland Security:
  Oral Statement.................................................     9
  Prepared Statement.............................................    10


            EXAMINING TSA'S CADRE OF CRIMINAL INVESTIGATORS

                              ----------                              


                       Tuesday, January 28, 2014

             U.S. House of Representatives,
           Subcommittee on Transportation Security,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:29 p.m., in 
Room 311, Cannon House Office Building, Hon. Richard Hudson 
[Chairman of the subcommittee] presiding.
    Present: Representatives Hudson, Rogers, Brooks, Sanford, 
and Richmond.
    Mr. Hudson. The Committee on Homeland Security Subcommittee 
on Transportation Security will come to order.
    Subcommittee is meeting today to hear testimony examining 
TSA's workforce of criminal investigators and how TSA can 
improve the management of its Office of Inspection to ensure it 
is meeting requirements set forth by Federal law and 
regulations.
    I recognize myself for an opening statement.
    I would first like to thank our witnesses, not only for 
being here today but also for their public service. I 
appreciate their willingness to come forward and work on ways 
to solve the difficult issues the Transportation Security 
Administration faces.
    The problem before us today is not a new one and it can, in 
fact, be traced back to the legislation that created the 
Transportation Security Administration 2 months after the 
terrorist attacks of 
9/11.
    The Aviation and Transportation Security Act, or ATSA, gave 
TSA sweeping authorities to, among other things, create its own 
employee classification system rather than adhere to the Office 
of Personnel Management system like the vast majority of other 
Federal agencies. At the time, Congress determined it was best 
to align TSA with the Federal Aviation Administration, which 
also has its own employee classification system separate and 
apart from OPM.
    Today TSA has 20 percent more employees than FAA and we 
continue to see significant challenges with the size and scope 
of TSA's workforce--challenges that are likely exacerbated by 
TSA's exemption from the OPM system. Today's hearing is an 
opportunity to examine one glaring example of the problem.
    TSA has roughly 100 employees in the Office of Inspection 
who are classified as criminal investigators. In order for 
these criminal investigators to receive premium law enforcement 
pay, TSA is required to confirm that they spend the majority of 
their time on long-term criminal investigations related to 
alleged or suspected violations of Federal criminal law.
    The I.G.'s office found no evidence that TSA had actually 
done this, and yet these criminal investigators are still 
receiving premium pay. According to the I.G., TSA's criminal 
investigators spend the majority of their time investigating 
non-criminal cases, monitoring criminal cases conducted by 
other agencies, and carrying out inspections, covert tests, and 
internal reviews. Non-criminal investigators or other non-law 
enforcement employees could just as easily carry out the bulk 
of these tasks.
    All these activities appear valuable, particularly the 
covert testing, so it is not my intent to disparage the hard 
work of these men and women. However, the I.G. estimates that 
if TSA does nothing to correct this situation of 
misclassification it will cost the taxpayers at least $17.5 
million over the next 5 years in premium pay alone. That does 
not include other expenses such as law enforcement officer 
training, weapons, ammunition, vehicles, communications 
equipment, and enhanced retirement benefits.
    What message does it send to the law enforcement officers 
who put their lives on the line every day to keep us safe or 
those who have lost their job due to budget cuts if TSA does 
not play by the same rules as other agencies? We are all 
accountable to the taxpayer and this subcommittee is 
responsible for holding TSA to standards the American people 
expect and deserve.
    Today we have the assistant administrators for two offices 
in TSA with significant potential to fix this problem.
    Mr. Allison, you have been in your position for a year and 
4 months. In that time I understand you have tried to make some 
changes.
    I hope you will share these today and provide us with 
suggestions of how we can resolve this problem. I look forward 
to hearing specifically how you intend to address all the 
I.G.'s recommendations.
    Ms. Shelton Waters, it was not too long ago that you 
testified before this subcommittee as the head of TSA's 
acquisition office. As the head of the Office of Human Capital 
it is your duty to ensure that TSA is not abusing the unique 
authority it has been given to maintain its own employee 
classification system and to provide the Office of Inspection 
the tools and support it needs to make significant changes.
    Finally, Ms. Richards, I look forward to hearing directly 
from you on the numerous recommendations put forth in your 
report and how we can bring greater accountability to TSA's 
Office of Inspection and shine a light on TSA's employee 
classification system.
    Okay. When our Ranking Member gets here, Mr. Richmond, who 
we are anticipating will be here, I will recognize him for his 
opening statement. In the mean time, we are trying to move 
forward as quick as we can due to the vote schedule, and so at 
this point we will move right into witness testimony.
    Other Members of the committee are reminded that opening 
statements may be submitted for the record.
    [The statements of Ranking Member Richmond and Ranking 
Member Thompson follows:]

             Statement of Ranking Member Cedric L. Richmond
                            January 28, 2014

    As you all know, the work that this subcommittee does is extremely 
important. We are tasked with making sure that the Transportation 
Security Administration fulfills its mission of protecting the Nation's 
transportation systems to ensure freedom of movement for people and 
commerce.
    More importantly, we are tasked with ensuring the safety of 
American Citizens as they travel across the Nation.
    To accomplish this mission, we must ensure that every office within 
the Transportation Security Administration is operating both 
effectively and efficiently.
    The report released in September 2013 by the Department of Homeland 
Security's Office of Inspector General regarding the Office of 
Inspection is both alarming and scathing. The report details that the 
Office of Inspection is not operating at maximum efficiency, or in a 
cost-effective manner because of a top-heavy structure.
    Specifically, the Office of Inspection employs personnel classified 
as ``criminal investigators'', despite their duties not fitting the 
classification of criminal investigations according to Federal 
regulations. This classification allows these ``criminal 
investigators'' to receive enhanced benefits, and LEAP pay.
    According to the OIG report, and as I understand it, two prior 
reports, substantial savings could be achieved by reclassifying these 
``criminal investigators'' in a manner consistent with the needs of the 
Office of Inspection and the type of work they perform.
    Undoubtedly, there are many examples of instances in which the 
Office of Inspection has helped thwart the efforts of nefarious actors 
who mean to do our Nation harm.
    That, however, does not diminish the need for us to use our 
resources effectively so that we can operate at maximum efficiency.
    It is my hope that through the testimony we gather today, we can 
get further insight about where these inefficiencies are occurring, how 
we can reallocate our resources in an effective manner, and also what 
can be done structurally within the TSA so that when these structural 
problems are first brought to light, they can be quickly addressed.
    I look forward to all of the witnesses' testimony, and hope that 
the work that we do here today aids in making the Transportation 
Security Administration stronger, more efficient, and more effective.
    Before yielding back, I would like to note that this is the first 
hearing of the subcommittee in the Second Session of this Congress.
    It is my expectation that this subcommittee will be as bipartisan 
and productive this year as it was last year when our subcommittee 
produced four out of the five bills that the committee saw pass the 
House.
    I look forward to continuing to work with the Chairman to see that 
the bills we sent to the Senate in December, including Ranking Member 
Thompson's bill to codify the Aviation Security Advisory Committee, 
become law this year.
                                 ______
                                 
             Statement of Ranking Member Bennie G. Thompson
                            January 28, 2014

    Last September, the Department of Homeland Security's Office of 
Inspector General released a report that was highly critical of the way 
the Office of Inspection classifies its employees and documents its 
work.
    The OIG report was not the first to identify inefficiencies within 
TSA's Office of Inspection. Indeed, it is the third such report in the 
last 3 years to come to the same conclusion. In 2011, TSA's Office of 
Human Capital conducted a position management review of the Office of 
Inspection and found that its workload did not support the number of 
criminal investigators in the office.
    Following this review, the Office of Human Capital contracted with 
a private company to conduct a comprehensive position classification 
audit of the Office of Inspection. The result was the same; positions 
were found to have been misclassified.
    The findings of a single report may be the result of anomalies or 
misunderstandings. Three consecutive reports conducted by distinct 
entities with the same conclusions cannot be so easily dismissed. 
Clearly, reforms within the Office of Inspection are in order.
    I can assure you that if TSA does not act to see that the office is 
reorganized and made more efficient, this committee will take it upon 
itself to mandate the reforms needed. When Congress established TSA in 
2001, it gave the agency broad authority to set its personnel practices 
as it saw fit to best accomplish its critical mission. With that 
authority comes a great deal of responsibility.
    Unfortunately, it appears TSA's Office of Inspection has not been a 
responsible steward of its authority to classify positions. As a 
result, the office has more employees designated as criminal 
investigators than any independent audit shows they need. This dynamic 
has resulted in increased cost to taxpayers and less efficiency within 
a critical component of TSA.
    To the witnesses here today from TSA, Mr. Allison and Ms. Shelton 
Waters, I look forward to hearing from you about the steps you intend 
to take to address the findings and recommendations in the Inspector 
General's report.
    Beyond the concerns I have about classification of employees within 
the Office of Inspection, I am gravely concerned by the Inspector 
General's finding that management at TSA may not be able to rely on the 
office's work.
    As Assistant Administrator Allison's written testimony points out, 
the Office of Inspection's mission is to ensure the integrity, 
efficiency, and effectiveness of TSA's workforce, operations, and 
programs.
    If structural and organizational flaws within the Office of 
Inspection compromise its ability to perform its mission, the entire 
agency suffers.
    If those same deficiencies result in the administrator not being 
able to rely on the office's work, we have a much bigger problem on our 
hands.
    Both the administrator and the workforce must have confidence that 
the Office of Inspection is an efficient and effective entity that 
holds itself to the highest possible standard. The Inspector General's 
report calls that into question.
    To all of the witnesses appearing before us today, I thank you for 
appearing and for your service. It is my hope that today's hearing will 
allow for a productive dialog whereby solutions to the problems that 
have plagued the Office of Inspection since long before Assistant 
Administrator Allison took over responsibility for the office can be 
identified.

    Mr. Hudson. We are very pleased to have a distinguished 
panel of witnesses with us today.
    Mr. Roderick Allison is TSA's assistant administrator for 
inspection at the Transportation Security Administration, a 
position he has held since August 2012. In this capacity Mr. 
Allison oversees and ensures the security and integrity of 
TSA's operations through inspections, investigations, and 
covert testing. Before becoming assistant administrator Mr. 
Allison served as the deputy assistant administrator and deputy 
director for the Office of Law Enforcement within the Federal 
Air Marshal Service.
    Ms. Karen Shelton Waters is TSA's assistant administrator 
for human capital. Ms. Shelton Waters is responsible for 
programs that empower TSA to hire, retain, and deploy a 
qualified workforce. Previously, Ms. Shelton Waters served as 
TSA's assistant administrator for the Office of Acquisition.
    Finally, Ms. Anne Richards is the assistant inspector 
general for the Office of Audits under the Office of Inspector 
General at the Department of Homeland Security. The Office of 
Audits focuses on promoting effectiveness, efficiency, and 
economy in DHS's programs and operations in addition to 
detecting fraud, abuse, waste, and mismanagement. Prior to 
joining the Office of Inspector General Ms. Richards was 
assistant inspector general at the U.S. Department of the 
Interior.
    The witnesses' full statements will appear in the record.
    The Chairman now recognizes Mr. Allison to testify.

