[Senate Hearing 108-48]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 108-48

 
 NOMINATIONS OF HON. CLARK KENT ERVIN, JANET HALE, AND LINDA M. SPRINGER

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


                                HEARING

                               before the


                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                 ON THE

 NOMINATIONS OF HON. CLARK KENT ERVIN TO BE INSPECTOR GENERAL FOR THE 
 DEPARTMENT OF HOMELAND SECURITY, JANET HALE TO BE UNDER SECRETARY FOR 
   MANAGEMENT FOR THE DEPARTMENT OF HOMELAND SECURITY, AND LINDA M. 
SPRINGER TO BE CONTROLLER OF THE OFFICE OF FEDERAL FINANCIAL MANAGEMENT 
                FOR THE OFFICE OF MANAGEMENT AND BUDGET

                               __________

                           FEBRUARY 27, 2003

                               __________

      Printed for the use of the Committee on Governmental Affairs


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                               WASHINGTON : 2003


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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Deleware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas
              Michael D. Bopp, Staff Director and Counsel
                    Johanna L. Hardy, Senior Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                  Lawrence B. Novey, Minority Counsel
                   Susan E. Propper, Minority Counsel
           Jennifer E. Hamilton, Minority Research Assistant
                     Darla D. Cassell, Chief Clerk

                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Collins..............................................     1
    Senator Carper...............................................     2
    Senator Lautenberg...........................................    15
    Senator Akaka................................................    17
    Senator Pryor................................................    20
Prepared statement:
    Senator Voinovich............................................    29

                               WITNESSES
                      Thursday, February 27, 2003

Hon. Kay Bailey Hutchison, a U.S. Senator from the State of Texas     3
Hon. John Cornyn, a U.S. Senator from the State of Texas.........     3
Hon. Elizabeth Dole, a U.S. Senator from the State of North 
  Carolina.......................................................     5
Hon. Clark Kent Ervin to be Inspector General for the Department 
  of Homeland Security...........................................     6
Janet Hale to be Under Secretary for Management for the 
  Department of Homeland Security................................     8
Linda M. Springer to be Controller of the Office of Federal 
  Financial Management for the Office of Management and Budget...    21

                     Alphabetical List of Witnesses

Cornyn, Hon. John:
    Testimony....................................................     3
Dole, Hon. Elizabeth:
    Testimony....................................................     5
Ervin, Hon. Clark Kent:
    Testimony....................................................     6
    Prepared statement...........................................    30
    Biographical and professional information....................    32
    Responses to pre-hearing questions...........................    38
    Responses to post-hearing questions..........................   124
Hale, Janet:
    Testimony....................................................     8
    Prepared statement...........................................    55
    Biographical and professional information....................    57
    Responses to pre-hearing questions...........................    63
    Responses to post-hearing questions..........................   134
Hutchison, Hon. Kay Bailey:
    Testimony....................................................     5
Springer, Linda M.:
    Testimony....................................................    21
    Prepared statement...........................................   105
    Biographical and professional information....................   107
    Responses to pre-hearing questions...........................   114
    Responses to post-hearing questions..........................   136

 NOMINATIONS OF HON. CLARK KENT ERVIN, JANET HALE, AND LINDA M. SPRINGER

                              ----------                              


                      THURSDAY, FEBRUARY 27, 2003

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 11:03 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Susan M. 
Collins, Chairman of the Committee, presiding.
    Present: Senators Collins, Coleman, Akaka, Carper, 
Lautenberg, and Pryor.

             OPENING STATEMENT OF CHAIRMAN COLLINS

    Chairman Collins. The Committee will be in order.
    Today the Committee of Governmental Affairs is holding a 
hearing to consider three nominations, Clark Kent Ervin to be 
the Inspector General of the Department of Homeland Security; 
Janet Hale to be the Under Secretary for Management at the 
Department for Homeland Security; and Linda Springer to be the 
Controller of the Office of Federal Financial Management at the 
Office of Management and Budget.
    In January the Committee approved the nominations of 
Governor Ridge to be the Secretary of the new Department and 
Gordon England to be its first Deputy Secretary. I am pleased 
today that the Committee is considering the next set of 
Homeland Security nominees, Mr. Ervin and Ms. Hale, both of 
whom appear to have strong credentials and relevant experience 
to the positions for which they have been nominated.
    The Department of Homeland Security officially opened its 
doors on January 24. The establishment of the Department is the 
most significant government restructuring in more than 50 
years. It involves the merger of some 22 agencies and 170,000 
employees.
    The creation of the Department is an enormous undertaking 
that will require a team effort to ensure its success. As part 
of that team, the Under Secretary for Management, who will be 
responsible for the organizational issues in the new 
Department, will have a particularly challenging job.
    With this massive merger, the Under Secretary for 
Management will have to work to integrate disparate management, 
human resources, and information technology systems. Ms. Hale's 
extensive background in management in both the public and the 
private sectors appears to be ideal for undertaking the 
integration and management of these issues.
    Another critical member of the Homeland Security team is 
the Inspector General. For more than 20 years the Inspectors 
General have been the watchdogs for Congress and the taxpayers 
in the ongoing battle against waste, fraud, and abuse. The DHS 
IG will face extraordinary challenges. Audit and investigative 
components from the various agencies must be integrated into a 
single entity within the Department.
    The IG is also responsible for performing annual audits of 
the Coast Guard to ensure that its new Homeland Security 
responsibilities do not divert attention from its traditional 
roles, including vital search and rescue missions, which are of 
particular importance to my State.
    Both the Under Secretary for Management and the Inspector 
General will be crucial to the successful organization and 
proper functioning of this vital new Department.
    I am also pleased that today we will consider the 
nomination of Linda Springer to be the Controller of the Office 
of Federal Financial Management at OMB. The Controller acts as 
the deputy and principal advisor to the Deputy Director for 
Management in carrying out the financial management duties as 
outlined in the Chief Financial Officers Act of 1990.
    This position is critical to ensuring that the financial 
management systems in the Executive Branch are efficient, 
accurate, and reliable. Ms. Springer's background again appears 
to be tailor-made for this position.
    Before turning to my colleagues, I want to recognize 
Senator Carper for any opening comments that he may have, and 
to welcome him today.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Madam Chairman.
    And to our witnesses and to our colleagues, it is great to 
see each of you and I am looking forward to the hearing.
    I am going to ask a rhetorical question. I know this is not 
a time to ask questions. But I see Senator Dole here and I have 
always wondered this.
    For years I have told this story about when you had been 
nominated to be a cabinet secretary by former President Bush, 
and you were presented to the Senate by your husband, Senator 
Dole. And I am told that he said to his colleagues, he quipped, 
I regret that I have but one wife to give to my country. Is 
that true?
    Senator Dole. To my country's infrastructure. I think he 
also mentioned something about my biscuit recipe being 
something that might be used for potholes, too. We had a lot of 
fun with that.
    Senator Carper. Good. He has to be a hard act to follow. I 
am delighted to be here and look forward to the testimony and 
to having a chance to vote for our nominees. Thank you for your 
willingness to serve.
    Chairman Collins. I very much appreciate the Senator from 
Delaware clearing up that essential question that we have all 
wondered about throughout the year.
    Senator Carper. I have others, too.
    Chairman Collins. It is now my pleasure to recognize my 
distinguished colleagues for purposes of an introduction. We 
are very pleased to have the senior Senator from Texas, Senator 
Kay Bailey Hutchison here today, as well as our new colleague, 
Senator John Cornyn. I would ask Senator Hutchison if she would 
proceed.

STATEMENT OF HON. KAY BAILEY HUTCHISON, A U.S. SENATOR FROM THE 
                         STATE OF TEXAS

    Senator Hutchison. Thank you, Madam Chairman.
    Bear with me a little bit because I had some dental work 
this morning and I am not speaking as clearly as I hope I 
usually do.
    I am very pleased to be here for Clark Kent Ervin, someone 
I have known for years and years. And he comes to this post, I 
think, with all of the right qualifications. First, of course, 
is academic qualifications, having gotten his bachelor of arts 
degree and his law degree from Harvard with honors, and he was 
a Rhodes Scholar.
    But then he went on into the legal field, distinguishing 
himself in that field and in several areas of our State 
service, including working with my colleague when he was 
Attorney General, and I know he will elaborate on that.
    But I think, even more to the point now, I cannot imagine a 
more important job than the Inspector General of the Department 
of Homeland Security because with the new emphasis that we are 
putting on terrorism, counterterrorism, and intelligence 
gathering in this agency, I think the role of Inspector General 
is going to be so very important.
    And he has the experience for the job. He has been 
Inspector General at the Department of State, and he has been 
Acting Inspector General since the Department of Homeland 
Security came into being. So I cannot think of a better person 
for this job and someone that I know personally will go the 
extra mile to do everything just right in this agency.
    And I am pleased to recommend him to you.
    Chairman Collins. Thank you very much, Senator Hutchison. I 
want to express admiration for your stamina and ability to 
withstand pain and still keep all of your Senate commitments, 
as well. It is typical of your extraordinary dedication to your 
job and the nominee is indeed fortunate to have your 
endorsement.
    Senator Cornyn.

