[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



                   NATIONAL SCIENCE FOUNDATION BUDGET
                       AND MANAGEMENT CHALLENGES

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

                                HEARING

                               BEFORE THE

                        SUBCOMMITTEE ON RESEARCH

                          COMMITTEE ON SCIENCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 9, 2005

                               __________

                            Serial No. 109-7

                               __________

            Printed for the use of the Committee on Science


     Available via the World Wide Web: http://www.house.gov/science

                                 ______


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                          COMMITTEE ON SCIENCE

             HON. SHERWOOD L. BOEHLERT, New York, Chairman
RALPH M. HALL, Texas                 BART GORDON, Tennessee
LAMAR S. SMITH, Texas                JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania            EDDIE BERNICE JOHNSON, Texas
DANA ROHRABACHER, California         LYNN C. WOOLSEY, California
KEN CALVERT, California              DARLENE HOOLEY, Oregon
ROSCOE G. BARTLETT, Maryland         MARK UDALL, Colorado
VERNON J. EHLERS, Michigan           DAVID WU, Oregon
GIL GUTKNECHT, Minnesota             MICHAEL M. HONDA, California
FRANK D. LUCAS, Oklahoma             BRAD MILLER, North Carolina
JUDY BIGGERT, Illinois               LINCOLN DAVIS, Tennessee
WAYNE T. GILCHREST, Maryland         RUSS CARNAHAN, Missouri
W. TODD AKIN, Missouri               DANIEL LIPINSKI, Illinois
TIMOTHY V. JOHNSON, Illinois         SHEILA JACKSON LEE, Texas
J. RANDY FORBES, Virginia            BRAD SHERMAN, California
JO BONNER, Alabama                   BRIAN BAIRD, Washington
TOM FEENEY, Florida                  JIM MATHESON, Utah
BOB INGLIS, South Carolina           JIM COSTA, California
DAVE G. REICHERT, Washington         AL GREEN, Texas
MICHAEL E. SODREL, Indiana           CHARLIE MELANCON, Louisiana
JOHN J.H. ``JOE'' SCHWARZ, Michigan  VACANCY
MICHAEL T. MCCAUL, Texas
VACANCY
VACANCY
                                 ------                                

                        Subcommittee on Research

                  BOB INGLIS, South Carolina, Chairman
LAMAR S. SMITH, Texas                DARLENE HOOLEY, Oregon
CURT WELDON, Pennsylvania            RUSS CARNAHAN, Missouri
DANA ROHRABACHER, California         DANIEL LIPINSKI, Illinois
GIL GUTKNECHT, Minnesota             BRIAN BAIRD, Washington
FRANK D. LUCAS, Oklahoma             CHARLIE MELANCON, Louisiana
W. TODD AKIN, Missouri               EDDIE BERNICE JOHNSON, Texas
TIMOTHY V. JOHNSON, Illinois         VACANCY
DAVE G. REICHERT, Washington         VACANCY
MICHAEL E. SODREL, Indiana           VACANCY
MICHAEL T. MCCAUL, Texas             VACANCY
VACANCY                                  
SHERWOOD L. BOEHLERT, New York       BART GORDON, Tennessee
                 DAN BYERS Subcommittee Staff Director
            JIM WILSON Democratic Professional Staff Member
       DAVID FINGER Professional Staff Member/Chairman's Designee
        ELIZABETH GROSSMAN, KARA HAAS Professional Staff Members
                      JAMES HAGUE Staff Assistant


                            C O N T E N T S

                             March 9, 2005

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Bob Inglis, Chairman, Subcommittee on 
  Research, Committee on Science, U.S. House of Representatives..    14
    Written Statement............................................    15

Statement by Representative Darlene Hooley, Ranking Minority 
  Member, Subcommittee on Research, Committee on Science, U.S. 
  House of Representatives.......................................    16
    Written Statement............................................    17

Prepared Statement by Representative Eddie Bernice Johnson, 
  Member, Subcommittee on Research, Committee on Science, U.S. 
  House of Representatives.......................................    18

Prepared Statement by Representative Russ Carnahan, Member, 
  Subcommittee on Research, Committee on Science, U.S. House of 
  Representatives................................................    19

                               Witnesses:

Dr. Arden L. Bement, Jr., Director, National Science Foundation
    Oral Statement...............................................    20
    Written Statement............................................    22
    Biography....................................................    28

Dr. Mark S. Wrighton, Chairman of the Committee on Audit and 
  Oversight, National Science Board; Chancellor, Washington 
  University, St. Louis
    Oral Statement...............................................    28
    Written Statement............................................    30
    Biography....................................................    35

Dr. Christine C. Boesz, Inspector General, National Science 
  Foundation
    Oral Statement...............................................    36
    Written Statement............................................    37
    Biography....................................................    43

Discussion.......................................................    43

             Appendix 1: Answers to Post-Hearing Questions

Dr. Arden L. Bement, Jr., Director, National Science Foundation..    58

Dr. Mark S. Wrighton, Chairman of the Committee on Audit and 
  Oversight, National Science Board; Chancellor, Washington 
  University, St. Louis..........................................    69

Dr. Christine C. Boesz, Inspector General, National Science 
  Foundation.....................................................    71

             Appendix 2: Additional Material for the Record

Letter to Dr. Arden Bement from Chairman Sherwood Boehlert, dated 
  April 13, 2005.................................................    74

Letter of Response to Chairman Sherwood Boehlert from Dr. Arden 
  Bement, dated May 23, 2005.....................................    76

National Science Board Members 2005..............................    81

 
      NATIONAL SCIENCE FOUNDATION BUDGET AND MANAGEMENT CHALLENGES

                              ----------                              


                        WEDNESDAY, MARCH 9, 2005

                  House of Representatives,
                          Subcommittee on Research,
                                      Committee on Science,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:10 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Bob Inglis 
[Chairman of the Subcommittee] presiding.



                            HEARING CHARTER

                        SUBCOMMITTEE ON RESEARCH

                          COMMITTEE ON SCIENCE

                     U.S. HOUSE OF REPRESENTATIVES

                   National Science Foundation Budget

                       and Management Challenges

                        wednesday, march 9, 2005
                         10:00 a.m.-12:00 p.m.
                   2318 rayburn house office building

1. Purpose

    On Wednesday, March 9, 2005, the Research Subcommittee of the 
Committee on Science of the House of Representatives will hold a 
hearing to examine the fiscal year 2006 (FY06) budget request for the 
National Science Foundation (NSF), as well as longer-term budget and 
management challenges facing the Foundation.

2. Witnesses

Dr. Arden L. Bement is the Director of NSF. Prior to his appointment as 
NSF Director, Dr. Bement was Director of the National Institute of 
Standards and Technology and before that he was Professor and Head of 
the School of Nuclear Engineering at Purdue University.

Dr. Mark S. Wrighton is Chairman of the Audit and Oversight Committee 
of the National Science Board and the Chancellor of Washington 
University in St. Louis, where he also serves as Professor of 
chemistry.

Dr. Christine C. Boesz is Inspector General of the NSF. Prior to 
joining NSF, she served as Head of Regulatory Accountability at Aetna 
U.S. Healthcare, and before that she held several government compliance 
and oversight positions within the Department of Health and Human 
Services.

3. Overarching Questions

          In developing the request, how were priorities 
        determined across and within various agency budget accounts, 
        programs, objectives, and priorities? If NSF were to receive 
        additional funding in FY06 beyond the President's request, 
        where should it be directed?

          What are the most important short-term and long-term 
        budget and management challenges facing NSF, and how should 
        they be addressed?

          What can NSF do to ensure that limited research and 
        management resources are allocated most effectively?

4. Brief Overview

          NSF is the primary source of federal funding for non-
        medical basic research conducted at U.S. colleges and 
        universities. In addition, NSF is the principal federal agency 
        charged with supporting K-12 and undergraduate science, math, 
        and engineering education, and NSF fellowships and research 
        assistantship programs support many graduate and post-doctoral 
        students.

          NSF funds basic research across nearly all 
        disciplines of science and engineering. In many disciplines, 
        such as mathematics, computer science, and the social sciences, 
        NSF is the primary source of federal support for university 
        researchers. Further, NSF supports research in emerging fields, 
        such as computing and information technology since the 1960's, 
        and nanotechnology today.

          The FY06 budget request for NSF is $5.61 billion, an 
        increase of 2.4 percent, or $132 million over the FY05 level. 
        However, because NSF received a 3.1 percent ($180 million) cut 
        in FY05, the overall request level for FY06 is approximately 
        one percent below the FY04 level. In addition, the increase 
        includes a proposed transfer of $48 million from the U.S. Coast 
        guard for ice breaking expenses in support of Antarctic 
        research, so the increase for NSF in reality is about 1.5 
        percent. These flat budgets have forced NSF to make difficult 
        decisions on priorities among its many programs and placed 
        increasing pressure on the agency to ensure that programmatic 
        and management resources are allocated as efficiently as 
        possible.

          The FY06 budget request recommends major cuts to the 
        Education and Human Resources (EHR) account. The request of 
        $737 million for EHR is $104 million, or 12 percent, below the 
        FY05 level and $207 million, or 22 percent, below the FY04 
        level. The cuts are concentrated largely on elementary and 
        secondary education programs, and, to a lesser extent, 
        undergraduate programs. NSF has indicated that the reductions 
        are part of a conscious policy to significantly pare its role 
        in program implementation, allowing work in this area to 
        migrate to the Department of Education.

5. Background

About the National Science Foundation
    NSF was created by Congress in 1950 ``to promote the progress of 
science; to advance the national health, prosperity, and welfare; to 
secure the national defense.. . .'' Roughly 200,000 people--including 
senior researchers, postdoctoral associates, graduate and undergraduate 
students, and K-12 teachers and students--are involved in NSF 
activities each year. NSF funds approximately 10,000 awards annually 
through a highly respected competitive, merit-review process. In 
addition to providing grants to support research projects, NSF also 
funds the construction and operations for major research facilities\1\ 
(such as telescopes and ocean research vessels), supports all levels of 
science and engineering education, and funds programs to increase the 
size and proficiency of the U.S. scientific and technological 
workforce. Since its inception in 1950, NSF has supported 123 of 
America's Nobel Prize winners, including about 50 percent of winners in 
Chemistry and Physics and about 60 percent of winners in Economics.
---------------------------------------------------------------------------
    \1\ NSF-funded major research facilities are constructed and 
operated by outside consortia.
---------------------------------------------------------------------------
    NSF is organized into directorates that support specific 
disciplines of science and engineering research and education: 
Biological Sciences; Computer and Information Science and Engineering; 
Geosciences; Engineering; Mathematics and Physical Sciences; Social, 
Behavioral and Economic Sciences; and Education and Human Resources. In 
addition, a number of separate offices support various specific program 
and management functions. (See Chart 1 for a diagram of NSF's 
organizational structure.)
    By law, NSF leadership has two major components: a director, who 
oversees NSF staff and management and is responsible for program 
administration, merit review, planning, budget and day-to-day 
operations; and the 24-member National Science Board that oversees and 
establishes policies for the Foundation. The Board members, who are 
Presidentially-appointed and Senate-confirmed, are supported in part by 
the work of the Office of the Inspector General (OIG) of the NSF. The 
OIG recommends policies to promote economy, efficiency, and 
effectiveness in administering NSF programs and operations. The OIG 
reports directly to the National Science Board and to Congress.
    NSF has continued to receive high marks from the Office of 
Management and Budget (OMB) for the quality of its management and the 
excellence of its programs. For example, in the FY06 budget request, 
NSF was one of only seven agencies that were awarded three green lights 
on the Executive Branch Management Scorecard. In addition, eight NSF 
programs were examined using OMB's Program Assessment Rating Tool 
(PART),\2\ and all eight programs received ratings of ``Effective'' 
(the highest rating). NSF was the only agency in the Federal Government 
to receive the highest rating on every program that underwent a PART 
review.
---------------------------------------------------------------------------
    \2\ PART is described by the budget as a tool ``developed to assess 
and improve program performance so that the Federal Government can 
achieve better results. A PART review helps identify a program's 
strengths and weaknesses to inform funding and management decisions 
aimed at making the program more effective.''
---------------------------------------------------------------------------
The Merit Review Process
    The merit review process is a critical element of NSF activities. 
No research is performed at NSF by NSF employees; the Foundation's role 
is to solicit, select, and support the best projects proposed by the 
research and education communities. NSF currently receives more than 
40,000 proposals per year. NSF then uses a merit review process to 
determine which proposals receive funding. In this process, proposals 
are evaluated by a panel of independent reviewers consisting of 
scientists, engineers and educators, who do not work at NSF or for the 
institution that employs the proposing researchers.\3\ The reviewers 
assess the intellectual merit and quality of the proposed activity, 
taking into consideration other factors such as the impact of the work 
on enhancing scientific knowledge, providing educational opportunities 
and societal benefits, and broadening participation by under-
represented groups. The reviewers' recommendations are then passed on 
to NSF program officers for a final decision on whether an award should 
be issued.
---------------------------------------------------------------------------
    \3\ NSF selects the reviewers from among the national pool of 
experts in each field and their evaluations are confidential. On 
average, about 50,000 experts give their time to serve on review panels 
each year.
---------------------------------------------------------------------------
NSF Authorization
    In 2002, Congress passed, and the President signed, the National 
Science Foundation Authorization Act of 2002 (P.L. 107-368). The Act 
authorized research and educations programs and appropriations for NSF 
from FY03 to FY07, and strengthened management and oversight of the 
Foundation. The cornerstone funding recommendation in the Act placed 
the overall NSF budget on a five-year doubling track, a goal that 
Congress and the President have fallen far short of (Table 1 includes 
the authorization levels set forth in P.L. 107-368).

6. Issues Facing NSF

    In the current tight budget environment, NSF faces difficult 
challenges in determining priorities among its many programs that are 
deserving of increased funding. For example, NSF must determine the 
right balance between:

        --  education and research activities;

        --  increasing grant size and duration and supporting more 
        scientists;

        --  facilities construction and operations and research;

        --  K-12, undergraduate, and graduate education; and

        --  multi-investigator, interdisciplinary projects and single-
        investigator research in core disciplines.

    In addition to these difficult decisions regarding program 
priorities, budget constraints also force NSF to tackle difficult 
questions about allocating resources for management tasks. Below are 
outlined several notable programmatic and management challenges facing 
NSF.

Decreasing Funding for Education Programs
    The programs in the NSF EHR directorate are designed to support and 
improve U.S. science, technology, engineering and mathematics (STEM) 
education at all levels and in all settings (both formal and informal).
    Of the seven budget categories within the Education and Human 
Resources Directorate, four would receive major budget cuts in the FY06 
request: Math and Science Partnerships (down 24 percent), Elementary, 
Secondary, and Informal Education (down 23 percent), Undergraduate 
Education (down 12 percent), and Research, Evaluation, and 
Communication (down 43 percent) (see Table 2). Most programs within 
these accounts are planning reductions in the number of new awards in 
2006, and two--Math and Science Partnerships and Research, Evaluation, 
and Communication--will not make any new awards.
    NSF has indicated that the reductions in elementary, secondary and 
undergraduate education are part of a conscious policy to significantly 
pare its role in program implementation, allowing these to migrate to 
the U.S. Department of Education. However, NSF's education programs are 
unique in their capacity to develop new and improved materials and 
assessments, create better teacher training techniques and move 
promising ideas from research to practice. An example of the different 
roles NSF and the Department of Education play can be seen in their 
Math and Science Partnerships (MSP) programs. The Department of 
Education's program awards funds to states on a formula basis and 
focuses primarily on secondary-level mathematics, while NSF's program 
provides competitive, merit-reviewed grants to universities and school 
districts to explore innovative ideas and improve math and science 
proficiency for students of all grades. Some education policy experts 
have expressed concern that disinvesting in NSF K-12 education will 
deprive states, districts and schools of the tools and ideas they need 
to achieve the goals of proficiency under the No Child Left Behind Act.

Decreasing Success Rates for Grant Proposals
    The total funding for NSF has increased significantly 
(approximately 40 percent) over the past six years, but the total 
number of proposals NSF receives has risen dramatically as well, from 
under 30,000 to over 44,000. This increase in proposals, coupled with a 
recent concerted effort to increase the size and duration of NSF 
grants, has led to a drop in ``success rate''--the percentage of 
proposals that receive funding has declined from 33 percent in FY00 to 
an estimated 20 percent in FY05. The National Science Board has 
estimated that each year NSF is unable to fund 1,500 to 2,000 research 
proposals (about $1.5 billion worth) that receive reviewer ratings as 
good as those being funded.\4\
---------------------------------------------------------------------------
    \4\ Fulfilling the Promise: A Report to Congress on the Budgetary 
and Programmatic Expansion of the National Science Foundation (National 
Science Board, January 2004), page 6.
---------------------------------------------------------------------------
    For FY06, NSF has set a goal of halting the decline in the success 
rate while maintaining grant size and duration.\5\ Given this 
constraint, and the relatively flat budget requested for FY06, NSF 
plans to try to reduce the number of proposals it receives, in part by 
reducing the number of solicitations the agency issues, narrowing the 
areas covered in those solicitations, and requiring ``pre-proposals'' 
for some programs.\6\
---------------------------------------------------------------------------
    \5\ The average NSF research award provides about $137,000 per year 
for three years.
    \6\ A short ``pre-proposal'' is designed to allow NSF to quickly 
evaluate the general quality and ideas within a potential proposal so 
that only people with a reasonably probability of success have to go 
through the trouble of putting together a full proposal.
---------------------------------------------------------------------------
    NSF's efforts to reduce the number of proposals and increase the 
success rate are motivated by three goals: to be able to fund more of 
the high quality proposals they receive, to use researchers' time more 
effectively (putting together proposals is very time-consuming), and to 
reduce the administrative burden on NSF staff. However, there is some 
concern that narrowing the pool of proposals has the potential to lower 
the overall quality of the pool and hence the quality of the research 
NSF funds. In addition, it is not clear whether this effort will 
conflict with NSF's overall goal of broadening participation in NSF 
programs.

Funding for Major Research Equipment and Facilities Construction, 
        Oversight, Operations, and Research
    One of NSF's core missions is to provide scientists and engineers 
with the tools they need to perform research in a wide variety of 
fields. These tools range from the desktop computers and tabletop 
laboratory equipment used by a single researcher to scanning electron 
microscopes, mass spectrometers, and small supercomputers shared by 
multiple departments on a university campus, to large national (or 
international) facilities, such as radio telescopes and aircraft for 
environmental and atmospheric sampling.
    In the 1990's, NSF created a special budget account for the largest 
facilities with the greatest cost, complexity, and scientific impact. 
Known as Major Research Equipment and Facilities Construction (MREFC) 
projects, these proposals must go through a special review and approval 
process--including merit review of the proposal quality, internal 
review by NSF scientific and financial staff, and final approval by the 
National Science Board--before they can be proposed to Congress for 
funding. While Congress has historically had concerns about the 
transparency and rigor of this process, it appears NSF has made 
significant progress recently in formalizing selection and oversight 
for MREFC projects (see below).
    In the current budget situation, the key challenge will be 
determining how to appropriately balance the need to provide cutting-
edge, large-scale research equipment with the need to fund research. 
Due to the multi-year nature of MREFC construction projects, and their 
long lifetime of use (usually 10-30 years), each project start is a 
serious commitment by NSF to provide construction, operations, 
maintenance, and research funding for many years to come. While the 
FY06 budget request does not propose any new MREFC starts, five MREFC 
projects are ongoing, five have been completed in the past two years, 
and four more have been approved by the National Science Board and are 
in the queue for future funding (Table 3). Setting aside support for 
these projects is placing increasing budget pressure on core research 
activities, and NSF faces a difficult and growing challenge in 
balancing these two needs.

Management and Oversight of the Construction and Operations of Large 
        Research Facilities
    As noted above, Congress has historically had concerns about the 
transparency and rigor of NSF's processes for selecting and overseeing 
large research facilities. For example, the relative priorities among 
projects--and the rationale supporting those priorities--have not 
always been clear. Also, clear guidelines for development, management, 
and oversight of large facilities, and responsibility within NSF for 
ensuring compliance with those guidelines--both key components of 
effective implementation--did not exist.
    NSF is making progress in addressing these shortcomings, and four 
significant efforts to improve the situation are at various levels of 
implementation. First, NSF is now required (per P.L. 107-368) to 
maintain a prioritized list of pending projects that includes the 
criteria and rationale used in developing the rankings. Second, in 2003 
NSF established the position of Deputy Director for Large Facility 
Projects within the NSF Office of Budget, Finance and Award Management. 
Third is the development of a ``Major Facilities Guide'' to outline a 
process for NSF's management and oversight of proposal, construction, 
and operations of large facilities projects and of a document 
describing the process for ``Setting Priorities for Large Research 
Facility Projects Supported by the National Science Foundation.'' Both 
of these documents have been drafted and are scheduled to be finalized 
by the NSF and the National Science Board this summer. Fourth, NSF has 
hired a contractor to develop an automated central cost-tracking system 
specifically to enable full cost accounting for large facilities 
projects; the basic elements of this system are expected be in place in 
September 2005, with the full system becoming operational in 2006.
    These are all important steps that bear careful watching going 
forward. Of particular concern is how NSF will provide the Deputy 
Director for Large Facility Projects with the resources and authorities 
needed to carry out his oversight responsibilities. Each large facility 
project has program management staff within the research directorate 
that spawned the project, but the Deputy Director for Large Facility 
Projects is responsible for overseeing all of the projects. The 
completion of the central cost-accounting system should certainly 
provide the Deputy's office with a valuable tool, but support staff 
will also be needed to help gather and maintain information on, and 
assess the scientific progress and financial performance of, large 
facility projects.\7\ Finally, the role that the Deputy will play in 
certifying to the National Science Board projects' readiness to begin 
construction and monitoring projects' progress is still to be finalized 
and implemented.
---------------------------------------------------------------------------
    \7\ Currently, the support staff for the Deputy Director for Large 
Facility Projects is only 1.5 full-time equivalents.
---------------------------------------------------------------------------
Workforce Planning
    The Office of Inspector General (OIG) has identified workforce 
planning as one of the most serious management challenges facing NSF. 
The effectiveness of NSF's current workforce of 1,700 permanent staff, 
visiting personnel, and contract employees has been increasingly 
hampered by rapidly growing workloads and limited space. For example, 
since 1999, the agency has seen a 40 percent increase in the number of 
proposals received each year, including a 14 percent increase last year 
alone. As a result, NSF estimates that program officers now spend 55 
percent of their time reviewing proposals, leaving less time for other 
duties such as award oversight and program planning.
    While the OIG reports that recent steps taken by NSF to lease 
additional office space and add full-time employees has alleviated some 
of these pressures, a longer-term solution is still needed. NSF asserts 
that its comprehensive, multi-year project reviewing internal business 
processes (known as the ``Business Analysis''), which is scheduled for 
completion by the end of FY05, will provide a long-term plan for 
identifying and addressing workforce needs.