STATEMENT OF RODERICK ALLISON, ASSISTANT ADMINISTRATOR, OFFICE 
  OF INSPECTION, TRANSPORTATION SECURITY ADMINISTRATION, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Mr. Allison. Thank you, Mr. Chairman.
    Chairman Hudson, Ranking Member Richmond, and Members of 
the subcommittee, I appreciate the opportunity to appear before 
you today. As the Chairman said, my name is Roderick Allison; I 
am the assistant administrator for the Office of Inspection, or 
OOI.
    The TSA administrator and deputy administrator have stated 
that TSA has zero tolerance for misconduct. In fact, in July of 
last year the deputy administrator testified before your 
subcommittee and the Subcommittee on Oversight and Management 
Efficiency on TSA's role in promoting a strong counterterrorism 
workforce to safeguard the traveling public and secure our 
Nation's transportation systems. In that testimony the deputy 
administrator highlighted OOI's role and responsibilities to 
investigate misconduct by TSA employees.
    One of TSA's mission priorities is efficiencies and the 
administrator has charged his staff to find efficiencies in our 
respective organizations. To that point, beginning in fiscal 
year 2013 OOI initiated and completed more organizational 
improvements in that year than the previous 5 years combined.
    OOI is responsible for investigations, audits, and 
compliance inspections, as well as covert testing efforts. We 
investigate allegations of criminal and administrative 
misconduct by TSA employees and contractors, conduct 
inspections of TSA through covert testing and audits designed 
to identify system vulnerabilities and provide mitigation 
strategies.
    In 2013 we conducted over 400 covert tests at 136 airports, 
and through our September 11 security fee audits we identified 
over $753,000 in fees due back to TSA--or back to the 
Government. Since 2008 our audit program has identified over 
$13 million in security fees owed back to TSA.
    In fiscal year 2013 OOI closed 887 investigations, an 11 
percent increase in productivity over the previous year, with 
approximately 55 percent of selected cases closed within 90 
days. Also in fiscal year 2013 OOI opened 747 criminal 
administrative conduct mis-cases. This number includes 423 
cases that TSA was required to refer to the DHS OIG, which they 
retained only 3 percent of the 423 cases and referred the 
remaining back to TSA for investigations.
    Additionally, our investigators completed 25 Office of 
Worker's Compensation fraud investigations, OWCP, which have 
resulted in $3 million in cost avoidance to the Government. In 
total, our OWCP investigations have resulted in saving the 
taxpayers $57 million in fraudulent claims.
    In fiscal year 2013 OOI criminal investigators also 
provided technical service to our investigations, including 113 
criminal polygraph examinations, 137 computer forensic 
analyses, and 135 technical equipment support services. In 
2012, at the request of Administrator Pistole, our office 
initiated theft stings, or what we call integrity testing.
    During 2013 fiscal year, we conducted over 2,500 tests at 
114 airports around the country. I am pleased to announce that 
in that effort we have a 99.7 percent pass rate, and the 
employees that we caught were removed from Federal service.
    The administrator office routinely publishes the results of 
these tests and broadcasts e-mails and newsletters to the 
workforce on this effort and we intend to continue. All these 
milestones were achieved with a 6 percent reduction in the 
number of criminal investigators during the fiscal year.
    In September 2013 DHS OIG report on Office of Inspection, 
which is the subject of today's hearing, offered 11 
recommendations and we have concurred with each of them. These 
recommendations will further refine and improve the performance 
of the Office of Inspection.
    For example, recommendation No. 5 focused on developing an 
annual work plan, and recommendations No. 6 and 7 center on 
developing and tracking outcome-based performance measures. 
Recommendation No. 8, which we have already undertaken, 
required employees, including criminal investigators, to 
document their work hours to investigations and other 
assignments in an automated system.
    In fact, on December 20, 2013 we submitted documentation to 
OIG to request closure of the 10 remaining open recommendations 
and the OIG is currently evaluating our documentation.
    While we have concurred with each of the OIG 
recommendations, I believe that the independent workforce 
analysis outlined in recommendation No. 3, along with the data 
we are now completely tracking, will provide TSA with the 
necessary information to determine what the proper number of 
investigative positions--or what positions TSA should have with 
respect to that number, I am sorry. As noted in our 90-day 
response to the report, we expect that analysis and 
classification review to be completed by September.
    In closing, it is our responsibility to conduct impartial, 
thorough, and expedient investigations of misconduct to uphold 
the integrity of our workforce. However, we are also 
responsible for ensuring that allegations of misconduct do not 
compromise TSA's ability to perform its security mission.
    It is important to note that while our investigations often 
substantiate allegations of wrongdoing, many cases exonerate 
employees of allegations of misconduct. Effectively managing 
these cases in a time frame consonant with the allegations 
allow these employees to return to their security duties.
    I appreciate the opportunity to appear before you today, 
and I will be happy to answer any questions you may have.
    [The joint prepared statement of Mr. Allison and Ms. Waters 
follows:]

 Joint Prepared Statement of Roderick Allison and Karen Shelton Waters
                            January 28, 2014

    Chairman Hudson, Ranking Member Richmond, and Members of the 
subcommittee, I appreciate the opportunity to appear before you to 
discuss the Transportation Security Administration's (TSA) Office of 
Inspection (OOI). I am joined today by Karen Shelton Waters, TSA's 
assistant administrator for the Office of Human Capital.
    TSA OOI ensures the integrity and effectiveness of TSA's employees 
and programs, which are entrusted with safeguarding our Nation's 
transportation systems, as well as the security systems used to 
safeguard the traveling public.
    TSA OOI's mission is to ensure the integrity, efficiency, and 
effectiveness of TSA's workforce, operations, and programs through 
objective audits, covert testing, inspections, and criminal 
investigations. Every day, TSA's nearly 60,000 employees screen 1.8 
million air travelers, and perform the vetting for more than 2 million 
new airline passenger reservations and 14 million transportation worker 
records against the Federal Government's consolidated terrorist watch 
list. It is critical to our mission that the TSA workforce and its 
programs adhere to the highest standards of conduct.

                       TSA'S OFFICE OF INSPECTION

    TSA OOI has a wide range of responsibilities including criminal 
investigations, audit and compliance cases, as well as covert testing 
efforts. We investigate allegations of criminal and administrative 
misconduct of TSA employees and contractors; conduct inspections of TSA 
operations to ensure all offices and airports are in full compliance 
with Federal laws, regulations, and current policies; and evaluate the 
effectiveness of our transportation security systems through covert 
testing and audits designed to identify system vulnerabilities and 
provide mitigation strategies. Of these, there are 100 criminal 
investigators who handle allegations of criminal and administrative 
misconduct. The criminal investigators have an average of 17 years of 
Federal experience, including an average of 7 years of service at TSA.
    In 2012, at Administrator Pistole's direction, TSA OOI initiated 
integrity tests at airports around the country to assess compliance 
with our core value of integrity in handling the property of 
passengers. Since 2012, TSA OOI's criminal investigators have conducted 
more than 2,530 integrity tests in 114 airports around the country. At 
times, the tests included local law enforcement and Department of 
Homeland Security (DHS) Office of Inspector General (OIG), Office of 
Investigations agents. I am pleased to report that we have found 99.7 
percent compliance. In fact, only 7 TSA employees failed the covert 
tests and all 7 were removed from Federal service.
    TSA is required by DHS Management Directive 0810.1 to refer 
allegations of criminal misconduct to the DHS OIG, so the DHS OIG may 
determine which cases it will retain and investigate. Any case DHS OIG 
does not choose to investigate is referred back to TSA OOI. This 
responsibility requires the employment and retention of investigators 
who are professional, capable, and able to appropriately handle 
criminal investigation cases. In fiscal year 2013, TSA referred 423 new 
cases to the DHS OIG, which retained 12 cases. The remaining 411 cases 
were referred back to TSA OOI for investigation.

                               EFFICIENCY

    During fiscal year 2013, TSA OOI's 100 criminal investigators 
completed 887 \1\ total investigations including 309 of the 411 newly-
opened cases referenced above, of which the majority were criminal 
investigations. TSA OOI's criminal investigators used their expertise 
and knowledge of law, regulation, and policy to investigate and close 
these complex cases, thus ensuring the highest standards of integrity 
and professionalism within our workforce. Additionally, TSA OOI 
partners with the TSA Office of Professional Responsibility (OPR) to 
ensure that allegations of misconduct are thoroughly investigated and 
that discipline is appropriate, consistent, and fair across the agency.
---------------------------------------------------------------------------
    \1\ The 887 completed investigations include new cases from fiscal 
year 2013 as well as cases opened or investigated in the prior year.
---------------------------------------------------------------------------
    Since becoming the assistant administrator of TSA OOI, I have 
focused on making our office more efficient and effective in carrying 
out its mission. During fiscal year 2013, TSA OOI closed over 55 
percent of investigations within 90 days of initiation. In fiscal year 
2013, TSA OOI completed 25 workers' compensation fraud investigations 
which resulted in cost avoidance to the Government of over $3,000,000. 
Our office also conducted over 400 covert tests, which focused on 
potential vulnerabilities in existing policies, procedures, 
supervision, and training. Furthermore, OOI implemented risk-based 
initiatives through the development and implementation of tools, 
conducted risk-based analysis of information for program development 
and execution, and collaborated with internal and external 
stakeholders.

                          OIG RECOMMENDATIONS

    The OIG produced a September 2013 report entitled Transportation 
Security Administration Office of Inspection's Efforts to Enhance 
Transportation Security which recommended 11 improvements in TSA OOI. 
While the majority of these recommendations are still open, TSA has 
made a significant progress in addressing the OIG's concerns such as 
Recommendation No. 2, which the OIG closed when TSA finalized and 
implemented a Management Directive requiring criminal investigators to 
document their work hours properly. To adequately capture the 
utilization of our criminal investigators, TSA OOI uses a Resource 
Allocation Model (RAM) to document all criminal investigative 
activities and hours concurrent with the investigation, which 
supervisors are reviewing on a regular basis.
    Additionally, TSA's Office of Human Capital (OHC) is conducting an 
independent workforce review to evaluate the workforce profile and the 
nature of the caseload in TSA OOI. This will ensure the proper 
assignment of cases requiring the special skills and expertise of 
criminal investigators. The evaluation will also include a predictive 
model to determine the future demand for criminal investigators. As 
part of this review, OHC will examine cost-effective and appropriate 
staffing models to support TSA OOI's mission.
    On December 9, 2013, I approved a work plan for TSA OOI's 
divisions, which contains project-specific information such as 
duration, cost estimates, and staffing. I am also reviewing our current 
fiscal year goals to develop outcome-based performance measures, and 
working to establish a regular review process to ensure that TSA OOI's 
programs, projects, and operations are meeting the intended goals. TSA 
OOI anticipates completing this task in March of this year.
    TSA produced a 90-day update to the OIG's recommendations in 
December of 2013, and anticipates closure of additional recommendations 
in the coming weeks.

                               CONCLUSION

    TSA appreciates the partnership of the DHS OIG and this committee 
to ensure TSA OOI is managing our security system and workforce in the 
most efficient, effective manner possible. Thank you for the 
opportunity to appear before you today. I will be happy to address any 
questions you may have.

    Mr. Hudson. Thank you, Mr. Allison.
    The Chairman recognizes Ms. Shelton Waters to testify.

