[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]








   EXAMINING MISMANAGEMENT IN OFFICE OF JUSTICE PROGRAMS GRANTMAKING

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

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         GOVERNMENT OPERATIONS

                                 OF THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 14, 2016

                               __________

                           Serial No. 114-141

                               __________

Printed for the use of the Committee on Oversight and Government Reform



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     JASON CHAFFETZ, Utah, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
TIM WALBERG, Michigan                    Columbia
JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
RON DeSANTIS, Florida                TED LIEU, California
MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
MARK WALKER, North Carolina          MARK DeSAULNIER, California
ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
JODY B. HICE, Georgia                PETER WELCH, Vermont
STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama

                   Jennifer Hemingway, Staff Director
                      Sean Brebbia, Senior Counsel
                    Sharon Casey, Deputy Chief Clerk
                 David Rapallo, Minority Staff Director

                                 ------                                

                 Subcommittee on Government Operations

                 MARK MEADOWS, North Carolina, Chairman
JIM JORDAN, Ohio                     GERALD E. CONNOLLY, Virginia, 
TIM WALBERG, Michigan, Vice Chair        Ranking Minority Member
TREY GOWDY, South Carolina           CAROLYN B. MALONEY, New York
THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of 
MICK MULVANEY, South Carolina            Columbia
KEN BUCK, Colorado                   WM. LACY CLAY, Missouri
EARL L. ``BUDDY'' CARTER, Georgia    STACEY E. PLASKETT, Virgin Islands
GLENN GROTHMAN, Wisconsin            STEPHEN F. LYNCH, Massachusetts


















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 14, 2016....................................     1

                               WITNESSES

The Hon. Michael E. Horowitz, Inspector General, U.S. Department 
  of Justice
    Oral Statement...............................................     4
    Written Statement............................................     6
Ms. Beth McGarry, Principal Deputy Assistant Attorney General for 
  Office of Justice Programs, U.S. Department of Justice
    Oral Statement...............................................    13
    Written Statement............................................    15
Ms. Gretta Goodwin, Acting Director, Homeland Security and 
  Justice, U.S. Government Accountability Office
    Oral Statement...............................................    20
    Written Statement............................................    22
Mr. Jeffrey Sedgwick, Ph.D., Executive Director, Justice Research 
  and Statistics Association
    Oral Statement...............................................    44
    Written Statement............................................    47

 
   EXAMINING MISMANAGEMENT IN OFFICE OF JUSTICE PROGRAMS GRANTMAKING

                              ----------                              


                        Thursday, July 14, 2016

                   House of Representatives
              Subcommittee on Government Operations
               Committee on Oversight and Government Reform
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 2:14 p.m., in 
Room 2247, Rayburn House Office Building, Hon. Mark Meadows 
[chairman of the subcommittee] presiding.
    Present: Representatives Meadows, Walberg, Carter, and 
Plaskett.
    Mr. Meadows. All right. The Subcommittee on Government 
Operations will come to order. And without objection, the chair 
is authorized to declare a recess at any time.
    I want to thank you once again for the delay and for your 
graciousness with that.
    Obviously, the Office of Justice Programs, or OJP, as it is 
commonly referred to, is the largest of three departments--of 
the Department of Justice grantmaking entities. OJP gave out 
more than $4 billion in fiscal year 2015, with about $1.2 
billion issued for State, local, and tribal law enforcement, 
plus another $251 million for the juvenile justice initiatives.
    That is a lot of the programs and a whole lot of money. 
There is no doubt that grants can provide an important resource 
to State and local government entities, allowing them to do 
important work in many areas, including crime prevention and 
reduction of recidivism. The Office of Justice Programs has a 
responsibility to effectively manage its grants program, and it 
is our job in Congress to make sure that OJP is carrying out 
its responsibility and spending the taxpayer dollars 
responsibly and effectively.
    Over the last decade, OJP has made improvements in its 
grantmaking process, thanks in no small part to the oversight 
provided by GAO and the Inspector General. We are here today to 
discuss those improvements and also to discuss the status of 
some of the open recommendations made by both GAO and the 
Inspector General.
    While OJP has made progress in its grant management, the 
Inspector General's reports and audits show that there is still 
room for improvement. For example, the IG published a report 
last year that found that OJP's grant money was used to build 
two correctional facilities that were at least 250 percent 
larger than they needed at an excess cost of some $32 million. 
This was a $70 million grant to the Navajo Division of Public 
Safety to plan and construct a tribal justice facility, and 
somewhere along the way the plans changed, and there was a 
massive increase in the size and scope of that facility.
    One of the facilities had an approved plan for a 42-bed 
prison that ended up, they ended up building a facility that 
had 132 beds. This, despite having an average jail occupancy 
between 14 and 22 inmates a month. The other facility, with 
averages of 7 to 11 inmates, ended up with 80 beds.
    They built these buildings so big that they do not have 
enough money to fully staff them. They sit there today largely 
empty, a $70 million price tag for nearly empty prisons.
    Look, my issue here is not about the grant itself. I can 
tell you that in my district there have been the deployment of 
some of these grants in effective ways. But it is blatantly 
mismanaged taxpayer dollars, plain and simple, that we have to 
address, and here is the question I would like to get to today.
    Are we actually managing these grants at a sufficiently 
detailed level to achieve results, prevent waste, fraud, and 
abuse, or are we just checking the boxes? And so I am 
interested to hear from all of our witnesses today on the many 
issues presented by the DOJ's grant management and the progress 
that has been made and the progress that still needs to be 
made.
    And so, with that, I would like to now recognize my good 
friend, the gentlewoman from the Virgin Islands, Ms. Plaskett, 
for her opening remarks.
    Ms. Plaskett. Thank you so much, Mr. Chairman.
    And good afternoon to all of you. Thank you for attending 
this Subcommittee on Government Operations.
    I want to thank you, Mr. Chairman, for holding today's 
hearing to highlight very important office at the Department of 
Justice, that being the Office of Justice Programs. Currently, 
OJP oversees 7,000 active grants, some of which are mandated by 
Congress, totaling more than $7.5 billion.
    As a former prosecutor and also an official at the 
Department of Justice where, working under the Deputy Attorney 
General's office, I oversaw some of OJP's work, I know 
firsthand what an important partner OJP is to our local and 
State governments by providing resources for training, 
coordination, and equipment to support law enforcement efforts. 
OJP funds are used to support anti-gang initiatives, 
bulletproof vest purchases, and programs to counter spousal or 
child abuse and trafficking, human trafficking.
    These grants make a difference in people's lives. Just 2 
weeks ago, OJP reported that the Internet Crimes against 
Children's Task Force, funded through OJP grant program, 
arrested more than 1,300 suspected child predators. Last fall, 
OJP announced the addition of five cities to the Violence 
Reduction Network, a collaborative program between DOJ and 
cities which have contributed to the arrest of criminals 
suspected of violent crimes, such as sexual assault and 
homicide.
    As part of its own oversight, OJP assesses the risk of all 
grant applicants and grantees to identify any high-risk 
grantees that may require additional controls or corrective 
actions. In fact, OJP actually exceeds the 10 percent statutory 
goal for conducting extensive monitoring of grant dollars, and 
less than 1 percent of grants are currently considered as high 
risk.
    To supplement its internal efforts, OJP relies on the 
Office of the Inspector General. Independent audits of grantees 
and review of OJP grant management, like those conducted by the 
Inspector General and the Government Accountability Office, 
which are here with us this afternoon, have aided the office in 
making improvements to its management processes.
    While the both the IG and GAO--that is a lot of acronyms 
there--have singled out specific grant programs for concern in 
recent years, OJP has acted in good faith to implement 
corrective recommendations and close out those cases. As a 
result of IG recommendations, OJP has taken significant steps 
to change its policies and procedures, clarify or issue 
guidance, put in place performance control, and remedy 
unallowable costs.
    For example, OJP has requested Treasury send a collection 
notice to recruit unsupported expenditures from one grantee and 
has offered individualized technical assistance to all grantees 
under the DNA Backlog Reduction Program as it works to update 
its program guidance.
    In 2012, GAO found that DOJ needed to put into place better 
controls to reduce the risk of duplication of grant awards, 
including OJP grants. As a result, DOJ granting agencies now 
coordinate with one another to ensure that grantees are not 
unnecessarily receiving duplicative awards.
    OJP's improvements to its grant management controls over 
the past decade have been welcomed by grant applicants and 
recipients. For example, OJP created the Office of Audit 
Assessment and Management in fiscal year 2007 to conduct audits 
of OJP processes and risk assessments of grant programs, 
oversee program monitoring, and create policies to improve OJP 
grant management.
    Since then, applicants report experiencing better 
communication of the grant peer review process, receiving a 
more transparent and timely review of the strengths or 
weaknesses of the grant proposal, and have frequent 
communication about grant requirements and policy changes. 
These changes make OJP--and OJP are lowering the risk to 
taxpayers. But there is always room for improvement.
    It is essential for OJP to continuously evaluate its 
programs with the IG and with GAO for lessons learned and to 
identify ways to improve its oversight and monitoring of grant 
programs to ensure that funding is effectively and efficiently 
used by grant recipients. I look forward to hearing from 
today's witnesses about their observations and suggestions for 
assisting OJP and this subcommittee in conducting robust 
oversight of these grant dollars, which are vital to our State 
and local partners.
    Thank you.
    Mr. Meadows. I thank the ranking member for her comments 
and well thought out delivery.
    And so, as I enter into this, I just want to thank all of 
you for coming. I will hold the record open for 5 legislative 
days for any Member who would like to submit a written 
statement.
    Mr. Meadows. We will now recognize our panel of witnesses. 
Pleased to welcome the Honorable Michael Horowitz--welcome 
back--Inspector General of the Department of Justice.
    Ms. Beth McGarry, Principal Deputy Assistant Attorney 
General of the Office of Justice Programs at the Department of 
Justice. Welcome.
    Ms. Gretta Goodwin, a Ph.D., Acting Director of Justice and 
Law Enforcement Issues on the Homeland Security and Justice 
team at the Government Accountability Office. Welcome.
    And Mr. Jeffrey Sedgwick, Ph.D., Executive Director of the 
Justice Research and Statistics Association.
    Welcome to you all, and pursuant to committee rules, all 
witnesses will be sworn in before they testify. So if you would 
please rise and raise your right hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Response.]
    Mr. Meadows. Thank you.
    Let the record reflect that all witnesses answered in the 
affirmative.
    And in order to allow time for discussion, please limit 
your oral testimony to 5 minutes. However, your entire written 
statement will be made part of the record.
    And so, Mr. Horowitz, I recognize you for 5 minutes.