Ice-breaking Services for NSF Facilities at the South Pole
    The NSF manages three year-round facilities in Antarctica, where 
research in physics, astronomy, ocean science, climate science, marine 
and land ecosystems, and other fields is performed. To access these 
facilities for resupply missions, NSF uses two large ice breaking ships 
owned and operated by the U.S. Coast Guard (USCG). NSF reimburses the 
USCG for the incremental costs associated with this use. While there 
are other needs for these ships (such as military preparedness, law 
enforcement, and USCG training), over the past three years, support of 
NSF science activities has accounted for roughly 90 percent of the 
ships' time. Therefore, in the FY06 budget request, the Administration 
proposes shifting the base funding for the two polar class ice 
breakers, as well as another ship,\8\ from the USCG to NSF.
---------------------------------------------------------------------------
    \8\ The third ship is the Healy, a research vessel with ice-
breaking capabilities that operates mainly in the Arctic.
---------------------------------------------------------------------------
    Much of the information needed to evaluate the appropriateness of 
transferring the responsibility and funding for the ice breakers from 
USCG to NSF remains elusive. In the short-term, the actual costs of 
operations and maintenance for these ships has not been determined, and 
it is unclear if the transferred $48 million will be sufficient. In the 
longer-term, Congress and the Administration must consider how best to 
replace the current polar class ice-breaking ships, which are nearing 
the end of their useful lives. It is not immediately clear which 
agencies should bear the costs and be responsible for refurbishment or 
replacement of the existing ships. NSF and USCG, along with the Office 
of Science and Technology Policy and the Office of Management and 
Budget, are engaged in deliberations on these questions.

Post-Award Administration
    For the third consecutive year, independent audits of NSF's 
financial statements have identified post-award monitoring of grantee 
institutions as a ``reportable condition.'' The OIG reports that 
effective post-award monitoring should ensure that: ``awardees are 
complying with award terms and conditions and federal regulations; 
adequate progress is being made toward achieving the objectives and 
milestones of the program; and expenditures listed on NSF's financial 
statements are accurate.'' \9\
---------------------------------------------------------------------------
    \9\ NSF Office of the Inspector General's Semiannual Report to 
Congress (September 2004), page 52.
---------------------------------------------------------------------------
    In response, NSF has taken steps to address some of the post-award 
monitoring issues identified through the independent audits, such as 
establishing a risk-based program for identifying and tracking high-
risk awardees. The Foundation has also noted that the expensive nature 
of site visits associated with post-award monitoring, coupled with 
limited administrative and personnel resources, have hindered its 
ability to address many of these issues. While noting that progress has 
occurred, and recognizing budget limitations, the OIG has (1) 
emphasized that NSF's measures have been too narrowly focused on 
``high-risk awardees,'' which constitute less than 0.1 percent of NSF's 
award portfolio; and (2) recommended that NSF ``apply more cost-
effective monitoring procedures such as desk reviews of reports from 
awardees and computer-assisted screening to medium and low-risk 
awardees on a random basis.''

7. Witness Questions

    The witnesses were asked to address the following questions in 
their testimony:
Questions for Dr. Arden Bement

          In developing the request, how were priorities 
        determined across budget accounts (research, education, 
        facilities, and administration), within accounts (i.e., K-12, 
        undergraduate, and graduate education; research directorates 
        and divisions), and among related agency objectives and 
        priorities (i.e., success rate, grant size and duration; multi- 
        and single-investigator research; facilities construction, 
        operation, and research)? If NSF were to receive additional 
        funding in FY06 beyond the President's request, where should it 
        be directed?

          What are the most important short-term and long-term 
        budget and management challenges facing NSF and how is the 
        agency working to address them?

          The FY06 budget request includes a goal to halt this 
        precipitous decline in the success rate while maintaining 
        recent gains NSF has made in expanding the average size and 
        duration of its grants. What strategies will NSF employ to 
        achieve this? How will NSF ensure that efforts to reduce the 
        number of proposals does not conflict with efforts to broaden 
        participation in NSF programs? To what extent would a strategy 
        of narrowing the pool of proposals lower the overall quality of 
        the pool and hence the quality of the research NSF funds?

          As an increasing number of Major Research Equipment 
        and Facilities Construction (MREFC) projects transition out of 
        the construction phase and into operation, how will NSF balance 
        the need to support core activities in its research accounts 
        with the need to fully fund the operations and research costs 
        associated with new facilities?

          Within NSF's Education and Human Resources (EHR) 
        directorate, the Division of Research, Evaluation, and 
        Communication receives a proposed cut of 43 percent from the 
        FY05 enacted level and will propose no new awards. Is it NSF's 
        goal to provide funding for new awards in FY07 and beyond, or 
        does the fact that no new awards will be made in FY06 signal a 
        planned phase-out of this division?

          What actions is NSF taking to address the management 
        and performance issues outlined in the Office of Inspector 
        General's (OIG) FY05 ``Management Challenges'' letter, 
        particularly those related to workforce planning, post-award 
        administration, and large facilities projects?

Questions for Dr. Mark Wrighton

          If NSF were to receive additional funding in FY06 
        beyond the President's request, where should it be directed?

          What are the most important short-term and long-term 
        budget and management challenges facing NSF and how is the 
        National Science Board (NSB) working to address them? Please 
        provide a summary of recent policy actions that the Board has 
        taken, and a summary of other current issues that are under 
        consideration.

          How is the NSB working with NSF to address the 
        management and performance issues outlined in the Office of 
        Inspector General's (OIG) FY05 ``Management Challenges'' 
        letter, particularly those related to workforce planning, post-
        award administration, and large facilities projects?

Questions for Dr. Christine Boesz

          Please provide an overview of NSF Inspector General 
        (IG) responsibilities and activities, and a summary of recent 
        IG actions and reports.

          What are the most important short-term and long-term 
        budget and management challenges facing NSF, and what actions 
        should NSF be taking to address those challenges? In 
        particular, please discuss the issues related to workforce 
        planning, post-award administration, and large facilities 
        planning.
        
        
        
        
        
        
        
        
    Chairman Inglis. Thank you for coming to this morning's 
hearing on the National Science Foundation Budget and 
Management Challenges, the first Research Subcommittee hearing 
of the 109th Congress.
    I want to extend a special welcome to my colleague, Ms. 
Hooley, the Ranking Democrat on this committee. I am glad that 
the Science Committee has a history of working in a bipartisan 
way. It is a new thing for me, having been on Judiciary and 
Budget in my previous time in Congress, so it is very 
refreshing to be here at Science.
    I spoke recently to a General Electric executive in the 
course of a plant tour in Greenville, South Carolina. They have 
2,600 employees and 1,000 of them are engineers in Greenville, 
South Carolina. We are very happy about that. And I asked him, 
``Could you hire more?'' He said, ``We could take 300 right 
away. The core problem,'' he said, ``those are just not 
available.'' I asked him, ``Why not?'' He said, ``It is the 
teachers.'' He said, ``You need inspiration in order to teach 
people engineering and science.''
    Well, that is what we are here about today. And to 
celebrate the work of NSF and to provide for its future.
    He also told me that they are using the technology in their 
gas turbines, technology that is unique in the whole world. GE 
depends on their ability to innovate to be competitive. For 
most American companies, innovation is their only edge. To 
continue to win in this world of commerce, we must continue to 
create new and improved technologies. If we want to lead the 
world in innovation, we must train the Ph.D.s whose basic 
research fuels technological innovation for the decades to 
come.
    Basic research is surely the lifeblood of innovation. It 
used to be that our large companies did the basic research, 
companies like Bell Labs, IBM, and Xerox. They were 
supplemented in their work by the Department of Energy, and the 
Department of Defense, and NSF. Now, market pressures and the 
need to return bottom-line numbers by their shareholders have 
pushed the burden almost entirely to the Federal Government in 
basic research and increasingly the NSF. Without NSF supporting 
basic research, our edge in science will slip, and our 
innovation gap will grow.
    That is why I am so concerned about the current NSF budget. 
Although there is a slight increase for this year, it doesn't 
make up for last year's cuts, and it is far below the promised 
level that we had of doubling NSF's budget over five years. In 
my previous stint in Congress, as I mentioned, I was on the 
Budget Committee, and I am quite concerned about our current 
budget deficit. I learned during those years, though, that it 
takes two things to balance the budget, and amazingly, we did 
it between 1993 and 1998. We went from a $300 billion deficit 
to a slight surplus. Now we are in the $400 billion range, and 
we need to get to a slight surplus again, we hope. But what I 
learned, though, is it takes two things. It takes spending 
restraint, plus economic growth. Spending restraint alone is 
not enough. You have got to have economic growth.
    So the key, I think, for us, is to figure out how to stop 
simple spending and start thoughtful investing. And that is 
what we are here to talk about today with NSF.
    We have a need to train more scientists and engineers. We 
have to continue the stream of exciting innovations that save 
lives and improve our quality of life. Just as it would be 
shortsighted for a company not to plan the next generation of 
products, it would be irresponsible of us to neglect future 
research in basic science. It is more important than ever, 
because it is the foundation of our innovation economy.
    The NSF has been a key force for innovation, from the MRI 
to bar code scanners to the creation of the Internet and the 
origins of Google. The NSF has a track record of accountability 
and a focus on excellence, and we have to seek continuous 
improvement. The standard for us is higher because the work--
the nature of the work is harder for many of us to understand.
    I will tell you that I wonder about the cuts in math and 
science education and indications that some NSF activities may 
be migrating to the Department of Education. The NSF has a 
passion for excellence, while the Department of Education is 
arguably focused on simple proficiency. Passion isn't easily 
transferred. Are we investing enough in research? Are we simply 
spending on current needs? If we continue down this path, will 
we be positioned in the global--where will we be positioned in 
the global economy in 20 years? Will the modifications to merit 
review ultimately reduce the quality of submissions? Also, what 
are the appropriate costs for Coast Guard icebreaking services, 
and are these activities best funded through the NSF? These are 
challenging questions, and I am hopeful that we can get some 
answers today.
    [The prepared statement of Mr. Inglis follows:]

               Prepared Statement of Chairman Bob Inglis

    I want to welcome everyone and thank you for coming to this 
morning's hearing--the first Research Subcommittee hearing of the 109th 
Congress. I want to extend a special welcome to my esteemed colleague 
Congresswoman Hooley, who is the new Ranking Member of the 
Subcommittee. I am glad that the Science Committee works in such a 
bipartisan way, and I look forward to working with Ms. Hooley.
    I recently spoke to an executive for General Electric. When I asked 
him if he had enough qualified engineers to fill his research jobs, he 
said ``No.'' He could hire 300 tomorrow if they were available. The 
core problem is teachers. There just aren't enough qualified and 
inspiring teachers to produce the scientists and engineers his company 
needs.
    He also told me about the technology that they are using in their 
gas turbines--technology that is currently unique in the world. GE 
depends on their ability to innovate to be competitive. For most 
American companies, innovation is their only edge. To continue to win 
in this world of commerce, we must continue to create new and improved 
technologies. If we want to lead the world in innovation, we must train 
the Ph.D.s whose basic research fuels technological innovation in 
decades to come.
    Basic research is the lifeblood of innovation. It used to be that 
our large companies did the basic research--companies like Bell Labs, 
IBM, and Xerox. They were supplemented by the work of the DOE, DOD, and 
NSF. Now, market pressures and shifting government priorities have 
pushed the burden almost entirely to the Federal Government, and, 
increasingly, NSF. Without NSF supporting basic research, our edge in 
science will slip away and an innovation gap will grow.
    That's why I'm so concerned about the current NSF budget. Although 
there is a slight increase this year, it doesn't make up for last 
year's cuts, and is still below the FY04 level. It is also now far from 
the Congress' promise to double the NSF budget over five years. On my 
previous stint in Congress, I was on the Budget Committee and I was 
quite concerned about our budget deficit. I learned during those years 
that getting it balanced requires spending restraint and economic 
growth. We've got to stop spending and start investing. Investing in 
basic and applied science research makes sense. If we invest wisely, we 
can find economic growth through innovation.
    We also have to train more scientists and engineers. We have to 
continue the stream of exciting innovations that save lives and improve 
our quality of life. Just as it would be short-sighted for a company to 
not plan the next generation of products, it would be irresponsible of 
us to neglect future research in basic science. It's more important 
than ever because it is the foundation of our innovation economy.
    The NSF has been a key force for innovation, from the MRI to bar 
code scanners, from the creation of the Internet to the origins of 
Google. The NSF has a track record of accountability and a focus on 
excellence, and we have to seek continuous improvement. The standard 
for us is higher because the nature of the work is harder for many to 
understand.
    I wonder about the cuts in math and science education, and 
indications that some NSF activities may be ``migrating'' to the 
Department of Education. The NSF has a passion for excellence, while 
the Department of Education is arguably focused on proficiency. Passion 
isn't easily transferred. Are we investing enough in research? Or are 
we simply spending on current needs? If we continue down this path, 
where will we be positioned in the global economy in twenty years? Will 
the modifications to merit review ultimately reduce the quality of 
submissions? Also, what are the appropriate costs for Coast Guard ice-
breaking services, and are these activities best funded through NSF? 
These are challenging questions, and I'm hopeful that we can get some 
answers today.

    Chairman Inglis. The Chair now recognizes Ms. Hooley, the 
Ranking Minority Member on the Subcommittee, for an opening 
statement.
    Ms. Hooley. Mr. Chair, thank you, and I am looking forward 
to working with you. Welcome back to Congress.
    I, too, served on the Budget Committee and know what you 
are talking about. So I am looking forward to serving on this 
committee and working in a bipartisan way.
    I want to welcome our witnesses. Thank you very much for 
taking your time to be here, and I look forward to working with 
you.
    The thrust of this hearing is on the fiscal year 2006 
budget request for the Foundation, and more broadly, on policy 
issues that affect the ability of the Foundation to carry out 
its historic role of nurturing the research and education 
capabilities of the Nation in all fields of science and 
engineering.
    I must say at the onset that I am deeply concerned about 
the overall level of the resources provided for our NSF in the 
President's budget. The budget is clearly inadequate to meet 
the wide-ranging responsibilities of NSF. It was just a little 
over two years ago that we said we wanted to double the budget 
over five years. Congress asked the National Science Board to 
report back on how the increased resources authorized by 
legislation would be used. The Board subsequently responded and 
made the case that valuable as the budget doubling would be, it 
would still be inadequate to allow NSF to satisfy all of the 
unmet needs in basic research and education that would be 
required to sustain future U.S. leadership in science and 
technology. The Board set the desired target as a four-fold 
increase in the budget over five years.
    The budget request before us would leave an accumulative 
shortfall of $5.8 billion in meeting just the doubling goal, 
let alone achieving the target suggested by the Science Board. 
I recognize what our budget looks like, that we are in a 
deficit. And without commenting on the priorities and events 
that led to our current fiscal situation, I believe it is time 
to answer the many calls for strengthening federal support for 
research from such diverse sources as former Presidential 
Science Advisor Alan Bromley, Federal Reserve Chairman Alan 
Greenspan, former Speaker of the House Newt Gingerich, and the 
Hart-Rudman Commission on National Security.
    Increased funding for research is not a drain on the 
budget, but rather it is a necessary investment to allow our 
country to succeed in an increasingly competitive world. 
Withholding this investment, even at a time of tight budgets, 
places us in real danger of losing the competitive edge that we 
have enjoyed for so long. The President's Council of Advisors 
for Science and Technology has called for adjusting the federal 
R&D budget upward for the physical sciences and engineering to 
bring them in collective parity with life sciences over the 
four-year budget cycle.
    I am disappointed that the current budget request for the 
main agencies that support research in these fields, including 
NSF, makes no forward progress toward achieving this goal. In 
addition to the meager levels of the fiscal year 2006 NSF 
budget request, I am also puzzled and concerned about the lack 
of priority it affords to science education activities. NSF K-
12 education funding level, under this request, would drop by 
over 50 percent relative to fiscal year 2004. Not only is the 
Math and Science Partnership Program targeted for a close-out, 
but core programs are slashed that support teacher professional 
development that develop improved educational materials.
    In the face of widespread concerns about the quality of 
science and math in our schools, I am at a loss to imagine any 
reasonable justification for these budget decisions. I would 
note that they seem to be counter to the position that the 
National Science Board has taken on K-12 programs, particularly 
on the value and importance of the Math and Science Partnership 
Program. I believe NSF is making a serious mistake in 
abandoning its long-time role in K-12 science education. I 
suspect this is not a policy change that will be viewed 
favorably by many Members of the Science Committee.
    Adequate funding for basic research and education in 
science and engineering is not a partisan issue. The benefits 
from this investment flow to our economy, to national security, 
and to the well being of our citizens. We in Congress must take 
action that will provide for a vigorous academic research 
enterprise for the Nation. NSF is a key player in realizing 
this vision.
    Mr. Chairman, I want to thank you for calling this hearing 
and thank our witnesses for appearing before the Subcommittee 
today, and I look forward to our discussion.
    [The prepared statement of Ms. Hooley follows:]

          Prepared Statement of Representative Darlene Hooley

    Mr. Chairman, I am pleased to join you in welcoming our witnesses 
today to this oversight hearing on the National Science Foundation. I 
want to congratulate you as you begin your chairmanship of the 
Subcommittee on Research, and I look forward to working with you.
    The thrust of this hearing is on the fiscal year 2006 budget 
request for the Foundation, and more broadly, on policy issues that 
affect the ability of the Foundation to carry out its historic role of 
nurturing the research and education capabilities of the Nation in all 
fields of science and engineering.
    I must say at the outset that I am deeply concerned about the 
overall level of resources proposed for NSF in the President's budget. 
The budget is clearly inadequate to meet the wide ranging 
responsibilities of NSF. It was only a little over two years ago that 
the Congress passed, and the President signed, legislation calling for 
a five-year doubling of the NSF budget.
    Congress asked the National Science Board to report back on how the 
increased resources authorized by the legislation would be used by NSF. 
The Board subsequently responded, and made the case that, valuable as a 
budget doubling would be, it would be inadequate to allow NSF to 
satisfy all of the unmet needs in basic research and education that 
would be required to sustain future U.S. leadership in science and 
technology. The Board set the desired target at a fourfold increase in 
the budget over five years.
    The budget request before us would leave a cumulative shortfall of 
$5.8 billion in meeting the doubling goal--let alone achieving the 
target suggested by the Science Board.
    I recognize that we are facing a daunting budgetary outlook. 
Without commenting on the priorities and events that led to the current 
fiscal situation, I believe it is time to answer the many calls for 
strengthening federal support for research from such diverse sources as 
former presidential science advisor Allen Bromley, Federal Reserve 
Chairman Alan Greenspan, former speaker of the House Newt Gingrich, and 
the Hart-Rudman Commission on National Security.
    Increased funding for research is not a drain on the budget. But 
rather it is a necessary investment to allow the Nation to succeed in 
an increasingly competitive world.
    Withholding this investment, even in a time of tight budgets, 
places us in real danger of losing the competitive edge we have enjoyed 
for so long.
    The President's Council of Advisors for Science and Technology has 
called for adjusting the federal R&D budget upward for the physical 
sciences and engineering to bring them collectively to parity with the 
life sciences over four budget cycles. I am disappointed that the 
current budget requests for the main agencies that support research in 
these fields, including NSF, make no forward progress toward achieving 
this goal.
    In addition to the meager level of the FY 2006 NSF budget request, 
I am also puzzled and concerned about the lack of priority it affords 
to science education activities. NSF's K-12 education funding level 
under this request would drop by over 50 percent relative to fiscal 
year 2004.
    Not only is the Math and Science Partnership program still targeted 
for close-out, but core programs are slashed that support teacher 
professional development and that develop improved educational 
materials.
    In the face of widespread concerns about the quality of science and 
math education in our schools, I am at a loss to imagine any reasonable 
justification for these budget decisions. I would note that they also 
seem to be counter to the position the National Science Board has taken 
on K-12 programs, particularly on the value and importance of the Math 
and Science Partnership program.
    I believe NSF is making a serious mistake in abandoning its long-
time role in K-12 science education. I suspect this is not a policy 
change that will be viewed favorably by many Members of the Science 
Committee.
    Adequate funding for basic research and education in science and 
engineering is not a partisan issue. The benefits from this investment 
flow to our economy, to national security, and to the well being of our 
citizens. We in Congress must take action that will provide for a 
vigorous academic research enterprise for the Nation and, thereby, will 
help fill the storehouse of basic knowledge that powers the future. NSF 
is a key player in realizing this vision.
    Mr. Chairman, I want to thank you for calling this hearing and 
thank our witnesses for appearing before the Subcommittee today. I look 
forward to our discussion.

    Chairman Inglis. Thank you, Ms. Hooley. Thank you for those 
remarks.
    And any additional opening statements will be welcomed by 
the Committee and may be submitted by the Members for the 
record.