  STATEMENT OF KAREN SHELTON WATERS, ASSISTANT ADMINISTRATOR, 
       OFFICE OF HUMAN CAPITAL, TRANSPORTATION SECURITY 
      ADMINISTRATION, U.S. DEPARTMENT OF HOMELAND SECURITY

    Ms. Shelton Waters. Good afternoon, Chairman Hudson, 
Ranking Member Richmond, and Members of the subcommittee. My 
name is Karen Shelton Waters and I am the assistant 
administrator for the Office of Human Capital at the 
Transportation Security Administration.
    In my position I serve as the principal agency adviser on 
matters pertaining to human capital. Among other things, my 
office is responsible for providing human capital services to 
develop and sustain a high-performing workforce, developing the 
agency's human capital policy agenda, and monitoring progress 
towards those goals, implementing survey systems to gauge 
organizational effectiveness and workforce job satisfaction, 
ensuring sound position management principles are in place 
throughout TSA, and ensuring the TSA personnel management 
system supports legislative and policy requirements such as 
merit principles, prohibited personnel practices, diversity in 
hiring, and application of veterans preference.
    Through each of these functions, Human Capital supports 
TSA's program offices in meeting their mission needs. For 
example, when the agency needs to hire a canine handler or a 
Federal air marshal it is the program office that provides the 
technical skills and ability required for the position. Human 
Capital assists the program office by reviewing and advising on 
the proper classification of the position, creating the vacancy 
announcement, advising on recruitments strategy, and evaluating 
the applicants. The list of qualified applicants is then 
provided to the hiring office for review and selection.
    TSA is somewhat unique in that it is an excepted service 
agency. TSA's human capital authorities are outlined by the 
Aviation and Transportation Security Act and not Title 5 of the 
U.S. Code.
    The act provided that, among other things, the TSA 
administrator develop a personnel system that, at a minimum, 
provided for greater flexibility in hiring, training, 
compensation, and location of personnel. TSA's core 
compensation does this.
    It is also important to note that the Office of Personnel 
Management has approved an interchange agreement with DHS for 
TSA after determining TSA's established merit system is 
consistent with the intent of civil service laws.
    As you know, Administrator Pistole and the TSA leadership 
are committed to the culture of hard work, professionalism, and 
integrity. In furtherance of those ideals, the agency has taken 
a number of steps in recent years, including the creation of 
the Office of Professional Responsibility, or OPR.
    OPR works closely in conjunction with the Office of 
Inspection to ensure that allegations of misconduct are swiftly 
and thoroughly investigated and that misconduct is dealt with 
consistently and appropriately. My role in that process is to 
ensure that my colleagues in Inspection and OPR have the 
necessary staffing and resources to achieve those results.
    With respect to the Inspector General report being 
discussed here today, I will have an independent analysis of 
the criminal investigator workforce conducted and then use the 
results of that analysis to assist OOI in balancing their 
criminal investigator workforce against the agency's criminal 
investigative workload. I am committed to work with the Office 
of Inspection and the TSA leadership to utilize cost-effective 
human capital processes and practices that provide the 
appropriate resources needed to ensure the integrity of the TSA 
workforce.
    Thank you for the opportunity to appear before you today. I 
will be happy to answer any questions you may have.
    Mr. Hudson. Thank you, Ms. Shelton Waters.
    The Chairman recognizes Ms. Richards to testify.

  STATEMENT OF ANNE L. RICHARDS, ASSISTANT INSPECTOR GENERAL, 
     OFFICE OF AUDITS, U.S. DEPARTMENT OF HOMELAND SECURITY

    Ms. Richards. Good afternoon, Chairman Hudson, Ranking 
Member Richmond, Members of the subcommittee. Thank you for 
inviting me to testify on our recent audit of TSA's Office of 
Inspection.
    During our audit we identified several issues that led us 
to conclude the Office of Inspection was not operating 
efficiently or effectively. Specifically, we determined that 
using criminal investigators to conduct inspections, covert 
testing, and internal reviews was not cost-effective because 
other employees who are paid less could perform the same work.
    We also concluded that more than 100 Office of Inspection 
staff members who were classified as criminal investigators may 
not have met Federal requirements entitling them to extra pay, 
called law enforcement ability pay, or LEAP. To receive LEAP, 
criminal investigators must spend, on average, at least 50 
percent of their time on criminal investigations, that is 
investigating, apprehending, or detaining individuals suspected 
or convicted of criminal offenses.
    The office's criminal investigators worked primarily on 
collateral and administrative cases rather than on criminal 
cases. Data compiled by our Office of Investigations indicated 
that in fiscal years 2010 and 2011 about 75 percent of the 
Office of Inspection's workload consisted of collateral and 
administrative cases. This means that criminal investigators 
primarily monitored and reported on criminal investigations 
conducted by other agencies or investigated cases of alleged 
employee misconduct.
    During our audit period Office of Inspection employees, 
including criminal investigators, were not required to document 
their activities so the office could not definitively show that 
its criminal investigators met the LEAP requirements. Yet, 97 
percent received LEAP.
    We estimate that if the office maintains the same number of 
criminal investigator positions the cost of LEAP over the next 
5 years will add up to $17.5 million, most of which could be 
avoided if the workload analysis was performed and its 
recommendations promptly implemented. This estimate does not 
include the cost of special employment benefits for law 
enforcement officers or additional costs in training, travel, 
and supplies.
    For these reasons we recommended that a workforce analysis 
and a position classification review be performed for the 
Office of Inspection. We believe that OPM would be best suited 
to conduct this work independently and objectively.
    TSA has reported that the Office of Inspection is working 
with the Office of Human Capital on a workforce analysis, but 
the review will cover only two divisions which employ just 12 
of the current 105 criminal investigators in the office. There 
were no plans to review the other 87 criminal investigator 
positions. This is troubling because a previous study by the 
Office of Human Capital and by a contractor hired by the Office 
of Human Capital identified similar issues as our audit work, 
but those recommendations were not accepted or implemented.
    Our audit also showed that the office did not effectively 
plan its work, did not adequately measure its performance, and 
did not ensure that all divisions complied with the 
professional standards it had committed to using. The office 
also could not ensure that staff members were properly trained 
and that supervisors adequately reviewed work products.
    Without proper quality controls, TSA could not be certain 
that Office of Inspection's work was reliable. In addition, TSA 
was not obligated to implement the office's recommendations and 
therefore may have missed opportunities to improve 
transportation security.
    Mr. Chairman, this concludes my remarks. Thank you.
    [The prepared statement of Ms. Richards follows:]

                 Prepared Statement of Anne L. Richards
                            January 28, 2014

    Good afternoon Chairman Hudson, Ranking Member Richmond, and 
Members of the subcommittee.
    Thank you for inviting me here today to testify on the 
Transportation Security Administration (TSA) Office of Inspection's 
(OOI) efforts to enhance transportation security. My testimony will 
focus on the results of our audit to determine the efficiency and 
effectiveness of OOI's efforts, which we published in September 2013.
    OOI conducts inspections, internal reviews, and covert testing to 
ensure the effectiveness and efficiency of TSA's operations and 
administrative activities, and to identify vulnerabilities in TSA 
security systems. Additionally, the office carries out internal 
investigations of the TSA workforce to ensure its integrity. We 
conducted an audit of this office to determine whether it is efficient 
and effective in its efforts to enhance transportation security.
    We determined that OOI did not operate efficiently. Specifically, 
the office did not use its staff and resources efficiently to conduct 
cost-effective inspections, internal reviews, and covert testing. OOI 
employed personnel classified as criminal investigators, even though 
their primary duties may not have been criminal investigations as 
required by Federal law and regulations. These employees received 
premium pay and other costly benefits, although other employees were 
able to perform the same work at a lower cost. Additionally, the office 
did not properly plan its work and resource needs, track project costs, 
or measure performance effectively. Quality controls were not 
sufficient to ensure that inspections, internal reviews, and covert 
testing complied with accepted standards; that staff members were 
properly trained; and that work was adequately reviewed. Finally, the 
office could not always ensure that other TSA offices acted on its 
recommendations to improve operations.
    As a result of these issues with the office's cost-effectiveness 
and quality controls over its work products, TSA was not as effective 
as it could have been, and management may not be able to rely on the 
office's work. Additionally, OOI may not have fully accomplished its 
mission to identify and address transportation security 
vulnerabilities. With the appropriate classification and training of 
staff and better use of resources, the office could improve the quality 
of its work. The appropriate number of reclassifications and more 
precise cost savings cannot be determined without an objective and 
comprehensive review of position classifications. If TSA does not make 
any changes to the number of criminal investigator positions in OOI, we 
estimate that it will cost as much as $17.5 million over 5 years for 
premium Law Enforcement Availability Pay (LEAP). OOI could realize 
further savings in training, travel, supplies, and other special 
employment benefits, including statutory early retirement, if its 
personnel classified as criminal investigators were reclassified to 
non-criminal investigator positions.

                               BACKGROUND

    TSA is responsible for protecting the Nation's transportation 
systems. The agency provides airline and other transportation security 
through passenger, baggage, and container screening, as well as other 
security programs. OOI's mission is to: (1) Ensure the effectiveness 
and efficiency of TSA's operations and administrative activities 
through inspections and internal reviews, (2) identify vulnerabilities 
in security systems through operational testing, and (3) ensure the 
integrity of TSA's workforce through comprehensive special 
investigations. At the time of our audit, OOI was composed of the 
following four divisions:
   Inspections and Investigations Division.--Inspects TSA 
        program components, including the Federal Air Marshal Service, 
        Federal Security Directors' offices, and TSA Headquarters' 
        offices to ensure they are following TSA's policies and 
        procedures. Additionally, the division identifies 
        vulnerabilities in passenger, baggage, and cargo operations; it 
        also investigates alleged criminal and administrative 
        misconduct of TSA employees.
   Internal Reviews Division.--Assesses TSA programs and 
        operations for efficiency, effectiveness, and compliance with 
        laws, regulations, and TSA policies. The division also conducts 
        audits of air carriers in accordance with Government Auditing 
        Standards, to determine their compliance with 9/11 security fee 
        requirements. From 2008 through 2011, the division audited 
        approximately $4.8 billion in 9/11 security fees and identified 
        approximately $12.6 million in fees that were owed to the 
        Federal Government.
   Special Operations Division.--Plans, conducts, and reports 
        results of covert testing to identify vulnerabilities in 
        transportation security systems. Covert testing is designed to 
        identify security vulnerabilities and address deficiencies by 
        recommending corrective actions.
   Business Management Office.--Supports the three operational 
        divisions by managing OOI's communications and information 
        systems and coordinating resources.
    As shown in Table 1, OOI reported the following accomplishments 
from fiscal year 2010 through the first quarter of fiscal year 2012.

 TABLE 1.--INVESTIGATIONS OPENED AND REPORTS COMPLETED FROM FISCAL YEAR
               2010 THROUGH FIRST QUARTER FISCAL YEAR 2012
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Investigations Opened...................................             930
Reports of Inspections..................................              93
Reports of Internal Reviews.............................              56
Reports of Special Operations (Covert Testing)..........              16
------------------------------------------------------------------------
Source.--Totals based on data provided by OOI.