                       WITNESS STATEMENTS

             STATEMENT OF HON. MICHAEL E. HOROWITZ

    Mr. Horowitz. Thank you, Mr. Chairman, Ranking Member 
Plaskett, members of the subcommittee. Thank you for inviting 
me to testify today.
    From fiscal year 2011 through fiscal year 2015, OJP awarded 
over $10 billion in grants to thousands of recipients. During 
that same time period, the OIG issued approximately 100 audits 
of OJP grant awards, containing about 700 recommendations and 
identifying approximately $100 million in dollar-related 
findings.
    In fiscal year 2015 and 2016, Congress additionally 
authorized the department to issue over $5 billion in Crime 
Victims Fund awards, with the vast majority likely to be OJP 
grants. This significant increase in CVF grants requires OJP to 
have sufficient controls and oversight in place to ensure that 
those funds are used appropriately. We are currently conducting 
a risk assessment of OJP's management of CVF grants in light of 
this funding increase, and we're also auditing CVF grantees and 
subgrantees' use of these funds.
    Over the past several years, OJP and the department have 
made positive strides in improving their grants management, 
including implementing online grants management training, 
enhancing its management of high-risk grantees, and 
consolidating grant rules promulgated--that had been 
promulgated separately by three DOJ grantmaking agencies into a 
consolidated department grants financial guide.
    While these advances are encouraging, protecting taxpayer 
funds from mismanagement and misuse remains one of the most 
significant challenges facing the department. The department 
must undertake robust efforts to ensure that the billions it 
gives out in grants are appropriately spent and that the public 
receives the expected return on its investment.
    Our past work has identified several instances where the 
department grant monitoring was too limited and where site 
visits were too few. In particular, we found breakdowns in 
monitoring subgrantees to ensure that they are fulfilling all 
grant conditions. It's also important for the department to 
develop a results-oriented performance measures approach to 
ensure the grant programs are meeting their intended goals and 
producing a measurable outcome.
    Such measures are critical for the department to 
effectively assess which grant program should receive valuable 
taxpayer funds. In addition to our audit work, the OIG conducts 
grant-related investigations into possible fraud, embezzlement, 
and conflicts of interest. In the past 5 fiscal years, those 
investigations resulted in 13 criminal convictions and more 
than $6 million in restitution and recoveries.
    Our office participates in other efforts to improve grant 
management and reduce fraud across the Federal Government. I 
chair the Grant Fraud Working Group of the Financial Fraud 
Enforcement Task Force, a diverse coalition of IG offices and 
executive branch agencies. The working group looks to improve 
our ability to investigate and prosecute grant fraud matters. 
It played a key role in developing grant fraud training for 
special agents, Government prosecutors, and auditors. The 
working group also serves as an information-sharing platform 
regarding best practices and our ongoing data analytics 
efforts.
    In concluding, I want to thank the committee for its 
support, bipartisan support of the IG Empowerment Act. The bill 
contains several important provisions that will assist 
Inspectors General in conducting effective oversight, including 
of grant awards.
    For example, the bill ensures that IGs will have timely and 
unimpeded access to agency and grant recipient records. It 
allows OIGs to match data across agencies to help uncover 
improper payments and wasteful spending, which will improve our 
ability to detect grant fraud and uncover duplicative grant 
awards, and it provides OIGs with the testimonial subpoena 
authority, which will be a particularly helpful tool in 
enabling IGs to gain critical evidence when conducting civil 
and administrative grant fraud investigations.
    I very much appreciate the House of Representatives passing 
the legislation, and I hope that the Senate will take action 
soon so that all Inspectors General are able to conduct their 
important work effectively.
    Thank you, and I look forward to answering any questions.
    [Prepared statement of Mr. Horowitz follows:]
    
  
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    Mr. Meadows. Thank you, Mr. Horowitz, and I want to thank 
you for your continuing work. As you know, the Inspectors 
General provide a critical role in a number of scenarios, and 
it is always good to have you before this committee.
    Ms. McGarry, you are recognized for 5 minutes.

                   STATEMENT OF BETH MCGARRY

    Ms. McGarry. Thank you, Chairman Meadows, and thank you, 
Congresswoman Plaskett and distinguished members of the 
committee.
    I am pleased to have this opportunity to discuss the Office 
of Justice Programs' commitment to rigorous oversight of its 
grants program and our collaboration with the Department of 
Justice Office of the Inspector General and the Government 
Accountability Office. These collaborations strengthen and 
support OJP's grant oversight process.
    I am Beth McGarry, the Principal Deputy Assistant Attorney 
General for OJP. Prior to my service in this position, I was an 
Assistant United States Attorney and a career Deputy Assistant 
Attorney General at OJP.
    Every day across the country, OJP grantees do amazing work, 
preventing and controlling crime, administering justice, and 
assisting crime victims. For example, two of our justice 
reinvestment initiative States, Georgia and North Carolina, 
have both reduced their prison populations and reinvested the 
cost savings to add community probation and parole officers and 
intervention and treatment programs.
    We are honored to call the recipients of these 7,000 grants 
partners, and we take very seriously our responsibility to be 
vigilant stewards of taxpayer dollars as we manage the public 
funds behind these grants.
    Key to these efforts is OJP's Office of Audit Assessment 
and Management, which was stood up in 2007. OAAM establishes a 
stronger oversight structure for OJP's multi-billion dollar 
grant programs. With congressional support and through OAAM's 
leadership, OJP has implemented a robust framework of oversight 
across its grants programs.
    Congress also requires OJP to conduct comprehensive 
monitoring of not less than 10 percent of total award dollars. 
Demonstrating its commitment to this requirement, OJP 
consistently exceeds this 10 percent level each fiscal year. In 
fiscal year 2015, OJP monitored 20 percent of award dollars, 
completing in-depth programmatic and financial monitoring twice 
the amount required by law.
    Given the magnitude of the oversight required, it is 
essential that we focus monitoring efforts on grants where 
there is the most risk to Federal resources. To accomplish 
this, OJP uses a risk-based assessment and analytic approach to 
oversight. This approach entails analyzing myriad criteria 
during both the grant application and post award phases.
    In addition, OJP developed rigorous monitoring standards 
and procedures to ensure that grant awards are assessed, the 
information collected is analyzed, and determinations made 
regarding the grantees' performance on all programmatic, 
financial, and administrative requirements of award.
    OJP recognizes that we must consider potential risk before 
individual grants are awarded. Last year, OJP implemented an 
enhanced pre-award risk process. Based on this analysis, OJP's 
program offices implemented actions to manage or mitigate and 
identify potential risks to the Government by requiring 
increased oversight and financial training.
    Once awarded, OJP assesses grants against more than two 
dozen risk factors and determines the appropriate monitoring 
plan. At a minimum, each grant award undergoes a desk review 
once a year. Informed by the annual desk reviews and quarterly 
risk-based assessment, OJP conducts in-depth programmatic and 
financial monitoring of selected grantees.
    We are honored that the Association of Government 
Accountants cited OJP's model as a best practice and that other 
Federal agencies and the OIG have requested OJP's assistance to 
replicate our risk-based model. For grants recipients deemed 
high risk, OJP provides extensive monitoring and in many cases 
intensive technical assistance. When warranted, we freeze 
grantee funds or refer the grantee for investigation by the 
OIG.
    The OIG is a critical part of the Federal oversight 
framework. OJP works as a liaison between the OIG and the grant 
recipient to ensure that the findings identified in the OIG 
audit reports are corrected properly. OJP also uses the audit 
reports to strength our internal controls and grant monitoring.
    Also we work with the GAO to strengthen our programs. 
Preventing wasteful duplication in Government programs is a 
critical priority for DOJ and OJP. The department's three 
grantmaking components collaborate closely on the development 
and implementation of grant programs. Each year, the grant 
programs conduct an assessment to determine the risk of 
overlap. Through this collaboration, we ensure that our tribal 
grants are not duplicate but support complementary justice 
purposes.
    OJP values transparency in our grant operations. We have a 
dynamic Web site, where we post all of our solicitations, grant 
awards, the DOJ financial guide, and grant information.
    I look forward to working with the subcommittee to ensure 
that our programs and activities meet the high standards that 
you expect of us and that the American people deserve. Thank 
you again for this opportunity, and I look forward to your 
questions.
    [Prepared statement of Ms. McGarry follows:]
    