    [The prepared statement of Ms. Johnson follows:]

       Prepared Statement of Representative Eddie Bernice Johnson

    Thank you, Mr. Chairman. I also would like to thank our witnesses 
for agreeing to appear before us today. The purpose of this hearing is 
to provide an opportunity to discuss the National Science Foundation's 
budget for FY 2006.
    I am very excited about this hearing today because we will be 
discussing something that is very close to my heart, and that is 
National Science Foundation (NSF) funding.
    Three years ago, Congress sent the President a bill authorizing a 
doubling of NSF's program over five years. Despite signing that bill to 
glowing reviews, the President has sent us four successive budgets that 
fall far short of reaching that goal. This marks a fundamental breach 
of trust with our institutions of higher education and with our 
children, who depend on NSF to fund the best and brightest to pursue 
the most promising scientific insights. The only thing more surprising 
is the continued phase out of the K-12 Math and Science Partnerships 
(MSP) program (down $20 million) and additional cuts to the K-12 
activities in the education directorate. With funding levels down 
another 24 percent from last year, we are devastated our K-12 education 
programs.
    With this budget, what messages are we sending to our children? The 
Nation must take advantage of the human resource potential of all our 
people if we are to succeed in the international economic competition 
of the 21st century. This will require that reform efforts in science 
and math education be founded on educational materials and practices 
that are derived from rigorous research and that seek to engage and 
cultivate the interest of all children.
    For my entire Congressional career, I have worked to increase the 
participation by minorities and women in science, mathematics and 
engineering programs and increased funding for institutions who 
actively recruit under-represented students for these paths of study. 
It is time to take action to ensure the best possible education for our 
children.
    Hopefully, the witnesses today can discuss ways to protect the 
future of our children's education. Thank you, Mr. Chairman.

    [The prepared statement of Mr. Carnahan follows:]

           Prepared Statement of Representative Russ Carnahan

    Mr. Chairman and Ms. Ranking Member, I want to thank you for 
holding this subcommittee hearing today.
    I am pleased to have Dr. Mark Wrighton, Chancellor of Washington 
University, which resides in my congressional district, testifying 
before us. ``WashU'' is a remarkable institution and I am blessed to 
represent many outstanding minds who continually provide our nation 
with important scientific research.
    Today's discussion on the National Science Foundation (NSF) allows 
us to examine our research and development priorities. I am 
disheartened to find much of our budget cuts are again in the area of 
education, specifically K-12 science education programs. Many of us on 
this committee and in the larger U.S. House have noted that our 
continuing global presence in science and technology is reliant upon a 
strong student body, well-versed in science and math curricula. 
Furthermore, our nation's economic and security interests will be 
affected by the priorities we place on invigorating our science and 
technology. I sincerely hope that we can recognize the real value of 
science education when we make NSF's budgetary decisions.
    Dr. Wrighton, thank you for being here today. I look forward to 
hearing the testimony of all our witnesses. However, I want to 
apologize that I must leave the hearing early to attend a previously 
scheduled appointment.

    Chairman Inglis. At this point, I would like to introduce 
our witnesses. Dr. Arden Bement is the Director of the National 
Science Foundation and a former Director of NIST. Dr. Bement 
and I first met at the R&D budget hearing two weeks ago, and I 
am encouraged by his vision for innovation and in keeping our 
economy strong. Dr. Mark Wrighton is also with us, and I am 
going to defer to my colleague, Mr. Carnahan, for an 
introduction.
    Mr. Carnahan. Thank you, Mr. Chairman. It is an honor to 
welcome hometown St. Louis here today in Dr. Mark Wrighton.
    I am pleased to have you here before the Research 
Subcommittee. He is here in his capacity as Chairman of the 
Audit and Oversight Committee of the National Science Board, 
but back home, he is our Chancellor at the Washington 
University in St. Louis and has been one of our fine local 
leaders. Not only do they have a national reputation at 
Washington University, but he has been really instrumental in 
developing a lot of our science and research technology and 
capability in the St. Louis region. So it is great to have you 
here today.
    Chairman Inglis. Thank you, Mr. Carnahan.
    And our third witness is Dr. Christine Boesz, the Inspector 
General of the National Science Foundation and performs there 
this indispensable oversight work.
    Thank you all for coming. We are looking forward to what 
you have to say. We would ask, if you can, to limit your 
remarks to five minutes, although we will be flexible with the 
time limits, as we have already been this morning. Afterwards, 
Members of the Subcommittee will have five minutes each to ask 
their questions.
    We will start with the testimony of Dr. Bement.

   STATEMENT OF DR. ARDEN L. BEMENT, JR., DIRECTOR, NATIONAL 
                       SCIENCE FOUNDATION

    Dr. Bement. Thank you, Chairman Inglis and Ranking Member 
Hooley and Members of the Subcommittee.
    Thank you for this opportunity to provide you with some 
context for our fiscal year 2006 budget request. I welcome you 
to your new positions on the Research Subcommittee, and I look 
forward to continuing the close and productive relationship 
that NSF has had with the Congress over the past 55 years.
    Let me get right to the questions in your invitation letter 
regarding the management challenges we face.
    The first of them deals with priorities, how they are set 
both within and across accounts, and among agency objectives. 
This is an excellent starting point for gaining a perspective 
on NSF, because setting priorities is at the core of what we do 
every day.
    The most important source of information for setting 
priorities comes from the research communities themselves. In 
addition to proposals, the broader research communities also 
provide continuous input in the form of advice from National 
Academy reports, analyses by professional societies, and 
national and international workshops and conferences.
    Our directorate Advisory Committees and Committees of 
Visitors provide top-to-bottom reviews of existing programs and 
help formalize research priorities within and across 
disciplines.
    Ultimately, the priorities reflected in our budget request 
are refined through consultations with the Deputy Director, the 
Assistant Directors, the National Science Board, and the Office 
of Science and Technology Policy. Finally, they are negotiated 
with the Office of Management and Budget in developing the 
President's budget request to Congress.
    This year's budget request highlights four broad 
priorities: strengthening core disciplinary research, providing 
broadly accessible cyberinfrastructure and world-class research 
facilities, broadening participation in the science and 
engineering workforce, and sustaining organizational excellence 
in NSF management practices.
    This last priority leads directly into the next question 
raised in your invitation letter regarding our budget and 
management challenges.
    Nearly three years ago, NSF initiated an independent 
business analysis that has identified a number of important 
management challenges in the areas of workforce requirements, 
information technology, and business practices.
    It may help to give you some examples of NSF's workload.
    In 1993, NSF had 1,205 full-time equivalent employees, and 
we processed 29,000 proposals. In the intervening 12 years, our 
budget has doubled, and the number of proposals we have 
processed grew by more than 50 percent. But our FTEs have 
increased only by 5.7 percent. We have dealt with this 
increased workload by relying on investments in technology. But 
the need for additional people becomes an overriding need at 
some point, and we have reached that point.
    Last year, more than 44,000 proposals submitted to NSF 
received approximately 250,000 reviews by outside experts. Yet, 
in some programs the success rate is 10 percent or less. So one 
of our management challenges we face is being clearer in our 
solicitations so that researchers are not writing proposals 
that are unlikely to get funded.
    Large facilities are necessary to keep NSF at the frontier. 
Although our budget does not request any new starts for major 
research facilities, we will continue projects already 
underway.
    While new starts receive a great deal of attention, very 
little is paid to research facilities that are phased out at 
the end of their useful life. Over the past five years, for 
example, we have phased out four ocean research vessels, two 
aircraft, and two accelerators.
    These decisions were based on the scientific value of these 
platforms, as well as their operation and maintenance costs. 
Indeed, the operation and maintenance costs are a key factor in 
the decision-making process for approval of new research 
facilities.
    When we set priorities, a number of programs in our 
Education and Human Resources directorate were protected from 
reductions. We are maintaining effective programs aimed at 
increasing the participation of women and under-represented 
minorities in research fields. We are also maintaining programs 
to increase the number of science and engineering baccalaureate 
degrees as well as our prestigious fellowship support to the 
most talented U.S. graduate students.
    After providing for high-priority areas, it is necessary to 
find offsets, and as you know, this is the most difficult part 
of priority setting. However, it is important that we focus not 
only on the numbers, but look at the broader policies as well.
    For example, we are proposing a significant reduction in 
the Research, Evaluations, and Communication Division. This is 
not a signal that we are no longer committed to evaluation. 
Rather, we are committed to building evaluations into the 
projects we fund rather than treating it as a separate 
activity. Already, we have used this approach in major projects 
to great advantage, and we expect to expand this design 
throughout EHR.
    NSF faces many management challenges, including, but not 
certainly limited to, those identified by the Inspector 
General. We have been steadily implementing the recommendations 
from the business analysis and will continue to do so. NSF 
employees and I take very seriously the need to earn and 
maintain the taxpayers' trust and to preserve the agency's 
reputation.
    Mr. Chairman, I hope that this brief overview conveys to 
you NSF's commitment to advancing science and engineering in 
the national interest. I am very aware and appreciate the 
Committee's long-standing bipartisan support for NSF, and I 
would be happy to respond to any questions you have.
    [The prepared statement of Dr. Bement follows:]

               Prepared Statement of Arden L. Bement, Jr.

    Chairman Inglis, Ranking Member Hooley, and Members of the 
Subcommittee, thank you for this opportunity to discuss NSF's FY 2006 
budget Request. It is a pleasure to appear before you today. For over 
fifty years, NSF has been charged with being a strong steward of the 
scientific discovery and innovation that has been crucial to increasing 
America's economic strength, global competitiveness, national security, 
and overall quality of life.
    For many years, the United States economy has depended heavily on 
investments in research and development--and with good reason. 
America's sustained economic prosperity is based on technological 
innovation made possible, in large part, by fundamental science and 
engineering research. Innovation and technology are the engines of the 
American economy, and advances in science and engineering provide the 
fuel.
    Investments in science and technology--both public and private--
have driven economic growth and improved the quality of life in America 
for the last 200 years. They have generated new knowledge and new 
industries, created new jobs, ensured economic and national security, 
reduced pollution and increased energy efficiency, provided better and 
safer transportation, improved medical care, and increased living 
standards for the American people.
    Investments in research and development are among the highest-
payback investments a nation can make. Over the past 50 years 
technological innovation has been responsible for as much as half of 
the Nation's growth in productivity.
    Sustaining this innovation requires an understanding of the factors 
that contribute to it. The Council on Competitiveness, a consortium of 
industry, university, and labor leaders, has developed quantitative 
measures of national competitiveness: the number of R&D personnel in 
the available workforce; total R&D investment; the percentage of R&D 
funded by private industry; the percentage of R&D performed by the 
university sector; spending on higher education; the strength of 
intellectual property protection, openness to international 
competition; and per capita gross domestic product. A similar set of 
indicators has been developed by the World Bank Group, and voluminous 
data have been compiled by NSF. The important point underscored by 
these indicators is that, for America to remain a prosperous and secure 
country, it must maintain its technological leadership in the world.
    Perhaps the Council on Competitiveness' 2004 National Innovation 
Initiative report captured it best by simply stating, ``Innovation has 
always been the way people solved the great challenges facing 
society.''
    Often the connection between an area of research, or even a 
particular scientific discovery, and an innovation may be far from 
obvious. Fundamental research in physics, mathematics and high-flux 
magnets supported by NSF led to the development of today's Magnetic 
Resonance Imaging (MRI) technology. Today, MRIs are used widely to 
detect cancer and internal tissue damage. Fundamental research on 
extremophiles, or microorganisms living in extreme environments, led to 
the polymerase chain reaction, a procedure essential to modern 
biotechnology, as well as one that allows us to use DNA for forensic 
evidence. Continuing progress in basic science and engineering research 
promises more discoveries as well as further improvements in living 
standards and economic performance.
    And still, science and engineering is becoming an ever-larger 
portion of our nation's productivity. In the early 1950s, Jacob 
Bronowski wrote, ``The world today is powered by science.'' I would 
take this premise one step farther, ``No science; no economic growth.'' 
Our current level of scientific and technological productivity is what 
keeps us ahead of our global competitors as the playing field continues 
to become more level.
    NSF has helped advance America's basic science and engineering 
enterprise for over fifty years. Despite its small size, NSF has an 
extraordinary impact on scientific and engineering knowledge and 
capacity. While NSF represents only four percent of the total federal 
budget for research and development, it accounts for fifty percent of 
non-life science basic research at academic institutions. In fact, NSF 
is the only federal agency that supports all fields of science and 
engineering research and the educational programs that sustain them 
across generations. NSF's programs reach over 2,000 institutions across 
the Nation, and they involve roughly 200,000 researchers, teachers, and 
students.
    NSF specifically targets its investments in fundamental research at 
the frontiers of science and engineering. Here, advances push the 
boundaries of innovation, progress and productivity.
    Compared to other commodities, knowledge generated from basic 
science investments is unique, long lasting and self-leveraging. 
Knowledge can be shared, stored and distributed easily, and it does not 
diminish by use. Incremental advances in knowledge are synergistic over 
time. NSF is proud to have built the foundation for this knowledge base 
through decades of peer-reviewed, merit-based research.

Management Perspectives on the FY 2006 Budget Request

    Before I get into the details of our FY 2006 request, let me first 
address the questions you have raised in your invitation letter so that 
you can see how we plan to meet the challenges we face. The first item 
deals with priorities--how they are set both across and within accounts 
and among agency objectives. This is an excellent starting point for 
gaining a perspective on NSF, because setting priorities is at the core 
of what we do every day.
    The most important source of information for setting priorities 
comes from the research communities themselves. The research proposals 
that we receive help identify the leading edge of research and areas 
ripe for greater investment. The broader research communities also 
provide continuous input in the form of advice and analyses from myriad 
National Academy reports, analyses by professional societies, and 
national and international workshops and conferences. Our Committees of 
Visitors provide top-to-bottom reviews of existing programs and help 
formalize research priorities within and across disciplines. Ultimately 
the priorities reflected in our budget request are refined through 
consultations with the Deputy Director, the Assistant Directors, the 
National Science Board, and the Office of Science and Technology 
Policy. Finally, they are negotiated with the Office of Management and 
Budget in developing the President's budget request to Congress.
    This year's budget request has four priority areas:

          Strengthening core disciplinary research;

          Providing broadly accessible cyberinfrastructure and 
        world-class research facilities;

          Broadening participation in the science and 
        engineering workforce; and

          Sustaining organizational excellence in NSF 
        management practices.

    This last priority leads directly into the next question raised in 
your invitation letter regarding our short and long-term budget and 
management challenges. Nearly three years ago NSF initiated an 
independent business analysis that has identified a number of important 
management challenges in the areas of workforce requirements, 
information technology, and business practices.
    It may help to give you some examples of NSF's workload. In 1993 
NSF had 1,205 full-time equivalent (FTE) employees and we processed 
29,000 proposals. In the intervening 12 years, our budget has doubled 
and the number of proposals we process grew by more than 50 percent. 
But our FTEs have increased by only 5.7 percent. To put it another way, 
15,000 more proposals were being managed with 69 additional people. We 
have managed this increased workload by relying on investments in 
technology and other efficiency gains, but the need for additional 
people becomes an overriding need at some point, and we have reached 
that point.
    Last year the more than 44,000 proposals submitted to NSF received 
approximately 250,000 reviews by outside experts. Yet in some programs 
the success rate is 10 percent or less. So one of the management 
challenges we face is better calibration of our solicitations so that 
the research community spends less time writing proposals that are not 
likely to get funded. We expect this to result in fewer non-competitive 
proposals and a more productive use of resources.
    Another challenge we face is maintaining a healthy and vibrant 
science and engineering workforce. To do so means encouraging students 
from all backgrounds to enter into science and engineering careers. We 
are protecting effective programs at NSF aimed at increasing the 
participation of women and under-represented minorities in research 
fields, as well as programs to increase the number of science, 
engineering and technology baccalaureate degrees, and our prestigious 
fellowship support for the most talented U.S. graduate students.
    An area that has received a great deal of attention in recent years 
is our support of large research facilities. Our budget does not 
request any new starts for major research facilities, but we will 
continue construction and operation of projects underway. While new 
starts receive a great deal of attention, very little is paid to 
research facilities that are phased out at the end of their useful 
life. Over the past five years, for example, we have phased out or de-
commissioned four ocean research vessels, two aircraft, and two 
accelerators. These decisions were based on the scientific value of 
these platforms as well as their operation and maintenance costs. 
Indeed, the operation and maintenance costs are a key factor in the 
decision-making process for approving new research facilities.
    One of the most conspicuous aspects of our budget request is the 
change in funding for the Education and Human Resources Directorate. As 
I mentioned earlier, when we set priorities, we protected a number of 
programs in EHR from significant reductions. After providing for high-
priority areas, it is necessary to find offsets. As you know, this is 
the part of the priority setting that is most difficult. However, it is 
important that we focus not only on the numbers, but look at the 
broader policies as well.
    For example, although we are proposing a significant reduction in 
the Research, Evaluations and Communication division, this is not a 
signal that we are no longer committed to evaluation. Rather, we are 
committed to building evaluations into the projects we fund, rather 
than treating it as a separate activity. Already we have used this 
approach in major projects to great advantage and we expect to expand 
this design throughout EHR.
    NSF faces management challenges from a number of directions 
including, but certainly not limited to, those identified by the 
Inspector General. Earlier I mentioned our business analysis. We 
undertook this as a proactive measure to help identify workforce 
issues, business practices, and information technology needs that we 
are, and will be, confronting in the future. We have been steadily 
implementing recommendations as they come forth and will continue to do 
so. In the year that I have been at NSF I have been extremely impressed 
by the professionalism and dedication that I have encountered. NSF 
employees, and I, take very seriously the need to earn and maintain the 
taxpayers' trust and preserve the agency's reputation. A complete list 
of agency actions in response to the management challenges is included 
in NSF's FY 2004 Performance and Accountability Report, and would be 
pleased to include a copy for the record.

FY 2006 Budget Request

    Mr. Chairman, the Foundation's FY 2006 budget Request reflects the 
Administration's confidence in our continuing with this mission. In 
light of the tight fiscal climate, NSF fared relatively well. For the 
coming fiscal year, NSF requests $5.6 billion, an increase of $132 
million, or 2.4 percent, over last year's appropriated levels.
    At a time when many agencies are looking at budget cuts, an 
increase in our budget underscores the Administration's support of 
NSF's science and engineering programs, and reflects the agency's 
excellent management and program results.
    With the wealth of benefits that investments in science and 
engineering bring to the Nation, perhaps none is more powerful than the 
capability to respond quickly and effectively to challenges of all 
kinds. NSF's programs reach over 2,000 institutions across the Nation, 
and they involve researchers, teachers, and students in all fields of 
science and engineering and at all levels of education. They also keep 
us abreast of scientific advances throughout the world. This breadth of 
activity in and of itself creates a vital national resource, as it 
provides the Nation with a constantly invigorated base of knowledge, 
talent, and technology. For example, in areas ranging from terrorism 
threats to natural disasters, NSF's ongoing support of research in 
areas such as advanced information technologies, sensors, and 
earthquake engineering ensures a broad base of expertise and equipment 
that allows the science and engineering community to respond quickly in 
times of need and in partnership with scientists and engineers from 
other countries.
    Four funding priorities centering this year's request are designed 
to address current national challenges and strengthen NSF's core 
research investments. They include: (1) Strengthening core disciplinary 
research; (2) Providing broadly accessible cyberinfrastructure and 
world-class research facilities; (3) Broadening participation in the 
science and engineering workforce; and (4) Sustaining organizational 
excellence in NSF management practices.
    This year's investments will strengthen the core disciplines that 
empower every step of the process from discovery at the frontier to the 
development of products, processes, and technologies that fuel the 
economy. At the same time, NSF's investments will enable increasing 
connections and cross-fertilization among disciplines.
    NSF's focus on a clear set of priorities will help the Nation meet 
new challenges and take advantage of promising opportunities, while at 
the same time spurring the growth and prosperity needed to secure the 
Nation's long-term fiscal balance. The FY 2006 budget will emphasize 
investments that address established interagency research priorities, 
meet critical needs identified by the science and engineering 
community, and advance the fundamental knowledge that strengthens the 
Nation's base of innovation and progress. NSF will respond to these 
challenges by supporting the best people, ideas, and tools in the 
science and engineering enterprise, and by employing the best practices 
in organizational excellence.

Research and Related Activities Account

    For FY 2006, total funding for NSF's Research and Related 
Activities account increases by $113 million--nearly three percent--to 
$4.33 billion. This increase largely reflects NSF efforts to strengthen 
fundamental research in the core scientific disciplines as well as 
promote emerging areas of research. The FY 2006 portfolio balances 
research in established disciplines with research in emerging areas of 
opportunity and cross-disciplinary projects. The most fertile 
opportunities sometimes lie in novel approaches or a collaborative mix 
of disciplines.
    Maintaining a strong and robust core is critical during such a 
budget climate as certain segments of the academic community rely 
heavily on NSF funding. In many scientific disciplines, NSF is a major 
source of federal funding to academic institutions, including 
mathematics (77 percent), computer sciences (86 percent), the social 
sciences (49 percent), the environmental sciences (50 percent), 
engineering (45 percent) and the physical sciences (39 percent).
    Research, however, is only part of the NSF equation. Training the 
Nation's next generation of scientists and engineers is another key 
component of NSF's mission, and critical for maintaining economic 
prosperity and global competitiveness. Here, we are finding ways to 
leverage our resources. For example, as we strengthen our core 
disciplinary research programs, we will continue to encourage the types 
of partnerships between researchers and students that provide hands-on 
experience while ensuring that future generations gain the skills, 
knowledge and insight that come from working at the frontier of 
discovery.