    In fiscal year 2011, the TSA Office of Human Capital (OHC) 
conducted a position management review in OOI and reported that the 
office could gain efficiencies by restructuring its organization, 
realigning its workload, reclassifying positions, and refocusing on 
core functions and purpose.\1\ In fiscal year 2012, at the direction of 
the TSA administrator, OHC began an Organizational Transformation 
Initiative. The initiative is designed to support the agency's on-going 
evolution into a high-performance counterterrorism organization and 
ensure that each TSA office executes its assigned responsibilities 
efficiently, effectively, and economically. As a result, OOI changed 
its organizational structure and, in an effort to reduce the number of 
supervisory layers, eliminated several positions.
---------------------------------------------------------------------------
    \1\ TSA OHC Position Management Review, Office of Inspection, 
August 2011.
---------------------------------------------------------------------------
    OOI staff is composed primarily of personnel employed in positions 
classified by TSA as criminal investigators, transportation security 
specialists, and program analysts who operate in a matrix environment 
in which individuals assist divisions other than the one to which they 
are assigned. For example, in addition to conducting investigations, 
criminal investigators may conduct inspections or covert testing. 
According to data provided by OOI's Business Management Office, in 
fiscal year 2011, TSA allocated approximately $43.5 million to OOI, of 
which $27.2 million was spent on salaries for 205 employees, including 
35 transportation security specialists and 124 criminal investigators. 
Transportation security specialists supervise, lead, or perform 
inspections, investigations, enforcement, or compliance work. TSA 
defines a criminal investigator as an individual who plans and conducts 
investigations of alleged or suspected violations of Federal criminal 
laws.
    According to TSA Management Directive No. 1100.88-1, Law 
Enforcement Position Standards and Hiring Requirements, TSA criminal 
investigators are considered law enforcement officers. By law, however, 
to qualify for statutory enhanced retirement benefits, only those 
Federal employees whose duties include ``primarily the investigation, 
apprehension, or detention of individuals suspected or convicted of 
offenses against the criminal laws of the United States'' qualify as 
law enforcement officers.\2\ Office of Personnel Management (OPM) 
regulations require law enforcement officers to spend in general an 
average of at least 50 percent of their time investigating, 
apprehending, or detaining individuals suspected or convicted of 
violating criminal laws of the United States.\3\
---------------------------------------------------------------------------
    \2\ 5 United States Code (USC)  8331(20),  8401(17), 5 Code of 
Federal Regulations (CFR).  831.902; see also 5 CFR.  842.802.
    \3\ 5 CFR  831.902, 842.802. These regulations define and 
establish requirements for law enforcement officers. This workload 
requirement does not apply to individuals who qualify to be in a 
secondary position, such as first-level supervisors to criminal 
investigators or those in administrative positions.
---------------------------------------------------------------------------
    Law enforcement officers are entitled to special statutory 
employment benefits. For example, they are entitled to retire at age 50 
with full benefits after 20 years of service.\4\ They receive a faster 
accruing pension. They also are eligible to receive extra pay known as 
LEAP.\5\ Although TSA is exempt from certain personnel management 
provisions of Title V of the United States Code (USC), including the 
LEAP statute, TSA Management Directive No. 1100.88-1 incorporates 
LEAP.\6\ To receive LEAP, an additional 25 percent above base pay, 
criminal investigators must certify annually that they have worked and 
are expected to be available to work a minimum annual average of 2 or 
more unscheduled duty hours beyond each normal workday.\7\
---------------------------------------------------------------------------
    \4\ 5 USC  8336(c), 8412(d)(2).
    \5\ Congress enacted the Law Enforcement Availability Pay Act of 
1994 ``to provide premium pay to criminal investigators to ensure the 
availability of criminal investigators for unscheduled duty in excess 
of a 40-hour work week based on the needs of the employing agency.'' 5 
USC  5545a(b).
    \6\ TSA's Management Directive No. 1100.88-1 also incorporates the 
statutory and regulatory definitions of ``law enforcement officer'' 
referred to throughout this report. TSA is not exempt from Title V 
provisions concerning law enforcement retirement.
    \7\ See 5 CFR  550.181-186, particularly  550.184, Annual 
certification. Each newly hired criminal investigator and the 
appropriate supervisory officer must certify the investigator is 
expected to meet the substantial hours requirement in  550.183 during 
the upcoming 1-year period. 5 CFR  550.184(a).
---------------------------------------------------------------------------
    Because of their position classifications, OOI criminal 
investigators are eligible for LEAP and entitled to early retirement. 
These benefits are more costly to the Government than regular 
benefits.\8\ Approximately 97 percent of OOI's criminal investigators 
received LEAP during the period of our audit. The salary for criminal 
investigators is capped and varies based on the differing locality pay 
of each duty station. For example, criminal investigators based in OOI 
headquarters in the Washington, DC, area have a salary cap of 
approximately $164,000, which includes LEAP and locality pay. From 
financial information we obtained from TSA, we determined that in 
fiscal year 2011, the median pay for an OOI criminal investigator was 
$161,794 and the median pay for a transportation security specialist 
was $117,775. TSA's records showed that in fiscal year 2011, salaries 
for criminal investigators, who comprised about 60 percent of OOI 
staff, accounted for $18.5 million, or 68 percent, of the $27.2 million 
in total salaries paid. OOI also paid criminal investigators 
approximately $6.1 million in LEAP over fiscal years 2010 and 2011. For 
purposes of this audit, we did not review the cost to TSA of other 
statutory law enforcement benefits such as early retirement. Chart 1 
shows the total salaries paid by position in OOI for fiscal year 2011.
---------------------------------------------------------------------------
    \8\ Eligibility for law enforcement retirement coverage must be 
``strictly construed'' because the benefits are ``more costly to the 
government than more traditional retirement plans and often results in 
the retirement of important people at a time when they would otherwise 
have continued to work for a number of years.'' Bingaman v. Department 
of the Treasury, 127 F.3d 1431, 1435 (Fed. Cir. 1997).



    In April 2012, the Department of Homeland Security (DHS) Office of 
Inspector General (OIG) Office of Investigations issued a Report of 
Inspection for TSA's Office of Inspection, Inspections and 
Investigations Division on OOI's process of conducting investigations 
into TSA employee misconduct. As a result of its inspection, the Office 
of Investigations determined that the Inspections and Investigations 
Division's investigative process complied with applicable policies, 
directives, and law enforcement standards. Because the Office of 
Investigations recently reviewed this process, we focused our audit on 
OOI's other products, services, and operations, and on personnel 
matters.

                     USE OF CRIMINAL INVESTIGATORS

    OOI did not use its staff and resources efficiently in carrying out 
its work. The office did not have a process to ensure that its criminal 
investigators met their positions' criminal investigative workload 
requirement or were properly classified as criminal investigators. 
Rather than investigating criminal cases, the majority of the criminal 
investigators' workload consisted of noncriminal cases; monitoring and 
reporting on criminal cases; and carrying out inspections, covert 
testing, and internal reviews. Such work could have been performed by 
other OOI employees who do not receive LEAP, and who are not eligible 
for statutory early retirement and other costly law enforcement 
benefits.
    OOI did not ensure that its criminal investigators met the Federal 
workload requirement for law enforcement officers, which makes them 
eligible for LEAP (if they meet the unscheduled hours availability 
requirement) and entitles them to early retirement. Specifically, the 
office could not ensure that its criminal investigators spent an 
average of at least 50 percent of their time investigating, 
apprehending, or detaining individuals suspected or convicted of 
criminal offenses. Additionally, some supervisory criminal 
investigators may not have been properly classified. Their 
classification depends on correctly classifying the individuals they 
supervise, and OOI had no assurance that subordinates were properly 
classified, based on the Federal workload requirement for criminal 
investigators. Although not able to demonstrate that criminal 
investigators met the Federal workload requirement for law enforcement 
officers, which is a prerequisite for receiving LEAP, OOI personnel in 
these positions and their supervisors received LEAP during the period 
of our audit.
    DHS Management Directive 0810.1, The Office of Inspector General, 
requires OOI to refer allegations of potentially criminal employee 
misconduct to the DHS OIG Office of Investigations for review. Any case 
not retained by OIG is referred back to OOI. According to the April 
2012 Office of Investigations report, OOI closed 1,125 cases in fical 
years 2010 and 2011; of the cases it closed, 253, or approximately 22.5 
percent, were criminal in nature.
    OOI criminal investigators primarily monitored and reported to TSA 
management the results of collateral criminal investigations conducted 
by other Federal, State, or local agencies, or they investigated 
administrative cases of alleged employee violations of TSA policy. 
Table 2 shows the Office of Investigations' categorization of 1,125 
investigative cases closed by OOI in fiscal years 2010 and 2011. The 
statistics in Table 2 are based on the number of cases managed, not the 
time spent working on cases. Thus, these statistics do not address the 
Federal workload requirement for criminal investigators, which is based 
on time spent working on criminal investigations.

                   TABLE 2.--FISCAL YEAR 2010 AND FISCAL YEAR 2011 CLOSED CASE CATEGORIZATION
----------------------------------------------------------------------------------------------------------------
                                                                                                      Percent of
              Type of Case                            Category Description                 Number       Total
----------------------------------------------------------------------------------------------------------------
Collateral..............................  Criminal investigations conducted by other            577         51.3
                                           Federal, State, or local agencies, which
                                           OOI monitored and reported the results or
                                           investigated administratively.
Administrative..........................  Investigations of TSA employee misconduct             295         26.2
                                           that violated TSA policy.
Criminal (other than collateral)........  Criminal investigations submitted for                 253         22.5
                                           acceptance or declination to a U.S.
                                           attorney or State or local prosecutor when
                                           appropriate.
                                         -----------------------------------------------------------------------
      Total Cases.......................  ............................................        1,125          100
----------------------------------------------------------------------------------------------------------------
Source.--DHS OIG Report of Inspection for TSA's Office of Inspection, Inspections and Investigations Division,
  April 19, 2012.