STATEMENT OF HON. JOHN CORNYN, A U.S. SENATOR FROM THE STATE OF 
                             TEXAS

    Senator Cornyn. Madam Chairman, thank you for letting me 
appear here today with my senior Senator and my good friend, 
Clark Ervin, on this day when he comes before you seeking 
Senate confirmation as Inspector General of the Department of 
Homeland Security.
    When I was Attorney General for the 4 years preceding my 
service in the U.S. Senate, I recruited what I consider to be 
the best and brightest that our State had to offer when it came 
to my executive staff at the AG's office. In that pursuit I 
think I accomplished it, at least in part, when I convinced 
Clark to come to work with me as Deputy Attorney General, as 
General Counsel, and Director of Administration in my office 
before he was whisked away to Washington, DC to work at the 
State Department.
    While serving as my Deputy Attorney General, Clark 
tirelessly sought to ensure that taxpayer money was spent 
efficiently, effectively, and wisely. People that come into 
contact with Clark quickly realize, though, that he is more 
than just an excellent manager. Clark spent considerable time 
and effort helping make Texas a better place to work and live 
for some of the most vulnerable in our State.
    In one instance, Clark recognized that many very helpful 
government programs for children were not being utilized, 
particularly for children at risk. Parents, teachers, and other 
adults coming into regular contact with children were simply 
unaware of programs that existed to provide such necessary 
items as warm coats, dental services, and the like.
    Clark was also the one who introduced me to then-General 
Colin Powell's work on America's Promise, a wonderful 
organization that continues even today. And recognizing Clark's 
talents, he was whisked away by now Secretary of State Powell, 
who asked him to come to the Department of State as his 
Inspector General.
    Clark will be embarrassed to know that I will recount one 
story I remember of his meeting with then-designee for 
Secretary of State Colin Powell. When after meeting Clark and 
being very impressed with him personally and professionally 
General Powell asked him if he was married and pointed out or 
just dropped the idea that he happened to have two daughters 
that were not. It may have just been coincidence in that 
conversation, but Clark has since married someone else, for 
which we are very happy and congratulate him, and I know he is 
happy as well.
    As Inspector General at the State Department, Clark 
supervised inspections for diplomatic posts around the world to 
determine whether policy goals were being achieved and ensure 
the protection of our personnel, facilities, and intelligence 
information.
    Based on his dedication to public service, his love of this 
great country, and past success, the President has now 
nominated Clark for this very challenging position. Everybody 
who knows Clark recognizes his can-do attitude and I know that 
will serve him well as he works with Secretary Ridge to shape 
disparate organizations into a smooth functioning whole 
safeguarding the American people.
    I want to thank you, Madam Chairman, for giving me these 
few minutes to offer my enthusiastic and unequivocal support to 
this wonderful nominee, my friend Clark Ervin, to serve as 
Inspector General of the Department of Homeland Security.
    Chairman Collins. Thank you very much. I want to thank you 
for your personal endorsement and your firsthand knowledge of 
the nominee is very helpful.
    I know that both of the Senators from Texas have very tight 
schedules and we would excuse you at this point, if necessary.
    Senator Carper. Madam Chairman.
    Chairman Collins. The Senator from Delaware.
    Senator Carper. Before the Senators leave, something that 
happened last night has just sort of come into focus for me. 
Last night I got a phone call at home from Secretary Powell and 
he does not often call me at home. I thought he was calling to 
talk about the situation in the Middle East or Korea or 
whatever.
    And he asked if I was on this Committee and I said that I 
was. And he said if a fellow named Clark Kent Ervin comes 
before the Committee, ask him if he is happily married. 
[Laughter.]
    Chairman Collins. You need to get more sleep, Senator. 
[Laughter.]
    Senator Carper. I told him I would ask.
    Chairman Collins. Thank you. That can be your first 
question for the day, but we will not deduct it from your time.
    Again, I want to thank both Senators from Texas for taking 
the time to be with us this morning to share their thoughts.
    It is now my great pleasure to call upon the Senator from 
North Carolina, Senator Dole, to introduce Ms. Hale.

STATEMENT OF HON. ELIZABETH DOLE, A U.S. SENATOR FROM THE STATE 
                       OF NORTH CAROLINA

    Senator Dole. Thank you. Madam Chairman, Members of the 
Committee, it is my great pleasure to introduce Janet Hale of 
Virginia as the President's nominee for Under Secretary for 
Management for the Department of Homeland Security.
    Despite the fact that she is not from the great State of 
North Carolina, a forgivable flaw, I am delighted to recommend 
Janet to you for this very important position. I have known her 
for many years and in many different capacities and I know that 
she is extremely well qualified and well prepared for this 
position.
    And Senator Lautenberg, you might remember our work 
together on aviation security, as well as age 21, the drinking 
law. Janet was at my side when we were working on those issues 
and it was a pleasure to work with you that time.
    Janet's resume includes numerous positions of significant 
responsibility in both the public and the private sectors. More 
importantly, her reputation and the results of her work are 
distinguished by the respect of her peers. Her accomplishments 
are numerous on behalf of the public and the institutions that 
she has so devotedly served for over 2 decades.
    As you well know, the duties of the Under Secretary for 
Management are critically important to the success of this new 
Department. The scope of responsibility is broad indeed, 
including budget development and execution, human resource 
management, information technology architecture and 
integration, procurement, and systems management and 
administrative services. Janet Hale's career has given her a 
depth of experience in each of these areas.
    I first worked with Janet when I served as Secretary of 
Transportation and she was a key member of my senior management 
team, serving as Assistant Secretary for Budget and Programs 
and managing the annual $26 billion budget.
    I was so proud and pleased for Janet when she moved on to 
the Office of Management and Budget to serve as the Associate 
Director for Economics and Government. There she was 
responsible for the Departments of Transportation, Treasury, 
Commerce, Justice and 25 smaller agencies, managing a $70 
billion annual Federal budget.
    Over the years her management experience and portfolio have 
grown significantly and in her most recent position as 
Assistant Secretary of Budget, Technology and Finance at the 
Department of Homeland Security, her job description called for 
development and execution of a $475 billion budget.
    Janet also comes with private sector management experience, 
having served as Executive Vice President of the University of 
Pennsylvania. As the Chief Administrative Officer of the 
University, Janet was responsible for management of human 
resources, finances, facilities, and safety. While there she 
reengineered all core business functions, resulting in 
significant cost reduction and improvements in efficiency.
    It is important to highlight Janet's recent experience with 
systems integration, both at the Department of Health and Human 
Services and the House of Representatives, where she designed 
new financial accountability systems and unified the IT 
systems. This experience will serve her well as the Department 
of Homeland Security integrates the operations of 22 agencies.
    By temperament, talent, and experience Janet Hale is a 
proven and effective leader in institutional change management. 
As you can see, most of her career has been dedicated to 
serving the public and I believe we are fortunate indeed that 
she is willing to perform this important job for our country at 
such a critical time.
    Madam Chairman and Members of the Committee, it is my 
privilege to present Janet Hale.
    Chairman Collins. Thank you very much, Senator Dole. Your 
endorsement means a great deal to the Committee and I know it 
does to the nominee as well. And we would be happy to excuse 
you also at this point.
    Mr. Ervin and Ms. Hale have filed responses to biographical 
questions.
    Senator Carper. It is going to be an interesting hearing.
    Chairman Collins. For those of you in the audience who are 
not aware of the Senate's schedule, we were in until 1 a.m. 
last night.
    They have filed responses to biographical and financial 
questionnaires, answered pre-hearing questions submitted by the 
Committee, and had their financial statements reviewed by the 
Office of Government Ethics. Without objection, this 
information will be made part of the hearing record with the 
exception of the financial data which are on file and available 
for public inspection in the Committee offices.
    Our Committee rules require that all witnesses at 
nomination hearings give their testimony under oath, so I would 
ask that you both stand and raise your right hand.
    [Witnesses sworn.]
    Mr. Ervin, do you have a statement you would like to make?
    Mr. Ervin. Yes, Madam Chairman.
    Chairman Collins. Please proceed.