Providing Broadly Accessible Cyberinfrastructure and World-Class 
                    Research Facilities

    Twenty-first century researchers and the students who will bring 
new skills into the workforce rely on cutting-edge tools. In FY 2006, 
NSF is placing a high priority on investments in cyberinfrastructure 
and in unique, widely shared research equipment and facilities.
    An infrastructure of power grids, telephone systems, roads, bridges 
and rail lines buttressed this nation's industrial economy and allowed 
it to prosper. However, cyberinfrastructure--a networked system of 
distributed computer information and communication technology--is the 
lynchpin of today's knowledge-based economy. In FY 2006, NSF 
cyberinfrastructure investments total $509 million, an increase of $36 
million (7.6 percent) over the FY 2005 level.
    Modeling, simulation, visualization, data storage and communication 
are rapidly transforming all areas of research and education. NSF 
investments in cyberinfrastructure support a wide mix of projects and 
encourage participation from broad segments of the research community 
that rely on such technology as they tackle increasingly complex 
scientific questions. Thanks to cyberinfrastructure and information 
systems, today's scientific tool kit includes distributed systems of 
hardware, software, databases and expertise that can be accessed in 
person or remotely. In fact, programs such as Teragrid, a multi-year 
effort to create the world's largest distributed infrastructure for 
open scientific research, are specifically designed to transcend 
geographic boundaries and accelerate virtual collaborations.
    NSF is also increasing funding for the Major Research Equipment and 
Facilities Construction by $76 million or 44 percent, in FY 2006 for a 
total of $250 million. There are no new starts, but we will continue to 
fund ongoing projects. Work will proceed on five major facilities that 
will serve a spectrum of the science and engineering community. These 
include world-class astronomy, physics, and geosciences observatories 
identified as the highest priorities for advancing science and 
engineering.

          The Atacama Large Millimeter Array (ALMA), in Chile, 
        is a model of international collaboration. It will be the 
        world's largest, most sensitive radio telescope.

          The EarthScope facility is a multi-purpose array of 
        instruments and observatories that will greatly expand the 
        observational capabilities of the Earth Sciences and permit us 
        to advance our understanding of the structure, evolution and 
        dynamics of the North American continent.

          Ice Cube, the world's first high-energy neutrino 
        observatory, will be located under the ice at the South Pole.

          RSVP, the Rare Symmetry Violating Processes Project, 
        will enable cutting edge physics experiments to study 
        fundamental properties of nature. Studies will probe questions 
        ranging from the origins of our physical world to the nature of 
        dark matter.

          SODV, the Scientific Ocean Drilling Vessel, is a 
        state-of-the-art ship that will be a cornerstone of a new 
        international scientific ocean-drilling program. Ocean core 
        sediment and rock collected by the vessel will help 
        investigators probe changes in the earth's oceans and climate, 
        and explore the planet's geological history.

    Additionally, In FY 2006, NSF will assume the responsibility, from 
the U.S. Coast Guard, for funding the costs of ice-breakers that 
support scientific research in polar regions; $48 million was 
transferred for those purposes.

Broadening Participation

    To feed our knowledge-based economy, the Nation needs to capitalize 
on all of its available talent to produce a workforce of skilled 
technologists, scientists and engineers. That means developing the 
largely untapped potential of those under-represented in the science 
and engineering workforce--minorities, women and persons with 
disabilities. It also means supporting science education and training 
in all regions of the country--not just at large universities or in a 
handful of states.
    To achieve these goals, the FY 2006 Request maintains a total 
investment of almost $400 million. Funding will be targeted to programs 
with a proven track record of progress in these areas. Included in this 
is $8 million in additional support from the research directorates that 
will supplement the Education and Human Resources Account to help 
achieve our goal of broadening science and engineering participation. 
Working closely with the directorates offers a dual benefit of 
providing educational opportunities and hands-on research experience to 
prepare students for the 21st century workforce.
    NSF will invest $396.5 million in a range of programs with proven 
track records. Several highly successful programs for broadening 
participation--the Louis Stokes Alliances for Minority Participation, 
the Alliances for Graduate Education and the Professoriate, the Centers 
for Research Excellence in Science and Technology (CREST), Robert Noyce 
Scholarship program, STEM Talent Expansion Program and EPSCoR--just to 
name a few, are secured in this request. Each of these serve as models 
for integrating educational and research resources to improve 
recruitment and retention in science and engineering to all sectors of 
our diverse population.

Sustaining Organizational Excellence in NSF Management Practices

    NSF directly supports over 210,000 scientists, educators and 
students and processes over 40,000 proposals a year. Balancing the 
needs of a growing, increasingly complex portfolio with new 
requirements for e-business practices, security, accountability, and 
award oversight presents a challenge. NSF sets high standards for its 
business practices and strives to create an agile, innovative 
organization through state-of-the-art business conduct and continual 
review. In order to meet these management goals, NSF will be increasing 
funding for activities that advance organizational excellence by $46 
million, to a total of $336 million. In addition to critically needed 
upgrades to our information technology infrastructure, this increase 
will allow for the recruitment of 25 full-time employees--23 for NSF 
and one each for the National Science Board and the Office of the 
Inspector General--which will improve our ability to manage our 
increasingly complex portfolio.
    Expanding our e-government systems and the implementing of our 
ongoing business analysis recommendations are high priorities for FY 
2006.
    Over the past two years, as part of the Administrations Program 
Assessment Rating Tool, NSF has worked with OMB to rate eight of our 
investment categories. All of these areas have received the highest 
rating of Effective. As such, NSF programs fall within the top 15 
percent of 600 government programs evaluated to date.

Crosscutting Activities

    Beyond our budget priorities lie dozens of programs and initiatives 
that cut across NSF directorates and enrich the overall science and 
research enterprise. NSF sets priorities based on a continual dialogue 
and exchange of ideas with the research community, NSF management and 
staff and the National Science Board. Programs are initiated based on 
several criteria: intellectual merit, broader impacts of the research, 
balance across disciplines and synergy with research in other agencies. 
The Committee of Visitors process ensures a continuous evaluation of 
our merit review process and feedback on how NSF programs are 
performing. In FY 2006, NSF will emphasize four crosscutting areas.
    Crosscutting areas of emerging opportunity: Over several years, NSF 
has funded exceptionally promising interdisciplinary efforts aimed at 
advancing our knowledge, addressing national needs, and probing the 
grand challenges of science. The FY 2006 request maintains or increases 
FY 2005 levels of funding for the following priority areas: $84 million 
for Biocomplexity in the Environment, $243 million for Nanoscale 
Science and Engineering, $89 million for the Mathematical Sciences 
Priority Area and $39 million for Human and Social Dynamics.
    International Collaborations: Science and engineering research are 
increasingly global endeavors. International partnerships are critical 
to the United States in maintaining a competitive edge, capitalizing on 
global opportunities, and addressing global problems. The Office of 
International Science and Engineering's recent move to the director's 
office, and the budget request reflects this important trend. The FY 
2006 budget provides $35 million for NSF's Office of International 
Science and Engineering.
    The recent Indian Ocean Tsunami disaster represents the finest in 
international cooperation--and clearly demonstrates an international 
desire to develop scientific methods for natural disaster prediction 
and ways to reduce losses when such catastrophic events do inevitably 
occur. A network of more than 128 sensors--which NSF has a 20-year 
investment in--recorded shock waves from the recent earthquake as they 
traveled around the Earth. This network is the primary international 
source of data for earthquake location and tsunami warning and its data 
forged the critical core of the early knowledge of this event. Within 
days of the disaster NSF research teams deployed to the region to 
gather critical data before it was lost to nature and reconstruction. 
Their work will help scientists and engineers better understand the 
warning signs of natural disasters, the design of safer coastal 
structures, the development of early warning and response systems, and 
effective steps for disaster recovery.
    Interagency Initiatives: NSF will continue to play a lead role in 
interagency collaborations to address national needs and take advantage 
of economic growth opportunities. In FY 2006, NSF investments in the 
National Nanotechnology Initiative increase by $6 million over FY 2005 
levels to total $344 million. NSF participation in the Networking 
Information Technology Research and Development initiative will 
increase to $803 million--$8 million over the FY 2005 level. The NSF 
contribution to the Climate Change Science Program decreases slightly 
to $197 million.
    Homeland Security Activities: The FY 2006 Request includes a $2 
million increase for government-wide efforts in homeland security 
research and development. This $344 million investment will strengthen 
NSF's commitment to cyber security by supporting innovations to secure 
today's computer and networking systems, embed cyber security into 
future systems and preparing tomorrow's workforce with state-of-the-art 
security skills.

Conclusion

    Mr. Chairman, I've only touched upon the variety and richness of 
the NSF portfolio. NSF research and education efforts contribute 
greatly to the Nation's innovation economy and help keep America at the 
forefront of science and engineering. At the same time, NSF supported 
researchers produce leading edge discoveries that serve society and 
spark the public's curiosity and interest. Extraordinary discoveries 
coming from dozens of NSF programs and initiatives are enriching the 
entire science and engineering enterprise, and making education fun, 
exciting and achievement-oriented. In fact, just this month, two of the 
most widely-read and e-mailed stories from the national press were the 
discoveries of NSF-supported researchers.
    In one, scientists using new bio-bar-code technology created a 
detection method for a protein implicated in Alzheimer's disease. It's 
the first test designed for use in living patients and holds promise 
for diagnosing Alzheimer's at an early stage. In the second 
development, scientists generated an entirely new classification system 
for the brains of birds based on recent studies showing that birds are 
much closer in cognitive ability to mammals than previously thought. 
The new scheme will affect thousands of scientists, and help merge 
research efforts on both birds and mammal. These two examples, fresh 
off the press, illustrate NSF's motto ``Where Discoveries Begin.''
    Mr. Chairman and Members of the Subcommittee, I hope that this 
brief overview conveys to you the extent of NSF's commitment to 
advancing science and technology in the national interest. I am very 
appreciative of the Subcommittee's long-standing bipartisan support for 
NSF. I look forward to working with you and your colleagues in 
continuing the close and productive relationship that NSF has had with 
Congress over the past 55 years.
    I would be happy to respond to any questions that you have.

                   Biography for Arden L. Bement, Jr.

    Arden L. Bement, Jr., became Director of the National Science 
Foundation on November 24, 2004. He had been Acting Director since 
February 22, 2004.
    He joined NSF from the National Institute of Standards and 
Technology, where he had been director since Dec. 7, 2001. Prior to his 
appointment as NIST director, Bement served as the David A. Ross 
Distinguished Professor of Nuclear Engineering and Head of the School 
of Nuclear Engineering at Purdue University. He has held appointments 
at Purdue University in the schools of Nuclear Engineering, Materials 
Engineering, and Electrical and Computer Engineering, as well as a 
courtesy appointment in the Krannert School of Management. He was 
Director of the Midwest Superconductivity Consortium and the Consortium 
for the Intelligent Management of the Electrical Power Grid.
    Bement served as a member of the U.S. National Science Board from 
1989 to 1995. The board guides NSF activities and also serves as a 
policy advisory body to the President and Congress. As NSF director, 
Bement will now serve as an ex officio member of the NSB.
    He also chaired the Commission for Engineering and Technical 
Studies and the National Materials Advisory Board of the National 
Research Council; was a member of the Space Station Utilization 
Advisory Subcommittee and the Commercialization and Technology Advisory 
Committee for NASA; and consulted for the Department of Energy's 
Argonne National Laboratory and the Idaho National Engineering and 
Environmental Laboratory.
    Bement joined the Purdue faculty in 1992 after a 39-year career in 
industry, government, and academia. These positions included: Vice 
President of Technical Resources and of Science and Technology for TRW 
Inc. (1980-1992); Deputy Under Secretary of Defense for Research and 
Engineering (1979-1980); Director, Office of Materials Science, DARPA 
(1976-1979); Professor of Nuclear Materials, MIT (1970-1976); Manager, 
Fuels and Materials Department and the Metallurgy Research Department, 
Battelle Northwest Laboratories (1965-1970); and Senior Research 
Associate, General Electric Co. (1954-1965).
    He has been a director of Keithley Instruments Inc. and the Lord 
Corp. and was a member of the Science and Technology Advisory Committee 
for the Howmet Corp. (a division of ALCOA).
    Bement holds an Engineer of Metallurgy degree from the Colorado 
School of Mines, a Master's degree in Metallurgical Engineering from 
the University of Idaho, a doctorate degree in metallurgical 
engineering from the University of Michigan, an honorary doctorate 
degree in engineering from Cleveland State University, and an honorary 
doctorate degree in science from Case Western Reserve University. He is 
a member of the U.S. National Academy of Engineering.

    Chairman Inglis. Thank you, Dr. Bement.
    Dr. Wrighton.

    STATEMENT OF DR. MARK S. WRIGHTON, CHAIRMAN, AUDIT AND 
          OVERSIGHT COMMITTEE, NATIONAL SCIENCE BOARD

    Dr. Wrighton. Chairman Inglis, Congresswoman Hooley, and 
Members of the Subcommittee, I appreciate the chance to be here 
this morning. I am Mark Wrighton, Chancellor of Washington 
University in St. Louis. My testimony today is in my capacity, 
however, as a member of the National Science Board and chair of 
the Audit and Oversight Committee.
    As Chairman of the National Science Board, Dr. Warren 
Washington regrets that he is unable to be here to give this 
testimony. However, he did ask me to say that on behalf of the 
entire Board and the widespread and diverse research and 
education communities that we serve, that he thanks the House 
for its long-term commitment to a broad portfolio of 
investments in science, engineering, mathematics, and 
technology research and education.
    The Congress established the National Science Board in 1950 
and gave it two key responsibilities: number one, to oversee 
the activities of and establish policies for the National 
Science Foundation; and number two, to serve as an independent 
national science policy body to render advice to the President 
and to Congress on policy issues related to science and 
engineering research and education.
    During our recent Board retreat in February, Board members 
reaffirmed their strong commitment to fulfilling these 
responsibilities. Board members, including the NSF Director, 
also discussed the important role of the Board in establishing 
a vision in setting priorities for the Foundation. Approving 
the annual NSF budget is one way for the Board to contribute to 
the setting of priorities.
    I would like to provide some general comments regarding the 
NSF fiscal year 2006 budget and then briefly update you on the 
National Science Board activities over the last year and 
discuss some of the priorities for the coming year. The written 
testimony that has been provided provides more detail on the 
following points.
    First, on the 2006 budget, the Board has reviewed and 
approved the NSF 2006 budget request that was submitted to the 
OMB in September of 2004, and, broadly, we support the 
President's budget request.
    Given the overall cut to non-defense domestic discretionary 
spending, the Board appreciates that the President's budget 
request recognizes the importance of returning NSF to positive 
growth. We are also certain that the Members of this 
subcommittee fully understand the unique and long-term value of 
NSF programs to important national priorities; these being to 
ensure the future economic health of our nation, maintain the 
United States' pre-eminence in discovery and innovation, and 
provide valuable contributions to homeland security efforts.
    The Board fully supports the fiscal year 2006 NSF budget 
focus on the four funding priorities that Dr. Bement has 
indicated. These address the current national challenges as 
well as making NSF's core portfolio of research investment 
stronger. We recognize that a budget request of $5.6 billion, 
representing a 2.4 percent increase over NSF's fiscal year 2005 
budget, is a significant investment in NSF programs in these 
difficult times. However, we, and others, have noted that this 
request remains below the level of the 2004 NSF operating 
budget.
    Should additional funds beyond the Administration's request 
be made available to NSF in 2006, the National Science Board 
recommends the following: that we support a strong and growing 
role for the NSF in the Nation's investment in science and 
engineering education. There is no greater--no more valuable 
investment than in preparing young men and women to enter 
careers in science and engineering. We should also address the 
backlog of Board-approved and prioritized Major Research 
Equipment and Facilities Construction projects, the so-called 
MREFC projects. Further, we should provide support for 
addressing the financial burden the Foundation will encounter 
related to the transfer of the icebreaker-ships from the Coast 
Guard to the National Science Foundation, in terms of financial 
responsibility.
    Let me give you a brief overview of some of the NSB 
activities during the past year.
    We have developed and implemented a process for the annual 
Board re-prioritization of all approved but not yet funded 
MREFC projects. We have provisionally approved the report 
Setting Priorities for Large Research Facility Projects 
Supported by the National Science Foundation. We are also 
seeking comments from hundreds of individuals and organizations 
that would be expected to use these facilities. We expect Board 
approval and full implementation of the revised process by the 
fall of 2005.
    The Board examined our policies and positions relevant to 
the NAPA report recommendations concerning the Board's 
implementation of the Sunshine Act, the use of IPA and rotator-
type employees, the appointment and reporting process of the 
NSF Inspector General, and the role of the Board in oversight 
and in setting policies for the National Science Foundation.
    There are a number of other important activities that the 
Board engages in. We are currently examining issues raised by 
the fiscal year 2004 financial statement audit and the NSF 
Office of Inspector General on NSF procedures for post-award 
administration of grants and contracts. The Board feels 
strongly that the reportable conditions surrounding post-award 
grant monitoring must be dealt with by NSF management in a 
timely manner. It is my understanding that NSF management has 
developed a draft corrective action plan and is currently 
discussing it with the Inspector General. I would expect that 
both the IG and the NSF management will provide the Board's 
Audit and Oversight Committee an update at our meeting later 
this month.
    While much can and will be done to address these issues in 
2005, the Board is also cognizant that to fully implement the 
auditor recommendations for corrective action--with which the 
Board concurs--that an appropriate level of future funding must 
be provided to support the administrative effort within the 
Foundation.
    We appreciate very much the budget extended to the National 
Science Board, approximately $4 million. In the coming year, 
the Board will expand its ongoing examinations of its role and 
responsibilities as it implements the new protocol for the 
process by which MREFC proposals are developed, prioritized, 
and funded; NSF policies for long-lived data collections, 
policies regarding the identification, development, and funding 
of transformative research; and policies to ensure an adequate 
and diverse science and engineering workforce for the future.
    Let me thank this committee for its role in enhancing the 
investment that will bring great strength to America in the 
future. There is no better investment that you can place than 
in science and engineering education and research.
    Thank you very much.
    [The prepared statement of Dr. Wrighton follows:]

                 Prepared Statement of Mark S. Wrighton

    Chairman Inglis, Congresswoman Hooley and Members of the 
Subcommittee, I appreciate the opportunity to testify before you. I am 
Mark Wrighton, Chancellor, Washington University, Saint Louis, 
Missouri. My testimony today is in my capacity as Member of the 
National Science Board and Chairman of its Committee on Audit and 
Oversight.
    The Chairman of the National Science Board, Dr. Warren Washington, 
regrets that he is unable to provide this testimony to you today. 
However, he did ask me to say that--on behalf of the Board and the 
widespread and diverse research and education communities that we all 
serve--he thanks the House for its long-term commitment to a broad 
portfolio of investments in science, engineering, mathematics, and 
technology research and education.
    The Congress established the National Science Board in 1950 and 
gave it dual responsibilities:

          oversee the activities of, and establish the policies 
        for, the National Science Foundation (the Foundation, NSF); and

          serve as an independent national science policy body 
        to render advice to the President and the Congress on policy 
        issues related to science and engineering research and 
        education.

    During our recent Retreat, Board Members reaffirmed their strong 
commitment to fulfilling these responsibilities. Board Members, 
including the NSF Director, also discussed the important role of the 
Board in establishing a vision and setting priorities for the 
Foundation. Approving the annual NSF budget is one way for the Board to 
set priorities.
    I would like to provide some general comments regarding the NSF FY 
2006 budget request, then update you on National Science Board 
activities over the last year and some of our priorities for the coming 
year.

FY 2006 NSF BUDGET REQUEST

    The National Science Board has reviewed and approved NSF's FY 2006 
budget request that was submitted to the Office of Management and 
Budget (OMB) in September 2004, and we generally support the 
President's budget request before you today. Given the overall cut to 
non-defense domestic discretionary spending, the Board respects and 
appreciates that the President's budget request recognizes the 
importance of returning NSF to positive growth. We are cognizant of the 
current federal fiscal constraints that our nation faces and that there 
are many worthy competing interests for a limited resource. However, we 
are also certain that the members of this House Authorization 
Subcommittee fully understand the unique and long-term value of NSF 
programs in science and engineering research and education to ensuring 
the future economic health of our nation, maintaining U.S. preeminence 
in discovery and innovation, and providing valuable contributions to 
homeland security efforts.
    The Board fully supports the FY 2006 NSF budget focus on the four 
funding priorities that address current national challenges as well as 
strengthening the core portfolio's of NSF's research investment. We 
also recognize that a budget request of $5.605 billion, representing a 
2.4 percent increase over NSF's FY 2005 budget, is a significant 
investment in NSF programs in a time of National fiscal austerity. 
Nevertheless, it is incumbent on the Board to note that this request 
remains below the level of the 2004 NSF operating budget.
    Should additional funds, beyond the Administration's request, be 
made available to NSF in FY 2006, the National Science Board would 
recommend support for a strong and growing role for the NSF in the 
Nation's investment in science and engineering (S&E) education, 
addressing the backlog of Board approved and prioritized Major Research 
Equipment and Facilities Construction (MREFC) projects, and addressing 
the financial burden to the Foundation related to the transfer of 
financial responsibility for ice-breaker ships from the Coast Guard to 
the NSF.
    Adequate preparation of future participants in the U.S. workforce, 
at all levels of education, will require increasing mathematics and 
science understanding and skills if the U.S. is to sustain global 
preeminence in S&T. The Board has underscored its concern about the 
poor performance of U.S. citizens in essential knowledge and skill 
areas in science, technology, engineering, and mathematics (STEM) 
fields, in comparison with other high technology countries. It is 
impossible to conclude that growth in our National capabilities can 
occur without continual enhancement of the skills of our workforce. We 
have relied too heavily on attracting international students and 
professionals to meet our workforce needs, and, as a result, we need to 
do a better job of preparing U.S. students for joining the S&E 
workforce. Other nations are competing with the U.S. for the best 
international students and most accomplished S&E professionals. We must 
recognize the critical challenge our Nation now faces in sustaining a 
U.S. science and technology (S&T) workforce that will be competitive 
over the long-term in an increasingly global and competitive S&T 
environment.
    The Board fully supports the proposed FY 2006 funding for MREFC 
projects, and appreciates the significant increase in funding for this 
budget category. Members of the House Authorization Subcommittee are 
aware of the exciting opportunities at the frontiers of knowledge that 
we are unable to pursue without the cutting edge facilities that are 
funded under this account. While funding for ongoing MREFC projects is 
the highest priority for the Board, the lack of any new project starts 
in FY 2006 will increase the concern of the science community that the 
U.S. is losing its ability to sustain cutting edge S&E research. Should 
additional funding for MREFC projects be available, the Board 
recommends, in priority order, support for Ocean Observatories and the 
Alaska Regional Research Vessel.
    The third area for which the Board would recommend any additional 
NSF funding be allocated is appropriate support for the costs that NSF 
will incur with the transfer of financial responsibility for ice-
breaking activities previously supported by U.S. Coast Guard. The 
Administration's FY 2006 NSF budget request allocated $43 million. The 
Board is very concerned that the true costs to NSF for these new 
responsibilities will be greatly more that $43 million and will, 
therefore, drain resources from NSF research and related activities. We 
understand that a new NSF-Coast Guard Joint Working Group is discussing 
various options for dealing with this issue. In addition, we understand 
that the National Academies Polar Research Board is studying this issue 
and expects to provide an interim report in September 2005. When these 
two groups have completed their discussions and assessments, we urge 
Congress to factor their conclusions into any final budget decisions 
and provide adequate funding to fully support this new NSF 
responsibility.
    Again, the NSB supports the integrated portfolio of investments in 
S&E research and education represented in the NSF FY 2006 budget 
proposal. It thoughtfully blends support for the core disciplines with 
encouragement for interdisciplinary initiatives, brings together people 
from diverse and complementary backgrounds, provides infrastructure for 
research and STEM education, and strengthens the NSF's management of 
the enterprise.
    Further, in this time of National emergency, this budget for NSF 
continues to foster S&T that enhances our homeland security. NSF 
activities in this area include Critical Infrastructure Protection, 
Research to Combat Bioterrorism, Cybercorps/Scholarships for Service, 
Counterterrorism, and Physical/Information Technology Security. Of 
course, by enabling future discovery and innovation, NSF supports our 
nation's long-term prosperity and economy security.