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    Mr. Meadows. Thank you so much for your testimony, and 
thank you for your service.
    Ms. Goodwin, you are recognized for 5 minutes.

                  STATEMENT OF GRETTA GOODWIN

    Ms. Goodwin. Chairman Meadows, Ranking Member Plaskett, I 
am pleased to be here today to discuss GAO's work examining the 
Department of Justice's grant program practices.
    Grants are an important tool the Federal Government uses to 
provide program funding to State and local governments. In 
fiscal year 2016, it is expected that the Federal Government 
will provide States and localities more than $650 billion in 
grants to fund a wide range of public policies, some related to 
criminal justice.
    DOJ has three granting agencies, which provide grants that 
support victims assistance, technology and forensics, juvenile 
justice, mental illness and substance abuse, policing, and 
other activities. My testimony today summarizes the progress 
DOJ and its largest granting agency, the Office of Justice 
Programs, or OJP, have made in addressing 17 recommendations 
from earlier GAO studies.
    I will highlight our key findings and the agency's efforts 
to address them in the following three areas--DOJ's overall 
grant administration practices, OJP's management of the 
Bulletproof Vest Partnership Program, and OJP's management of 
the Victims of Child Abuse Act grant program, or VOCA.
    With respect to DOJ's overall grant management, in 2012, we 
examined the extent to which overlap existed across DOJ grant 
programs and whether that contributed to the risk of 
unnecessary duplication, whether DOJ had taken steps to reduce 
overlap and the potential for unnecessary duplication, and how 
DOJ used monitoring and assessment to determine grant program 
effectiveness, as well as how it used the results to enhance 
its grant programs.
    We found that DOJ had not assessed its grant programs to 
identify overlap, nor had DOJ routinely coordinated grant 
awards to avoid unnecessary duplication. We also reported that 
DOJ could take steps to better assess the results of its grant 
programs.
    We made eight recommendations to DOJ to enhance its overall 
grant administration practices. DOJ has implemented seven and 
is making progress on the final recommendation related to 
codifying new policies and procedures.
    We also assessed how well OJP managed its Bulletproof Vest 
Partnership Program, which I'm going to refer now as the body 
armor program. In 2012, we examined the efforts OJP had 
underway to support State and local law enforcement's use of 
body armor, the extent to which there were controls in place to 
manage and coordinate these efforts, as well as factors related 
to body armor's use and effectiveness and the steps OJP had 
taken to address them.
    We found that OJP could enhance grant management controls 
and better ensure consistency in its program requirements by 
improving grantee accountability, reducing the risk of grantee 
noncompliance, and ensuring consistency in its efforts to 
promote law enforcement officer safety.
    We made five recommendations to OJP to address each of 
these areas. OJP has implemented all five.
    Finally, in our assessment of OJP's management of VOCA 
grants, in 2015 we reported on the extent to which OJP had 
ensured the timely expenditures of VOCA grant funding and 
assessed the performance of VOCA grantees. We found that OJP 
had several administrative review and approval processes in 
place that contributed to delays in grantees' ability to begin 
spending their award funds.
    We also found that OJP did not have complete data to assess 
VOCA grantees' performance against the measures it had 
established. We made four recommendations to OJP, and as of 
this July, one has been implemented. OJP is making progress on 
the three remaining recommendations, which relate to examining 
its administrative processes and project length and 
establishing and enforcing clear program requirements.
    As you know, GAO annually conducts recommendation follow-
up. So we will continue to monitor the implementation of our 
recommendations to DOJ and OJP.
    Chairman Meadows, Ranking Member Plaskett, and members of 
the subcommittee, this concludes my remarks. I'm happy to 
answer any questions you have.
    [Prepared statement of Ms. Goodwin follows:]
    
    
  
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    Mr. Meadows. Thank you for your testimony, and thank you 
for your service.
    Mr. Sedgwick?

              STATEMENT OF JEFFREY SEDGWICK, PH.D.

    Mr. Sedgwick. Chairman Meadows, Ranking Member Plaskett, 
and members of the committee, I'm pleased to have the 
opportunity to speak with you today about the Department of 
Justice's progress in improving the operations and management 
of the Office of Justice Programs.
    I say progress because, as you know from my resume, I've 
intermittently worked in the Office of Justice Programs and its 
predecessor--the Office of Justice Assistance, Research, and 
Statistics--since 1984. Currently, I serve as the Executive 
Director of the Justice Research and Statistics Association, a 
national nonprofit association of analysts, researchers, and 
practitioners throughout the justice system dedicated to 
providing accurate and timely information in support of sound 
policy development.
    Created by the State Statistical Analysis Centers in 1974, 
JRSA works closely with the Bureau of Justice Statistics and 
other Federal agencies to promote the effective use of criminal 
and juvenile justice information.
    I have the somewhat unique perspective of having worked 
within OJP to strengthen its management and then, after a lapse 
of 6 years away from OJP, coming back to view it from the 
outside as head of an organization that performs a significant 
amount of research, training, and technical assistance 
supported by OJP grants. That permits me to comment from my 
present position on whether the management improvements 
initiated 8 years ago have persisted and perhaps been extended, 
judging, of course, from the perspective of an outside 
observer.
    Members of this committee may remember the management 
challenges confronting OJP 8 years ago. Significant numbers of 
expired grants that had not been closed out, with unexpended 
funds reverted to the Treasury, questions about the integrity 
of the grantmaking process and whether or not awards were 
properly reflective of peer reviewers' scores of competing 
proposals, concern over whether grants and contracts were 
properly monitored and audited to assure performance and uphold 
OJP's fiduciary responsibility to the American taxpayer, and 
the lack of clean financial audits for OJP.
    Upon my departure in January 2009, OJP had a clean 
financial audit. The backlog of expired, but unclosed grants 
was eliminated with all de-obligated funds properly reverted to 
the Treasury. A process was instituted that assured any 
deviation from peer reviewer scores in awarding grants were 
clearly documented and justified by reference to publicly 
announced criteria, and the Office of Audit Assessment and 
Management was stood up, fully staffed, and headed by an 
exceptionally talented and qualified leader.
    Six years later, I returned to Washington to assume my 
current position, giving me an opportunity to see OJP 
management from the outside rather than the inside. I'd like to 
share with you my observations and the inferences I draw from 
them about the trajectory of management in OJP.
    First, I notice a number of new features of the grantmaking 
process which I heartily applaud. OJP now posts on its Web site 
a funding resource center listing all upcoming, current, and 
closed opportunities. This allows associations like mine to 
plan ahead, assemble good teams, and write excellent proposals 
to perform needed work on behalf of OJP bureaus.
    I also notice that there is a considerable degree of 
uniformity across solicitations issued by OJP bureaus with 
common performance and reporting requirements, common scoring 
criteria for proposals, and a common set of statutory and 
financial management requirements. Equally pleasing to me is 
the longer window of time between the issuance of a 
solicitation and the deadline for proposal submission. Short 
deadlines disadvantage newer and smaller organizations that 
often have the most innovative ideas.
    And I've noticed that OJP now routinely returns to each 
applicant, successful or not, the peer reviewer's comments on 
his or her proposal. In the past, applicants had to request 
peer reviewer's comments, and they were often delayed as bureau 
staff edited those comments.
    In fairness, any organization that takes the time to write 
a grant application deserves prompt and complete feedback on 
their proposal so they have the opportunity to improve.
    All of these changes encourage more applicants to apply and 
increase the chance that taxpayer dollars will go to those with 
the most innovative ideas and the strongest subject matter 
expertise on their teams, a sign of good management.
    Supporting these improvements in the application process is 
a much more detailed and accessible grants management system 
with an extensive online training tool providing step-by-step 
guidance for meeting the OJP-specified reporting requirements 
and making necessary adjustments to projects as they unfold 
through the submission of grant adjustment notices.
    The detailed online training offered to every grantee at a 
time of their convenience is an enormous aid to grantees with 
everything spelled clearly out through step-by-step 
instructions. Again, a sign of good management.
    And finally, I'd like to comment on a small change, but one 
that says a great deal about the integrity of the current 
grantmaking process in OJP. Since my return to Washington, I've 
noticed something new. Bureau heads and program managers will 
not meet with the head of an organization while a solicitation 
is open to which the organization may respond with a proposal.
    Every applicant plays on a level playing field whether they 
hover on downtown, the beltway, or the heartland. No 
preferential treatment, no insider access during proposal 
writing. Again, a sign of good management.
    As I commented at the beginning, I'm no longer in a 
position where I can knowledgeably comment on the specific 
management practices currently deployed in OJP, but I can make 
inferences from what I observe as one who does business with 
OJP on a now regular basis. My inference from what I have 
witnessed these past 18 months is that the trajectory of 
management improvement that I testified to previously in this 
chamber in September 2008 continues, and I applaud those 
responsible for carrying on in OJP a culture of continuous 
improvement.
    [Prepared statement of Mr. Sedgwick follows:]
    