TESTIMONY OF HON. CLARK KENT ERVIN \1\ TO BE INSPECTOR GENERAL 
            FOR THE DEPARTMENT OF HOMELAND SECURITY

    Mr. Ervin. Good morning, Chairman Collins and other Members 
of the Committee. I am grateful to you for holding this hearing 
today on my nomination to serve as the Inspector General of the 
Department of Homeland Security.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Ervin appears in the Appendix on 
page 30.
      The biographical information appears in the Appendix on page 32.
      Responses to pre-hearing questions appear in the Appendix on page 
38.
      Responses to post-hearing questions appear in the Appendix on 
page 124.
---------------------------------------------------------------------------
    Let me begin by expressing my thanks and appreciation to 
President Bush for the confidence in and support for me that he 
has shown by once again nominating me for a high Federal 
position. I also thank, of course, Senators Hutchison and 
Cornyn for taking time out of their very busy schedules to be 
here today on my behalf and for their extraordinarily kind 
words of support.
    Let me take a minute, if I may, also to introduce those 
members of my family who could be present today. I am joined by 
my wife, Carolyn Harris, and by my parents-in-law, Barbara and 
Harold Harris, as well.
    I am humbled, gratified, and excited by the prospect, if 
confirmed, of serving as the first Inspector General of the 
newest cabinet department representing, as you say, the largest 
reorganization of the Federal Government in more than half a 
century and charged with a mission of paramount importance, 
protecting our homeland against terrorist attack.
    Since being so designated by President Bush late last 
month, I have served as the Acting Inspector General to the new 
Department. Over the course of the first few weeks I have had a 
number of occasions to speak to and to interact with both 
Secretary Ridge and Deputy Secretary England. On several such 
occasions each of them has both privately and publicly stressed 
their support for me personally, and their appreciation of role 
of the Inspector General as an independent, objective, analyst, 
consultant, and constructive critic of the Department's 
programs and operations. To their credit, they have sought to 
involve me at the front end as the Department begins its 
operations, as opposed to my having to come in after the fact 
to conduct an inspection, audit, or investigation and finding 
problems that could be minimized if caught early or, better 
still, avoided altogether. Based on my experience so far with 
the Secretary, the Deputy Secretary, and other members of the 
senior management team, I expect to have a close and 
collaborative working relationship with them.
    As I believe that I demonstrated during the course of my 
tenure as Inspector General of the Department of State and the 
Broadcasting Board of Governors, I am deeply committed to the 
mission of inspectors general. As I see it, through inspection, 
evaluations, audits and investigations, it is to help the 
departments for which we have oversight responsibility achieve 
their respective missions in as efficient, effective, and 
economical manner as possible.
    The Department of Homeland Security faces a number of 
significant management challenges. First, of course, it is a 
new Department. Second, as of March 1 it will be a huge 
Department, the third largest in the Federal Government with 
more than 170,000 employees and a budget of more than $30 
billion. It will be composed of 22 different Federal agencies 
or parts thereof, each of which will bring its own set of 
management challenges.
    And last but not least, and as noted above, its mission, 
protecting our country against terrorist attack, could not be 
more important. It is no exaggeration to say that the fate of 
our Nation depends upon the degree to which the Department 
succeeds in accomplishing its mission. And in seeking to 
accomplish a mission such as this, the Department cannot afford 
to waste one minute or one dollar.
    The Inspector General will play a key role in evaluating 
the degree to which the Department is accomplishing its mission 
and in recommending ways for it to do so as efficiently, 
effectively, and economically as possible.
    I pledge to each of you to be independent, objective, 
thorough, apolitical, and when need be, critical of the 
Department's programs and operations. I also pledge to be 
responsive, equally so, to both the Secretary and the Congress. 
I fully appreciate the fact that, if confirmed, I have a 
responsibility to keep the Congress, as well as the Secretary, 
thoroughly and promptly informed of significant findings and 
developments.
    One of the several gratifying aspects of my relatively 
short tenure as Inspector General at the State Department and 
the Broadcasting Board of Governors was developing a close and 
productive working relationship with certain Congressional 
members and staffers. Over the course of my tenure, the number 
of Congressional requests for work products and hearings 
steadily increased, which I took to be a measure of the 
Congress's confidence in me and the team that I had assembled. 
I hope to maintain Congress' confidence in me if confirmed for 
this position, and I would look forward to working closely with 
you, Chairman Collins, and other Members of the Committee or 
staff, and any other members and staffers who have an interest 
in Homeland Security-related matters.
    With that, thank you again, Chairman Collins, and other 
Members of the Committee, for holding this hearing today. And I 
look forward to answering any questions that any of you may 
have. Many thanks.
    Chairman Collins. Thank you.
    Ms. Hale, do you have a statement?
    Ms. Hale. Yes, I do.