OVERVIEW OF NSB ACTIVITIES DURING THE LAST YEAR

    During the last calendar year, even while going through a 
continuing evolution in terms of its operation, the Board has 
accomplished a great deal in terms of our mission to provide oversight 
and policy direction to the Foundation.
    I would like to briefly highlight some of these accomplishments, 
but will not attempt to discuss them all here.
    In terms of providing oversight for the Foundation, the Board has:

          reviewed and endorsed the Office of Inspector General 
        Semi-annual Reports to Congress, and approved NSF management 
        responses;

          approved the NSF FY 2006 budget request for 
        transmittal to OMB;

          reviewed the Foundation's report on its merit review 
        system;

          provided review and decisions on nine major awards or 
        proposal funding requests;

          developed and implemented a Board process for re-
        prioritization of all Board approved, but not yet funded, MREFC 
        projects; and

          provisionally approved the report Setting Priorities 
        for Large Research Facility Projects Supported by the National 
        Science Foundation (NSB/CPP-04-20).

    The Board and Foundation are implementing the principles of the 
revised process described in this provisionally approved document for 
the FY 2006 budget. At the same time, the Board Office has implemented 
an extensive outreach effort to invite comments from nearly 400 
individuals and organizations that would be expected to have particular 
interest in large facilities. We expect final revisions based on this 
additional review and input, Board approval of all revised procedures 
and policies, and full implementation of the revised process in the 
Fall, 2005.
    With respect to providing policy direction to the Foundation, the 
Board has:

          approved a report on Broadening Participation in 
        Science and Engineering Faculty (NSB 04-41) that addresses the 
        need to increase the diversity of this component of the S&E 
        workforce to more nearly reflect the diversity of the student 
        body it serves, and

          approved elimination of agency requirements for cost 
        sharing, beginning this year (2005), while retaining the one 
        percent statutory cost-sharing requirement.

    In terms of advice to the President and the Congress, the Board 
has:

          published and distributed widely Science and 
        Engineering Indicators 2004, the 16th volume of this statutory, 
        biennial series and initiated the Science and Engineering 
        Indicators 2006 report;

          published a policy statement accompanying Indicators 
        2004, An Emerging and Critical Problem of the Science and 
        Engineering Labor Force (NSB 04-07), which draws attention to 
        the disturbing long-term trends in U.S. education and the 
        globalization of S&T that, if ignored, may result in a loss of 
        U.S. leadership in innovation and high technology;

          approved the draft report on Long Lived Data 
        Collections: Enabling Research and Education in the 21st 
        Century (NSB/CPP-04-21);

          reported to the Congress on Delegation of Authority 
        in accordance with Section 14 of the NSF Act of 2002;

          responded to four specific IPA-related questions that 
        NSB's Executive Officer received from the House Appropriations 
        Subcommittee for VA, HUD, and Independent Agencies;

          published and disseminated Fulfilling the Promise: A 
        Report to Congress on the Budgetary and Programmatic Expansion 
        of the National Science Foundation (NSB-03-151);

          provided testimony to congressional hearings;

          interacted with Office of Science and Technology 
        Policy (OSTP) and OMB on NSF and S&E issues;

          provided briefings and presentations to the Congress 
        and other policy organizations concerning the Board's reports 
        and statements; and

          responded to specific questions and inquiries from 
        Senators and Representatives.

    In an effort to facilitate more openness of Board meetings in 
accord with the Sunshine Act, we expanded our practices for:

          providing public notice of all our meetings in press 
        releases, the Federal Register, and the NSB website;

          treating teleconferences of committees as open 
        meetings;

          providing much more information to the public in a 
        more timely manner regarding meeting discussions and decisions; 
        and

          encouraging public comment during the development of 
        Board publications.

    Also, this past year the Board:

          examined our policies and positions relevant to the 
        recommendations of the National Academy of Public 
        Administration report concerning the Board's implementation of 
        the Sunshine Act, the use of Intergovernmental Personnel Act 
        (IPA) employees and other rotators at NSF, the oversight of the 
        NSF Inspector General, and the role of the National Science 
        Board in oversight and setting policies for NSF;

          began implementing recommendations of the Office of 
        Inspector General to continue enhancing our procedures and 
        policies related to compliance with the Sunshine Act; and

          significantly increased and improved our direct 
        outreach and communication with OMB, OSTP, Congress, other 
        federal agencies, various interest groups and the outside S&E 
        research and education community.

    To that end, the Board Office is contracting to develop monitoring 
and evaluation tools, to expand outreach, and measure the impacts of 
NSB statements, resolutions and reports; and to redesign the NSB 
website for greater accessibility and utility to the public.

          One thematic area of significant accomplishment was 
        transformative or ``high risk'' research where the Board 
        organized a Workshop on Identifying, Reviewing, and Funding 
        Transformative Research and established within the Committee on 
        Programs and Plans a Task Force on Transformative Research.

          Another thematic area of accomplishment this year was 
        long-lived data collections where the NSB established within 
        the Committee on Programs and Plans a Task Force on Long-Lived 
        Data Collections; and prepared a draft report, Long-Lived Date 
        Collections: Enabling Research and Education in the 21st 
        Century (NSB/CPP-04-21).

          The year 2004 also saw the Board's examination of NSF 
        issues related to broadening participation in S&E as well as 
        efforts toward obtaining industry perspectives on workforce 
        issues. The Board has also continued its recognition of 
        outstanding science, engineering and science education 
        accomplishments through the Vannevar Bush Award, Alan T. 
        Waterman Award, and Public Service Awards.

FY 2006 NSB BUDGET

    The Administration's FY 2006 Budget Request of $4.0 million for the 
NSB will be adequate to support Board operations and activities during 
FY 2006. The request seeks resources to carry out the Board's statutory 
authority and to strengthen its oversight responsibilities for the 
Foundation. We expect that the Foundation will continue to provide 
accounting, logistical and other necessary resources in support of the 
NSB and its missions, including expert senior S&E staff serving as a 
cadre of executive secretaries to Board committees and task forces.
    At the urging of Congress, in FY 2003 the Board began examining 
options for augmenting its professional staffing levels. At its May 
2003 meeting, the Board decided to begin a process to assess the 
feasibility of recruiting for positions that would broaden its policy 
support, provide additional legal advice, and enhance the Board's 
capabilities in advanced information technology. The Board Office has 
continued to implement the staff enhancement plan, adding four 
positions this fiscal year for support staff, including information 
technology staff, science assistants, national awards assistant, and 
filling the vacancy for an editor/writer. The Board Office will be 
recruiting two senior professionals to provide policy and legal support 
to the Board this year. The Board is very pleased with the progress of 
the staff enhancement process.
    The NSB Office staff provides the independent resources and 
capabilities for coordinating and implementing S&E policy analyses and 
development. It also provides operational support essential for the 
Board to fulfill its mission. By statute, the Board is authorized five 
professional positions and other clerical staff as necessary. In 
consultation with the Congress, the Board has defined these 
professional positions as NSB senior S&E policy staff, and the clerical 
and technical positions as NSB staff that support Board operations and 
related activities. The full impact of increasing the number of 
professional positions closer to the statutory level is expected to 
occur in FY 2005, emphasizing a broadening of professional skills to 
support the Board.
    In addition to the NSB Office's essential and independent resources 
and capabilities, external advisory and other services are especially 
critical to support production of NSB reports, and supplement the NSB 
staff's general research and administration services to the Board. 
These external services provide the Board and its Office with the 
flexibility to respond independently, accurately and quickly to 
requests from Congress and the President, and to address issues raised 
by the Board itself.
    In FY 2006, the Board will expand its ongoing examinations of its 
role and responsibilities regarding the NSF's MREFC programs as it 
finalizes the development and implementation of a new protocol for the 
process by which major research equipment and facilities proposals are 
developed, prioritized, and funded; NSF policies for Long-lived Data 
Collections; NSF policies regarding the identification, development and 
funding of transformative ``high risk'' research; and policies to 
ensure an adequate and diverse S&E workforce for the future. These 
special activities are, of course, in addition to NSB's normal 
oversight of the Foundation.
    For example, through the Board's Audit and Oversight Committee, 
which I chair, we are currently examining issues raised by the FY 2004 
Financial Statement Audit and the NSF Office of Inspector General on 
NSF procedures for post-award administration of grants and contracts. 
The Board feels strongly that the reportable conditions surrounding 
post-award grant monitoring must be dealt with by NSF Management in a 
timely manner. NSF has assured the Board that corrective actions will 
be taken. It is my understanding that NSF Management has developed a 
draft corrective action plan and is currently discussing it with the 
IG. NSF has been requested to provide updates to the Board on progress 
in addressing this issue. I would expect that both the IG and NSF 
Management will provide the Board's A&O Committee with an update at our 
March meeting. While much can and will be done to address these issue 
in FY 2005, the Board is also cognizant that to fully implement the 
auditor recommendations for corrective action, with which the Board 
concurs, appropriate level of future funding must be provided.
    At the request of Congress, and consistent with Board discussions 
during our recent Retreat, the Board will undertake the development and 
establish a new vision for the Foundation for the 21st Century. This 
visionary document will also include overarching goals with both long- 
and short-term priorities that take into account federal fiscal 
realities. We expect to work closely with the NSF Director and finalize 
this effort by the end of 2005.
    At the request of Congress, the Board will also conduct an 
examination of the NSF Merit Review System and report our initial 
findings before the end of this fiscal year.
    The Board will continue to review and approve NSF's actions for 
creating major NSF programs and funding large projects. Special 
attention will be paid to impacts of budget constraints on the S&T 
workforce, broadening participation in higher education, national S&T 
infrastructure, and the size and duration of NSF grants.
    Effective communications and interactions with our constituencies 
contribute to the Board's work of identifying priority S&T policy 
issues, and developing policy advice and recommendations to the 
President and Congress. To this end, the Board will increase 
communication and outreach with the university, industry and the 
broader S&E research and education community, Congress, Federal S&T 
agencies, and the public. These activities will support U.S. global 
leadership in discovery and innovation based on a continually expanding 
and evolving S&T enterprise in this country, and will insure a 
principal role for NSF programs in providing a critical foundation for 
S&E research and education.
    With our eight new Board Members, new openness, and new modes of 
operations, the Board has much to do in 2005. However the most daunting 
challenge we face is making the tough choices and prioritizing NSF 
programs and projects in the face of constrained federal budgets and a 
growing competition for those funds.

CLOSING REMARKS

    This is a difficult time for federal budgets for S&E research and 
education and the institutions and individuals in the nonprofit and 
public sectors that rely on federal support. For over 50 years the 
Federal Government has sustained a continual, visionary investment in 
the U.S. research and education enterprise in the expectation that such 
investment would redound to the benefit of all Americans. That federal 
effort has expanded the horizon of scientific discovery and engineering 
achievements far and wide, leading to the realization of enormous 
benefits to our nation and, indeed, all of humanity.
    In recognition of the federal fiscal realities our nation faces, 
the National Science Board pledges that we will be a force for causing 
the NSF to set priorities, to make hard programmatic budget decisions 
and, as a result, to obtain the most benefits from the funds provided. 
However, even in a time of budget constraints, as a nation we cannot 
ignore our growing dependence as a society on innovation for economic 
prosperity and the ever-improving quality of life Americans have come 
to expect. The federal compact in research and education with the 
nonprofit sectors is an essential pillar of our nation's global 
dominance in S&T.
    We know what works--we have a very long history of success to draw 
on. We know the expanding frontiers of knowledge offer enormous 
opportunities for research and innovation. We also know that the 
education of all our citizens in the fundamentals of math, science and 
engineering must be addressed if the U.S. is to remain eminent in S&T 
when we enter the 22nd century. As other nations ramp up their 
investment in the infrastructure for S&E research and innovation, we 
cannot be complacent. The federal investment in the Nation's S&T is a 
necessity for the Nation's future prosperity and security. The U.S. 
must sustain its advantages through continued wise, adequate federal 
support for our S&E enterprise.

                     Biography for Mark S. Wrighton

CHEMISTRY

B.S., Florida State University, 1969

Ph.D., California Institute of Technology, 1972

    Mark Stephen Wrighton was born in Jacksonville, Florida, and 
attended the California Institute of Technology, where he was awarded 
the Ph.D. degree in Chemistry in 1972. Following graduation, he joined 
the chemistry faculty at the Massachusetts Institute of Technology 
(MIT), became a Full Professor in 1977, was named the Frederick G. 
Keyes Professor of Chemistry in 1981, headed the Department of 
Chemistry from 1987 to 1990, was named the Ciba-Geigy Professor of 
Chemistry in 1989, and served as provost of MIT from 1990 to 1995. He 
was elected the 14th Chancellor of Washington University in St. Louis 
in 1995 and also serves as professor of chemistry. Wrighton's research 
interests include transition metal catalysis, photochemistry, surface 
chemistry, molecular electronics, and photoprocesses at electrodes. He 
has authored or co-authored more than 300 articles in professional and 
scholarly journals, and he holds 14 patents.
    Wrighton serves on the Board of Directors of the Consortium on 
Financing Higher Education, the Donald Danforth Plant Science Center, 
Cabot Corporation, Helix Technology Corporation, Ionics, Inc., and A.G. 
Edwards, Inc. He is also a trustee of the Missouri Botanical Garden and 
the St. Louis Science Center. Wrighton has served on numerous editorial 
advisory boards, councils, committees, and study groups for scientific 
organizations, including the National Science Foundation.
    Among Wrighton's many awards are the Herbert Newby McCoy Award in 
1972 and the California Institute of Technology Distinguished Alumni 
Award in 1992. The American Chemical Society honored him in 1981 with 
the Pure Chemistry Award and in 1988 with the Award in Inorganic 
Chemistry. In 1983 he received the E.O. Lawrence Award from the U.S. 
Department of Energy and the Gregory and Freda Halpern Award in 
Photochemistry from the New York Academy of Sciences; the same year, he 
was named a MacArthur Fellow. He is also a fellow of the American 
Academy of Arts and Sciences, the American Association for the 
Advancement of Science, and the American Philosophical Society. He is a 
member of the American Chemical Society, Sigma Xi, and the 
Electrochemical Society. Wrighton was appointed to the National Science 
Board in 2000. He chairs the Board's Audit and Oversight Committee.

    Chairman Inglis. Thank you, Dr. Wrighton.
    Dr. Boesz.

    STATEMENT OF DR. CHRISTINE C. BOESZ, INSPECTOR GENERAL, 
                  NATIONAL SCIENCE FOUNDATION

    Dr. Boesz. Good morning, Chairman Inglis, Congresswoman 
Hooley, and distinguished Members of this subcommittee.
    I appreciate the opportunity to appear before you today. I 
am Christine Boesz, sometimes called Tina, and I am the 
Inspector General of the National Science Foundation.
    The National Science Foundation, or NSF, is an innovative 
agency dedicated to maintaining American leadership across the 
frontiers of scientific and engineering research and education. 
As the scientific enterprise changes and research evolves, new 
challenges inevitably arise.
    Consequently, my office has worked closely with the 
National Science Board and NSF management to identify and begin 
to address issues that are important to the success of NSF 
achieving its goals.
    As Inspector General, I enjoy a unique perspective. My 
office is responsible for promoting economy, efficiency, and 
effectiveness in administering NSF's programs; for detecting 
and preventing fraud, waste, and abuse within NSF or by 
individuals that submit proposals to or receive funding from 
NSF; and for identifying and helping to resolve cases of 
research misconduct. We also engage in outreach activities in 
an effort to build partnerships within NSF, with other federal 
agencies, with NSF awardees, and with the scientific, 
engineering, and educational communities.
    In addition to individual audit and investigation reports, 
the two primary methods for communicating with the Congress, 
the National Science Board, and NSF management are through our 
semi-annual reports and annual management challenges letters.
    Today, I want to highlight two of the most important short-
term and long-term management challenges facing NSF: the 
strategic management of NSF resources and improved financial 
performance.
    First, the strategic management of NSF administrative 
resources, especially human capital, is an ongoing and pressing 
issue. In 2002, NSF launched a multi-year business analysis 
effort to address this challenge, yet NSF still struggles with 
the development of a workforce plan.
    While NSF's workload has rapidly increased over the past 
few years, the agency has not identified the amount of staffing 
and other administrative resources needed to address this 
growing disparity. NSF's critical staffing shortage is evident 
in NSF's management and oversight of its large facility 
portfolio. It is also apparent by the lack of resources that 
have been assigned to carry out many of NSF's general post-
award monitoring responsibilities.
    This brings me to the second challenge: improved financial 
performance through better post-award administration. For four 
consecutive years, auditors have found that NSF's monitoring of 
grantee institutions has significant weaknesses. Specifically, 
NSF's current program is not comprehensive enough for it to be 
effective in identifying and resolving issues. An effective 
monitoring program would ensure that awardees are complying 
with federal requirements, are making adequate progress towards 
achieving research objectives, and are charging allowable 
costs.
    Further, an audit by my office recently found that many 
research reports, which are used to monitor progress, are 
submitted significantly late or not at all. While NSF has taken 
steps over the past three years to improve its post-award 
administration, progress is slow and much remains to be done.
    I realize that resources are needed for NSF to fully 
address its challenges. While new resources would be highly 
desirable, I believe that realignment of certain management 
priorities would ease some of the current burden. Just as the 
scientific enterprise has changed over the past few decades, 
NSF must address its changing administrative challenges by 
reassessing how it conducts its business. In an environment of 
increased accountability and stewardship of limited federal 
funds, effective award administration is essential.
    In closing, I want to point out that in my recent semi-
annual report to the Congress for the 6-month period ending 
September 30, my office reported on numerous audit and 
investigative activities, resulting in over $30 million in 
questioned costs and $500,000 in investigative recoveries. My 
written testimony highlights samples of both audit and 
investigative matters.
    I look forward to working with the National Science 
Foundation management, the National Science Board, and you as 
together we address the challenges facing the National Science 
Foundation, a unique and innovative agency.
    Again, thank you for your invitation to participate in this 
hearing, and I would be happy to answer any questions that you 
may have.
    [The prepared statement of Dr. Boesz follows:]

                Prepared Statement of Christine C. Boesz

    Chairman Inglis, Ranking Member Hooley, and distinguished Members 
of the Subcommittee, I appreciate the opportunity to appear before you 
today. As you know, the National Science Foundation (NSF) is an 
innovative agency dedicated to maintaining American leadership in 
discovery and the development of new technologies across the frontiers 
of scientific and engineering research and education. As the scientific 
enterprise changes and research evolves, new challenges arise. 
Consequently, my office has worked closely with the National Science 
Board and NSF management to identify and begin to address issues that 
are important to the success of NSF achieving its goals.
    As Inspector General, I enjoy a unique perspective on NSF 
activities and the research and education enterprise in general. My 
office is responsible for promoting economy, efficiency, and 
effectiveness in administering NSF's programs; detecting and preventing 
fraud, waste, and abuse within NSF or by individuals that submit 
proposals to or receive funding from NSF; and identifying and helping 
to resolve cases of research misconduct. My office also engages in 
outreach activities in an effort to build partnerships within the 
agency, other federal agencies, NSF awardees, and the scientific, 
engineering, and education communities. These partnerships assist us in 
resolving audit and investigation matters effectively and promoting 
education on research misconduct and award administration issues. In 
addition to reports on individual audits and investigations, the two 
primary methods for formally communicating with the National Science 
Board, NSF management, and the Congress are through our Semiannual 
Reports and annual management challenges letters.