    In its 2011 position management review of OOI, OHC concluded that 
OOI's investigative workload did not support the number of criminal 
investigators in the office. According to a fiscal year 2011 OOI 
workload assessment, criminal investigators spent, in 1 year, an 
estimated 25 to 30 percent of their time on all investigations-related 
activities, whether monitoring collateral cases or conducting 
administrative and criminal investigations. Based on the OOI workload 
assessment, OHC raised concerns in its review about the number of 
criminal investigators in the Inspections and Investigations Division. 
In its report, OHC also noted that TSA is focused on transportation 
security and has a limited law enforcement function; therefore, 
modeling OOI after a law enforcement agency might not be appropriate.
    As a result of its review, OHC concluded that OOI could improve its 
efficiency, and recommended that the office eliminate criminal 
investigator positions not supported by the criminal investigative 
workload, either through attrition or reassignment to an appropriate 
position. Following its position review, OHC contracted with a company 
to conduct comprehensive position classification audits of some OOI 
positions. These audits, the findings of which were presented to OHC in 
February 2012, confirmed OHC's findings that positions were 
misclassified.
    Subsequently, OHC reversed its position, and no longer concurred 
with the contractor's findings regarding reclassifications. In its 
Summary of Classification Determinations dated June 2012, OHC 
maintained that these position classifications were secondary law 
enforcement positions, and as such there was ``no required percentage 
of time or workload level required to sustain their classification as 
law enforcement.'' As of August 2012, OHC had not taken action to 
reevaluate and reclassify criminal investigator positions. Although OHC 
concluded in 2011 that OOI's investigative workload did not support the 
number of criminal investigators and recommended eliminating positions, 
in December 2012, OOI posted multiple vacancy announcements to hire 
more criminal investigators Nation-wide.
    In June 2012, in response to OHC's position management review 
findings, the OOI assistant administrator at the time agreed to consult 
with OHC to assess the office's needs and determine the appropriate 
positions to perform OOI's work. The former assistant administrator 
also agreed to begin tracking criminal investigators' workload 
statistics to ensure that they met the legal requirement to spend a 
minimum of 50 percent of their time on criminal investigative activity. 
OOI Letter No. 0007.2, dated August 2012, requires its employees to 
track work hours, including LEAP hours, in its data management system.
    OOI criminal investigators were also assigned to inspections, 
covert tests, and internal reviews, all of which could be accomplished 
by other personnel who do not receive LEAP or other statutory law 
enforcement benefits. Our review of 29 reports that were issued between 
fiscal year 2010 and the first quarter of fiscal year 2012 by various 
OOI divisions showed that criminal investigators composed:
   61 percent of OOI personnel who conducted the 5 inspections;
   50 percent of OOI personnel who conducted the 10 covert 
        testing modules; and
   51 percent of OOI personnel who conducted the 14 internal 
        reviews.
    These results show that criminal investigators performed work not 
related to criminal investigations, which is not an efficient use of 
resources. Paying LEAP to these employees costs more, and because they 
are not required to document the hours they spend conducting criminal 
investigations, it does not comply with TSA Management Directive 
1100.88-1, which incorporates the LEAP statute. Using criminal 
investigators to perform this work also cost TSA more in salary and 
benefits.
    OOI did not require all staff to enter time spent working on 
projects into its database, which would have supported the hours 
charged to its criminal investigations. Additionally, TSA has no 
assurance that the LEAP availability hours were properly certified 
because it was unable to determine whether the criminal investigators 
met the Federal workload requirement for that position. Without 
evidence to support the classification and workload of the 124 criminal 
investigators in OOI, there is no assurance that these positions are 
properly classified.
    Using non-criminal investigators who do not receive LEAP to perform 
inspections, covert tests, and internal reviews could result in future 
cost savings. Specifically, we estimate that over a 5-year period, OOI 
could save as much as $17.5 million in LEAP if its 124 criminal 
investigators were reclassified to non-criminal investigator positions. 
However, the appropriate number of reclassifications and more precise 
cost savings cannot be determined without an objective and 
comprehensive review of position classifications.
    Our cost savings estimate does not take into account a potential 
increase in overtime pay, which could result from criminal 
investigators being converted to transportation security specialists or 
program analysts. Criminal investigators who receive LEAP are not 
generally eligible to receive overtime pay, but transportation security 
specialists and program analysts are eligible.\9\ During fiscal years 
2010 and 2011, OOI paid approximately $109,000 in overtime pay to 66 
individuals in these two job positions. If all 124 criminal 
investigators (approximately twice the number of OOI's transportation 
security specialists and program analysts who received overtime pay 
during this 2-year period) were converted, we estimate the increase in 
overtime pay would be approximately $218,000 based on pay data from 
fiscal years 2010 and 2011. This potential increase in overtime pay is 
significantly less than the $6.1 million paid in LEAP for the same 2-
year period.
---------------------------------------------------------------------------
    \9\ Criminal investigators who receive LEAP pursuant to 5 USC  
5545(a) are exempt from the overtime provisions in the Fair Labor 
Standards Act of 1938, as amended, but may still receive overtime pay 
per Title 5 of the USC.
---------------------------------------------------------------------------
    In addition to the LEAP savings, OOI could realize savings if its 
criminal investigators were reclassified as transportation security 
specialists or other non-criminal investigator positions. These savings 
would come from cost categories such as training, travel, supplies, and 
other benefits, including statutory early retirement and a faster-
accruing pension. OHC reached this same conclusion in its position 
management review.
    When OOI was established in September 2003, TSA management may have 
believed that the number of criminal investigators on staff was 
appropriate to meet the office's mission. However, in the 10 years 
since its establishment, neither OOI nor TSA has conducted a 
comprehensive workforce analysis, which would help determine the 
correct set of skills and the appropriate number of personnel to 
accomplish the office's mission cost-effectively. In addition, OOI has 
not demonstrated the need to retain the current number of criminal 
investigators.
    According to OPM's August 2009 Introduction to the Position 
Classification Standards 2009, OPM and Federal agencies are responsible 
for carrying out the classification system in accordance with the 
principles set forth in law. Federal managers are responsible for 
organizing work to accomplish the agency's mission most efficiently and 
economically. The Federal Government's policy is to use available 
resources optimally in assigning work.
    Although OPM has overall responsibility for establishing the basic 
policies and guidance governing position classification and management 
for most Federal agencies, TSA is exempt from OPM classifications.\10\ 
TSA has established its own position classifications and classification 
management procedures. However, with respect to law enforcement, TSA's 
policy is to adhere to OPM requirements so that TSA criminal 
investigators will be entitled to enhanced retirement benefits. Without 
OPM's approval, TSA criminal investigators would not qualify for 
enhanced retirement benefits covered in 5 USC Chapters 83-85 because 
TSA is not exempt from these provisions.\11\ These benefits are only 
provided to those law enforcement personnel who are covered under the 
statutory and regulatory definitions of ``law enforcement officer.''
---------------------------------------------------------------------------
    \10\ 49 USC  40122(g).
    \11\ 49 USC  40122(g)(2)(G).
---------------------------------------------------------------------------
    TSA is required to submit to OPM a list of law enforcement 
positions, separating the primary and secondary positions.\12\ To 
ensure compliance with OPM regulations for law enforcement retirement 
benefits, TSA must also establish and maintain a file for each law 
enforcement officer with the position classification, the officer's 
actual duties, and all background material used to make the 
determination; OPM has the authority to audit these files.\13\ 
Additionally, OPM can respond to requests for interpretations of 
classification issues and advisory opinions. Although OPM does not have 
the authority to require TSA to reclassify positions, OPM may determine 
that positions have been misclassified and therefore do not qualify for 
law enforcement retirement benefits.
---------------------------------------------------------------------------
    \12\ 5 CFR  842.808(a).
    \13\ 5 CFR  842.808(c).
---------------------------------------------------------------------------
    In our opinion, as a subject matter expert, OPM can help TSA ensure 
that OOI law enforcement positions are properly classified according to 
statutes and regulations. This could help establish an efficient and 
cost-conscious organizational structure for OOI. Noting that OOI took 
no action to reclassify position misclassifications previously 
identified by OHC and its contractor, we believe that OPM would be the 
best organization to conduct this work independently and objectively. 
Without an objective and comprehensive workforce analysis of law 
enforcement position designations, OOI cannot ensure that it is using 
its staff and funding as efficiently as possible.

               PLANNING, PERFORMANCE, AND QUALITY CONTROL

    OOI did not effectively plan its work, did not adequately measure 
its performance, and did not have quality control procedures to ensure 
that all divisions complied with standards that the office had 
committed to using in its work. OOI also could not require other TSA 
offices to respond to its recommendations. In addition, TSA did not 
hold OOI accountable for developing and implementing effective quality 
controls over its resources, staffing, and operations. As a result of 
the issues that we identified with OOI's quality controls over its work 
products, TSA management may not be able to rely on this work, and the 
office may not have accomplished its mission to identify and address 
transportation security vulnerabilities.
    OOI did not create an annual work plan to identify projects for 
each division to complete and the resources needed for each project. 
OOI divisions were not required to submit annual work plans for 
approval to ensure that OOI's planned work was consistent with TSA's 
priorities. Without an approved plan, OOI may not have been held 
accountable for accomplishing planned projects and could not 
effectively measure its annual performance.
    OOI did not establish adequate performance measures or set 
standards to demonstrate its improvement over time. The office also did 
not create outcome-based performance measures, which would compare the 
results of its activities with the intended purpose, to assess its 
operations. Although OOI collected data to measure each division's 
output, such as the number of recommendations made, the number of 
offices inspected, and new investigations opened, these measures did 
not tie output to goals. During our audit, OOI indicated that it would 
begin to include more outcome-based metrics in its performance 
measures.
    Without an annual work plan and without adequate outcome-based 
performance measures, OOI could not prepare an annual budget plan based 
on proposed work. Although OOI submitted a spending plan to TSA based 
on historical data, including its salary obligations, travel, 
contracts, and training, it did not track actual spending against the 
plan. Without a work plan as a basis for an annual budget plan, OOI was 
unable to demonstrate that it was effectively managing and distributing 
its resources.
    OOI did not have accurate information on project costs. Not all OOI 
personnel were required to record hours spent on projects or report 
other resource-related information in the existing data management 
system, and use of the system varied by division. Recording project 
hours provides the basis for estimating and tracking project costs. 
Without consistent use of the data management system, OOI could not 
accurately measure project costs and could not ensure efficient use of 
resources.
    OOI did not establish quality control procedures to ensure that all 
its divisions complied with applicable professional standards, such as 
Government Auditing Standards and the Council of the Inspectors General 
on Integrity and Efficiency Quality Standards for Inspection and 
Evaluation. Although OOI is not required to follow these standards, the 
office committed to using them in conducting its work. For instance, 
although during our audit it took steps to comply, the Internal Review 
Division had not been externally peer-reviewed as required by 
Government Auditing Standards.
    To determine air carriers' compliance with 9/11 security fee 
requirements, OOI conducts audits in accordance with Government 
Auditing Standards. For audits that meet all applicable requirements in 
Government Auditing Standards, OOI should include a compliance 
statement in the report. For audits that do not meet all applicable 
requirements, OOI should include a modified compliance statement in the 
report identifying the requirement or requirements that were not met. 
Consequently, until a peer review is completed, all OOI reports 
claiming to meet Government Auditing Standards should have modified 
statements.
    OOI also did not have policies and procedures to ensure that its 
staff members met these standards' training requirements to maintain 
technical proficiency. Following these standards would help OOI operate 
more efficiently and effectively and would enhance its credibility.
    OOI supervisors in the office's three operational divisions did not 
adequately review the supporting work papers for reports of 
inspections, covert testing, and internal reviews. Of the 29 reports 
issued between fiscal year 2010 and the first quarter of fiscal year 
2012 that we reviewed, only 6 had evidence of supervisory review. 
Supervisory review ensures that the work performed has met its 
objectives and that the findings, conclusions, and recommendations are 
adequately supported. Without consistent supervisory review, OOI could 
not ensure the quality of its reports or that it had adequately 
identified and addressed security vulnerabilities.
    OOI did not have effective quality controls on data entry and 
review in its management information system; therefore, it could not be 
certain of the accuracy and reliability of its trend analyses and 
updates on the status of its operations. For example, misspelling words 
in the system could result in employees not identifying all of the 
investigations in a query when totaling the number of investigations. 
In October 2011, after receiving conflicting information on the number 
of investigations OOI had completed, the TSA deputy administrator at 
the time identified data accuracy as an issue.
    OOI's recommendations resulting from its inspections, covert 
testing, and internal reviews were not always implemented. According to 
an OOI official, TSA offices were not required to respond to or 
implement OOI's recommendations because OOI did not have the authority 
to require compliance with its recommendations. OOI also did not have a 
formalized process to monitor responses and implementation of 
recommendations or a resolution process to resolve instances of 
nonconcurrence. As a result, TSA may have missed opportunities to 
address transportation security vulnerabilities.