  
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    Mr. Meadows. Thank you so much for your testimony.
    Thank each of you for your testimony, and I am going to 
recognize the vice chair of the Subcommittee on Government 
Operations, the gentleman from Michigan, Mr. Walberg, for an 
opening statement.
    Mr. Walberg. Thank you, Mr. Chairman, and I thank you for 
holding this hearing about how we can bring much-needed 
transparency and accountability to the Federal grantmaking 
process.
    This is a bipartisan issue, which is why earlier this year, 
we passed my bill, the GONE Act, requiring Federal agencies to 
take action to identify thousands of expired grant accounts, 
which are costing the taxpayers millions of dollars.
    I am pleased that legislation was signed into law, and that 
took a step in the right direction toward responsibly managing 
our grant accounts and eliminating wasteful spending. However, 
this process and in this hearing process more work needs to be 
done to make sure agencies are appropriately monitoring and 
managing their grant accounts.
    These grants open opportunities and provide important 
resources to law enforcement and our communities. So we have a 
duty to ensure these funds aren't being wasted and taking away 
opportunities from other potential recipients.
    So, again, Mr. Chairman, I appreciate the hearing, you 
holding it even as others are leaving, and we have an 
opportunity to finish some work that is good work.
    Thanks much. I yield back.
    Mr. Meadows. Well, I thank the gentleman from Michigan and 
the ranking member for hanging with me on a fly-out day. You 
can normally smell the jet fumes shortly on leaving, and so I 
understand that you both may have other places to be, but we 
really appreciate you being here.
    So let me--I am going to recognize myself for 5 minutes for 
a series of questions. Before I do that, I want to thank the 
staff. You know, so many times, we ask questions, we look at 
things, and good oversight really comes down to our staff and 
how well they do it.
    And we are about to leave for 7 weeks. They are so excited 
about that, but I want to make sure that part of the record is, 
is that we thank an incredible staff. Both on majority and 
minority, the staffs do a great job in providing this.
    Ms. McGarry, I want to come to you a little bit because we 
hear a lot of glowing success stories, and yet I am a little 
bit perplexed. We wouldn't be here today if everything was 
rosy, and so I want you to help me understand a little bit 
about what I mentioned in my opening statement about the 
prisons that were opened, I guess, on Navajo lands.
    I want to be the first one to be very clear. I have the 
Eastern Band of the Cherokee Indians, who has enjoyed a grant 
by your group, and a justice center in my home county. I am one 
of the few Members that actually--in fact, maybe the only 
Member that has a congressional office on tribal lands, and so 
I enjoy an extremely good relationship with my Native American 
constituents and yet recognize they are a sovereign nation as 
well.
    So this is not designed to really single this out as an 
entity is more as, hopefully, an anomaly and how we can make 
sure that it doesn't happen again if it is as bad as what I 
read. And I guess, when did the prisons open?
    Ms. McGarry. Chairman Meadows, thank you for your question.
    The grant was funded in 2009, and the OJP and OIG are still 
working to resolve these audit issues. And we rely heavily on 
the OIG's intensive, in-depth audits. And whenever issues are 
brought to our attention, we take action.
    And, in fact, in the next several weeks, members of OJP 
leadership are going out to the Navajo Nation to meet with the 
Navajo leaders to discuss an agreement that will satisfy the 
OIG's concerns, but also meet the criminal justice needs of the 
Navajo Nation.
    So this audit is still--we're still resolving the issues 
with the OIG, but we take this matter very seriously, and we 
look forward to our continuing dialogue with the IG.
    Mr. Meadows. Well, I appreciate that. So when did the 
prisons open?
    Ms. McGarry. Chairman Meadows, I'm going to have to get 
back to you on the exact date. I believe that the Tuba City 
facility opened last year, and the Kayenta facility is just 
waiting one last construction permit for it to open, a water 
cooler ----
    Mr. Meadows. So one of them is open, one of them is not. So 
the one that is not open, I would assume it has no inmates in 
it?
    Ms. McGarry. Not until it has the final certificate of 
occupancy.
    Mr. Meadows. So what is the monthly occupancy of the one 
that is open?
    Ms. McGarry. Chairman, I'm going to--I will have to get 
back to you on the exact occupancy. I know that the Navajo 
Nation ----
    Mr. Meadows. Average occupancy. I mean, plus or minus two 
inmates?
    Ms. McGarry. I can't give you those specifics. I'll have to 
get back to you. I know that the Navajo Nation is working 
closely with the Bureau of Indian Affairs to hire and train 
staffing to be fully operational.
    Mr. Meadows. Oh, so it is not operational?
    Ms. McGarry. I mean, it's operational, but I mean, to be at 
full capacity. It's--I know--I know it's not at full capacity, 
but I don't know the exact number.
    Mr. Meadows. Okay. Because the numbers I have would suggest 
that it is far from full capacity. So the one that opened up, 
how many beds does it have?
    Ms. McGarry. I don't have the specifics of their ----
    Mr. Meadows. Mr. Horowitz, can you help illuminate some of 
those questions for me?
    Mr. Horowitz. I believe, and I could find it, I think, 
here, it's about 80 or so beds, if I recall correctly, 80 to 90 
beds.
    Mr. Meadows. All right. So the one that is open is the 
smaller of the two facilities.
    Mr. Horowitz. Yes. And our numbers that we last received, 
it appeared that it had about 82 percent vacancy rate at the 
point we last heard about it, which was probably towards the 
end of last year, early this year. In terms of its occupancy, 
only 2 of the 11 parts of the facility at that point were yet 
opened.
    And part of the issue being, as Ms. McGarry said and one of 
the criticisms and concerns we had, is the way the Federal 
Government has set up these facilities, the Justice Department 
funds construction through their grants, but the Interior 
Department funds the staffing or a portion of the staffing. And 
if those two agencies aren't ----
    Mr. Meadows. That is a real problem.
    Mr. Horowitz. It is, and it was here. We found that if 
those two agencies don't have robust dialogues with each other, 
a facility can be built that is far too big for what staffing 
either for its needs, as we thought here, but just generally, 
even moving away from this facility in particular, one that BIA 
can't afford to--the Bureau of Indian Affairs can't afford to 
staff.
    Mr. Meadows. Well, so the whole scenario ``If you build it, 
they will come'' is not necessarily true in this situation, as 
it relates to both inmates and people to actually have the 
facility staffed. Is that correct?
    Mr. Horowitz. That's correct.
    Mr. Meadows. So--so, Ms. McGarry, and I am going to close 
and go to the ranking member here, and we will have another 
round of questions. But I guess my concern is, is as we have 
this--and I understand your statement that you are taking it 
seriously.
    But with the lack of specificity with regards to, you know, 
it is almost like we have this unbelievable outbreak of crime 
on the Navajo facility that we start to build these huge 
facilities that we can't staff and we don't have enough inmates 
for them, how can we feel good about the process of the grant 
being given if, one, they're not finished, and we will get to 
$32 million of, I guess, money that is out there.
    I mean, do you see a real systemic problem with our 
process, or is this it just happened that somebody who was 
managing it on this particular case failed to do what they were 
supposed to do?
    Ms. McGarry. Well, Congressman, there have been two 
intervening laws that have increased the criminal jurisdiction 
for the Navajo Nation.
    Mr. Meadows. Yes, I am very aware of those. Like I say, I 
have got Native American tribes in my area, and they actually 
lobbied for some of that. But it doesn't necessarily translate 
into additional inmates. It possibly would, but it doesn't 
necessarily.
    But those two laws wouldn't indicate that we should build a 
facility that is two and a half times what the grant was made 
for, would it?
    Ms. McGarry. In this particular case, we consulted research 
from the National Institute of Corrections about planning 
correctional facilities for the future, recognizing that if 
there's intervening laws that greatly increase the criminal 
jurisdiction of a tribal community that you are to recognize 
that and to not build facilities that will last 20 years.
    Mr. Meadows. So, Mr. Horowitz, would you agree with that 
analysis?
    Mr. Horowitz. I think it's obviously fine and smart to plan 
for a 20-year period.
    Mr. Meadows. Sure.
    Mr. Horowitz. I think the issue from our standpoint was the 
building size is so disproportionate to what the current inmate 
population was and, frankly, still is once the prison is now 
open that, consistent with the master plan that was actually in 
place at the time at the Navajo Nation from 2007-2008, that 
master plan has proven to continue to be--look quite accurate 
and, in fact, that was a document that should have been 
followed.
    Mr. Meadows. So, so they adjusted the master plan that they 
started with. I guess you adjusted it after the laws were 
passed, thinking that it was going to change.