Management Challenges

    This past October, my office conducted its annual assessment of the 
most serious management and performance challenges facing NSF.\1\ My 
office compiled a list of eleven management challenges based on our 
audit work, general knowledge of the agency's operations, and the 
evaluative reports of others, such as the Government Accountability 
Office and NSF's various advisory committees, contractors, and staff. 
These challenges, which are essentially unchanged from our previous 
assessment,\2\ fall into five general categories: 1) strategic 
management of agency resources, 2) improved financial performance, 3) 
expanded electronic government, 4) budget and performance integration, 
and 5) program-specific challenges.
---------------------------------------------------------------------------
    \1\ Memorandum from Christine C. Boesz, Inspector General, National 
Science Foundation, to Warren Washington, Chairman, National Science 
Board, and Arden Bement, Acting Director, National Science Foundation 
(Oct. 15, 2004) (on file with NSF OIG).
    \2\ Memorandum from Christine C. Boesz, Inspector General, National 
Science Foundation, to Warren Washington, Chairman, National Science 
Board, and Rita R. Colwell, Director, National Science Foundation (Oct. 
17, 2003) http://www.nsf.gov/oig/managementchallenges2004.pdf.
---------------------------------------------------------------------------
    I believe that the two most important challenges are related to the 
first two of these general categories, which encompass both the short-
term and long-term needs of NSF. The strategic management of NSF 
resources is an ongoing and pressing issue. NSF needs to devote more 
resources and attention to making business and process improvements, 
while at the same time, planning for its future workforce needs. 
Although advances in technology have enhanced the workforce's 
productivity, NSF's rapidly increasing workload has forced the agency 
to become increasingly dependent on temporary staff (e.g., rotators and 
visiting scientists) and contractors to handle the additional work. 
NSF's efforts in the past to justify an increase in staff have been 
impeded by the lack of a comprehensive workforce plan that identifies 
workforce gaps and outlines specific actions for addressing them. 
Without such a plan, NSF cannot determine whether it has the 
appropriate number of people or the types of competencies necessary to 
accomplish its strategic goals. In 2002, NSF launched a multi-year 
business analysis effort to address this challenge. To date, NSF has 
made few decisions regarding implementation of a workforce plan. 
Without such a plan, NSF is unable to assess the number and skill-level 
of rotators and other personnel needed to carry out its work. Of 
particular concern is the need for resources to oversee NSF's large 
facility projects and carry out effective post-award monitoring.
    Throughout my five years as Inspector General of NSF, my office has 
increased its audit attention on matters related to NSF's management 
and oversight of its large facility project portfolio, which includes 
projects ranging from tens of millions to hundreds of millions of 
dollars. In 2000 and 2002, my office issued reports critical of NSF's 
management of large infrastructure projects and made recommendations 
for addressing this important piece of NSF's research portfolio.\3\ 
These recommendations urged NSF to establish formal guidance for the 
programmatic and financial management of large facilities, including 
full-cost tracking. An important aspect of NSF's plan to address these 
recommendations is the establishment of a Large Facility Project (LFP) 
Office with responsibility for managing and overseeing large facility 
projects. We reviewed the progress this Office is making in issuing 
project management guidance and providing oversight of current 
projects.\4\ The Office's progress has been slow and constrained by 
workload and staffing issues. Currently the LFP Office has 2.5 full-
time-equivalent employees responsible for overseeing 13 projects, each 
of which is estimated to receive an average of $100-$400 million in 
total Major Research Equipment and Facilities Construction 
appropriation funding. While the LFP Office may have some access to 
other NSF staff to support its activities, I believe that dedicated 
resources, specific to the Office's oversight responsibilities, are 
essential. In addition to resources, however, and perhaps more 
importantly, the LFP Office needs organizational authority to 
independently oversee the management and construction of these 
projects, and a high-level champion to ensure that authority. I believe 
Dr. Arden Bement, as NSF Director, intends to be this champion. 
Further, the Office needs a more structured management approach that 
includes a formal mission statement, specific goals and measures, and a 
realistic staffing plan.
---------------------------------------------------------------------------
    \3\ Office of Inspector General, National Science Foundation, Audit 
of the Financial Management of the Gemini Project, Report No. 01-2-001 
(Dec. 15, 2000); Office of Inspector General, National Science 
Foundation, Audit of Funding for Major Research Equipment and 
Facilities, Report No. 02-2-007 (May 1, 2002) (both on file with NSF 
OIG).
    \4\ Office of Inspector General, National Science Foundation, 
Survey of Large Facility Projects Management and Oversight Division, 
Report No. 05-6-002 (Dec. 29, 2004) http://www.nsf.gov/oig/
LFP-Report.pdf
---------------------------------------------------------------------------
    Finally, over the past five years, we have focused increasing audit 
efforts on addressing NSF's challenge to effectively administer and 
oversee all of its approximately 30,000 active grants and cooperative 
agreements once they have been awarded. Since 2002, four consecutive 
independent audits of NSF's financial statements have cited weaknesses 
in the agency's post-award monitoring of grantee institutions as a 
significant deficiency.\5\ Specifically, the auditors found that (1) 
NSF's current risk model for focusing its monitoring efforts does not 
adequately capture all high-risk awardees; (2) NSF's award-monitoring 
program does not address procedures for both baseline and advanced 
monitoring depending on the financial risk of the award; and (3) 
procedures for conducting on-site award monitoring at awardee 
institutions are not adequate for the performance of an effective on-
site review. In addition, in the FY 2004 audit, the independent auditor 
identified a second reportable condition: contract monitoring. The 
auditors found that NSF does not adequately review public vouchers 
submitted by contractors receiving advance payments to ensure that the 
reported expenditures are proper and allowable under the contract. 
Without adequately performing such procedures, misstatements and 
unauthorized expenditures may go undetected.
---------------------------------------------------------------------------
    \5\ KPMG Auditor's Report, Fiscal Year 2004 National Science 
Foundation Financial Statement Audit (Nov. 12, 2004) (page III-45 of 
NSF's 2004 Accountability Report found at http://www.nsf.gov/pubs/2005/
nsf0501/new-pdf/nsf0501.pdf); KPMG Auditor's Report, Fiscal 
Year 2003 National Science Foundation Financial Statement Audit (Nov. 
17, 2003) (page III-43 of NSF's 2003 Accountability Report found at 
http://www.nsf.gov/pubs/2004/nsf0410/new-pdf/
nsf0410final.pdf); KPMG Auditor's Report, Fiscal Year 2002 National 
Science Foundation Financial Statement Audit (Jan. 29, 2003) (page III-
39 of NSF's 2002 Accountability Report found at http://www.nsf.gov/
pubs/2003/nsf03023/pdf/nsf03023final.pdf); KPMG Auditor's Report, 
Fiscal Year 2001 National Science Foundation Financial Statement Audit 
(Jan. 18, 2002) (page 71 of NSF's 2001 Accountability Report found at 
http://www.nsf.gov/pubs/2002/nsf02097/nsf02097.pdf).
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    A recent audit by my office further highlights the need for 
increased post-award monitoring.\6\ My auditors found, over a five-year 
period, that approximately 47 percent of the 151,000 annual and final 
project reports required by the terms and conditions of NSF's grants 
and cooperative agreements were either submitted late or not at all. Of 
the 43,000 final project reports, eight percent were never submitted, 
and 53 percent were submitted, on average, five months late. Of the 
108,000 annual progress reports, 42 percent were never submitted. This 
is due in part because of a lack of emphasis placed on the importance 
of these reports, as evidenced by a lack of policies and infrastructure 
that facilitate the staff's ability to adequately address this key 
facet of award administration. Moreover, in 74 of 571 occurrences over 
the past five years, NSF provided additional funding, contrary to its 
own policy, to principal investigators who had not submitted final 
project reports for prior awards.
---------------------------------------------------------------------------
    \6\ Office of Inspector General, National Science Foundation, Audit 
of Project Reporting for NSF Awards, Report No. 05-2-006 (Dec. 13, 
2004) http://www.nsf.gov/oig/05-2-006Final.pdf.
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    An effective post-award monitoring program should ensure that: 
awardees are complying with award terms and conditions and federal 
regulations; adequate progress is being made toward achieving the 
objectives and milestones of the funded research project; and awardee 
expenditures listed on NSF's financial statements represent costs that 
are accurate and allowable. While NSF has taken some steps over the 
past three years toward establishing a risk-based program for post-
award monitoring of its grants, more needs to be done. NSF must broaden 
its approach to award monitoring to go beyond the relatively few high-
risk awardees,\7\ develop more effective award oversight guidance, and 
increase the coordination between program and financial officers. We 
have recently received and are currently reviewing an action plan from 
NSF that proposes to address these additional award-monitoring 
activities.
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    \7\ In FY 2004, NSF identified only 42 of its approximately 30,000 
awards as ``high risk'' and did not include some awards that were known 
to be high risk. For FY 2005, NSF has revised its risk assessment model 
and has identified 252 awards as ``high risk.'' While the revised model 
captures a greater number of risky awards, it still identifies less 
than one percent of NSF awards as ``high risk.''
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    All of these challenges reflect areas of fundamental program risk 
that continue to pose barriers to NSF's accomplishment of its 
responsibilities. They will therefore require ongoing attention from 
NSF management over the long-term. While NSF recognizes these 
challenges, progress has been slow and much remains to be done in order 
for NSF to become a more successful organization and better serve the 
research and education communities, which so heavily rely on it. In 
addition, NSF has results from its own consulting study of post-award 
monitoring, which includes specific recommended actions.\8\ Although 
NSF now recognizes that both post-award and contract monitoring 
activities are necessary, the next step is for NSF to more aggressively 
implement concrete actions that will mitigate my concerns. I am 
particularly concerned over NSF's response to the independent auditors 
finding of a reportable condition in the area of contract monitoring. 
NSF's corrective action plan suggests that my office, rather than NSF 
staff, be responsible for the periodic testing of contract vouchers 
recommended by the auditors. Voucher examination is a basic accounting 
function that resides with management. As such, it would be 
inappropriate for my office to take on this management function in 
light of our statutory independence.
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    \8\ NSF contracted with a consultant to assess NSF's post-award 
monitoring processes. The results of this assessment, issued in March 
2004, indicated that while NSF made commendable efforts to develop 
policies and procedures, it still faces a number of challenges to 
achieve effective administration. Further, using other grant making 
agencies as a benchmark, the consultant identified gaps in NSF's post-
award administration. IBM, Post-Award Monitoring Assessment (March 
2004). NSF has not developed an action plan to address the reported 
opportunities for improvement.
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    I realize that resources are needed for NSF to fully address these 
challenges. However, I also believe that realignment of NSF's 
management priorities should ease the resource burden. The nature of 
the scientific research enterprise has changed over the past few 
decades. Consequently, the programmatic and management challenges 
facing NSF have changed. NSF's assessment of needed resources should 
address its changing administrative challenges.

Investigative and Audit Activities

    In our most recent Semiannual Report to the Congress for the six-
month period ending September 30, 2004, my office reported on numerous 
audit and investigative activities.\9\ During that time period, my 
office issued one interim and 10 final audit reports that contained 
over $30 million in questioned costs, and made recommendations that 
would improve grants management controls and oversight processes at 
both NSF and its awardee institutions. We closed 38 civil/criminal 
cases and 51 administrative cases and our investigations recovered 
$522,387. Three cases were referred to the Department of Justice for 
criminal prosecution and 15 administrative cases were forwarded to NSF 
management for action during this period. The following is a sample of 
investigations and audits that were reported in our most recent 
Semiannual Report.
---------------------------------------------------------------------------
    \9\ Office of Inspector General, National Science Foundation, 
Semiannual Report to the Congress (September 2004) http://www.nsf.gov/
pubs/2004/oigsept2004/oig2004sept.pdf
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Investigations
    My office investigates allegations of wrongdoing involving 
organizations or individuals that receive awards from, conduct business 
with, or work for, NSF. In investigating these allegations we assess 
their seriousness and recommend proportionate action. When possible, we 
work in partnership with agencies and awardee institutions to resolve 
these issues. Where appropriate, the results of these investigations 
are referred to the Department of Justice or other prosecutorial 
authorities for criminal prosecution or civil litigation, or to NSF 
management for administrative resolution.
    For example, as we reported in our most recent Semiannual Report, 
the owner of a company that received Small Business Innovation Research 
(SBIR) awards from NSF and other federal agencies pleaded guilty to 
mail fraud and tax evasion as a result of our investigative efforts. 
The owner sent a progress report to NSF for his SBIR award that 
included research previously conducted by his company under an Air 
Force SBIR award. He also used federal SBIR funds to pay for personal 
expenses, such as repairs and improvements to his home, thereby evading 
over $93,000 in income tax on his personal tax return for 1999. The 
total loss of federal funds related to the subject's fraudulent scheme 
is estimated at $1.4 million. Based on the guilty plea and our 
recommendation, NSF recovered $120,000 of its funds that it withheld 
from the NSF grant pending the outcome of our investigation. We also 
recommended that NSF exclude through debarment the owner and his 
company from receiving funds from any federal agency.
    One of the more unique areas of investigation for my office is in 
the realm of research misconduct, specifically falsification of data, 
fabrication of results, and plagiarism. Research misconduct strikes at 
the core of NSF's mission, and is a special concern for my office. 
Although there is a strong sense of integrity within the scientific and 
engineering research communities, my office often receives allegations 
that result in misconduct findings. For example, after receiving an 
allegation that a postdoctoral scientist fabricated and falsified data 
in a published research paper, my office concluded that the researcher 
knowingly and intentionally fabricated data in multiple analyses to 
make it appear that replicate experiments had been completed when in 
fact only a single analysis had been performed. The scientist's actions 
ultimately led to the retraction of the entire publication in which the 
fabricated and falsified data appeared. We recommended that NSF make a 
finding of research misconduct against the subject and prohibit him 
from receiving federal funds, otherwise known as debarment, for two 
years.
    In addition, my office recommended to NSF that it take action to 
protect federal interests by debarring a researcher for two years for 
his fabricating the existence of and citations for two manuscripts 
referenced in his two NSF awards. An investigation by the researcher's 
university determined that he provided false biographical information 
as part of his NSF proposals. The researcher cited two manuscripts as 
``submitted to'' two prominent journals, and also referenced a 
``submitted'' manuscript within the text of the proposal for his NSF 
award. However, our investigation revealed that those manuscripts did 
not exist. The investigation also identified a pattern of 
misrepresentation by the researcher that extended over a 10-month 
period.
    While the majority of our investigations involve individual 
actions, some involve entire organizations. For example, my office 
received a complaint that a university was charging a five percent 
surcharge to NSF awards for technical support salaries. We initiated an 
investigation and worked with the university to review technical 
support charges to NSF awards. Although we found no evidence of fraud, 
the university restored $364,539 to NSF for technical support expenses 
that were erroneously charged to its NSF awards.\10\ As a result of our 
investigation, the university changed its policies and procedures to 
ensure that technical support is charged appropriately to federal 
awards. The university also identified $518,993 of technical support 
charges that had been wrongfully charged to awards from 12 other 
federal agencies. We notified the other federal agencies of this issue 
and obtained a commitment from the university to work with each of them 
to resolve these overcharges.
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    \10\ Generally, technical support costs can be charged to federal 
grants as direct costs only for particular services provided for 
particular grants; otherwise such costs constitute administrative 
support services costs that are included in the university's indirect 
cost rate.
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Audits
    Our audit activities have two primary thrusts that often complement 
each other. We conduct financial audits of NSF's awards and awardee 
institutions to determine whether costs claimed by awardees are 
allowable, reasonable, and were incurred for the benefit of NSF's 
award. These audits also seek to identify weaknesses in awardee's 
controls in accounting for and in administering their NSF awards to 
ensure that NSF funds are spent properly. In addition, we conduct 
internal audits, which are reviews of selected NSF programs and 
operations that provide policy-makers and management with an 
independent appraisal of whether desired results and objectives are 
achieved efficiently, economically, and in accordance with prescribed 
laws, regulations, policies, and procedures.
    Recent examples of both these types of audits include an audit of a 
foreign treaty organization that, since 1996, has received $16.4 
million in NSF awards for global change research.\11\ The audit found 
that NSF, on behalf of the United States, is funding a disproportionate 
share of the organization's total costs. The U.S. contribution, which 
was initially expected to comprise 25 percent of the organization's 
total funds, actually represents 87 percent of its income from 1996 to 
2003. This occurred because 18 other member countries did not provide 
research and operational contributions in the amounts originally 
committed. As a result, the foreign organization has average annual 
expenditures of only $2.6 million or 82 percent less than expected, 
thereby impeding its ability to achieve its research goals. 
Additionally, the organization has not properly monitored its 14 
research subawards valued at $10.3 million. This resulted in serious 
problems with two subawards that cannot adequately support their $1.1 
million of claimed costs. Given the lack of financial support by other 
member countries, we recommended that NSF work with the foreign 
organization's governing bodies to promote and oversee fundraising 
activities; re-assess the organization's mission, goals, and staffing 
levels if additional funding is not obtained; and ensure that the 
organization establishes written subaward management policies and 
procedures. Finally, we recommended that NSF cease providing additional 
research awards to the organization until it has developed and 
implemented written monitoring procedures to ensure its subawardees are 
properly accounting for and managing NSF grant funds. NSF has agreed 
with the OIG recommendations and is implementing actions to address 
them.
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    \11\ Office of Inspector General, National Science Foundation, 
Audit of Inter-American Institute for Global Change Research, Report. 
No. 04-2-007 (Sept. 30, 2004) http://www.nsf.gov/oig/IAI-GCR.pdf
---------------------------------------------------------------------------
    My office also recently completed another audit of a foreign 
organization identifying similar award administration issues.\12\ This 
audit found that NSF, along with three other federal agencies, did not 
establish adequate grant agreements requiring the foreign organization 
to comply with statutory funding requirements as a condition for 
receiving U.S. monies for the organization's research endowment fund. 
Consequently, the organization did not provide 45 percent of its 
required matching contribution ($5 million) or implement adequate 
financial controls to account for and administer almost $11 million in 
U.S. funds. We recommended that as the largest U.S. contributor, NSF 
bring these concerns to the attention of the President's Office of 
Science and Technology Policy (OSTP) in order to facilitate a 
coordinated U.S. effort to secure corrective actions on the part of the 
foreign organization. While NSF responded favorably to the audit 
report, it does not agree that it should take a leading role in 
coordinating corrective actions for the entire U.S. Government. 
Nevertheless, NSF does generally agree to implement the remaining audit 
recommendations to secure improved financial controls over its own 
contributions to the foreign organization. It is my opinion that NSF 
should take the lead to bring these matters to OSTP in order to 
coordinate the U.S. interests in obtaining the needed corrective 
actions from the foreign organization.
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    \12\ Office of Inspector General, National Science Foundation, 
Audit of United States-Mexico Foundation for Science, Report. No. 05-2-
005 (Dec. 8, 2004) http://www.nsf.gov/oig/USMFS05.pdf
---------------------------------------------------------------------------
    As another example, at NSF's request, my office contracted with the 
Defense Contract Audit Agency (DCAA) to perform a financial audit of 
NSF's Antarctic Support Services Contractor.\13\ This contractor is 
NSF's largest, providing logistics and support services estimated at 
approximately $1.1 billion over ten years. In September 2004, DCAA 
staff reported on the interim results of the first phase of this audit. 
Of the $363 million total costs claimed by the Contractor for the 
three-year period ending December 31, 2002, the auditors questioned 
$29.2 million because the Contractor improperly billed indirect costs 
to the contract.\14\ The auditors also questioned $6.7 million because 
the Contractor claimed indirect costs that exceeded the limitations 
specified in the contract agreement. The remaining phases of the 
Antarctic Services Contract audit will include a review of the 
Contractor's internal controls for administering, monitoring, and 
accounting for the NSF contract funds and a review of the direct costs 
and remaining indirect costs charged to the contract through December 
31, 2004.
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    \13\ Office of Inspector General, National Science Foundation, 
Audit of Raytheon Polar Services Company's Indirect Costs Claimed for 
Fiscal Years 2000 to 2002, Report. No. 04-1-010 (Sept. 30, 2004) (on 
file with NSF OIG).
    \14\ Specifically, the contractor claimed indirect costs as direct 
costs of the contract, including $8.6 million related to home and 
corporate office costs, $5.7 million related to facilities costs, $3.4 
million related to human resources costs, $2.7 million related to 
financial management costs, and over $700,000 related to sign-on bonus 
costs.
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    As a final example, my office conducted an internal, or performance 
audit of the Math and Science Partnership (MSP) Program.\15\ In FYs 
2002 and 2003, NSF awarded a total of $436.6 million for 35 
comprehensive and targeted awards under this program. The audit 
objective was to determine the effectiveness of a sample of MSP 
projects' evaluation methods and measures to assess the impact of the 
intervention strategies on student achievement. This audit reviewed 
nine partnership projects funded in FY 2002 and found that five had 
effective evaluation plans designed to evaluate, define, and measure 
the impact of the intervention strategies, activities and outcomes on 
student achievement in math and science. While the remaining four 
projects did not address all the elements for an effective evaluation 
process, with appropriate guidance and monitoring NSF could ensure that 
each partnership had an effective evaluation process.
---------------------------------------------------------------------------
    \15\ Office of Inspector General, National Science Foundation, 
Audit of NSF's Math and Science Partnership Program, Report. No. 04-2-
003 (May 14, 2004) http://www.nsf.gov/oig/mspprogram.pdf
---------------------------------------------------------------------------
    Through these audits, and others like them, my office is able to 
make recommendations to NSF management aimed at correcting specific 
problems found with programs and awards. For example, as a result of 
the audit of the MSP program, NSF convened a workshop of subject matter 
experts to prepare an evaluation statement for current and future MSP 
projects. The results of these audits and others help to inform our 
assessment of the most critical challenges facing NSF, and help my 
office focus its future audit efforts.
    Chairman Inglis, this concludes my written statement. Thank you for 
the opportunity to share this information with you. I would be happy to 
answer any additional questions you or other Members of the 
Subcommittee may have, or to elaborate on any of the issues that I have 
addressed today.