     TESTIMONY OF JANET HALE \1\ TO BE UNDER SECRETARY FOR 
       MANAGEMENT FOR THE DEPARTMENT OF HOMELAND SECURITY

    Ms. Hale. Thank you very much, Senator Collins and 
distinguished Members of this Committee.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Hale appears in the Appendix on 
page 55.
      The biographical information appears in the Appendix on page 57.
      Responses to pre-hearing questions appear in the Appendix on page 
63.
      Responses to post-hearing questions appear in the Appendix on 
page 134.
---------------------------------------------------------------------------
    I, too, would like to take an opportunity to introduce some 
folks that are with me. Unfortunately, my mother is in Florida, 
my brother is in Southern California, but I have some friends 
here. I will spare them.
    But there are some people that work with both Clark and 
myself at the Department of Homeland Security that came to show 
their support for us and to understand the value of the 
Department that you all created here. And I would personally 
like to thank them and recognize that they have come up with us 
today.
    I obviously thank Senator Dole for her kind comments that 
she offered on my behalf.
    The primary mission of the new Department is clear, to 
deter, detect, prepare for, and respond to terrorist attacks 
and other threats against our country and our people. To 
accomplish this, the Department will need budgetary and human 
capital resources, technology development, and an efficient 
management and infrastructure support.
    The position I have been nominated to is charged with just 
these responsibilities. I am fortunate to have served in such 
capacities in both the public and private sector. I have had a 
unique opportunity to serve from the program level at a 
department, the departmental level, as Secretary Dole 
referenced, Office of Management and Budget, and here on 
Capitol Hill. I hope this has prepared me for the challenges 
that we are facing.
    Over the past few months, many people inside and outside 
government have highlighted the enormous management challenges 
facing the new Department. Merging 22 agencies and bringing 
nearly 180,000 Federal workers under one Department will not be 
an easy task. However with challenges comes opportunities. If 
confirmed, I look forward to helping the Department establish 
an organizational culture that values collaboration, 
interoperability, and information sharing to take advantages of 
these opportunities.
    There are several critical things that the Under Secretary 
for Management will need to focus on as a leader. First, all 
the management functions must directly support the operational 
mission and add value to the efforts of our men and women on 
the front line who are protecting our homeland and the American 
people.
    Second, the Under Secretary of Management must work closely 
with the four directors, the senior managers, and the IG to be 
sure that we are enforcing and implementing the Department's 
missions.
    Third, the Under Secretary for Management must recognize 
the importance of leveraging tremendous resources and 
capabilities of these incoming agencies for the benefit of the 
entire Department. The most important resources, of course, are 
our Federal employees who deserve the best tools available in 
order to ensure that they can effectively perform the homeland 
security and other critical missions.
    As Secretary Ridge said, new funding, technology and 
equipment are important, but no more so than the people who are 
willing to serve in this new Department. If confirmed, I am 
committed to ensuring that the leadership of the Department 
maintains continuous effective, two-way communication with our 
employees throughout all the organization.
    Finally, the Under Secretary must ensure that the 
management systems and processes provide good stewardship of 
government resources. The Department has a tremendous amount of 
resources and responsibility. If confirmed, I promise that I 
will honor those.
    I have been truly privileged to be nominated for this 
position and if the Senate should confirm me, I welcome the 
opportunity to work with Congress, with you particularly, to 
accomplish the important missions that we are charged in this 
statute.
    I look forward to answering your questions and I am pleased 
to be here today sitting next to my colleague, Clark Ervin. 
Thank you.
    Chairman Collins. Thank you very much, Ms. Hale.
    There are three standard questions that we ask of all 
nominees for the record and I am going to begin my questioning 
with those.
    First, is there anything that you are aware of in your 
background which might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Mr. Ervin. No.
    Ms. Hale. No.
    Chairman Collins. Second, do you know of anything personal 
or otherwise that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Mr. Ervin. No.
    Ms. Hale. No.
    Chairman Collins. And finally, do you agree without 
reservation to respond to any reasonable summons to appear and 
testify before any duly constituted committee of Congress if 
you are confirmed?
    Mr. Ervin. Absolutely.
    Ms. Hale. Yes.
    Chairman Collins. Mr. Ervin, the General Accounting Office 
recently included the new Department of Homeland Security on 
its 2003 high-risk list. The designation is based on three 
factors. First, it is an enormous undertaking that will take 
time to achieve in an effective and efficient manner.
    Second, the Department's prospective components already 
face a wide array of existing management and operational 
challenges.
    And third, the failure to effectively carry out its mission 
exposes the Nation to potentially very serious consequences.
    If you are confirmed as IG, how will you seek to ensure 
that DHS addresses these concerns and challenges? And what is 
your response to the GAO's listing the new Department on its 
high-risk list?
    Mr. Ervin. Madam Chairman, I think the GAO has done a good 
job of identifying the significant challenges that face the 
Department. And if I were to do so on my own, I would have 
identified exactly those challenges.
    As to how, if confirmed, I would proceed to help the 
Department to address them, I would intend to have a very 
robust inspections, audit, and investigative team thanks to the 
various parts of Offices of Inspector General that I would 
inherit. I would seek to conduct inspections, evaluations, 
audits, and investigations where necessary with regard to those 
three areas of challenge.
    Furthermore, as I noted in my opening statement, to the 
credit of the Secretary and the Deputy Secretary, I have been 
involved to a significant degree at the front end, as the 
Department begins its operations, and I have sought to provide 
some advice and recommendations to the Secretary and other 
senior management so that at the very beginning of its 
operations issues can be avoided and a plan can be put in place 
to address these challenges and others.
    Chairman Collins. Mr. Ervin, some of the component agencies 
of the new Department are, frankly, troubled agencies and the 
Immigration and Naturalization Services is one that comes 
immediately to mind. The INS, for example, has had continual 
problems in managing its information technology resources that 
are critical to its ability to function effectively, 
particularly in a post-September 11 environment.
    The Department of Justice's Inspector General, which has 
issued numerous reports on this, as well as GAO have made a 
series of recommendations designed to increase the 
effectiveness of the information technology practices at INS. 
As Inspector General, what would you do to ensure that we start 
to actually solve some of the problems that will be transferred 
to the new Department, particularly in the area of information 
technology?
    Mr. Ervin. Madam Chairman, I note that there are about 87 
different information systems in INS alone. The large number of 
information systems, the fact that those systems cannot 
communicate with each other, the security vulnerabilities that 
each of those systems has are all, as you say, issues in the 
information technology area that have been identified by my 
colleague, the DOJ Inspector General.
    I have had the benefit of a number of briefings, both from 
him personally and from other members of his team with regard 
to those issues and others that affect INS. I would propose to 
follow up on any outstanding recommendations with regard to 
those issues, if confirmed, and indeed I would expect to 
continue to do work in this area, both inspections and 
evaluations and audits, as INS becomes a part of the Department 
of Homeland Security.
    Chairman Collins. Ms. Hale, one of the challenges facing 
the new Department is developing a flexible and appropriate 
personnel system. It is my understanding that the component 
agencies are bringing in diverse personnel systems. I believe 
that it is very important that the Federal employees unions be 
fully involved in this process.
    What are your plans for helping to integrate and develop a 
personnel system with the advice and in consultation with the 
Federal employee organizations?
    Ms. Hale. I share your concern about the disparate systems 
that we are inheriting from these agencies. It is truly a 
concern of our employees and I think it is a considerable 
concern of all of ours.
    I have met with the senior union leadership and I have 
pledged to them, as I will pledge to all of you because I know 
of your concern, that they will be an intricate part. We need 
to have employees on the front line, both union and nonunion 
representative. We need middle management, we need senior 
management to be sure that this system is developed with an 
understanding of their business needs, their responsibilities 
out there, and we have already begun the consultation with the 
unions because they will be critically involved in this 
project.
    Chairman Collins. You are going to have an enormous task 
covering many different areas with a large department, and a 
complicated reorganization. If you are confirmed, what would be 
your top priorities for the coming year?
    Ms. Hale. I think first and foremost is a smooth 
integration and transition of these agencies coming into the 
Department. They clearly have diverse cultures, long histories, 
and proud accomplishments, and we need to be sure that the men 
and women on the front line do not see any adverse impact as 
they are transferred to the new Department.
    We then need to be sure that our IT systems are there to 
support their mission. We need to be sure that we have a new 
human capital system and an integrated financial management 
system.
    So I think if I started with the transition and then moved 
to the serious task that you have identified, those would be my 
top priorities.
    Chairman Collins. Thank you. Senator Carper.
    Senator Carper. Before I became a Senator I was a governor 
for 8 years, the Governor of Delaware, and very active in the 
National Governors Association.
    One of the traits of the practices within the National 
Governors Association is when a person is elected as a new 
governor in November of a year, the National Governors 
Association hosts what we literally call a new governor's 
school, and a school for governors and spouses. it is a 
wonderful time of sharing, where the old governors, the 
grizzled veterans, teach the new governors where they screwed 
up, the mistakes they made, and we learn from our experiences.
    Each of the new governors is appointed or assigned a mentor 
and it is a traditional organization. In my 8 years as 
governor, I got to be the mentor for Gary Locke from 
Washington, Governor Bob Wise from West Virginia, and also 
Governor Tom Ridge, which is unusual because you do not 
normally have someone from the opposite party. But he and I 
were colleagues and friends together in the House for a long 
time, came to the House together 20 years ago.
    Among the advice that I shared with Governor-elect Ridge, I 
said always surround yourself with people smarter than you. So 
my question for both of you is are you both smarter than Tom 
Ridge? [Laughter.]
    Ms. Hale. Clark, that is yours.
    Mr. Ervin. I certainly am not, Senator.
    Ms. Hale. If I can follow your advice, I will not answer 
because I think the guy is a great leader and I am proud to be 
part of this team, but I hope that I will put people smarter 
than me as my chief human capital officer and my CIO and CFO.
    Senator Carper. That is a great answer.
    Let us talk about team building. Can you talk to us about 
the nature of the teams that you will build and lead in your 
respective new assignments, if confirmed?
    Mr. Ervin. Senator, I will inherit if confirmed, about 457 
employees from various offices of inspector general. The FEMA 
Office of Inspector General will be coming to the DHS office of 
Inspector General in its entirety, about 200 people. I will be 
getting a similar number, about 195 to be exact, from the 
Treasury Department's Office of Inspector General, about 45 
from the Department of Transportation's Office of Inspector 
General, about 15 for the Department of Justice Inspector 
General, and two positions and about $250,000 from both the 
U.S. Department of Agriculture Inspector General and from GSA 
Office of Inspector General, for a total of about 457 employees 
and a budget of about $80 million.
    In addition to having a Washington-based staff of around 
100 or so, the rest of the people are located in field offices 
around the country in the major cities of the country and along 
the Southwest border, particularly with regard to INS work.
    I would hope, beginning on day one, if confirmed, to do 
what I can to craft a cohesive team that would, on day one 
ideally and if not as soon as possible thereafter, to begin to 
think of themselves not as employees of the Office of 
Transportation Inspector General or FEMA Inspector General, 
etc., but instead as members of one integrated cohesive team, 
the Office of Department of Homeland Security Inspector 
General, focused on the mission of the Department of Homeland 
Security.
    I have had occasion during the course of the last few 
weeks, as acting Inspector General, to meet with some of the 
employees who would be transferred to this office from the 
Treasury Office of Inspector General and the FEMA Office of 
Inspector General. I am heartened by the expertise and 
credentials that these people bring, their dedication to their 
respective missions. And if confirmed, I think that I will have 
a team in place that is smarter than I and able to help me 
perform the mission that I would be entrusted to perform.
    Senator Carper. Thank you.
    Ms. Hale, our Chairman already asked the question that was 
on my mind, and she spoke of the representatives of employee 
groups that you will be dealing with. I was very pleased to 
hear that you have already begun to consult with them and to 
listen to them and for them to hear you out, as well.
    I would just say, I am not going to ask a question about 
it, but I want to provide some positive reinforcement to say 
that is just the kind of approach I would hope that you would 
not only take initially, but one that you would continue to 
embrace as you go forward.
    One of the areas that I think--Senator Collins and I share 
common interests in a whole lot of legislative areas. Really 
coincidentally, one of the areas I think we have had some 
common interest is in the sort of coordination there will be 
between this new Department and State and local providers. Can 
you share just a little bit, either of you but particularly Ms. 
Hale, how you would approach that subject?
    Ms. Hale. First, as you know, there is a State and local 
coordinator that I will work closely with because I think it is 
essential. Due to my tenure at the Department of Health and 
Human Services, I understand how critically important it is to 
provide the resources, which we did through the appropriations 
in the Congress, for public health infrastructure preparedness. 
I think that is the same thing we will see with the ODP grants 
and the FEMA First Responder grants.
    It is critical that we have one-stop shopping for the 
States, clear messages, and clear interoperability.
    So my goal is, just like I did at Transportation and at 
HHS, to meet with them, understand their needs, and work 
closely with my colleagues as we quickly get the money out and 
provide the technical assistance that we need to be sure that 
we are utilizing those resources.
    Senator Carper. Good.
    Mr. Ervin. If I could add to that, Senator, I certainly 
share Ms. Hale's and the Department's interest in getting money 
to States and localities just as quickly as possible, given the 
immensity of the needs and the seriousness of the needs to 
which the money would be put.
    Equally important, of course, is ensuring that controls are 
put in place, to ensure that the money is spent for the 
intended purpose, and to ensure that the money achieves the 
results that the money is intended to achieve.
    Just recently I have sent some advice that I believe has 
gone forward to the Secretary about just that. I will be very 
interested, as Inspector General, to ensure that the Department 
at the Federal level ensures, as I say, that the money is spent 
for the intended purpose and that the results are achieved, 
accountability and performance are very important criteria, 
needless to say.
    Senator Carper. When Vince Lombardi was the football coach, 
the head coach at the Green Bay Packers, he used to say unless 
you are keeping score, you are just practicing. And I have 
always found in my life that the things that I measure or ask 
others to measure are the things that we do best.
    I guess my last question for each of you is how will you 
measure the success of the team that you lead? How will you 
measure, looking back a year, 2 years, 3 years from now? How 
will you measure your success?
    Mr. Ervin. Well, there are a number of ways, Senator. One 
is led to believe that the number of products that he or she 
produces is an important indicator of success. Of course, as 
Inspector General, if I am confirmed, I would produce 
inspection reports and audit reports. I expect, given the 
immensity of the Department, and the complexity of its mission, 
there will be a number of those reports.
    But quantity is only one criterion and, relatively 
speaking, it is the less important one. The important criterion 
for me is ensuring that the Department achieves its mission as 
effectively and efficiently and economically as possible.
    If confirmed, I hope to have a long tenure. And at the end 
of that tenure, I would hope to be able to say in a measured 
way that there has been noticeable and demonstrable and 
quantifiable progress in terms of economy, efficiency, and 
effectiveness with regard to each of the Department's programs 
and operations, or at least those that are most significant.
    Senator Carper. Ms. Hale.
    Ms. Hale. I share Clark's concerns. I would emphasize the 
outcomes. I hope our borders are safer. I hope that the 
response we give to disaster relief across the country is 
provided efficiently and effectively. We will need to develop 
the outcome measures that are necessary to be sure that we have 
addressed the mission critical areas of our Department.
    Senator Carper. Madam Chairman, I just want to again thank 
our witnesses for being here today. Not only for that, but for 
your willingness to serve our country during a really 
challenging time.
    Ms. Hale, you mentioned, I think, the name of your mom, I 
think you mentioned your brother who are not here. I am sure 
they are proud of you and we sent along our best to them. And 
especially to your mom. Our thanks for raising a daughter who 
has a commitment to public service.
    Mr. Ervin, to you and to your family members who are 
present, as well, we want to thank them for their willingness 
to share you with all of us.
    Mr. Ervin. Thank you, Senator.
    Chairman Collins. Thank you, Senator.
    We are following the early bird rules. Senator Lautenberg, 
you would be next.