    Ms. McGarry. Yes, sir.
    Mr. Meadows. Okay. And you do see that was an error at this 
point?
    Ms. McGarry. We're still working through these issues with 
the IG.
    Mr. Meadows. Okay. Well, I will come back because I see it 
has a major error, and if that is going to be your testimony, 
we have got a little bit deeper dive to go into. You know, it 
is one thing to make a mistake. It is another to ignore a 
mistake and not admit that you have it. And I guess if your 
statement is, is that you think that the jury is still out on 
this, we will come back to that.
    I am going to recognize the ranking member for a gracious 9 
minutes if she needs it.
    Ms. Plaskett. Thank you.
    I want to thank you all for being here today and for the 
information that you are sharing with us.
    Ms. McGarry, I know that OJP has experienced some of those 
challenges that we are here talking about, and I understand and 
it appears from the testimony that improvement in your 
management processes are taking place. Can you verify the 
amount of closures in fiscal year 2015 of the amount of single 
audits and IG audit reports that were done?
    Ms. McGarry. Thank you, Ranking Member Plaskett, for your 
question.
    On those specific examples, I will have--the numbers, I 
will have to get back to you. But ----
    Ms. Plaskett. I have a listing of 208 single audits and 23 
IG audit reports, which means the closure and implementation of 
620 recommendations.
    Ms. McGarry. Yes. I recall that that is our figure for last 
year.
    Ms. Plaskett. Okay, Mr. Horowitz, it is good to see you 
again.
    Mr. Horowitz. Good to see you.
    Ms. Plaskett. And although I know that our staff are really 
happy for us to be gone for 7 weeks, I don't know about the 
district staff, how they feel about, you know, us being there 
for 7 weeks now.
    Mr. Meadows. It is not vacation.
    Ms. Plaskett. Right, right, right. So is it true that out 
of the 54 recommendations your office made in the 6 audits 
being highlighted here, OJP has closed 44 and resolved 8. So 
leaving only two recommendations unresolved?
    Mr. Horowitz. I don't have the precise numbers with me, 
Congresswoman, but those numbers wouldn't surprise me 
generally. I think that what we found is we generally work with 
OJP to resolve our recommendations when they come out, and we 
have found that with many of the recommendations that they move 
forward and have closed them. And we work with them to try and 
address the remaining audits because as--open recommendations.
    Because as Ms. Goodwin noted with GAO, we also continue to 
do regular follow-ups with OJP and make sure that that happens.
    Ms. Plaskett. How long do those take for the closing out of 
those audits, the recommendations being implemented?
    Mr. Horowitz. It depends. The vast majority get closed 
within, I would say, 2 to 3 years.
    Ms. Plaskett. Two to 3 years? Is that a small--is that 
quick, or is that long?
    Mr. Horowitz. I think from our standpoint, we hope to close 
all recommendations out within 1 to 2 years. So once 
recommendations remain open for 2 years or longer, they start 
becoming a concern to us. And one of the things that we've done 
starting last year was post on our Web site all unimplemented 
recommendations, all open recommendations.
    So the public can see essentially an aging report of our 
open recommendations. And since we have posted that, there has 
been considerable follow-up in the department, including 
through the leadership of the Deputy AG's office to try and 
move some of those to closure.
    Ms. Plaskett. Do they always agree with the recommendations 
you are making and then implement them, or are there instances 
where they are like, ``No, we don't agree with you, and we are 
not going to implement that.''
    Mr. Horowitz. During my tenure in the 4 years I've been 
here and my understanding from my predecessor, it was rarely 
the case and it has been rarely the case where we have not 
agreed. The Navajo Nation audit is one where there are open--
from our standpoint, open, unresolved recommendations. And we 
are continuing the dialogue with OJP to try and move towards a 
resolution process.
    Ms. Plaskett. Okay. And Dr. Goodwin, I know that the GAO 
reports, they are not audits. But is it true that DOJ has 
implemented about 13 of the 17 recommendations your agency has 
made to DOJ regarding department-wide and OJP-specific grant 
administration?
    Ms. Goodwin. Yes. That's correct. The report we issued in 
2012, that had eight recommendations, and as of this July, 
they've closed seven. There is one, the final one they are in 
the process of getting us the documentation so we can--we hope 
to close that out soon. But we don't close anything out until 
we've done our own review.
    Ms. Plaskett. So every year, approximately how many audits 
or recommendation--reports do you do for OJP?
    Ms. Goodwin. I don't have the exact numbers on that, but we 
are continuously, you know, being asked to look at OJP 
programs.
    Ms. Plaskett. Okay.
    Ms. Goodwin. So it's quite a few.
    Ms. Plaskett. And since I get a little more time, the audit 
of the DNA Backlog Reduction Program, I was hoping to discuss 
that one. According to the IG's office, OJP requested that this 
audit be done to better ascertain the extent to which grantees 
were accurately reporting and using program income as well as 
how the National Institute of Justice could better manage the 
program.
    Ms. McGarry, is that an accurate representation of how the 
audit and why the audit was initiated?
    Ms. McGarry. Yes, Congresswoman. And this is a great 
example of our collaborative working relationship with the OIG. 
We looked at the program income of the DNA grant program and 
saw that we thought there were issues and that we would rely on 
the expertise of the IG, who has forensic auditors that we 
don't have to come in and help us examine this issue.
    Ms. Plaskett. Great. I think that shows that, you know, OJP 
is being proactive in terms of its own management and oversight 
of its programs, and the audit produced valuable results. 
Although it only looked at a narrow sample of four grantees, it 
found that NIJ could do a better job of identifying grantees 
with the potential for generating program income and working to 
ensure that grantees understood how to calculate income and use 
it appropriately.
    And I think that is important because too often we leap to 
the conclusion that individuals who are not fulfilling the 
requirements are doing so because they are seeking to break the 
law, as opposed to it being individual and grantees simply not 
understanding the requirements that are put on them by taking 
the grant.
    Would you say that that is correct in some instances?
    Ms. McGarry. I would say that that is correct, and in fact, 
as a follow-up to the OIG's review, our Office of Audit 
Assessment and Management is doing a comprehensive program 
assessment of program income, and we've already put 
instructions into the solicitation to applicants to clearly 
provide that guidance that they need.
    Ms. Plaskett. Well, I am going to ask you, for my own 
purposes, for my own district, I know that the Virgin Islands 
has had a very difficult time with OJP and with the kinds of 
grants that they have been given, fulfilling it in the audits 
that they have, and it has really held up them moving forward 
and being able to provide assistance to the people of the 
Virgin Islands.
    And I understand that there has been quite a bit of 
discussion within our local agencies that have management and 
oversight over that to be able to get beyond what was in the 
past. Everyone has said that it had a lot to do with the 
technical support really providing the kind of compliance and 
management that they needed to have to fulfill the requirements 
of those grants.
    Do you find that you have resources and individuals who 
follow the grant from the beginning to the end? Because I think 
that one of the problems we have seen in the Virgin Islands is, 
is that they want to do the right thing. They have been 
audited, but the auditors change. And so they have a new person 
who then has to go and review all of that all over again.
    What are you doing regarding that?
    Ms. McGarry. For the Virgin Islands, we work closely with 
the IG. The recommendations came out of an IG audit, and that's 
where the role of the Office of Audit Assessment and 
Management, they provide that consultation and close work with 
the staff in the Virgin Islands, and they have made great 
progress over the last year resolving their issues.
    And then we work as the liaison between the Virgin Islands 
public safety staff and the IG to resolve and close those 
recommendations.
    Ms. Plaskett. Okay. Thank you very much.
    Thank you for your indulgence, Mr. Chairman. You are such a 
great guy.
    Mr. Meadows. Well, you are very kind. Can you write that 
down for me? No.
    [Laughter.]
    Ms. Plaskett. It is on the record.
    Mr. Meadows. Oh, thank you. Thank you.
    I recognize the gentleman from Michigan, the vice chair of 
the Subcommittee on Government Operations, Mr. Walberg.
    Mr. Walberg. Great guy, yes.
    [Laughter.]
    Mr. Walberg. Two hours ago, my wife texted me a picture of 
her holding our new 10-month-old granddaughter in her arms that 
she met at the airport in Detroit, and she is spoiling her 
right now while I am in this meeting. And so we will vote that 
later, Mr. Chairman.
    Mr. Horowitz, good to see you again. You discussed in your 
testimony the importance of monitoring grants to ensure that 
recipients fulfill whatever obligations or conditions they 