                            RECOMMENDATIONS

    We made 11 recommendations to TSA that, when implemented, should 
lead to more efficient and effective operations, improve transparency 
and accountability, and enhance efforts to protect the Nation's 
transportation systems. TSA concurred with all of our recommendations. 
In late December 2013, we received updates from TSA on some of the 
recommendations, which we are currently reviewing. Below are the 
recommendations and their current status.
    Our first four recommendations related to OOI's criminal 
investigators.
    We recommended that the assistant administrator for OOI:

    1. Ensure that OOI criminal investigators in primary positions meet 
        the Federal 50 percent minimum workload requirement and meet 
        all LEAP requirements as a condition of receiving this premium 
        pay.

    Recommendation 1 is unresolved and will remain open until OOI 
        provides documentation showing how it will ensure that its 
        criminal investigators are meeting the legal requirement to 
        spend at least 50 percent of their time conducting criminal 
        investigations, which is required to qualify them as law 
        enforcement officers and make them eligible for LEAP. In its 
        response to our report, TSA did not specifically state how it 
        will ensure criminal investigators meet this requirement.

    2. Finalize and implement OOI's management directive on LEAP 
        policies and procedures to require all employees receiving LEAP 
        to document their work hours in the OOI database.

    Recommendation 2 is resolved and closed. TSA has directed that all 
        employees who receive LEAP must document their work hours.

    We also recommended that the TSA Deputy Administrator:

    3. Conduct an objective workforce analysis of OOI, including a 
        needs assessment, and perform a position classification review, 
        ensuring that those conducting the review, such OHC or OPM, are 
        independent of the process.

    Recommendation 3 is unresolved and open. In its response, TSA 
        agreed to have a workforce analysis conducted of OOI, but that 
        analysis will be limited to the Audits and Inspection Division 
        and the Security Operations Division. TSA made no mention of an 
        analysis of the criminal investigators in the Internal Affairs 
        Division, which at the time of our audit, comprised 
        approximately 82 percent of the total number of OOI criminal 
        investigators.

    4. Upon completion of the workforce analysis and position 
        classification review, reclassify criminal investigator primary 
        positions that do not or are not expected to meet the Federal 
        workload requirement. In addition, ensure that secondary law 
        enforcement positions are properly classified in accordance 
        with Federal regulations. Proper classification of supervisors 
        depends on correctly classifying the individuals they 
        supervise.

    Recommendation 4 is unresolved and open. Although TSA agreed to a 
        workforce analysis, it will be limited to the Audits and 
        Inspection Division and the Security Operations Division.

    To improve the quality of OOI's inspections, covert testing, and 
internal reviews, we recommended that the assistant administrator for 
OOI:

    5. Require OOI to develop a detailed annual work plan to be 
        approved by the assistant administrator, which contains 
        project-specific information, including purpose, duration, 
        realistic cost estimates, and required staffing.

    Recommendation 5 is resolved and open. In its response TSA stated 
        that OOI has developed a work plan for the Audits and 
        Inspection Division and Special Operations Division. These 
        plans will be combined into one plan for approval by OOI's 
        assistant administrator. TSA provided its response and proposed 
        implementation plan for corrective action. We are currently 
        evaluating TSA's response.

    6. Ensure that OOI develops outcome-based performance measures for 
        its programs, projects, and operations to evaluate efficiency 
        and effectiveness.

    Recommendation 6 is unresolved and open. TSA responded that OOI has 
        developed overall performance metrics for the office. In 
        reviewing TSA's corrective action plan, we believe the proposed 
        action does not fully address the intent of the recommendation 
        because it focuses on goals rather than outcome-based 
        performance measures. The recommendation will remain open until 
        TSA provides documentation to support that OOI has developed 
        and implemented outcome-based performance measures that 
        evaluate the efficiency and effectiveness of the office.

    7. Periodically assess the results of OOI's performance measures to 
        assess progress toward meeting the intended goals and revise 
        programs as necessary.

    Recommendation 7 is resolved and open. TSA responded that OOI 
        tracks conformance to performance measures quarterly and 
        annually and will continue to track the outcomes. This 
        recommendation will remain open until OOI provides 
        documentation that it periodically assesses outcome-based 
        performance measures, not only goals, for its programs, 
        projects, and operations to evaluate their efficiency and 
        effectiveness.

    8. Ensure that OOI requires staff members to document hours spent 
        on projects in its management information system, and ensure 
        that criminal investigators document hours to support LEAP.

    Recommendation 8 is resolved and open. TSA provided its response 
        and proposed implementation plan for corrective action. We are 
        currently evaluating TSA's response.

    9. Establish a quality assurance program to ensure that OOI 
        complies with applicable professional standards such as 
        Government Auditing Standards and the Council of the Inspectors 
        General on Integrity and Efficiency Quality Standards for 
        Inspection and Evaluation. This program should include:

     Tests of the quality and reliability of data in the 
        office's management information system.

     Evidence that staff meet continuing professional education 
        requirements.

     Documentation of staff's independence for each project.

     Quality control reviews to ensure that the work products 
        meet professional standards.

    For recommendation 9, TSA provided its response and proposed 
        implementation plan for corrective action. We are currently 
        evaluating TSA's response.

    10. Ensure that OOI expeditiously completes its action to have an 
        external peer review of its efforts to audit air carriers and 
        continues to have an external peer review of this work at least 
        once every 3 years. Prior reports that did not comply with 
        Government Auditing Standards need to be modified and reissued 
        with language that OOI was not fully compliant with Government 
        Auditing Standards when the audits were conducted.

    Recommendation 10 is resolved and open. TSA provided its response 
        and proposed implementation plan for corrective action. We are 
        currently evaluating TSA's response.

    11. Develop and implement a policy for recommendation follow-up and 
        resolution to ensure that other TSA offices respond to all of 
        OOI's recommendations, and establish a resolution process when 
        offices do not concur with recommendations.

    Recommendation 11 is resolved and open. TSA has provided its 
        response and proposed implementation plan for corrective 
        action. We are currently evaluating TSA's response.

    Mr. Chairman, this concludes my prepared statement. I welcome any 
questions you or other Members of the subcommittee may have.