            OPENING STATEMENT OF SENATOR LAUTENBERG

    Senator Lautenberg. Thank you very much.
    It is a pleasure to have a chance to hear two, if I can use 
the term aspirants, so well qualified and experienced to take 
on these important assignments. Frankly, I am still somewhat 
concerned about the ability to organize all of this in what now 
is an urgent moment. So each of you in your particular 
responsibility is going to have a huge undertaking.
     I think that as time goes by and the Chairperson has heard 
me raise the question about what we do in the Senate to match 
up to this new cabinet-level department. So I look at this, and 
I reviewed some of the responses to the inquiries.
    Mr. Ervin, one of the things that concerned me, I come out 
of the corporate world, and the job of the Inspector General 
is, of course, unique to the government, I believe, is how you 
continue the association that you described you might have with 
the Secretary, and talk about senior staff meetings, senior 
leadership meetings, and about the chance to communicate at 
those meetings.
    I wonder how free you are to communicate the concerns that 
you have or things that you start to see, because you are 
prevented, by virtue of your responsibility, from early 
discussions with--I think, with the Secretary, the person to 
whom you report because you have to have had the information 
you seek firmly in hand before any suggestions or any reports 
are released.
    Do you think that there is any kind of a compromise which 
you ought to be concerned about with discussions at a senior 
leadership meeting? I do not think you can freely discuss 
research or ongoing investigations that your Department is 
doing, can you?
    Mr. Ervin. No, I completely agree with that, Senator, and I 
did not mean to suggest otherwise. My role, really, in these 
leadership meetings to date has been, appropriately I think, 
only one of listening and informing myself as to what the 
Department's plans are going forward. So that, at this early 
stage, I can offer my suggestions and recommendations as to how 
the Department might avoid things that might become pitfalls.
    Senator Lautenberg. Right, and I think that is a proper 
view.
    What about the IT phase of this huge Department? How many 
people will be assigned to the Inspector General's Office, do 
you know?
    Mr. Ervin. Yes, sir. There will be about 457 or so, and 
they will be drawn from both Washington and offices in the 
field.
    I did something, I do not know if it is unique but it is 
unusual, when I was the Inspector General at the State 
Department with regard to IT operations. I formed a discrete, a 
separate unit, in the Office of Inspector General solely, 
exclusively to focus on information technology issues headed by 
an Assistant Inspector General. And I would propose, if 
confirmed, to do exactly the same thing.
    One of the biggest challenges, as we have all noted here, 
that the Department will face, of course, lies in the 
information technology area in terms of interoperability, in 
terms of efficiency, in terms of redundancy, in terms of other 
such things, the information security needless to say.
    What I would propose to do is to take a hard look at the 
number of inspectors that I will be inheriting from these 
different offices, I think there are around 14 or so. I will be 
inheriting around 208 auditors, several of whom are not just 
financial auditors but they have expertise in program audits, 
as well.
    And I would craft, from the inspections team and from the 
audit team that I would inherit, a team of some size--I would 
say in the 50-person range probably and hopefully grow over 
time--to focus on information technology and information 
security issues. It is a critical part of my mission.
    Senator Lautenberg. How early do you think it would be 
possible for you to be involved? The planning part of the job 
is, I think, a very important one. You make recommendations 
based on the experience that you have had, and based on the 
outcome that you would like to see. So do you see being asked 
to intervene at an early period of time, in terms of laying out 
the strategy for creating the organization, particularly as it 
affects the IT section?
    Mr. Ervin. As a matter of fact, just a few days ago I had 
occasion to, I sought and received a briefing, from the 
Department's CIO, Chief Information Officer, about his plans as 
to enterprise architecture for the Department and his plans 
generally for proceeding with regard to information technology 
and information security issues.
    I and my Assistant Inspector General for Information 
Technology Designate, if confirmed, were pleased by what we 
heard and thought that the Department, based on what we heard, 
was proceeding in the right direction. And we would propose, if 
I am confirmed, to continue to monitor that, to make 
recommendations along the way, with regard to things that we 
think the Department might be able to do better and more 
economically and efficiently.
    Senator Lautenberg. What do you have to do to get the 
resources, both personnel and non-personnel resources, that you 
need? Do you start out by getting a budget or requesting a 
budget that you know can cover the needs of the Department?
    Mr. Ervin. Yes, sir. As I say, the 457 people I will be 
inheriting from these various Offices of Inspectors General or 
parts thereof, and a budget of about $80 million. And I hope 
that that will be sufficient for purposes of starting to do the 
work that the Office of Inspector General must do.
    Having said that, I would note that this is a huge 
Department, needless to say, the largest Department in the 
Federal Government, more than 170,000 employees, more than $30 
billion budget.
    I would argue that over time thought should be given as to 
whether the Office of Inspector General should be comparable in 
size to other offices of Inspector General that oversee 
comparably-sized departments. The Office of Inspector General 
of the DOD, the Office of Inspector General at HHS, and the 
Office of Inspector General at the Tax Enforcement 
Administration are in the range of 1,000 people. And I would 
argue that over time an Office of Inspector General of 
comparable size would be in order for a department of this 
size.
    Senator Lautenberg. I see it says stop. That means go 
faster.
    Madam Chairman, we are fortunate to have two such skilled 
people, and the fact that you have worked together, I think, 
adds a degree of comfort to us that you are available to take 
this assignment.
    I need not caution you about how complicated life is going 
to get to be. Perhaps you should remember to greet your wife 
every time you see her because they may be less frequent than 
they used to be. The fact is that it is heartening to see such 
good candidates. We congratulate you as you go forth.
    Mr. Ervin. Thank you, Senator.
    Chairman Collins. Thank you, Senator.