agreed to in the first place. Could you expand on it a little 
bit more how that takes place? Give us a sense of what your 
work has shown you about OJP's monitoring of grantees and their 
projects.
    Mr. Horowitz. Thank you, Congressman.
    What we have seen is, is as a general matter, OJP doing a 
fine job in ensuring that the reports they get back demonstrate 
the money that was distributed was used, generally speaking, 
for the purpose of the grant. The problems we find are when we 
go out and learn that those reports aren't necessarily accurate 
that are coming back, and we find problems behind the 
reporting.
    But what we're finding isn't done systemically at a level I 
think should be done is reporting back on performance measures, 
on not just is the money being used for the purpose it was 
sent, but what's the result of that investment by the 
Government and the taxpayers in the program?
    The example I like to cite to was a program where OJP gave 
out--and this is a few years ago now, but I think the example 
is still relevant--monies to two local police departments to 
buy drones.
    Mr. Walberg. Buy drones?
    Mr. Horowitz. Buy drones.
    Mr. Walberg. Okay.
    Mr. Horowitz. And in fact, the drones were purchased. No 
issue about a misuse of funds. They bought the drones. The 
problem was the two departments had not gotten the FAA 
certificates and other regulatory approvals they needed to 
actually use the drones.
    And so when we went out, we determined that, yes, they used 
the funds per the grant. There was nothing improper about their 
use of the funds. But from a taxpayer standpoint, the drones 
never flew. They were never used.
    And so an investment had been made by the taxpayers, used 
by the local police as required, but after the fact, they could 
never get them out.
    Mr. Walberg. No outcome, yes. Okay.
    Mr. Horowitz. And that's an example of the kind of 
measurement you really want to get to. You want to get past was 
there a fraud or a misuse to, hopefully, there isn't, and then 
what was the value in return.
    Mr. Walberg. I guess, following up, Ms. McGarry, do you 
believe that OJP is adequately monitoring these grants? We have 
just heard this testimony. Do you see additional layers in your 
monitoring process that you can add?
    Ms. McGarry. Thank you for the question.
    We're very committed to improving our monitoring process, 
and each year, we evaluate the recommendations from the OIG and 
the GAO to make those changes. And in fact, we are focusing 
very closely on measuring the success of our grants to ensure 
accountability of results.
    The Office of Audit Assessment and Management has stood up 
a business process improvement to look OJP wide through all the 
grant components to assess their performance measures and the 
progress reporting, and they're in the process--the business 
process improvement team is in the process of making 
recommendations. And we hope to implement to make our 
monitoring of performance more robust.
    Mr. Walberg. Give me an idea of what, at least as far as 
the draft so far of these proposals, what are some of those?
    Ms. McGarry. I have not seen the draft recommendations. I 
think they're still being developed. But I'm happy to get--to 
come back to the committee and share those recommendations when 
we receive them.
    Mr. Walberg. I would assume it would be in the field seeing 
exactly if the drone is flying, for instance, if the license 
hangs on the wall?
    Ms. McGarry. Oh, we have made absolutely specific changes 
around the purchase of drones. Now we put in standards and 
procedures in place immediately after receiving that report 
several years ago, and no law enforcement agency can purchase 
an unarmed aerial system without direct approval from the BJA 
director, and it must be accompanied by an FAA certification 
for operation.
    Mr. Walberg. Okay. I yield back.
    Mr. Meadows. I thank the gentleman, and I hope he makes it 
very quickly to hold that 10-month-old grandbaby. So we are 
going to do a second round as time permits here, and so I will 
recognize myself.
    So let me follow up just a little bit on some of the other 
information that we had because Mr. Sedgwick was talking about 
the progress that we have made and how from an outsider's point 
of view and from an insider's point of view we have seen some 
real progress. And so as I looked at that, you were nodding, 
and I was seeing that smile on your face that we can all 
applaud.
    One of the concerns that continues to keep coming up in 
this, this particular testimony is that you keep referring to 
the audit that the IG does. And as much as an audit is 
appreciated and as much as I rely on those, and Mr. Horowitz 
can tell you that I comb over them with great detail. And so as 
much as we start to rely on that, my concern really gets in 
terms of the internal controls, the ones that Mr. Sedgwick was 
talking about that we made great progress. In terms of 
performance, a performance matrix and saying, okay, we made the 
right decision and these are the right things that have 
happened, do you have that in place, and is that significant?
    And I guess what I would like to say is in a perfect world, 
those performance matrix on what is there and what needs to be 
there, maybe to have you, Ms. McGarry, tell me what is there, 
and then Ms. Goodwin and Mr. Horowitz comment on what you would 
like to see. So I will start with you.
    Ms. McGarry. Chairman Meadows, we have, as you heard, put 
many agency-wide standards, procedures, and internal controls 
to prevent and catch any problems, and we look at the continuum 
of the grant process. As I said, we've put in pre-award risk 
analysis to try to prevent problems, require financial training 
for new grantees that often are the ones that have trouble 
following the rules.
    We also have programmatic monitoring with recommendations. 
And the Office of Audit Assessment and Management follows up on 
all those recommendations.
    Mr. Meadows. And I guess I understand that, but that is not 
qualitative necessarily. You know, that is, again, it can be 
just a check of the box. We have checked with the going out, 
and they said, you know, we have got the drones, and we are 
working on it.
    What I am looking for is something that is more qualitative 
and quantitative perhaps in its measuring where you can, for 
lack of a better word, you can get a score that it is a 9.2 on 
compliance, and I don't expect that. But something that is--so 
do you see my point?
    Ms. McGarry. Absolutely. And that is a very good question, 
and we have begun to make those changes. In our in-depth 
programmatic and financial monitoring, we are requiring on our 
review to look at source documentation and not just take the 
word on a report, but to dig down and look at the source 
documentation and do that verification.
    This year, the Office of Audit Assessment and Management is 
setting up a quality review process to also dig in on these 
internal monitoring to make sure that, indeed, what is being 
reported is true from the grantees.
    Mr. Meadows. All right. Ms. Goodwin, what would you look to 
see from a GAO perspective?
    Ms. Goodwin. I'll speak to the VOCA grant funds that we 
looked at.
    Mr. Meadows. Right.
    Ms. Goodwin. And of those recommendations, three are still 
open.
    Mr. Meadows. Right.
    Ms. Goodwin. And so if we think about one of the 
recommendations we made has to do with the 12-month project 
period length and some of the difficulties and challenges the 
grantees were having in kind of just getting their awards and 
starting to engage in those activities.
    So before a grantee can actually get the award, they have 
to be--OJP does this review process that takes about 2 months.
    Mr. Meadows. Right.
    Ms. Goodwin. And so that's 2 months of the 12 year--I'm 
sorry, of the 12 months that a grantee has to kind of engage in 
their activities.
    So when I mentioned that it was delaying a grantee's 
ability to kind of get their funds and then start engaging in 
those activities, the internal--the internal stuff that needs 
to happen at OJP is affecting a grantee's ability to really 
engage and do activities related to their grant funds. Since 
it's a 12-month period, 2 months are already gone.
    Mr. Meadows. So what you are saying--so what you are saying 
is the delay at OJP in terms of decisions that are made cuts 
into their 12-month window of deploying that grant?
    Ms. Goodwin. Exactly.
    Mr. Meadows. Okay. And you would agree with that, Mr. 
Sedgwick, from an outsider. Now I know you get grants. So I 
know you are going to be cautious on how you respond to this. 
You know, I found the ironic nature of somebody witnessing on 
somebody who is making the decision, but go ahead.
    Can you hit your mic?
    Mr. Sedgwick. Yeah, I actually coincidentally just finished 
writing my last grant proposal this cycle on Monday night at 
11:59 p.m. So a lot of this is fresh in my mind.
    There are, for example, in the proposal I just completed, 
pretty clearly the first 4 months of a 2-year grant are going 
to be spent not actually working on the grant, but actually 
kind of getting in place all of the agreements and all of the 
clearances and so on.
    Mr. Meadows. To make sure she is happy?
    Mr. Sedgwick. Yes. Now I will say one of the things in this 
proposal that I think speaks to the issue you're raising 
because I think the way I would phrase what you're asking a 
question about is it's one thing to ask people for outputs. 
It's another thing to ask them for outcomes, and I'd push it 
even further and then say, and what are the impacts?