    Mr. Hudson. Thank you, Ms. Richards.
    We appreciate all of you being here today.
    At this point I will recognize the Ranking Minority Member 
of the subcommittee, the gentleman from Louisiana, Mr. 
Richmond, for his opening statement.
    Mr. Richmond. Thank you, Chairman Hudson.
    Let me just thank you for convening this hearing, and the 
witnesses for appearing today and for your testimony.
    As you all know, the work that this subcommittee does is 
extremely important. We are tasked with making sure that the 
Transportation Security Administration fulfills its mission of 
protecting the Nation's transportation systems to ensure 
freedom of movement for our people and our commerce.
    More importantly, we are tasked with ensuring the safety of 
American citizens as they travel across this Nation. To 
accomplish this mission we must ensure that every office within 
the Transportation Security Administration is operating both 
effectively and efficiently.
    The report released in September 2013 by the Department of 
Homeland Security's Office of Inspector General regarding the 
Office of Inspection is both alarming and scathing. The report 
details that the Office of Inspection is not operating at 
maximum efficiency or in a cost-effective manner because of a 
top-heavy structure.
    Specifically, the Office of Inspection employs personnel 
classified as criminal investigators despite their duties not 
fitting the classification of criminal investigations according 
to Federal regulations. This classification allows these 
criminal investigators to receive enhanced benefits and LEAP 
pay. According to the OIG report and, as I understand it, two 
prior reports, substantial savings could be achieved by 
reclassifying these criminal investigators in a manner 
consistent with the needs of the Office of Inspection and the 
type of work they perform.
    Undoubtedly, there are many examples of instances in which 
the Office of Inspection has helped thwart the efforts of 
nefarious actors who mean to do our Nation harm. That, however, 
does not diminish the need for us to use our resources 
effectively so that we can operate at maximum efficiency.
    It is my hope that through the questions and testimony we 
gather today we can get further insight about where these 
inefficiencies are occurring, how we can reallocate our 
resources in an effective manner, and also what can be done 
structurally within the TSA so that when these structural 
problems are first brought to light they can be quickly 
addressed.
    I look forward to the continued dialogue and hope that the 
work that we do here today aids in making the Transportation 
Security Administration stronger, more efficient, and more 
effective.
    Before yielding back I would like to note that this is the 
first hearing of the subcommittee in the second session of this 
Congress. It is my expectation that this subcommittee will be 
as bipartisan and productive this year as it was last year, 
when our subcommittee produced four out of the five bills that 
the committee saw pass the House.
    I look forward to continuing to work with the Chairman to 
see that the bills we sent to the Senate in December, including 
Ranking Member Thompson's bill to codify the aviation security 
advisory committee, becomes law this year.
    With that, Mr. Chairman, I will yield back.
    Mr. Hudson. Thank the gentleman, and I thank you for the 
comments. I share the sentiment that we want to continue to 
work in a bipartisan way to find solutions for the American 
people here.
    At this point I will recognize myself for questions.
    The I.G. report states that TSA could save $17.5 million 
over the next 5 years if it reclassified the criminal 
investigators to non-law enforcement positions. According to 
the I.G., the amount of criminal cases conducted every year 
does not support all the TSA's criminal investigators so 
reclassifying these positions is necessary and appropriate.
    Mr. Allison, do you agree with the I.G.'s assessment that 
employees in non-law enforcement positions like transportation 
security specialist can perform the work of most of your 100 
criminal investigators? Why or why not?
    Mr. Allison. Thank you, Mr. Chairman.
    Actually, I do disagree with a certain point of that. I 
mean, when you look at this type of work, what is pretty much 
consistent in this field is tracking your hours against the 
cases, so admittedly the organization did not track its hours. 
So if the investigators were working criminal cases or 
administrative cases and they did not track their hours one 
wouldn't be able to tell what their workload was.
    So, for example, the 1,125 cases that the Office of 
Investigations for the I.G. reviewed in 2011, they identified 
some 40 percent that were collateral, meaning cases that other 
agencies investigated. But I would submit to you, Mr. Chairman, 
that those cases represent the most minimal amount of time 
because anytime someone is arrested, indicted, or under 
investigation by another law enforcement agency, given our 
mission, those people are a threat or a risk to our security 
mission.
    So what is pretty consistent in this career field is you 
would open a case and that is how we monitor those individual 
cases. So although they identified 423 cases, or some 40 
percent of the 1,125, without the time you wouldn't know if 
that constituted a majority of the workload.
    I will contend, having experience in this business, that 
the majority of the workload was divided between the criminal 
cases and the administrative cases and less to the 423. But 
again, I just want to acknowledge that, you know, our 
organization erred in not tracking those hours and you would 
not be able to discern what the workload truly was, so at first 
glance you would assume, given those 423 cases, a lot of work 
went there, but not necessarily the case.
    So I do believe we can, you know, through this analysis, 
take a look at our work through predictive analysis, through 
some of the work we have already done, and make a determination 
if we need to, you know, reduce the numbers of some of our 
investigative staff.
    Mr. Hudson. But to do these types of review where another 
agency is doing the investigation and your folks are 
monitoring, do you need the law enforcement classification to 
do that--1811 versus some other classification?
    Mr. Allison. I am sorry, Mr. Chairman. Yes, I mean, we can 
reduce some of our staff and augment our staff with non-
criminal investigators, there is no question, because all that 
information is coming back and it is being recorded and the 
cases are being updated, so yes.
    Mr. Hudson. So of the 100, how many do you think we could 
reduce out of that category?
    Mr. Allison. Well, Mr. Chairman, as I stated in my opening 
statement, since I have been there I have reduced by 6 percent. 
I believe we can reduce further. I don't have an accurate 
account for you. I mean, I am confident that we can attrit some 
of our positions.
    Mr. Hudson. Okay.
    Ms. Richards, would you like to comment on this response, 
or----
    Ms. Richards. I would like to comment.
    Yes, one of the main concerns is, as Mr. Allison says, the 
Office of Inspections was not having its employees record what 
they were actually doing so it was impossible to discern with 
certitude how many hours were spent on a criminal investigation 
versus an administrative investigation or on a collateral 
investigation or on an inspection or an internal review or 
covert testing. One of our recommendations to which they have 
agreed and taken action is to start recording exactly what the 
employees are doing, which will help them tremendously evaluate 
their workforce and complete the workforce analysis that we 
have asked them to do.
    It is also our contention that they could reduce the number 
of criminal investigators they have and that, for example, the 
collateral investigations could be conducted by non-criminal 
investigators.
    Mr. Hudson. Thank you.
    In order to enforce the time limits I am going to enforce 
them on myself and go ahead and conclude my questions and call 
on the Ranking Minority Member of the subcommittee, the 
gentleman from Louisiana, Mr. Richmond for any questions he may 
have.
    Mr. Richmond. Well, let me start with Ms. Richards where 
you just left off and the fact that they didn't accurately 
track their hours. I guess my question is: If they are not 
tracking their hours and they don't adequately say what their 
hours are going to and what case they are assigned to and all 
of that, how do you feel confident in your numbers? Because I 
guess we would all rely on the same reporting in order to draw 
conclusions, so I guess I am wondering, how did you draw your 
conclusions since they are not doing that?
    Ms. Richards. Our Office of Investigations had done an 
inspection of their criminal investigators and analyzed the 
workload that was completed. We also know what types of cases 
we refer to TSA.
    As you are aware, the Office of Inspector General has 
primacy on cases--criminal cases involving Department of 
Homeland Security employees, so TSA shows us the cases and when 
they are truly criminal or serious nature in general, our 
office takes those cases on and we refer back to TSA cases that 
are administrative in nature or what they call de minimis, 
which would mean that the cases were for an issue that was 
minor in nature and would be unlikely to be accepted for 
prosecution as a criminal case.
    Mr. Richmond. Ms. Shelton Waters, let me shift over to you, 
and I know you haven't been there a very, very long time, but I 
would assume that you are there because you are very good. Part 
of what I guess my question to you is just an assessment 
whether your office has the internal capacity to do inspections 
and reviews on your own or are you going to need to continue to 
contract out to have others do inspections?
    Ms. Shelton Waters. Thank you for the question, sir. So I 
think absolutely internally we have the ability, we have the 
subject-matter expertise to lend to the overall discussion.
    Our model right now, though, really is to have contractor 
support for what we do in OHC and it is a model that we have 
had for the last 9 years or so. So my staff is about 200 right 
now and that includes all of my FTE. But again, we use 
contractor support to augment or to supplement what we do 
there.
    So whatever work we end up doing with OOI--and we 
absolutely plan to be very robust in how we go about figuring 
out the right mix--the right levels of 1811s versus the other 
workforce that OOI needs to accomplish their mission--we will 
continue to rely on contractor support for that.
    Mr. Richmond. Do you think contractor support is the most 
efficient way to do it? I guess the reason why I am asking--and 
this is not my area of subject-matter expertise--that when you 
contract it out you get the result or the report that you are 
looking for but there is--that ends the on-going and long-term 
dialogue and coordination between agencies; and if you were 
able to do it in-house then you would have the same people 
there over the long term who could hopefully interact and 
monitor progress without having to go back to contractors.
    Ms. Shelton Waters. So I don't disagree with your 
assessment. One of the things that I looked at in the first 30 
days that I was in the Office of Human Capital was how we want 
to build our model for the future.
    The contract support that we currently have--the 
overarching contract support--expires at the beginning of 2017. 
My goal is to position us for what I consider to be a less 
risk--or a more risk-based approach, meaning that I will have a 
better understanding of the mix of Federal-to-contractor 
support than what I have today, and that will be our model 
moving forward.
    Mr. Richmond. Mr. Allison, it is my understanding and just 
my opinion that everybody at the table, everybody up here, we 
are all on the same team, although sometimes I differ from my 
colleagues on the other side of the aisle, but we are all on 
the same team and we want to be as efficient and productive as 
possible.
    It appears to me, just looking at the reports, unless you 
can just tell me, ``Something is flat-out wrong. We don't have 
efficiencies there. Other people can't do these criminal 
investigations, and we are not paying too much in LEAP pay and 
others,'' why can't we all get together and figure out what is 
the appropriate number, how much we can save so that we can 
take those savings and put it right back into homeland security 
or making the traveling public easier, reducing--I mean, I just 
don't understand how, if we are all on the same team, why we 
don't get together and fix it? Can you explain that to me?
    Mr. Allison. Sure, Mr. Richmond.
    I don't disagree. I mean, in these times we need to look 
within our organizations and be more efficient, when we can, 
where we can. The reason we reduced by 6 percent was just 
through that process. You know, I didn't have a report at the 
time when I walked in the door. Any time I have a vacancy the 
question I ask is: ``Do we still need this position? Do we 
still need this position at that grade?''
    So you are right. We have an obligation to be as efficient 
as we can.
    With respect to this problem, sir, there were various 
reports but again, I would contend what is missing from this 
equation, as you alluded to, without time attached to these 
numbers they don't tell the whole story. So again, you know, a 
case is just a file and it may not represent any time at all 
other than just an update.
    So to the Chairman's point, do you need an investigator--a 
criminal investigator for that percentage of workload that you 
know you are always going to have? The question comes: How do 
we balance our cadre of folks? Do we attrit down to a certain 
number and augment with non-criminal or do we just attrit down 
to a number and have those positions and work be done and 
contained as long as people are abiding by the law?
    So I don't disagree with you. I think this process that we 
are about to embark upon, you know, analyzing this data, 
recognizing the I.G.'s responsibility--you know, the cases that 
they take and the cases that they don't take. As I alluded in 
my opening statement, they took 3 percent of the cases--of the 
423 that we referred last year.
    I would disagree with my colleague; it has nothing to do 
with whether it prosecutes or not, they don't have the capacity 
to do this work. Their report to Congress for 2012 basically 
alludes to the fact that they refer a lot of cases back to the 
components for investigation.
    So we certainly need to have a cadre. One hundred is 
probably not the right number; it is certainly not zero. We are 
going to work and, you know, I assure you, we are going to fix 
this problem.
    Mr. Hudson. Thank you.
    The Chairman will now recognize other Members of the 
committee for questions they may wish to ask the witness. In 
accordance with our committee rules and practices, I plan to 
recognize Members who were present at the start of the hearing 
by seniority on the subcommittee. Those coming in later will be 
recognized in the order of arrival.
    At this time I will recognize the gentleman from Alabama, 
Mr. Rogers.
    Mr. Rogers. Thank you, Mr. Chairman.
    You know, the Senate is having a hearing similar to this 
today and it has been pointed out over there that tracking 
overtime is a problem Department-wide. Is that something you 
would agree with or do you think it is just happening in your 
Department--TSA?
    Mr. Allison. Thank you, Mr. Rogers.
    Again, no question OOI did not track their hours against 
cases--I mean, allocating hours towards the cases, that did not 
happen. They did track their law enforcement availability pay 
hours, meaning the 2 hours they must be available every day, on 
hard copy. That wasn't available in an automated fashion. But 
they did not track the hours, so a little bit of a different 
problem.
    Mr. Rogers. Okay. The I.G. recommended in its report that 
TSA conduct a workforce analysis to determine the appropriate 
OOI staffing levels. TSA stated that it would conduct this 