               OPENING STATEMENT OF SEANTOR AKAKA

    Senator Akaka. Thank you very much, Madam Chairman. I want 
to compliment you on this hearing and your work as Chairperson 
of this Committee. And I want to welcome our panelists and also 
your family and friends to this hearing.
    Having as hard-hitting Senators as you have to introduce 
you this morning, there is no question about your experience 
and abilities. What you have done for our government already is 
commendable. I have a few questions to ask of both of you.
    Ms. Hale, if confirmed as Under Secretary for Management, 
you will be responsible for human resources and personnel, 
which will be a huge and enormous responsibility given the 
overall structure of the Homeland Security Department.
    As you know, Section 881 of the Homeland Security Act 
required the Secretary, in consultation with the Office of 
Personnel Management, to report to Congress by February 24 on a 
plan to eliminate disparities in pay and benefits for the new 
Department. I know from a discussion that I had with Deputy 
Secretary England that pay disparities with Federal law 
enforcement officers have been studied. However, that addresses 
only one of many issues, other issues relating to pay and 
benefits that must be addressed.
    February 24 has passed. March 1 is coming. Why has this 
overall deadline been missed? And what is the status of the 
plan, if there is such a plan?
    Ms. Hale. The status of the plan is that it is this close, 
and I think it will be up here in the next couple of days. One 
of the things that I think is terribly important, as I know 
that Chairman Collins and you and others had the opportunity to 
discuss this with Deputy Secretary England, is that we think it 
is terribly important to be sure that we look at this in 
relationship not just to the disparities.
    What you will see when the report comes up is just, as you 
know, the tremendous disparities that exist among our agencies. 
But far more importantly, as you both have indicated, it is 
critical that we start the design of the new system and we need 
to look at them in concert.
    So we think that it is important to kick off that effort of 
designing, including our employees, the unions, our management 
from across the country, and from all of our agencies. And I 
look forward to doing that.
    When I was at the Office of Management and Budget I spent a 
significant period of time looking at the disparities and 
watched one by one the law enforcement agencies get different 
benefits at different times. And this really is the time, under 
the auspices of this Department and your statute, that we bring 
those together.
    I think it will be a period of time before we can resolve 
all of them but doing it in concert, I think, is critical.
    Senator Akaka. Mr. Ervin, Inspectors General conduct 
independent and objective investigations, audits, and 
inspections in order to promote economy and efficiency while 
preventing waste, fraud, and abuse. However, the Homeland 
Security Act provides broad authority to halt an IG inspection 
and investigation. In fact, the Secretary of Homeland Security 
is authorized to prohibit the Inspector General from carrying 
out or completing any audit or inspection.
    Mr. Ervin, do you believe these limitations will affect 
your ability to protect against waste, fraud and abuse?
    Mr. Ervin. Senator, I took note of that limitation 
provision in the statute and I discussed it, as a matter of 
fact, with Secretary Ridge in my very first encounter with him. 
He assured me at the time, and I take him at his word, that he 
is unlikely ever to invoke that provision. He says that he 
cannot conceive of a circumstance under which he would invoke 
the provision.
    As you know, it is limited to those instances where, in his 
judgment, an inspection, audit or investigation by the 
Inspector General would in some way, or could, compromise 
intelligence matters, national security matters, criminal 
investigations, etc.
    I think I have demonstrated in my relatively short time as 
Inspector General of the State Department, where there is no 
such limitation on the Inspector General incidentally, that I 
am very sensitive to the proper handling of intelligence 
information, other national security information, and criminal 
investigations. And so I believe that there should be no 
concern about my ability to handle such matters and then carry 
through with an inspection, audit, or investigation.
    I take Secretary Ridge at his word that he would not invoke 
that provision. I believe that he takes me at my word when I 
say that he would not need to invoke that provision.
    Of course, no Inspector General or no one likes the notion 
of a limitation on his or her power, particularly given the 
importance of the mission of this office. I would note that 
there is a similar provision, as you know, with regard to the 
Inspector General of the Defense Department, the Central 
Intelligence Agency, and in certain others. I believe the 
Treasury Department, as well.
    There is no such limitation on the State Department 
Inspectors General, as I say. As a practical matter, I do not 
think it will be a problem because I do not believe that the 
Secretary will invoke the provision.
    Senator Akaka. Madam Chairman, my time has expired. Let me 
just say, before I leave, that I am interested and concerned 
about whistleblowers. I have one more a question and then I 
will place in the record other questions.
    Chairman Collins. If you would like to ask it, feel free, 
Senator.
    Senator Akaka. Thank you very much, for that.
    Mr. Ervin, ensuring that employees at the new Department 
have full whistleblower rights and protections has been very 
important to me and to all of us on this Committee. The 
Inspector General plays, without question, a significant role 
in helping whistleblowers disclose waste, fraud, and abuse 
without retaliation.
    As a nominee for Inspector General at the Department of 
Homeland Security, how do you view the role of the IG as it 
relates to whistleblowers?
    Mr. Ervin. Senator, I too share your interest in and 
concern for these issues. Whistleblowers must be protected if 
the function of government is to proceed as it should.
    The way I handled it when I was Inspector General at the 
State Department, and the way that I would propose to handle it 
if I am fortunate enough to be confirmed as Inspector General 
of the Homeland Security Department, is as follows: As you 
know, there is a separate independent Federal prosecutorial 
agency called the Office of Special Counsel. And if one looks 
at the website of the Office of Special Counsel, it says that 
its mission is to safeguard the merit system by protecting 
Federal employees and applicants from prohibited personnel 
practices, especially reprisal for whistleblowing. It is the 
primary mission of that office.
    Likewise, of course, as you suggested, the Office of 
Inspector General has an interest in whistleblowing, as well.
    A secondary mission of the Office of Special Counsel is 
doing what it can do to guard against waste, fraud, and abuse. 
That is a major part of the mission of the Office of Inspector 
General. So there is a lot of parallelism and complementariness 
in the missions of the Office of Inspector General and the 
Office of Special Counsel.
    The way I handled it at State and the way I propose to 
handle it at Homeland Security is if someone alleged that he or 
she was being retaliated against for having cooperated with, or 
for that matter initiated, an Office of Inspector General 
investigation, then I would seek to investigate that 
whistleblower allegation myself because, of course, such an 
allegation would go to the very integrity and efficacy and 
continued efficacy of the Office of Inspector General. It would 
obviously have a chilling effect on our investigations if 
people could, without consequence, be retaliated against for, 
as I say, either initiating or cooperating with our 
investigations.
    If however, there was an allegation that there was 
retaliation for whistleblowing but there was no allegation that 
the retaliation resulted from cooperating with or initiating an 
Office of Inspector General investigation, my inclination would 
be, subject to the circumstances, to refer that matter to the 
Office of Special Counsel, for two reasons.
    One, as I say, dealing with whistleblower allegations is 
the primary mission of the Office of Special Counsel. Second, 
the Office of Special Counsel, as I understand it, has a staff 
of about 106 criminal investigators and lawyers. Whereas, the 
Office of Inspector General, at least at the State Department, 
we were very understaffed in terms of criminal investigators. 
During the course of my tenure, I think we went down from 30 to 
20.
    One of the felicitous things about the Department of 
Homeland Security, if I am fortunate to be confirmed is, as I 
may have said earlier, will be a much larger criminal 
investigative force.
    But that, generally, is the approach that I took there. I 
am inclined to say that I would take the same approach at 
Homeland Security if I am fortunate enough to be confirmed.
    Senator Akaka. Thank you very much for your response, and 
for both of you being here today.
    Madam Chairman, thank you for extending the time for me.
    Chairman Collins. Absolutely. Senator Pryor.

               OPENING STATEMENT OF SENATOR PRYOR

    Senator Pryor. Thank you, Madam Chairman.
    I actually do not have any questions, but more of a 
challenge for both of you. You all may have been here when now 
Secretary Ridge testified before the Committee. Many of us 
talked about this with him.
    You have this tremendous opportunity to have a brand-new 
department. We all know, everybody in this room, everybody in 
this country, from time to time gets fed up with bureaucracy 
and government and some of the seemingly idiotic things or the 
bad results sometimes the government gets itself into when 
everybody is trying to do the right thing and trying to do 
good.
    But both of you, especially in this Department, have a 
unique opportunity to set the course of this Department and set 
the tone, set up a framework where this Department could be the 
model agency in all of government. I hope you seize this 
opportunity and take the chance that history is giving you to 
go out there and do great things for this Nation and the world, 
and also do great things for our government so that other 
agencies, other departments can look to you about how to do 
things the right way, and the creative things that can be done 
in a government agency--under very difficult circumstances 
admittedly--but things that can be done there.
    And I just want to leave you all with that challenge and 
hope that you will go to the office every single day trying to 
establish this agency as a model agency for all of our 
government.
    Thank you, Senator.
    Chairman Collins. Thank you very much, Senator Pryor.
    Again, I want to thank our two nominees for appearing 
today. It is my hope that the Committee will be able to act 
expeditiously next week on your nominations to bring them 
before the full Senate for confirmation.
    I also want to express my personal appreciation for your 
willingness to serve your country, particularly in such 
challenging jobs. So thank you very much for your public 
service and for being with us this morning.
    We will now move to our second panel. We will consider and 
call up Linda Springer, who has been nominated to be the 
Controller of the Office of Federal Financial Management at the 
Office of Management and Budget.
    Ms. Springer is currently the Counselor to the Deputy 
Director for Management at the Office of Management and Budget. 
Prior to that she served in a number of executive positions in 
the private sector.
    Ms. Springer's strong background and experience in 
financial systems and management makes her well qualified for 
the position to which she has been nominated.
    Ms. Springer has filed responses to questionnaires, 
including biographical and financial information. She has 
answered pre-hearing questions submitted by the Committee, 
undergone an interview with the Committee staff, and had her 
financial statements reviewed by the Office of Government 
Ethics.
    Without objection, this information will be made part of 
the hearing record, with the exception of the financial data 
which are on file and available for public inspection in the 
Committee offices.
    Our Committee rules require that all witnesses give their 
testimony under oath. So Ms. Springer, I would ask that you 
stand and please raise your right hand.
    [Witness sworn.]
    Ms. Springer, if you have a statement that you would like 
to make you can proceed at this time.