                    Biography for Christine C. Boesz

    Christine C. Boesz assumed the duties as Inspector General of the 
National Science Foundation (NSF) in January 2000, reporting to the 
National Science Board and the Congress. As head of the Office of 
Inspector General (OIG), she recommends policies for promoting economy, 
efficiency and effectiveness of NSF programs and operations. She leads 
efforts to prevent and detect fraud, waste, and abuse, improving the 
integrity of NSF programs and operations and investigating allegations 
of misconduct in science. Dr. Boesz participates in leadership 
activities of the Inspector General community by serving on the 
Executive Council, the Inspection and Evaluation Committee, and by 
chairing the Misconduct in Research Working Group for the federal IG 
community, responsible for setting standards and training for 
investigations into research misconduct allegations.
    Prior to this position, Dr. Boesz served as Head of Regulatory 
Accountability, at Aetna U.S. Healthcare Inc. While there she had broad 
responsibilities for establishing and maintaining a compliance program 
for the managed care Medicare program. She also served as senior policy 
analyst on federal legislative and regulatory activities. From 1995 to 
1998, she served as Vice President of Government Programs at New York 
Life, developing and operating Medicare and Medicaid managed care 
programs in ten states. She oversaw product development, pricing, 
marketing, and compliance with government contracting requirements. She 
also developed legislative policy for the company.
    Prior to 1995, Dr. Boesz held several Federal Government compliance 
and oversight positions over an 18-year period with the Department of 
Health and Human Services. In her last position she served as Director 
of Operations and Oversight for the Medicare managed care program, 
responsible for awarding and overseeing contract compliance. Earlier in 
her federal career she was instrumental in developing the regulatory 
framework for health maintenance organizations (HMO), in operating the 
HMO loan fund, and in building a compliance staff for managed care 
oversight.
    Dr. Boesz is a Past President of the National Association of 
Managed Care Regulators, a member of the American Statistical 
Association, and the American Public Health Association. Over her 
career she has received numerous awards, including the Lifetime Service 
Award from Managed Care Regulators, and has been recognized as a 
Distinguished Alumna from Douglass College, Rutgers University.
    Dr. Boesz received her B.A. in mathematics from Douglass College 
(1966) and a M.S. in statistics from Rutgers University (1967). Her 
Doctorate in Public Health (health policy) was awarded by the 
University of Michigan School of Public Health (1997) where she was a 
Pew Fellow.

                               Discussion

    Chairman Inglis. Thank you, Dr. Boesz.
    I am happy to see that we have been joined by the Chairman 
of the Full Committee, Mr. Boehlert, and I would be happy to 
recognize him.
    Mr. Boehlert. Short and sweet.
    I am here because of my interest in the subject matter 
being discussed. And as Dr. Bement knows, we are sort of 
cheerleaders, unabashed cheerleaders for NSF, and we will 
continue in that role.
    But most importantly, Mr. Chairman, I am here to welcome 
you to this first hearing as Chairman of this subcommittee, and 
I want to wish you well, and I know you will do well, and we 
will be as cooperative as we can, because we have got important 
work.
    Thank you very much.
    Chairman Inglis. Thank you, Mr. Chairman.
    At this point, we are going to move to the first round of 
questions, and the Chairman recognizes himself.
    Dr. Bement, I hear some tension here between the objectives 
of NSF, and we all have tensions. We have got to keep them in 
balance, I suppose. But the tension between the funding of 
post-graduate education and projects there as opposed to the K-
12 effort. And it occurs to me that if we were inspiring kids 
in K-12 with great teachers and, like this fellow at General 
Electric pointed out to me, that is what it takes is somebody 
who really knows their subject matter and somebody who loves to 
teach it and somebody who is really excellent at it. Talk to me 
about the tension between doing that at NSF and the exciting 
things that we could be developing and getting quickly to 
market. I am inviting you to talk about that tension, I 
suppose.
    Dr. Bement. Okay. Thank you.
    First of all, let me assure you, Mr. Chairman, there is no 
tension. Our reach to K-12 pervades NSF. It is part of every 
program that we have. It is one of our criteria in terms of 
broader impacts. We encourage all of our scientists to extend 
themselves to K-12. We have a formal program called GK-12, 
which we are investing $50 million for it to enlist 1,000 
graduate students and upper-level undergraduate students to 
work at the schools at the interface between universities and 
K-12 programs. And that is turning out to be exceptionally 
exciting and effective.
    In addition, in all of our cooperative agreements with our 
centers programs, as a requirement, they are expected to engage 
in K-12 education to bring that excitement and show why science 
is fun and to try and encourage younger minds to enter into the 
STEM fields. So rather than just focusing on a couple programs 
in our EHR budget line, I would advise you to look at the 
broader perspective and what we do across the board in that 
area.
    Chairman Inglis. But are you comfortable with essentially 
transferring some of that money to the Department of Education 
that is the effect of what has happened?
    Dr. Bement. I think it is a matter of leadership. We have 
invested now over 10 years in these types of programs. They 
started out as Rural Systemic Initiatives and Urban Systemic 
Initiatives, and we have had extraordinary results. And then we 
tacked on to that the MSP program. It changed. It morphed into 
a new program. So we have 10 years of experience of what works. 
And if you ever look at the Appalachian project, which started 
as a Rural Systemic Initiative and it is now an MSP program, 
the amount of achievement they have made in the last 10 years 
is remarkable. The same thing in El Paso, Texas, which is 
largely--well, almost 87 percent Hispanic, and they are now one 
of the top performing school districts in the State of Texas.
    So those lessons learned and those best practices need to 
be propagated across all of the school districts in the 
country. And the place where the resources exist and where the 
mission exists is within the Department of Education. So we 
have been working very closely with them to develop peer-
reviewed projects to carry on that mission within the 
Department of Education. They have committed to putting more 
resources into math and science education. And the President 
now has established a President-level advisory board on 
education science--or education research, which I serve on, as 
a matter of fact.
    So through this partnership between NSF and the Department 
of Education, I can assure you we are going to try and transfer 
the passion.
    Chairman Inglis. Great.
    Dr. Boesz raised some crucial objectives. What is your 
response, Dr. Bement, to those--the two objectives that she 
laid out?
    Dr. Bement. Well, let me say, first of all, we welcome 
management challenges. No, I am quite serious about that. We 
not only feel we are an exemplary agency, but other people tell 
us so. On the other hand, we know that there is room for 
improvement, and management challenges challenge us to 
continuously improve. So we pay attention to those challenges.
    Just quoting from her statement, she has credited progress, 
and on the two areas that she cited, we made significant 
progress. And since the full answer to your question is very 
involved and very complex, I would like to give you that 
statement for the record, if I may, on the progress that we 
have made.
    Chairman Inglis. Certainly.
    Dr. Bement. Having said that, she also pointed out that 
progress isn't as rapid as she wants. She has indicated that it 
is resource paced. That is a basis for a significant increase 
in our S&E account in our fiscal year 2006 budget, because we 
need additional personnel. But in addition to that, we need the 
electronic business systems that will improve the productivity 
of our practices that will free up additional personnel to pay 
more attention to some of those challenges. So they all work 
together.
    Chairman Inglis. Thank you, Dr. Bement.
    My time has expired.
    Ms. Hooley.
    Ms. Hooley. Thank you, Mr. Chair.
    I am going to follow up on some educational questions, and 
then I am going to go to the icebreaker, because I have a lot 
of questions about that.
    Dr. Bement. Yes.
    Ms. Hooley. You know, I am concerned as I look at this 
budget, and the policy behind the change in the treatment of 
math and science programs that have been targeted for 
extinction. And I know that they are going to--some of that is 
going to the Department of Education. You have built a lot of 
good relationships, K-12, and you have got a lot of expertise 
that have helped you out in that K-12 program. I am trying to 
understand why you wouldn't continue that, and the thing that 
the Department of Education, I think, does well is 
dissemination and replication of best practices. But it seems 
to me that you have an equal role there. So help me understand 
what is going on and why that is targeted for extinction.
    Dr. Bement. I think the true picture is that this is the 
second year in which the draw-down on the program has 
occurred----
    Ms. Hooley. Right.
    Dr. Bement.--and when I say drawdown, it only means that we 
are not providing any new grants, but we are sustaining the 
grants that we currently have. And in those programs, we will 
continue to pursue further improvement.
    A lot of the activities under Math and Science Partnership 
deal with teacher development course and curriculum development 
and evaluation, for the most part; thus, they are not entirely 
research. And there is a lot of research that still needs to be 
done in math and science education so that as we transition or 
phase that part of the program over to the Department of 
Education, we are generating new programs. I mentioned the GK-
12 program, but there are other programs within our overall 
portfolio that tend to be more consistent with our research 
mission that we will continue to focus on. In particular, the 
portfolio of programs that have been highly successful in 
broadening participation is an area where we are investing 
upwards to $400 million just out of the EHR directorate this 
year. And we have kept those programs at about the enacted 
level from last year's appropriation, because we feel they need 
to be sustained.
    But in addition to those programs within EHR, we are also 
integrating programs within the science directorates. And if we 
count those activities, that adds about another $200 million to 
that general focus area of broadening participation. So the 
total investment is about $600 million. We feel that is where 
we really need to put our attention for the next decade, 
because with the declining interest in science and engineering 
among graduating seniors, it is not enough just to stimulate 
interest in math and science in K-12. We need to do that as 
well as we can. And I mentioned some programs that do that. But 
we also have to pay attention to replacing the current 
scientists and engineers who are going to be retiring over the 
next 10 years. And right now, we are going to fall short of 
that goal unless we broaden participation.
    Ms. Hooley. But it seems to me we are going to fall short 
of that goal if we don't generate enough interest in grade 
school and high school.
    Dr. Bement. Yes, your point is well taken.
    Ms. Hooley. And when we look at--right now, I know 
throughout this country, we have a shortage of math and science 
teachers. And I mean, if you don't get kids interested early 
on, you are never going to have enough math and science people 
to fulfill the needs of this country.
    Dr. Bement. Yes, Congresswoman; I agree. I think my main 
point is that the few districts we can touch, and we have 
improved over the last 10 years, is only a very minute fraction 
of the total school districts in the country. We have to build 
those programs in the Department of Education, and we have to 
touch all of the school districts if we are going to make the 
kind of impact that you are calling attention to. And that is 
what we are dedicated to doing.
    Ms. Hooley. Let me switch gears really quickly and talk a 
little bit about--I mean, if you look at this budget, so much 
of the budget really is an accounting change, because of taking 
over the icebreakers for the Coast Guard. So you are really 
looking at a 0.3 percent increase as opposed to a 2.7 percent 
increase. Tell me at what level of the Administration was the 
decision made to give NSF the responsibility to assume more of 
the icebreaker operation and maintenance for 2006. Tell me, who 
made that decision? Is that high level, lower level?
    Dr. Bement. No, that was a high-level decision made within 
the White House, and the reason for that decision was that in 
the new mission that the Coast Guard has at Homeland Security, 
supporting science was not going to be sustained by the 
Department of Homeland Security. So there was a concern that if 
the current icebreakers were decommissioned because the 
Department would not support their operation and maintenance, 
then our polar programs, especially in Antarctica, are at risk. 
So the decision was made to transfer responsibility for the 
operation and maintenance to the National Science Foundation to 
assure that there will be continuity of support over time to 
maintain our polar programs.
    Ms. Hooley. How much money is in the budget for that? 
What--do you--is that 48--what did you put in the budget for 
that?
    Dr. Bement. The transfer was $48 million.
    Ms. Hooley. Is that going to be enough? I mean, there is 
some indication the Coast Guard thinks it runs somewhere 
between $70 million and $75 million.
    Dr. Bement. Well, we are working closely with the Coast 
Guard to try and determine the structure of that estimate and 
to determine whether $48 million is enough. We have an 
interagency working group now focused on looking at all of the 
options of minimizing the cost of icebreaker operations. And at 
the present time, I don't really have an answer to your 
question, but we will have an answer some time this summer.
    Ms. Hooley. Do you have to use the Coast Guard icebreakers, 
or can you use a foreign company to do that? Or can you lease 
for foreign icebreakers? Is that viable?
    Dr. Bement. I think it is viable. Our Office of General 
Counsel has looked into statutory obligation, and their review 
indicates that there is no statutory restriction in our using 
other than Coast Guard icebreaker services, whether they are 
commercial or other nations'. We derived part of our guidance 
from the Presidential Memorandum Number 6646 on U.S. Antarctic 
Policy and Programs, and that goes way back. It was dated 
February 5, 1982 when the Coast Guard was in the Department of 
Transportation. And that provided the Department of Defense and 
Coast Guard a continuing role in Antarctic logistics to ensure 
that the United States has the necessary flexibility and 
operational reach in the area, which goes beyond research or 
science and engineering.
    On the other hand, that directive also pointed out that 
every effort should be made to manage the United States 
Antarctic Program in a manner that maximizes cost 
effectiveness. And then it goes on to say that it authorizes 
the NSF to use commercial support when it is determined to be 
cost effective and not detrimental to the national----
    Ms. Hooley. Does OMB agree with you?
    Dr. Bement. Well, this is just a finding that has just come 
to my attention within the last day or two. We have not yet had 
a chance to discuss this with OMB.
    Ms. Hooley. Okay. I have used more than my time. Thank you, 
Mr. Chair.
    Chairman Inglis. Thank you, Ms. Hooley.
    At this point, I would be happy to recognize Mr. Johnson.
    Mr. Johnson. Mr. Chairman, thank you for the courtesy of 
allowing me to ask the question, given the structure to today's 
process back in the office. I do appreciate it.
    I would like to address this question to Dr. Bement, 
Director.
    As you know, I represent the University of Illinois, which 
is the home of the Beckman Center, among others, and we are 
very proud of that. And so this question, at least revolves in 
part, around that reality.
    In the fiscal year 2006 budget request you have stated that 
providing cyberinfrastructure is one of your top priorities. 
Supercomputing is, as we all know, a key element of robust 
cyberinfrastructure, and NSF supports those key national 
centers that provide supercomputing facilities and expertise, 
including the National Center for Supercomputing Applications 
in my hometown. The budget request indicates that 
approximately, and this is a quote, $19 million will be 
provided for selective cyberinfrastructure enhancements in the 
fiscal year 2006. How much of this upgrade funding will go to 
hardware for supercomputing centers? And how and when will you 
decide what upgrades are needed and when? I know that sounds 
like a bit scripted question, but----
    Dr. Bement. No, no. It is a good question. I might point 
out parenthetically that Champaign is very close to Bement, 
Illinois.
    Mr. Johnson. It is, indeed. That is one of the finest 
country operas in the United States, so in case you ever have 
time to visit Champaign, see the supercomputer, and you are 
into country music, come over with me to the Bement Bowl, and 
we will have a good time.
    Dr. Bement. Thank you, Mr. Johnson.
    Total investment in cyberinfrastructure for 2006 is at $509 
million, which is a substantial increase over our 2005 enacted 
level. And a good part of that is in high-end computing, and 
not just in architecture, but also in software tools and also 
in networking as well as interface tools. So we are looking at 
it as a total system.
    We continue to support the supercomputing centers, 
including the ones in San Diego, Illinois, and Pittsburgh. And 
we have made investments to upgrade their facilities to the 
latest capabilities that are commercially available. In 
addition to that, we are trying to further integrate them into 
our Teragrid, which provides a broad network for very high 
bandwidth computing and data streaming within the science 
community. They were just--I just recently authorized an 
advisory committee that links all of these operations together 
to further leverage their capabilities and find new ways to 
serve the scientific community as part of our shared 
infrastructure in cyber tools.
    So I think our program is well balanced, in my opinion. I 
think we are paying attention to at least the near-term needs 
of the scientific community within our budget flexibility, and 
we are looking at all of the elements, including higher-end 
language and new algorithm development that will be required to 
use super-high-end computing.
    Mr. Johnson. Well, let me just underscore the significances 
of NSF to our specific facility, what an outstanding job you 
do, what a good cooperative relationship there is nationwide. 
And without sounding provincial, I think anyone who understands 
the area would understand that ours is among the finest, if not 
the finest, facility in the country, and its impact nationwide 
is something that not only we are very proud of, but the 
country is--relies in large or small part on in terms of the 
whole matrix. And so we are very grateful and hope that you 
will put us higher on your radar screen in terms of future, not 
only allocations, but prioritization.
    Dr. Bement. Thank you. We will.
    Mr. Johnson. And you are also welcome to join us, not only 
at the Bement Bowl and at the Beckman Center, but on April 5, 
2005 when we celebrate the national championship at the 
University of Illinois. And we will make it a three-fer, and 
you will be one of our guests as we introduce the national 
champions.
    Dr. Bement. I would love to see that game. Thank you.
    Chairman Inglis. Mr. Lipinski.
    Mr. Lipinski. Thank you, Mr. Chairman. And I thank the 
other Chairman now taking the seat there for holding this 
hearing. And I will make sure I don't go too much over time, 
although I see my time hasn't started, which is good.
    Oh, there you go. I know what a tough man the Chairman is 
here, so I will be careful.
    I have a rather unique perspective. I have a mechanical 
engineering degree, and we actually have the head of a company 
that I had applied for a job at--back 20 years ago, and I 
chided him jokingly on how he crushed my hopes as a young 
mechanical engineer by not offering me a job at that time. And 
I have since moved on, but one thing I did between here and 
there was I was a political science graduate student. I got my 
Ph.D. in political science. And Dr. Bement, I am happy to say 
that I did apply for an NSF grant, and I did receive the NSF 
grant, so you know, you are in a--from that perspective, you 
are in a much better position than the witnesses that I have 
talked to before.
    Okay. I am--because of my background, both as an engineer--
well, from being an engineer of science and math education, I 
know how important it is in K-12 and higher education and also 
the--to tell you the truth, I didn't know until I went to grad 
school in political science that social sciences were funded, 
also, with NSF grants.
    One thing that--I am echoing some of Ms. Hooley's concerns, 
I have seen, through my experiences, a real lack of connection 
between higher education and K-12. I always felt that more 
could be done with university research and the faculty at 
universities to help with science and math education in the K-
12 level. And I think NSF is in a unique position to help to 
make that connection. So I just--you know, I just want to say I 
would like to see NSF doing more of that, and I encourage, you 
know, more of that, because I think it could be extremely 
helpful, especially in science and math.
    But what I wanted to ask Dr. Bement about is the research 
grants for NSF, the funding has been increased for--the 
proposed increase for research project support is 0.3 percent, 
but it also, I see, the budget says that, you know, for fiscal 
year 2006, you want to increase the success rate while 
maintaining grant size and duration, which the only way to 
accomplish that would be to somehow discourage proposals from 
coming in. And so I was just wondering what the plan is there. 
Of course, I would like to see much more funding for these 
grants, but specifically to that question, you know, how is it 
possible to do both of those things, increase success----
    Dr. Bement. Yes.
    Mr. Lipinski.--and maintain the same level of funding while 
you are, you know, flat-lined in growth?
    Dr. Bement. There are many practical ways of doing that. 
One is we have both solicited and unsolicited proposals. The 
one thing we really want to encourage is more unsolicited 
proposals, because many of those are closer to the frontier, 
and many of them support newer, untenured faculty as well as 
minority faculty coming into the academic workplace.
    The success rate of some of our solicited proposals has 
been very low, too low, in some cases, as low as 10 percent. 
Part of that is because we weren't focused enough in our 
solicitation. Part of it is we did not indicate to the 
community initially what the likely success rate would be, so 
we are going to correct that. And hopefully, that will reduce 
the proposal volume for a small amount of funding.
    Secondly, we are going to limit our solicitations to only 
those key programs that are essential to our major priorities 
within the Foundation. So that will reduce the number of 
solicitations. And that should, also, automatically help 
increase our success rate. In some cases, in awards that we are 
making under solicitations, instead of giving all of the awards 
in one year, we are extending it over two years. So we are 
stretching our resources for each solicitation.
    And then finally, we are taking a hard look at our centers 
programs, and this is an area that we are engaged with the 
Board, the Board will be working with us on this, because it 
has had Board interest, to look at the balance between multi-
investigator awards as centers versus individual and small 
group awards through our unsolicited proposals.
    For centers that are reaching end of life where they are no 
longer working at the frontier or they are not meeting the 
criteria that we expect, we will be phasing those out and 
moving those resources back to the frontier to help support 
more individual and small group awards.
    And that is just a few examples of a large number of 
initiatives we are taking. But we feel that by refocusing, by 
working more closely with the community so that their 
expectations are not overblown, we will be able to, even within 
our given resources, turn around our decline in success rate. 
It is not going to go up dramatically without new resources, 
but at least we will halt the erosion.
    Mr. Lipinski. Thank you.
    Chairman Inglis. The gentleman could have mentioned that he 
has got his Ph.D. from a great school, my alma mater, from 
college. So----
    Mr. Lipinski. You know, that is terrible that I didn't 
mention Duke.
    Chairman Inglis. There we go. There we go.
    Now that Dr. Lipinski has fixed that, we are going to go 
down to Mr. Sodrel to find out whether Indiana is in the NCAA. 
Are you doing all right?
    Mr. Sodrel. Yes, Mr. Chairman. We are--the reason he says 
that, I use--in the 9th District in the bulletin, so I have to 
stick up for IU.
    Thank you, Mr. Chairman.
    You know, you pointed out in your opening statement that 
R&D used to be--perform basic research by Bell Labs, by IBM, 
Xerox, and a lot of the large corporations, and less of that is 
being done today.
    And forgive me, but I am a new Committee Member, so this 
may sound like an elementary question, but I would like to know 
if, when we develop technology with public tax dollars, how do 
we then transfer that to the private sector? In other words, 
who maintains the intellectual property rights to technologies 
that are developed with taxpayer-funded research? And Dr. 
Bement, would you be best to answer that?
    Dr. Bement. I think there are two or three components of 
the question.
    First of all, an investment in the National Science 
Foundation research tends to support graduate students who do 
the research, so there is the education component at the higher 
level within the universities. That graduate talent then goes 
into industry and transfers the knowledge into industry, so 
that is a direct technology transfer. And part of that 
intellectual property is with the individual.
    As far as intellectual property that deals with patents and 
copyrights, those rights remain with the university, and it is 
the obligation of the university to see that those rights are 
broadly applied through licensing in the private sector. And I 
think, by and large, they do that quite well. Many universities 
are not looking for revenue. They are looking for applying 
those resources back into further research in order to refine 
those new technologies. So it really can work as a close 
partnership between the private sector and the academic sector.
    But I am only making a point that I think public sector 
resources are being used very wisely and very effectively in 
supporting the private sector in their research objectives.
    Mr. Sodrel. I just wanted to understand how the 
relationship worked. And how--what do we do to ensure that the 
benefit that we derive from the research and development is not 
immediately exported to some of our world competitors?
    Dr. Bement. I would think that is a two-way street. I don't 
think we have very much of a role in trying to either regulate 
or keep track of that, but there are any number of articles 
that deal with that. I would like to point out that a lot of 
the research is being done by international students. And some 
of those students remain, and some of them go back to their 
home countries, so there is technology transfer happening both 
ways all around the world. And most of the large corporations 
that I know of bring in top talent, and they use them as 
hunter-gatherer technologists. Their role is to go around the 
world and scoop up anything they can get, bring it back home, 
add their own intellectual property, and then get an edge in 
the marketplace. So it is a worldwide game at the present time.
    Mr. Sodrel. Thank you. I just wanted to understand how the 
system worked, and thank you, Mr. Chairman.
    Chairman Inglis. Thank you.
    Mr. Gutknecht.
    Mr. Gutknecht. Thank you, Mr. Chairman.
    Since everybody is talking about basketball, I don't know 
if the Colorado School of Mines is going to be in the NCAA 
tournament, but I think anybody who graduated from there is all 
right by me.
    And Dr. Bement, I want to just change the course just a 
minute, and I apologize. Many of us have other meetings, but I 
think every Member of this committee takes the work of the 
National Science Foundation, particularly your work, very 
seriously. And we only wish that budget constraints weren't 
what they are. And so we are going to ask you to do more with 
less, and we apologize for that in advance.
    I want to bring your attention, though, to an issue that I 
have a great concern about, and that is we have, over the last 
several years, essentially given you more, NSF, latitude in how 
they deal with agricultural research. And there is one area 
that I just want to call your attention to, and I am not going 
to try and ask you to take a position on this, but at least to 
have you consider this. And that is, within that smear of 
agricultural research, I hope that you will at least pay some 
attention to a growing concern that we have, and that is that 
the potential of viruses, we know this is happening now, where 
they literally leap from ducks to pigs to us. And there are a 
number of interesting research projects underway around the 
country, and I will be a bit parochial, in my District, in 
particular, and I would just encourage you to, you know, at 
least reflect on the fact that you do have that latitude, and 
we hope that you will use that wisely.
    Dr. Bement. Thank you, Congressman Gutknecht.
    Let me respond in this way.
    We have now a robust program in plant genomics and also a 
grant program in microbial genomics, which we carry on in close 
cooperation with the Department of Agriculture, and that 
cooperation is to assure that there is not an excessive overlap 
and that those programs are mutually reinforcing.
    In the area of bacterial and viral diseases, we do have a 
program in the ecology of infectious disease and also in prion 
diseases that we are also carrying out jointly with the 
National Institutes of Health and also the Department of 
Agriculture. So that--first of all, we are paying attention to 
these major national issues and problems. And secondly, we are 
trying to leverage our programs with other agencies, through 
interagency cooperation.
    Mr. Gutknecht. I only have a second left, but just let me 
tell you that I would be more than happy to work with you and 
your office on all of those, because I do have a particular and 
a keen interest in those particular areas.
    So thank you very much, Dr. Bement.
    Dr. Bement. And we welcome that.
    Thank you.
    Mr. Gutknecht. Thank you.
    Chairman Inglis. We now have time for a second round of 
questions and then I would recognize Ms. Hooley.
    Ms. Hooley. Thank you. Unfortunately, I have to say none of 
the Oregon teams are in the finals this year.
    I have really just one question. Dr. Wrighton, in his 
testimony, indicated that NSF management has developed a draft 
corrective action plan in coordination with the IG's Office, 
which will be presented to the National Science Board. Dr. 
Bement and Dr. Boesz, is this the case, and when will this plan 
be available?
    Dr. Bement. First of all, it is the case. We have been 
negotiating with our auditor, KPMG, on some of the issues that 
they have brought out in their audit a year ago. We feel we 
have a corrective action plan that satisfies most of the issues 
that we raised with them, but we haven't gotten complete 
closure. But we do plan to bring our progress before the 
National Science Board and the Audit and Oversight Committee, 
which Dr. Wrighton chairs, at the coming March meeting, which 
is later this month.
    Ms. Hooley. You need to turn on your microphone.
    Dr. Boesz. I can add that my office received this 
corrective action plan about two or three weeks ago, and we 
are----
    Ms. Hooley. Okay.
    Dr. Boesz.--actively in the progress of reviewing it right 
now. We do contract as part of the audit function with KPMG, 
and so they are also a part of this process. And we do expect 
to have this resolved by the time of the Board meeting at the 
end of this month.
    Ms. Hooley. Okay. Thank you.
    Just for all of you, I think. I am concerned about the cost 
of the Coast Guard icebreakers and what that will do to your 
budget. And I guess I am offering that if there is anything we 
can do to help with that particular issue, we want to make sure 
that the money is spent as wisely as possible and that this 
isn't something that ends up breaking your back.
    Dr. Bement. Thank you very much. These icebreakers are 
nearing their end of life.
    Ms. Hooley. Right. I understand that, which----
    Dr. Bement. And the maintenance, as it gets closer to end 
of life, keeps going up each year. And if it gets beyond the 
resources we have set aside, then, of course, it has an impact 
on our logistics support and our research support in the polar 
programs. And I am charging myself to guard against that as 
much as I can, and that is going to mean that we are going to 
have to engage very cooperatively with the Coast Guard to 
determine what options will minimize icebreaker costs going 
forward. And that is what we are engaged in at the present 
time.
    Ms. Hooley. Thank you.
    Chairman Inglis. I will, at this point, recognize myself 
for another round of questions.
    And I want to follow up on Ms. Hooley's question just then, 
Dr. Bement.
    I am concerned, as well, about the transfer, particularly 
if the $48 million turns into a negotiation for a $75 million 
transfer to operate what had been a $48 million program. How 
can we help?
    Dr. Bement. I should call on Dr. Erb to qualify my answer. 
Part of that--most of that $75 million is for complete 
refurbishment. It is not for ongoing, recurring operation and 
maintenance.
    Chairman Inglis. Okay.
    Dr. Bement. Whether we do that in one year or whether we do 
that in two years is something we really need to understand, 
but let me call on Dr. Erb to amplify that.
    Dr. Erb. Mr. Chairman, I am Karl Erb, Director of the 
Office of Polar Programs at NSF.
    We have been told by the Coast Guard in discussions last 
fall that they estimate a need of between $70 and $75 million a 
year for each of the next four or five years to keep the ships 
operational until they can go into what they call a service 
life extension program, which I believe they estimate as a $600 
million activity. So we are talking with them now to see what 
our options are to, as Dr. Bement said, meet those requirements 
within our ability of the funds we have. And it is just much 
too early for me to predict how that is going to come out.
    Chairman Inglis. Well, I hope as it goes along that you 
will let us know how we might be helpful.
    Dr. Erb. Thank you, sir.
    Yes, sir.
    Chairman Inglis. And I appreciate your input here.
    Dr. Wrighton, I wonder if--as the one who has involvement 
at the Board, what question have we not asked here today that 
we should be asking about the direction of NSF and what do you 
wish we had been asking?
    Dr. Wrighton. I think you have shown great interest, and 
great questions have come forward already. I think, speaking 
for the Board, we see a great opportunity for the best to 
become better. And America's investment in science and 
engineering education and research has been strong.
    But I think one of the issues that we face looking ahead is 
how competitive will we be in the world, considering 
essentially level funding? While I think we can do more with 
less, as was suggested, and all of us are anxious to improve 
efficiency, I think we need to be cognizant that the developing 
world, India and China in particular, are developing 
investments in science and engineering that are destined to be 
very competitive in the future.
    So for us to sustain our preeminence in important areas of 
science and technology, I believe that we are going to have to 
make an even greater investment in finding not only the best 
science and engineering to support, but the highest impact 
science and engineering. And we, at the Board, are certainly 
interested in enhancing budgets. I think everybody acknowledges 
that probably no level of support for the Foundation would be 
adequate to support all of the great ideas that the 
investigators could come forward with. But I think we need to 
keep our eye on those areas of special importance and setting 
the priorities for the investments will be very important. But 
overall, I think our competitiveness, as a Nation, will hinge 
on ramping up our investment in science and engineering in ways 
that allow us to remain preeminent. These investments are a 
source of innovation for America, and I think nothing will be 
more important than securing our economic well being.
    Chairman Inglis. Yes, and as we come to a close here, I 
just want to underscore that and point out that, you know, if 
we enter into free trade policies that basically mean that we 
are challenged on the manufacturing aspects and particularly 
where labor is a major input, then the answer is that we are 
the innovators, that we can stay ahead of the competition by 
innovation. Well, that means that we are looking to you all to 
help us innovate. And you are, of course, looking to us to get 
the appropriate resource level to be able to carry that out, 
because if we are going to stay, as you put in your testimony, 
preeminent in discovery and innovation, then you have got to 
spend money on it. And you have got to spend it wisely, as Dr. 
Boesz points out. And you have got to spend it with vision and 
creativity.
    Thank you very much to our panel for being here today. Dr. 
Bement, Dr. Wrighton, and Dr. Boesz, we appreciate your time 
here this morning.
    And if there is no objection, the record will remain open 
for additional statements from Members and for answers to any 
follow-up questions submitted that the Subcommittee may ask of 
the panelists. Without objection, that is ordered.
    And the hearing is now adjourned. Thank you.
    [Whereupon, at 11:20 a.m., the Subcommittee was adjourned.]