    That is, you know, the output, presumably, affects people's 
behaviors in a positive direction, and that's an outcome. But 
then you have to ask the further question, if we improve the 
behavior of a bunch of people in the community, what's it do 
for the overall health or wellness of the community?
    And what I particularly--I think there's still some kind of 
areas for improvement in terms of clarifying that progression 
of outputs, which everybody is familiar with; outcomes, which 
people are getting more familiar with; but still the next step 
is the impacts.
    What I will give OJP tremendous credit on in this most 
recent proposal that I worked on that was very large was the 
emphasis, and I think this will get to the question you were 
raising, an emphasis on we had to link goal--a problem to a 
goal, to an objective, to a task, and then to a deliverable. 
And it was over and over again in that RFP that those 
deliverables had to be quantifiable.
    Mr. Meadows. Okay. Thank you.
    Mr. Horowitz, what about you?
    Mr. Horowitz. Well, I think that is a big part of it, what 
Mr. Sedgwick just mentioned, which is in the upfront, early in 
the process understanding what's the outcome that we are 
looking to achieve? If it's a grant related to reducing 
truancy, not measuring not just how many children have you put 
in the program, but what was the impact on truancy in the 
school, in the community?
    What measurements are you going to require the grant 
recipient to send to you? Because that's really what is 
required here. What goes on throughout this process is the 
inflow of information that's required of a grant recipient to 
OJP. That starts OAAM and other entities at OJP to look at 
that, and when they see anomalies, they'll often call us.
    But it's all because of the inflow of information that's 
demanded or required, pursuant to the grant. So it really 
starts right up front.
    I'll add one other part, one other issue to the discussion, 
which I think is important in that we're looking at in our 
ongoing review of the department's oversight of violent crime 
efforts that it has, and that is how are the three grantmaking 
components of the Justice Department coordinating with other 
law enforcement components at the Justice Department on the 
efforts to deliver to local law enforcement? Are those getting 
coordinated?
    Because that's another concern we've had is it looks as 
though, generally--this is a general statement. But the 
question that we're asking is, is the grantmaking that's going 
out to the local--State and local law enforcement, which 
obviously is partnering with Federal law enforcement ----
    Mr. Meadows. Right.
    Mr. Horowitz.--and the FBI and DEA and ATF and Marshals, et 
cetera, is there coordination going on within the Justice 
Department itself over how best to deal with and serve law 
enforcement needs at the local level? And so that's another 
issue.
    Mr. Meadows. And so you are saying that is not happening? 
Is that happening, Ms. McGarry?
    Ms. McGarry. Well, certainly ----
    Mr. Meadows. To the extent that it needs to happen. How 
about that? I will give you a qualifier.
    Ms. McGarry. Well, we share that goal of having 
coordination.
    Mr. Meadows. I understand that.
    Ms. McGarry. And we are doing it.
    Mr. Meadows. Is it happening or not?
    Ms. McGarry. Yes. In the Violence Reduction Network ----
    Mr. Meadows. Really?
    Ms. McGarry.--the grant components are working side by side 
with the DOJ law enforcement.
    Mr. Meadows. And so you have how it affects violent crimes 
and how it--the outcomes? So we would like to have a copy of 
that because I haven't been able to find that.
    Mr. Horowitz, what am I missing?
    Mr. Horowitz. We're in process of the audit. So I would 
probably be ----
    Mr. Meadows. So you are saying that you actually have that, 
Ms. McGarry?
    Ms. McGarry. Through ----
    Mr. Meadows. Because it is like building a school and 
educating someone and not having whether they get a job or not. 
That is the analogy that I make is that if we are going to 
invest this kind of dollars and we are--whether it is drug 
intervention or juvenile violence or abuse or any of those, we 
can do a lot of great programs. But if it doesn't stop what we 
are trying to stop, then it is just money that is being spent.
    It is like going to university and ending up coming back, 
driving a taxi cab because you can't get a job because of the 
degree you get. Do you follow me?
    Ms. McGarry. Absolutely. And we share your goal. And as Mr. 
Sedgwick said ----
    Mr. Meadows. So do you have--do you have the matrix to be 
able to figure out whether we are doing that?
    Ms. McGarry. We've put the matrix in the solicitation, and 
our business process improvement work we're doing is how can we 
better capture that to tell that complete story.
    Mr. Meadows. Okay. So will you commit to this committee 
that in the next 120 days that you will look at what you have 
put in, what Mr. Sedgwick just had to put his grant proposal in 
for, in terms of a way for you to monitor this going forward?
    And let me--this all comes back to what we see is the 
Navajo issue. And my big concern there is, as a fiscal 
conservative, I get beat up every time I give money for grants, 
and I have defended you. I have defended Department of Justice 
on a number of grant operations as a fiscal conservative.
    But any time that we build two prisons 75 miles apart that 
really are not being occupied and really don't have--unless you 
are going to ship in Federal inmates from outside the Navajo 
territory, it is going to be very hard to fill it up. I mean, I 
know the numbers, and I know what it is in my district, and you 
are going to be shipping in inmates to fill up something that 
you didn't have to build and that we have got a $32 million 
excess. Do you see the problem?
    Ms. McGarry. We certainly are taking this issue seriously.
    Mr. Meadows. So you don't see it as a problem?
    Ms. McGarry. I see it as an issue that we're still in the 
process of working with the IG and the Navajo Nation to 
resolve.
    Mr. Meadows. Okay. Here is my--and I am going to be nice. I 
want to go home, and you seem like a real nice individual. And 
so I am going to be a little bit perhaps indirect in my 
suggestion.
    We need within a 60-day timeframe for you to get back to 
this committee on how you are going to resolve the outstanding 
issues with the IG. And I don't mean that ``We are taking it 
serious, and we are working hard.'' I mean a real plan on how 
we are going to get this resolved.
    Because it inherently undermines the potential for future 
grants and future funding if this is believed to be across all 
of your grantmaking capability. And here your sworn testimony 
today is this is isolated, and you are committed to getting it 
worked. Is that correct?
    Ms. McGarry. We are committed to resolving these issues.
    Mr. Meadows. And this is isolated?
    Ms. McGarry. In my--this is an anomaly that we are working 
through.
    Mr. Meadows. All right. I recognize the ranking member for 
a series of questions.
    Ms. Plaskett. Thank you.
    Dr. Sedgwick, you have done some enormous work in this area 
and have a vast amount of experience with OJP. I wanted to talk 
with you about the arduous process for applicants that has in 
the past and there has been some discussion about the lack of 
transparency. And if we want the best programs to apply for OJP 
grant dollars, we must have a process that is completely fair.
    Now you talked in your testimony about the improvements 
that you have seen regarding detailed online training and 
releasing unedited peer review comments and et cetera. You have 
also testified about that in your tenure, the Office of Audit 
Assessment and Management was created. Can you tell us why this 
office was created?
    Mr. Sedgwick. I think to get at a lot of the questions that 
you all have been asking today. These are not new questions. 
The whole notion--you know, the Office of Justice Programs 
distributes a very large amount of money to law enforcement and 
to public safety in all its various manifestations in the 
United States. And there's always questions about was that 
money appropriately used, and did it have the intended effect?
    So this is--you know, these are not new issues. These have 
always been there, and I think they always will be there. And 
so that's why in my written statement, I ended with a comment 
about the importance of a culture of continuous improvement 
because I think, you know, during my tenure and my experience 
in OJP and its predecessor, OJARS, the organization has come a 
long way.
    But there's always going to be challenges, in part because 
the nature of the problems that OJP is trying to address are 
constantly changing. I'm kind of struck by when I was in the 
Bureau of Justice Statistics in 1984, the only thing anybody 
cared about were the FBI index crimes. So you really worried 
about seven crimes.
    I'm away for 22 years. I come back to BJS in 2006, and all 
of a sudden, people are talking about Internet crimes against 
children and human trafficking and a whole set of crimes that, 
quite frankly, nobody even thought about in 1984. And so, you 
know, you've got an agency that is grappling with an ever-
changing mix of what constitutes illegal behavior in the United 
States.
    At the same time that that's going on, so it's trying to 
chase a moving target, the bar is being raised. And I think OJP 
has been--has worked very hard at raising its own performance 
and moving along that continuum that I mentioned earlier where 
in the old days, you only monitored outputs.