  TESTIMONY OF LINDA M. SPRINGER \1\ TO BE CONTROLLER OF THE 
   OFFICE OF FEDERAL FINANCIAL MANAGEMENT FOR THE OFFICE OF 
                     MANAGEMENT AND BUDGET

    Ms. Springer. I do. Thank you, Madam Chairman.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Springer appears in the Appendix 
on page 105.
      The biographical information appears in the Appendix on page 107.
      Responses to pre-hearing questions appear in the Appendix on page 
114.
      Responses to post-hearing questions appear in the Appendix on 
page 136.
---------------------------------------------------------------------------
    I would also like to introduce, if I may, my family members 
who are here.
    Chairman Collins. Please do.
    Ms. Springer. My mother is here, and my brother, in the 
back. And my uncle and cousin, all from Pennsylvania.
    Chairman Collins. We welcome you all here today.
    Senator Lautenberg. Madam Chairman, if I may intervene with 
just a short statement.
    Chairman Collins. Absolutely.
    Senator Lautenberg. I note with pride that Ms. Springer was 
born in New Jersey, that she spent some part of her 
professional life, I believe, as well in our State and comes 
with a wealth of experience that we are pleased to have in 
government.
    We congratulate your mother and your family, as well, for 
having achieved this distinction that you are about to become, 
and we thank you for being here and we are proud of the things 
that you have done in the past, and look forward to talking to 
you for a moment about how you tackle this incredible job that 
lies ahead.
    Thank you very much, Madam Chairman. Thank you, Ms. 
Springer, for being here.
    Chairman Collins. I thank the Senator.
    Ms. Springer. Thank you, Senator. I might add that all of 
the family members that are here also have spent time in New 
Jersey as well. So we have a fondness for both States.
    Madam Chairman and Senator Lautenberg, Senator Pryor, as 
you know, I am pleased to be here today as the President's 
nominee to become Controller in the Office of Federal Financial 
Management at the Office of Management and Budget.
    My attraction to this position began last spring when I 
read the President's management agenda. My reaction was 
twofold. First I asked if the government was really this 
serious about management issues. And second, if it was, I 
wanted to be a part of it.
    As someone who is coming to government for the first time, 
I bring high expectations and standards for financial 
management. These are standards that I have held myself, as 
well as my staff in the areas for which I have been 
professionally responsible for over 25 years.
    There are three particular manifestations of these 
standards that I would like to share with the Committee today. 
The first is that financial management extends beyond a clean 
audit opinion. Integrity and reliability, things to which a 
clean audit attests, should be a given. In that area, with the 
particular help of this Committee, the Federal Government is 
making progress. A record 21 of 24 of the CFO Act agencies 
received clean audit opinions in 2002.
    But achievement of even 24 of 24 clean audits would not 
necessarily prove the existence of strong financial management. 
First class financial management requires integration of the 
financial impact of agency activities and decisions in 
operational execution and in senior management decisionmaking. 
It is accompanied by accountability standard setting, 
performance tracking, and other analysis.
    These are among the characteristics we should seek in 
government every bit as much as they are expected in the 
private sector.
    That leads to the second principle. Government should be 
held to the highest, if not higher, standards of financial 
management performance as the private sector. The Federal 
Government's constituents do not have the option of taking 
their business elsewhere. Citizens cannot elect to halt new 
investments; i.e., tax payments, until the company, the Federal 
Government, has improved its financial practices.
    Accordingly, I believe it is incumbent on every financial 
professional in government to execute his or her 
responsibilities according to standards of excellence that are 
consistent with this stewardship responsibility.
    The third principle is that the effort to advance the 
quality of financial management in the Federal Government 
largely transcends political philosophy. The government's 
financial managers are dedicated to making programs work better 
and more efficiently regardless of their purpose, and I 
certainly will be as well.
    It is analogous to the situation of the auto mechanic who 
is working to achieve optimal engine performance. His or her 
work is independent of the size of a car, the destination of 
the trip, or the identity of the driver. It occurs to me that I 
should tell you that I like to roll up my sleeves and get a 
little grease on my hands in checking the engine. So I am very 
committed to that principle.
    Should I be confirmed as Controller, I will lead the Office 
of Federal Financial Management with these principles in mind, 
in promoting and assisting the development of the type of 
environment that I have described. You have my personal 
commitment that I will give my very best effort in that 
responsibility.
    I do want to acknowledge the increased attention to strong 
financial management, of which I have been made aware, in both 
the Legislative and the Executive Branches, particularly as a 
result of the efforts of this good Committee. I hope to have 
the opportunity to participate in a continuation of that 
effort.
    Finally, I want to recognize and express my gratitude to 
the staff of the Office of Federal Financial Management for 
their work, and also to my family for their support in the 
period that has led up to this hearing.
    Thank you, Madam Chairman.
    Chairman Collins. Thank you very much, Ms. Springer.
    As I explained with our first panel, there are three 
standard questions that we ask of all nominees, and I would 
like to proceed with those at this time.
    First, is there anything that you are aware of in your 
background which might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Ms. Springer. No, there is not.
    Chairman Collins. Second, do you know of anything personal 
or otherwise that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Ms. Springer. No.
    Chairman Collins. And finally, do you agree without 
reservation to respond to any reasonable summons to appear and 
testify before any duly constituted committee of Congress if 
you are confirmed?
    Ms. Springer. Yes, I do.
    Chairman Collins. Ms. Springer, there has long been a 
concern by Members of this Committee, and it is a concern that 
I share, that management issues seem to take a back seat to 
budget matters within the Office of Management and Budget. I 
was interested in your testimony that before agreeing to go to 
OMB you raised this very issue. But I do feel it is so 
important that we put the M back in OMB, and it is my 
impression that, while this administration is making progress 
in that area, budget issues still tend to be the major focus of 
the office.
    What is your perspective on the emphasis placed on 
management?
    Ms. Springer. I think, Senator, that there is a perception 
that, by virtue of the size of the budget staff at the Office, 
that you could have the impression that management still is a 
lowercase ``m'' relative to the budget side.
    I would say that it is my observation so far that 
management probably has gotten more attention in recent years 
under the director and that has been reinforced now with the 
recent nomination of Mr. Johnson to the deputy director 
position for management. And also, in talking with the people 
on the budget side, the resource management offices, that they 
are very committed to partnering with the staff on the 
statutory management side in achieving our management goals.
    So I have seen an increasing amount of attention and I 
expect that to continue and I will be working very hard to make 
sure that it does.
    Chairman Collins. Financial management related issues have 
been on the General Accounting Office's annual high-risk list 
for many years. That is the list of programs or operations that 
the GAO determines are particularly vulnerable to waste, fraud, 
abuse, and mismanagement. The GAO has designated several 
agencies' financial management--and they are major agencies, 
the Department of Defense, for example, IRS, FAA, and the 
Forest Service--as high risk.
    In the most recent high-risk report, the GAO acknowledged 
that a wide range of financial management initiatives are 
underway and progress is being made. But we are still seeing 
departments and programs that are on the high-risk list year 
after year after year. In fact, some programs have been on the 
list since the inception of the high risk list which, I 
believe, is about a dozen years ago.
    What do you think should be done to make dramatic progress 
in improving the financial management systems of the Federal 
Government?
    Ms. Springer. I have had the opportunity, with this new 
high risk list that has just been published, to start to review 
those reports. I have requested them and I have started to read 
them. And I share your observation and your concern about the 
length of time that it takes for the remediation activities.
    One thing that I have noted is that there is a direct 
relationship between the time it takes and the size of the 
department. So that a department the size of the Department of 
Defense, for example, will take longer for its remediation to 
be totally installed and fruitful just by virtue of the size of 
the operation.
    Having said that, it will be my plan to visit with each of 
those departments, their chief financial officers and, where it 
is appropriate, their chief information officers, and have the 
opportunity to review their plans with them, to see that there 
are milestones, metrics, and accountability standards and ways 
to see that it is on track. We will do that on a regular basis 
where it is appropriate.
    And the staff of the Office of Federal Financial Management 
are assigned, as well, to each of these agencies so that we 
will be able to put very strong attention to monitoring 
progress on those plans.
    Should we find that there is not a plan in place, then 
obviously that would be step one, to work with those 
departments to make sure they have a viable plan to address 
those issues.
    Chairman Collins. What do you see as the relationship 
between an agency or a department's chief information officer 
and the chief financial officer? As I am sure you are aware, 
the Clinger-Cohen Act mandated the creation of CIOs across 
government and envisioned a close working relationship and a 
far greater emphasis on management of technology and 
information systems than had been the case prior to the Act.
    What is your assessment of the Act and how well it is 
working as you look across the Federal Government?
    Ms. Springer. I do not think that there is any more 
important partnership in the agencies, as I have found to be 
the case in the private sector, than between the chief 
information officer and the chief financial officer. Without 
the integrity and the timeliness of good data, the chief 
financial officer or any other senior officer in the agency 
will not be able to make informed decisions.
    So I think that the Act is absolutely on target. I think 
that the agencies--what I have seen is that there is a 
different structure in place in each agency. In some cases, 
there is a reporting relationship, for example, between the 
chief information officer and the chief financial officer. In 
other departments it is structured a little bit differently.
    And it will be one of my objectives to take the temperature 
and really get an assessment of how well that is working. One 
of the ways to gauge it will be to see how well the agencies 
are able to meet the accelerated time frames we have for 
financial reporting and to be able to have a look at some of 
the performance metrics and the timeliness and the quality of 
the data associated with those.
    Chairman Collins. Thank you. Senator Lautenberg.
    Senator Lautenberg. Thank you, very much, Senator Collins.
    You know, you had me nodding my head because I was, as I 
mentioned, in the corporate sector for a long time before I 
came here. Whatever I do seems to take a long time.
    I ran a company called ADP and I was a founder of that 
company. We were three kids just out of school and borrowed 
$5,000 from an unwitting investor and produced a company that 
today has 40,000 employees. And when the CEO, the last one that 
I picked in my work at ADP--the first one already retired but I 
could not stand that--the fellow now who runs the company, the 
CEO, when he gives a speech to employees it is immediately 
translated to 10 languages. The scope of the company, even 
though I sat there through its beginnings and its development, 
it is one of America's most successful public companies. I look 
at it in awe. I look at it as a true example of the American 
opportunity.
    The three of us, two of my partners were brothers. Their 
family, like mine, were hard working factory people in 
Patterson, New Jersey. And here we have a company that had the 
longest growth record of any company in America, over 10 
percent a year. That record, unfortunately, was just broken 
after 42 years. The CEO said publicly that it will be down to 
single digit growth in the next year because of the conditions 
around us. That it is not bad, 42 years of 10 percent increases 
each and every year.
    It was a good investment and I'm sorry I still do not have 
it.
    The thing that struck me, I am on the board of a not-for-
profit organization that is part of a quasi-governmental entity 
here in Washington. We got in an argument about how clean is 
clean. What does it really mean? You hit on a very good 
observation that, I guess, was from your experience with 
Cooper's, was it?
    Ms. Springer. And in the financial services generally, yes.
    Senator Lautenberg. When we looked at what happened to some 
of America's purportedly great companies who walked away with 
clean opinions from their auditors and it turned out that they 
were totally defrauding the public and the investors and people 
affiliated with them, it is one of America's most disgraceful 
private sector moments.
    I am on the board of the Columbia Business School, my alma 
mater, and just arranged for a chair to be established on 
corporate governance. And while on the board of this agency 
that I was talking about, the discussion about someone who was 
waving the clean flag while we were having all kinds of 
management problems, unable to keep up with our receivables, 
unable to keep up with our payables, unable to keep up with our 
need for resources for our mission.
    To hear you say that is reassuring to me, Ms. Springer, I 
can tell you that, and the alert that you put up when you say 
that standards for financial management in government have to 
match the highest that we seek for any operating entity whether 
it is private or otherwise.
    So again, I commend you for that insight and hope that you 
will be able to continue to insist on that as a standard.
    Now you are going to work with the most beloved agency in 
government, OMB. But I think you have got broad enough 
shoulders to withstand the occasional carping that might take 
place.
    Are you prohibited from expressing opinions about financial 
policy as a controller, would you say?
    Ms. Springer. No, actually, I think that one of the main 
focuses of the Office of Federal Financial Management is to be 
a force behind policy. So oftentimes that will relate in a very 
specific sense for forming content of financial statements. It 
may involve, in a broader sense, working for example, as last 
year, with the Committee on legislative activities in the area 
of improper payments, erroneous payments, and things like that 
that led to the Act last year.
    I view that as the model for how the Legislative and 
Executive Branches can work together to achieve a common 
objective. So I would like to see more of that and I think we 
can work in the policy area.
    Senator Lautenberg. Let me ask you this without meaning to 
in any way cause you any discomfort. Financing operations on a 
deficit basis, is that something that you would opine on?
    Ms. Springer. I do not think that that necessarily would be 
a part of my job description.
    Senator Lautenberg. You are good. You are going to be 
terrific.
    Thank you, very much.
    Ms. Springer. Thank you, Senator.
    Chairman Collins. Thank you, Senator Lautenberg.
    Ms. Springer, just one final question. If we were to bring 
you back before this Committee a year from now, what would you 
hope to have accomplished? What are your priorities for this 
year?
    Ms. Springer. There are several, Madam Chairman. The main 
priorities would, first of all, be in the area of moving toward 
meeting the accelerated time frame goals for 2004 for the 
financial statements from each of the agencies. I would hope 
that we could come back with a higher number of agencies beyond 
the 21 with clean opinions, I would like to be able to report 
that to the Committee. I would like to be able to report that a 
number of them were turned in on a shorter time frame than they 
were in 2002. So I would like to be able to report progress in 
that area.
    I would like to be able to report that we have made 
progress on erroneous payments. As you know, the original 
estimate was in the $20 billion range. And as a result of the 
reporting now required under the Act and that was required by 
OMB in the last budget cycle, the number now is closer to $35 
billion. I would like to be able to report to the Committee a 
year from now that that number is lower, and it already has 
come down in some areas, but we would like to see a lot more.
    Those two items are at the top of the list and I am sure, 
as I am more fully engaged, should I be confirmed, that there 
will be a number of others on the list.
    Chairman Collins. I was hoping you were going to report to 
us that the erroneous payments, rather than growing to $35 
billion would, because of better reporting, I suspect, 
declined. That really is a very serious problem and an issue 
that this Committee looks forward to working with you on.
    I want to thank you very much for appearing today. I do 
hope that the Committee will be able to move expeditiously on 
your confirmation next week. We appreciate your willingness to 
serve.
    Thank you.
    Ms. Springer. Thank you, Madam Chairman.
    Chairman Collins. Without objection, the hearing record 
will remain open until 5 p.m. today for the submission of any 
written questions or statements for the record.
    This hearing is now adjourned.
    [Whereupon, at 12:31 p.m., the Committee was adjourned.]
                            A P P E N D I X