analysis for the audits and inspections division and the 
security operations divisions of OOI; however, there is no 
indication that TSA will analyze the internal affairs division, 
which contains over 80 percent of OOI's criminal 
investigations.
    Mr. Allison and Ms. Waters, why is TSA not including the 
internal affairs division in its upcoming workforce analysis?
    Ms. Waters first.
    Ms. Shelton Waters. So I don't think that we are opposed to 
including that part of OOI in that analysis. I believe--and I 
apologize for not having the full information on that--I 
believe that there was an understanding at the time that that 
was done that the numbers that were being questioned were in 
those two divisions.
    But as Mr. Allison indicated, whether it is through this 
particular contract support or through the tools that we have 
in OHC, we do plan to do a full analysis of the Office of 
Inspections to understand what the right mix of workforce 
levels should be.
    Mr. Rogers. Mr. Allison, do you have anything to add?
    Mr. Allison. No, sir. I completely agree. I mean, we are 
going to embark upon this endeavor to do this analysis. You 
know, we need to include the full cadre of criminal 
investigators so I have no objection to that and I think it is 
a good idea.
    Mr. Rogers. Ms. Richards, do you have a comment? Do you 
think that it is important for the internal affairs division to 
be looked at?
    Ms. Richards. Absolutely. I think it is critically 
important as part of the workforce analysis that the entire 
office be looked at.
    Mr. Rogers. Okay. Ms. Richards, in your view, what entity 
is in the best position to conduct an objective, comprehensive 
analysis of OOI's workforce and give clear direction on how to 
fix the problem?
    Ms. Richards. As we stated in our report, we believe that 
OPM would be the best entity within the Government to do this 
workforce analysis and the reason that we believe that is 
because previous studies by OHC and a contractor working for 
OHC reached conclusions that were similar to those that we 
reached with our audit work but those reports, although they 
made recommendations, were disagreed with, and the 
recommendations were not implemented.
    Mr. Rogers. Okay. In your opinion, Ms. Richards, should TSA 
have the unique authority to set its own employee 
classifications or should it be brought under OPM's employee 
classification system?
    Ms. Richards. That is a really broad question. Based on our 
limited audit work I wouldn't be prepared to answer it at this 
time. I do have concerns with this particular office that we 
audited that they need to do a thorough workforce analysis and 
bring it in line with what is appropriate for the workload that 
they have.
    Mr. Rogers. I would like you to revisit the question I 
asked Mr. Allison at the beginning of my time, and that is: Do 
you think that the problem with tracking overtime is unique to 
TSA or do you think it is across the whole Department of 
Homeland Security?
    Ms. Richards. In regards to administratively uncontrollable 
overtime, which is the subject of the other hearing, a number 
of those cases have been referred to the Office of Inspector 
General and we are just initiating our audit review of those 
cases. Based on what the special council has found, it does 
seem that there is a problem with AUO in the Department of 
Homeland Security.
    It is slightly different than what is the problem in--that 
we are talking about in the Office of Inspection, but there are 
distinct similarities in that there seems to be a culture of 
entitlement that regardless of whether the specific work 
supports it or not or whether the documentation was there to 
support it or not, the money will be paid.
    Mr. Rogers. Great. Thank you.
    I yield back, Mr. Chairman.
    Mr. Hudson. Thank the gentleman.
    At this point the Chairman will recognize the gentleman 
from South Carolina, Mr. Sanford.
    Mr. Sanford. Yes. I just want to follow up again with Ms. 
Richards.
    So if you look at the whole question of log books and 
hours, there has been a question raised here, if you look at 
the mismatch between criminal activity, number of criminal-
related employees, and ultimately payroll budget, it seems like 
there is a mismatch there. In your findings, were there other 
mismatches that maybe didn't, you know, ultimately get surfaced 
in this audit but that were areas of concern that are worthy of 
conversation?
    Ms. Richards. I wouldn't say mismatch between employee 
skill sets and the duties that they were assigned. We had other 
concerns with the work that was being produced by the Office of 
Inspection.
    For example, they were doing audits and saying the audits 
were conducted under Government auditing standards but they 
weren't meeting all of those standards. Some of the work didn't 
have indications of any supervisory review; the employees 
weren't necessarily receiving the training they needed to 
conduct these audits; they weren't always following the rules 
for documenting their independence.
    So we had a number of issues with the other work that was 
being done but not necessarily with a mismatch between the 
skill sets of the employees and the work that was assigned 
them.
    Mr. Sanford. Why do you think--I would call it a mismatch; 
you wouldn't call it a mismatch--there was this overlay between 
demand, if you will, from a criminal investigative needs 
standpoint, and number of employees and compensation accrued? 
In your estimation, why did that exist?
    Ms. Richards. Looking back at how the office was stood up, 
I believe the anticipation was that they would need that many 
criminal investigators and that was never thoroughly examined 
in the history of the office. So, having stood the office up 
that way, they continued to grow it that way; that is the kind 
of individual that they hired and they attracted and that they 
used for the work that they considered important because these 
are good, solid employees and they felt that they were getting 
a good, solid product.
    Without doing a workforce analysis and really seeing 
whether they were meeting the requirements for the law 
enforcement pay and entitlements, they were paying people 
probably more than they should have been because they weren't 
doing that work.
    It is easy to see how the office was stood up in a hurry 
when TSA was stood up, but over the years that the office has 
existed they had, in my opinion, more than adequate time to do 
a workforce analysis and determine what their workload really 
was, and I believe they should have done so but they did not.
    Mr. Sanford. This, in your opinion, was not just a sloppy 
way of basically paying people more?
    Ms. Richards. I didn't find any evidence of that. I didn't 
find any evidence of intentional wrongdoing. I found evidence 
that they believed this was appropriate, and lacking the data 
to say differently and perhaps not the attention to detail that 
an auditor would give to determining all of the detailed 
information that would support their decision making.
    Mr. Sanford. How about throughput--the number of 
prosecutions that actually occurred? Did you look at that into 
the equation in your study, as well?
    Ms. Richards. We did not. Our Office of Investigations had 
recently looked at the workload of the criminal investigators 
and so we did not evaluate the quality of the workload or the 
results of those.
    Mr. Sanford. I am not saying quality, but just quantity, if 
you will. I mean----
    Ms. Richards. I don't have the statistics with me. I could 
get them for you.
    Mr. Sanford. No, no, no.
    Mr. Allison, would you have counterpoint to what she said 
or----
    Mr. Allison. Yes. Thank you, Mr. Congressman.
    I do agree that some quantitative analysis should have 
occurred at some point to give us some baseline as to how many 
of these individuals that we should have. I would agree with 
her.
    I came up in the Federal Marshal Service from TSA since 
2002. I don't know what led to the number of, you know, 
whatever it was--when I walked into the job it was 106. The 
I.G. report quoted 124 but we are at 100 now, so this is where 
we are now.
    So I do agree some sort of analysis should have been done, 
but I think, like I said before, sir, not documenting our 
hours, not accounting for our work is not the same as not doing 
the work. So last year we--I think we closed 887 cases; about 
70 percent of those cases really were violations of criminal 
laws of the United States. Of the ones we----
    Mr. Sanford. How many prosecutions came as a result?
    Mr. Allison. Sir, I have to get back to you on that 
information, I will provide it for you. I want to say around 18 
or so--a very low number. But, sir, as you know, I mean, those 
are subject to DOJ guidelines and prosecutorial thresholds and 
all that stuff.
    Mr. Sanford. I see I burned through my time.
    Thank you, Mr. Chairman.
    Mr. Hudson. Thank the gentleman.
    I will now recognize the gentlelady from Indiana, Mrs. 
Brooks.
    Mrs. Brooks. Thank you, Mr. Chairman. Thanks for holding 
this hearing.
    When you talk about TSA and when it was stood up and how it 
has changed over the years, I happen to have been a United 
States attorney, Southern District of Indiana, when TSA was 
stood up, so I have kind of watched--and served from 2001 until 
2007, so watched TSA grow, was a part of conversations in 
Indiana in supporting TSA and, you know, want to thank you all 
for your service and what, you know, how important it is. I 
defend TSA with constituents day in and day out about the 
importance of keeping this country safe.
    I also, though, know that the number of prosecution cases 
the U.S. Attorney's Office, you know, takes are limited because 
of their limited resources, but I do think there was a 
response--TSA did respond--I am just following up on 
Congressman Sanford's point. OOI opened 582 criminal cases in 
2012, 611 in 2013. Are you familiar with these numbers that--
and of those cases, U.S. attorneys accepted 12 for prosecution 
in 2012 and then 18 in 2013.
    Can you help us understand what seems to be the problems--
and I have been on the other side of the U.S. attorney making 
those decisions and with an office making the decisions about 
what to prosecute and what not to prosecute, but I am kind of--
they do seem to be fairly low numbers. For the numbers that are 
opened, if you are opening hundreds and it is not minimizing 
the work that is going into it, but what has happened with the 
Justice Department and the guidelines--what are the guidelines 
they are using to have to decide--or what have they told you 
the guidelines are to decide whether or not to prosecute or 
not?
    Mr. Allison. Yes, ma'am. I do not know unequivocally. When 
we got that request we did get some data from our supervisors 
in the field and I directed a 100 percent accounting of the 
casework to--so we can look at every individual case through 
2011 and 2012 and get an accurate accounting so I can report 
back to the committee.
    But to your prominent question, a lot of our criminal cases 
are thefts. From my experience in the year-and-a-half I have 
been in this office I think, you know, they would defer for 
administrative resolution.
    We do get some prosecutions on OWCP cases. Those are 
typically the larger amounts of cases. Those cases aren't 
accepted by the DHS OIG; those are always returned back to TSA.
    Mrs. Brooks. I am sorry, what kind of cases are those?
    Mr. Allison. Office of Worker's Compensation fraud. I am 
sorry, ma'am.
    Mrs. Brooks. Okay.
    Mr. Allison. Most of those cases--all of those cases go 
back to TSA, so we had a few prosecutions in that area. One of 
the prosecutions we had this year in the District of Maryland 
was time theft--fairly large amount related to time theft.
    So typically, the larger dollar amounts seem to get the 
interest of prosecutions where the lower dollar amounts do not.
    Mrs. Brooks. So of those prosecutions, were those typically 
done by your agency alone or were those with other 
investigative agencies involved?
    Mr. Allison. Ma'am, they would have been our agency.
    Mrs. Brooks. So have the prosecutors said there is a 
monetary threshold because of their sentencing guidelines that 
is then determining whether or not they are taking the cases or 
not taking the cases?
    Mr. Allison. Ma'am, I would contend that it varies upon the 
district. You know, some districts like New York have a very 
high threshold for prosecution that are extremely busy; some--
in Nevada, you know, they prosecuted a gentleman, I think, for 
stealing a pair of boots. So it varies.
    Mrs. Brooks. So if there are those disparities across the 
districts--and I appreciate that that does happen--when they 
get sent back, they are not prosecuted in the district courts, 
have you produced any reports--and I am just sorry that I don't 
know--as to what happens to all of those theft cases involving 
TSA employees that aren't prosecuted? How are they being 
handled within the agency?
    Mr. Allison. Well, that is a great question. I will assure 
you that those cases go over to Office of OPR and those people 
generally on theft cases are dismissed.
    Mrs. Brooks. So general theft cases are dismissed by OPR?
    Mr. Allison. Well, no. I mean, the--I am sorry, the 
employees are dismissed----
    Mrs. Brooks. The employees, okay. Thank you. I wanted to 
clarify.
    Mr. Allison. So once our investigations are concluded, if 
they are declined for prosecution those go to my colleague at 
OPR and they actually render administrative discipline on those 
cases.
    Mrs. Brooks. Is that an annual report that we would have 
ability to review and to take a look at to see what is 
happening with all of those other cases that are not being 
referred for criminal prosecution? Is that in a report form?
    Mr. Allison. I will be happy to give you a report----
    Mrs. Brooks. Okay.
    Mr. Allison [continuing]. And show you what we have done 
with the cases over the years, and to the ones to your question 
that aren't prosecuted.
    Mrs. Brooks. Just very briefly, one case that was 
prosecuted which I think is an incredibly important case that I 
am curious about the skill sets of the investigator, the case 
from 2009 involving the logic bomb that was actually inserted 
into the TSA system--the computer program file of the TSA 
operation system. Do you feel that we have the investigators 
properly trained to detect the cyber crime within TSA or cyber 
terrorism within TSA?
    Mr. Allison. Well, two points, ma'am. Typically an 
allegation of that would get referred to the I.G., and I think 
that one did, and we had to actually exercise, as I 
understand--I wasn't there at the time--you know, some very 
quick response to mitigate this issue. So with the investigator 
we had some I.T. professionals and we had a computer forensics 
agent and I think those folks went to Colorado Springs and 
worked that case and were able to resolve that issue 
successfully.
    Mrs. Brooks. Well, I would be interested in knowing how 
many of all of these investigators that we have actually have 
the expertise. That is a very important area that I think the 
whole country is very concerned about and I would be very 
curious--investigating thefts of baggage and other things, 
dramatically different skill set than investigation of the 
computer--the TSA computers and any, you know, cyber issues 
there.
    So I would love to know and would ask that you provide for 
us what kind of training your investigators are also getting 
with respect to cyber crime.
    I have exceeded my time and yield back. Thank you.
    Mr. Hudson. Thank the gentlelady.
    I want to thank the witnesses for your testimony, for your 
service to our country.
    I am very pleased we were able to get through the hearing 
before they called votes. Thank the Members for their questions 
and participation today.
    The Members of the subcommittee may have some additional 
questions for the witnesses and we ask that you respond to 
these in writing.
    Without objection, the subcommittee stands adjourned.
    [Whereupon, at 2:20 p.m., the subcommittee was adjourned.]