    Now we're well into the era of monitoring outcomes in terms 
of, all right, you ran this many people through your program, 
how did you move the needle? Tell me what improvement looks 
like, and how does that get measured?
    And I think now we're on the cusp of people beginning to 
say, well, okay, if we change the behavior of X number of 
citizens in a community, what's that do to make that community 
better, safer?
    We toss around the phrase ``community wellness,'' but I 
think that has to be taken very seriously. How is the community 
qualitatively improved as a result of the programs that are 
being funded by the Office of Justice Programs?
    Ms. Plaskett. And is that what the Office of Audit 
Assessment and Management ----
    Mr. Sedgwick. Very much was part of helping--first of all, 
helping applicants understand their responsibility in terms of 
measuring the effectiveness of what they were doing and 
reporting it to OJP. Then also helping OJP use that information 
that they were receiving from the field to say, all right, how 
is this particular grantee performing? Okay. They've got a 
great proposal, looks good, but is the needle moving, and how 
would we know, right?
    And I think that's--you know, I think that's a very 
important part of what the purpose of the Office of Audit 
Assessment and Management was. I can remember, I was in BJS 
when that agency actually first got authorized and stood up, 
and kind of taking a whole set of bureaus within OJP and 
getting them to accept the idea that this Office of Audit 
Assessment and Management was going to kind of get them to 
adopt a common set of performance measures was a bit of a 
chore.
    I mean, if you go way back to my beginning, 1984, before 
the reauthorization of the Justice Department, in 1984 every 
one of the bureaus in what is now OJP was by statute completely 
independent, except for one thing. The Assistant Attorney 
General had to approve your press releases, but everything else 
you could do on your own.
    So part of what you're kind of looking at and the kind of 
challenge is overcoming a culture, now you might say that's 32 
years ago, but in organizations and bureaucracies, 32 years is 
like saying before lunch today, right? I mean, for us, it seems 
like a generation, but in organizational terms, a lot of 
organizations, 32 years is the blink of an eye. And it takes a 
lot of work to move a culture of an organization like OJP, 
where you have a history of autonomy and get people to 
cooperate, right, and to work together.
    Ms. Plaskett. And you feel that it is moving that way?
    Mr. Sedgwick. Absolutely. I don't have any doubt at all.
    Ms. Plaskett. Okay, thank you.
    Mr. Sedgwick. Yes.
    Mr. Meadows. The chair recognizes the vice chair of the 
subcommittee, Mr. Walberg.
    Mr. Walberg. Thank you, Mr. Chairman.
    There was a gun buyback program, PSN--Philadelphia Safety 
Net program. And in that program, the policy was to give away 
$100 gift cards in exchange for guns. However, hundreds of the 
gift cards went missing, and the sole employee and executive 
director of PSN reportedly used grant money to pay for personal 
things like parking tickets, hotel stay, gasoline purchases, 
clothing, restaurants, meals, and cash withdrawals.
    And so, Ms. McGarry, did OJP know before PSN gun buyback 
program was concluded in March of 2012 that funds were being 
misspent?
    Ms. McGarry. Well, we've put several agency-wide standards 
and procedures in place to catch these type of problems. And we 
became aware of the issues, and our prevention mechanisms now 
are this grantee was an earmark and now would be put through 
the pre-award risk. And as a new grantee and as a small 
nonprofit would be required to do financing training to prevent 
these type of problems.
    Mr. Walberg. But did you know before it was concluded that 
the misspending had taken place?
    Ms. McGarry. I'm not personally aware. I believe that we--
our managers did not know the extent of the problem.
    Mr. Walberg. Has there been any check to find out why the 
managers didn't know that there was a problem?
    Ms. McGarry. Yes. And that's part of our continuous 
improvement. We've enhanced our grant manager training. We've 
added questions for programmatic managers about financial when 
they're going out, to give them checks to look more deeply into 
financial conditions of grantees. So that is part of our 
continuous improvement. Always learning from these 
irregularities and issues and making changes to help prevent 
them in the future.
    Mr. Walberg. Feel pretty confident now that an entity like 
that with basically one sole manager of the program, executive 
director, with this much money is detected hopefully before --
--
    Ms. McGarry. Yes. I think the measures of our pre-award 
risk assessment, intensive oversight of this type of a grantee 
would be--would be solid to detect and prevent these problems.
    Mr. Walberg. Mr. Horowitz, what was OJP's oversight like 
throughout that program as you looked into it?
    Mr. Horowitz. Well, we obviously saw a series of concerns 
there in the way the funds were being used, the lack of 
controls matching up, the gift cards that were given out with 
the firearms that were being purchased. In fact, there are 
still unaccounted for numbers of gift cards because there were 
more gift cards given out than there were guns collected.
    Mr. Walberg. Guns brought in.
    Mr. Horowitz. One of the things particularly concerning to 
us was that the executive director of the agency received 
almost $350,000 in compensation awarded by his sister, who was 
the chairman of the board.
    So those kinds of self dealing conflicts, lack of controls 
over program obviously ----
    Mr. Walberg. Would that have been expected as normal to see 
that if you saw that type of relationship, brother and sister 
running a program with that much money attached to it, handing 
out gift cards, over $300,000 salary? Should that have been 
something that would have been sniffed out very quickly?
    Mr. Horowitz. It's certainly something that if not done 
quickly, given the lapse of time, certainly we would have hoped 
that at some point along the way that those kinds of controls 
that were lacking in a place like PSN would have been 
identified sooner.
    And again, part of this goes to reporting back on results. 
What were the results of this audit? Well, if the executive 
director is taking a third of the money or so for himself, then 
there is a problem with the program.
    Mr. Walberg. At what point during the process would PSN 
have reported to OJP what it was spending the money on? I ask 
that of Ms. McGarry.
    Ms. McGarry. Each grantee has to submit a quarterly 
financial report, and in that report, they would designate what 
the money was being spent for. And this is one of the 
improvements we've put in place is to not just rely on these 
reports, but to have our managers look for source documents 
through the process.
    Mr. Walberg. And stay on top of it? Okay.
    Ms. McGarry. We're trying.
    Mr. Walberg. Mr. Chairman, I yield back.
    Mr. Meadows. I thank the gentleman.
    This has been a good hearing. I want to just thank each of 
you for your time. We have a few ``to dos'' that are out there, 
and Ms. McGarry, I would encourage you strongly to work with 
Ms. Goodwin and Mr. Horowitz in terms of those measurable 
matrix that I talk about, performance standards, how we can 
make sure.
    You have such a kind way of coming back that it makes a guy 
like me actually have empathy for you, and I guess that is a 
good thing. So it is--but in doing that, I want to underscore 
the seriousness of some of this, and I would love to come and 
visit with your sub-agency and thank your workers for the job 
that they do.
    It is real easy when we start to focus in on these problem 
areas to suggest that everything is awful, and we didn't hear 
that today that everything was awful. I think we heard some 
real things that concern us. And what concerns me is not just 
with the hard-working American taxpayer dollar that we are 
looking at in this $32 million discrepancy.
    What concerns me is the long-term viability of a grant 
program that I see a real need in, that has been benefited my 
constituents, and that if we allow these kind of things to 
happen and continue to happen, that the money will go away. 
Because they are going to use the Navajo example or perhaps the 
buyback program example, and they are going to paint a broad 
brush.
    And what that means is that there will be individuals 
without protective body armor perhaps, if there were not the 
right amounts of money spent. And so to put it in perspective, 
and I really want you--we have made a commitment here to work 
on these two outstanding issues with Mr. Horowitz and his team, 
but I want to put it in perspective.
    When we look at increasing something 250 percent. So we 
went from the original design, we expanded it 250 percent based 
on a couple of jurisdictional areas that should not increase 
the inmate population that much. It is like building--
originally setting out to build the Capitol, this facility, and 
instead building Nationals Stadium and then building Nationals 
Stadium again.
    So do you see why it really creates a real problem? The 
numbers are going to have to--I am going to continue to follow 
up, and I want to hear back from you, as we have suggested.
    But again, I want to thank all of you for your testimony, 
and if there is no further business before the committee, the 
Committee on Government Operations stands adjourned.
    [Whereupon, at 3:41 p.m., the subcommittee was adjourned.]

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