                              ----------                              


                PREPARED STATEMENT OF SENATOR VOINOVICH
    Good morning and thank you, Madam Chairman. Today, the Senate 
Governmental Affairs Committee meets to consider nominations for three 
important government management posts, two at the Department of 
Homeland Security, and one at the Office of Management and Budget.
    I would like to extend a warm greeting to our nominees, including 
the Honorable Clark Kent Ervin for Inspector General at the Department 
of Homeland Security; Ms. Janet Hale for Under Secretary for Management 
at the Department of Homeland Security; and Ms. Linda Springer for 
Controller of the Office of Federal Financial Management at the Office 
of Management and Budget.
    The role of Inspector General of Homeland Security is extremely 
important to the success of the new Department. If confirmed, Mr. Ervin 
will serve as the internal watchdog by conducting audits, 
investigations, and maintaining strict oversight of the Department. 
Specifically, the Inspector General will ensure that the Department's 
employees and managers uphold the Homeland Security mission of 
protecting the American public against another terrorist attack. As you 
know, Members of Congress take their oversight role very seriously, so 
I can appreciate the significance of the Inspector General's 
responsibilities. I look forward to working with Mr. Ervin as he 
embarks on this challenging opportunity.
    The Under Secretary for Management is responsible for the 
administration and management of the Department of Homeland Security. 
If confirmed, Ms. Janet Hale will oversee the daunting task of 
transitioning and reorganizing 170,000 employees from 22 different 
agencies into one new Department. In addition to this massive 
undertaking, the Under Secretary for Management will direct other 
departmental activities including the budget, procurement, personnel, 
facilities and equipment, security, and grants and other management 
assistance programs. Therefore, the person selected for this position 
must have a broad set of competiencies to accomplish the challenges 
associated with the largest government restructuring since the creation 
of the Department of Defense in 1947. After reviewing her 
qualifications, I am confident that Ms. Hale possesses the skills 
necessary for the Under Secretary position. As a fellow Buckeye, I 
promise to closely monitor her progress.
    This morning, we will also hear from Ms. Linda Springer, the 
President's nominee for the Controller of the Office of Federal 
Financial Management at the Office of Management and Budget. With over 
25 years of private sector experience, I commend her for answering the 
President's call to serve our country. I am certain that Ms. Springer's 
knowledge and background will be extremely helpful to the Federal 
Government's financial management community.
    I hope that we can move these nominations through the confirmation 
process in an expeditious manner. Thank you Madam Chairman.
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