                              Appendix 1:

                              ----------                              


                   Answers to Post-Hearing Questions


Responses by Arden L. Bement, Jr., Director, National Science 
        Foundation

Questions submitted by Chairman Bob Inglis

Award Oversight and Management

Q1.  Staffing shortages at the National Science Foundation (NSF) have 
impeded NSF's ability to conduct post-award management and to manage 
its portfolio of large facilities projects. Assuming the Foundation 
were provided adequate resources to address these staffing 
requirements, how many additional full-time-equivalents does NSF need 
to assign to each of these two areas?

A1. At any given time, the National Science Foundation (NSF) is 
managing an active portfolio of approximately 35,000 awards to over 
2,000 institutions. Effective oversight is accomplished through the 
combined efforts of NSF's program, financial, and administrative staff. 
This oversight is not confined to one part of an award life cycle but 
follows a continuum from solicitation through the close out of the 
program activity.
    NSF has identified certain factors that indicate a high potential 
for award and funding risk. To address this, NSF has, over the last 
several years, developed a program of on-site, post-award monitoring 
and oversight. A key element of the program is a dynamic multi-level 
risk assessment framework comprised of objective and subjective factors 
applied to the overall award universe; these may be technical, 
financial, or administrative. This risk framework helps guide decision 
making insofar as how best to deploy staff resources for more targeted 
oversight. Non-facility awards are addressed through the Post-Award 
Monitoring and Business Assistance Program Site Visit Review Guide led 
by the Division of Institution and Award Support, a division created to 
put additional focus on this issue. Large facilities are subject to a 
Total System Business Review.
    As part of competitive sourcing initiative, NSF has identified a 
number of activities that support overall monitoring as suitable for 
contract assistance. Given that, and based on the to-date 
implementation of the monitoring program, the 23 FTEs requested in FY 
2006 will be used to grow NSF's risk-based oversight efforts in a 
responsible, reasonable manner. This assumes that other resource 
demands remain constant. Note that because NSF's award monitoring and 
oversight is an agency-wide effort that involves program staff within 
the directorates as well as various administrative staff, the requested 
FTEs are to be allocated throughout the agency.

Post-award Monitoring

Q2.  Post-award management is critical both to allow NSF program 
managers to be aware of the scientific results of NSF-funded research 
and to ensure that government funds are spent appropriately.

     What changes is NSF making to its post-award monitoring processes 
in response to the recommendations of the Inspector General and the IBM 
reports on this topic?

A2. IBM's Post-Award Monitoring Assessment Report was prepared at NSF's 
request as a review and gap analysis of the Foundation's monitoring 
procedures and practices. Overall, IBM noted that NSF has a sound 
program of post-award monitoring but made several recommendations. In 
response, NSF management agreed to initiate a series of information 
exchanges with Office of Inspector General (OIG) Audit Staff and KPMG, 
the external auditor for the NSF Financial Statement Audit. Components 
of the NSF corrective action plan are below:

          NSF management has improved the FY 2005 risk 
        assessment model and will evaluate it annually for potential 
        improvements.

          NSF is proceeding with a plan to conduct advanced 
        monitoring, which refers to targeted business system reviews 
        carried out at institutions that manage high risk awards as 
        determined through risk assessments (see answer below). 
        Advanced monitoring supplements baseline monitoring done for 
        all NSF awards.

          NSF is proceeding with a plan to conduct baseline 
        monitoring. Baseline monitoring is carried out in a systemic 
        and automated fashion for all awards; this is supplemented by 
        standardized staff processes and specialized reviews. As an 
        enhancement to baseline monitoring, NSF is contracting out for 
        focused reviews of Federal Cash Transaction Report data that 
        will be drawn from a statistically valid sample of the medium 
        and low risk universe.

          NSF is focusing on opportunities for improvement for 
        advanced monitoring as identified in the IBM report and 
        underscored by the independent auditors as being most 
        significant. This includes addressing site visit duration, 
        program participation, pre-visit communication, awardee 
        feedback, follow-up and issue resolution, program and OIG input 
        into site visit plans, communication and collaboration between 
        NSF and OIG staff, dissemination of the annual monitoring plan, 
        systems automation, post-award monitoring staffing, NSF cost to 
        perform post-award monitoring, awardee cost to participate in 
        post-award monitoring, contracting out certain post-award 
        monitoring activities, cross training opportunities, formal 
        post-award monitoring training, report writing, documentation, 
        a database to maintain results, and dissemination of overall 
        findings and lessons learned.

          NSF has increased the overall resources deployed for 
        post-award monitoring and will continue these increases until 
        management deems them to be sufficient.

Q3.  Dr. Boesz testified that NSF provides extra scrutiny to high-risk 
projects. How do you define high-risk and what extra monitoring 
procedures do you follow for these projects? Have these procedures been 
effective? What protocols are in place to oversee lower- and medium-
risk awards?

A3. All NSF awards are assessed annually for financial and 
administrative risk using objective criteria such as type of awardee 
organization, dollar amount of award, whether NSF is cognizant for 
federal oversight, whether the awardee is a new federal awardee, 
complexity of the award instrument, cost sharing, sub-awards, 
participant support, and equipment. High-risk awards are identified via 
a set of weighted objective factors applied to the award universe. 
Examples of such factors include dollar amounts of the award, sub-
awards, and cost sharing. These factors are assigned point values, and 
the resulting point value, once all factors are accounted for and 
totaled, determine the classification of the award as low, medium or 
high risk. Objective criteria applied for the FY 2005 Risk Assessment 
model identified 252 awards made to 167 institutions as high risk.
    After the objective assessment, high risk awards are further 
reviewed using subjective factors. These include programmatic, 
administrative, financial, and/or OIG concerns. Of the 167 institutions 
previously identified as high risk, 52 were eliminated because they 
were subject to Office of Budget, Finance, and Award Management site 
visits or OIG-conducted audits in the last four years, are currently on 
the OIG audit plan, are subject to total business systems reviews, or 
had OIG-conducted audit reports issued within the last four years. Also 
eliminated were 49 organizations whose high risk awards were due to 
expire.
    Finally, of the 66 remaining institutions, NSF considered the total 
risk points assigned to an organization as well as its type. For 
example, organizations managing multiple high risk awards had higher 
risk points assigned. After applying both objective and subjective 
criteria as outlined in the Risk Assessment model, NSF selected 24 to 
30 institutions for post-award monitoring site visits in FY 2005. This 
includes tribal colleges, school districts, nonprofit organizations, 
and academic institutions.
    NSF has communicated this plan to NSF management and program staff 
as well as OIG. NSF will continue to assess its awards annually and 
will coordinate with programmatic, administrative, and financial staff 
as well as with OIG to ensure that high risk awards are closely 
monitored.
    The monitoring procedures that NSF follows for high risk projects 
are contained in the Post-Award Monitoring and Business Assistance 
Program Site Visit Review Guide. The guide contains roles and 
responsibilities, pre-site visit activities and procedures, on-site 
review modules that can be tailored for each visit, post site visit 
activities, worksheet appendices, and correspondence appendices. On-
site review modules include both core and targeted sections:

          Core modules (included in all site visit reviews) 
        include general management, accounting and financial system 
        review, and Federal Cash Transaction Report (FCTR) 
        reconciliation.

          Targeted modules (used by site visit teams based on 
        risk factors identified during the risk assessment) include 
        time and effort records for personnel, fringe benefits, travel, 
        consultants, cost sharing, participant support costs, indirect 
        costs, procurement, sub-award and sub-recipient monitoring, and 
        property and equipment.

    The Post-Award Monitoring and Business Assistance Program Site 
Visit Reviews conducted by NSF over the last several years continue to 
mature as part of NSF's comprehensive program. Issues have been 
identified during these visits and follow up is conducted. For 
institutions that have had the benefit of this business assistance 
visit, indications are that procedures have been effective.
    For lower and medium risk awards, NSF's baseline monitoring adheres 
to the Single Audit Act implemented by OMB Circular A-133. Audits 
performed by private CPA firms contain attestations on internal 
controls, compliance with federal regulations, and the schedule of 
federal financial assistance. In addition, OMB has designated cognizant 
federal agencies that have responsibility for overseeing institutions 
to ensure that the awardee financial systems and internal controls 
comply with federal requirements.
    Baseline monitoring is conducted in a systemic and automated 
fashion for all awards including those that are lower- and medium-risk. 
This is supplemented by standardized staff processes and specialized 
reviews. As an enhancement to baseline monitoring, NSF is contracting 
out for focused reviews of FCTR data that will be drawn from a 
statistically valid sample of the medium and low risk universe.

Deputy Director for Large Facility Projects

Q4.  What are the responsibilities of the Deputy Director for Large 
Facility Projects? How does he fit into NSF's process for selection and 
oversight of Major Research Equipment and Facilities Construction 
projects? What human and technology resources does he have? What 
authorities does he have?

A4. The Deputy Director for Large Facility Projects serves as the 
principal advisor on facility construction and project management to 
the Director of the Office of Budget, Finance, and Award Management 
(BFA), also known as the Chief Financial Officer. The Deputy is the 
day-to-day point of contact with senior agency officials, NSF program 
managers, and awardee managers on project management and oversight 
matters relating to NSF's large facility projects. The Deputy 
Director's responsibilities include:

          Advising the BFA Director on problem areas and 
        opportunities, and recommending courses of action; identifying 
        errors in judgment and/or time that could have serious effects 
        on cost or schedule;

          Providing assistance to NSF program managers in 
        planning, budgeting, constructing, and operating large facility 
        projects--activities that extend from pre-conceptual design 
        through engineering criteria, site selection, construction, 
        and/or acquisition, operations, and decommissioning;

          Directing the development, initiation, and 
        implementation of NSF policies, guidelines, and procedures for 
        large facility projects;

          Representing NSF in meetings with other federal 
        agencies, OMB, Congress, and other oversight or investigative 
        bodies on all matters involving the business operations 
        oversight aspects of large facility projects;

          Conducting independent cost, schedule, and management 
        reviews of large facility projects; and,

          Managing the annual validation reviews for large 
        facility projects for inclusion in the fiscal budget process.

    The Deputy Director serves on all Project Advisory Teams (PAT), the 
NSF advisory group assembled by each program officer managing a large 
facility project. The PAT is composed of representatives from BFA, the 
Office of the General Counsel, program managers with experience and 
expertise in large projects, the Office of Legislative and Public 
Affairs, and the Office of International Science and Engineering. 
Through their expertise in grants management, contracts, legal, 
legislative, and international aspects of project management, the PATs 
provide facility program managers with advice on a regular basis.
    NSF is currently re-evaluating this position to ensure that it has 
the right mix of responsibilities and authority to provide maximum 
benefit to the Foundation. The authority of the position is described 
above. The NSF Director fully supports this position and has charged 
the Deputy Director for Large Facility Projects with the authority to 
act in his name with respect to NSF's portfolio of large projects. The 
Director has specifically delegated to the Deputy Director for Large 
Facility Projects the authority to convene and conduct external reviews 
of any large facility projects when professional judgment indicates 
there is reason to do so.
    The process of selecting facility projects to be funded in the 
Major Research Equipment and Facility Construction (MREFC) account 
begins with the NSF program manager and the cognizant Division Director 
and Assistant Director recommending the project to the MREFC Panel. The 
MREFC Panel, chaired by the NSF Deputy Director and composed of NSF 
senior management including the Deputy Director for Large Facility 
Projects as a member ex-officio, reviews and recommends which projects 
are sent forward for final approval to the NSF Director and then to the 
National Science Board.
    Presently, 1.5 FTEs report directly to the Deputy Director for 
Large Facility Projects. In addition, as a line manager within BFA, the 
Deputy Director can call on the resources of the entire BFA staff. 
Examples include: The Division of Contracts and Complex Agreements 
manages the award and administration of cooperative agreements for 
MREFC projects; the Policy Office is responsible for implementing and 
issuing proposal, award, and acquisition policy for NSF programs; the 
Division of Financial Management oversees financial policy and 
financial management of NSF; and the Budget Division coordinates 
development of NSF's annual budget to OMB and Congress. All divisions 
participate in activities related to management of large facility 
projects; the Deputy Director relies on their expertise in providing 
the best advice and guidance to NSF program officers in planning, 
budgeting, constructing, and operating large facility projects. NSF 
expects to fill two additional positions in the near future. The Deputy 
Director for Large Facility Projects requires no extraordinary 
technical resources.

NSF Business Analysis

Q5.  NSF has contracted out for a multi-year, multi-million dollar 
Business Analysis of NSF workforce and procedures. What is the status 
of this project?

A5. In FY 2002, NSF initiated a comprehensive, multi-year Business 
Analysis, the outcomes of which are informing Organizational Excellence 
investments now and for the foreseeable future. The Business Analysis:

          Documented each of the agency's core Business 
        Processes and defined its contribution to the NSF mission.

          Defined process effectiveness and efficiency 
        improvements that leverage past experience, capitalize on best 
        practices in the public and private sectors, and respond to 
        emerging mission-related trends.

          Is developing future-looking Business Process 
        scenarios and criteria for success.

          Defined a Human Capital Management Plan to provide 
        next-generation human capital capabilities. The Plan identifies 
        future-looking workforce competencies and describes human 
        capital strategies and approaches to support the Business 
        Process scenarios and to capitalize on opportunities afforded 
        by Technology and Tools innovations.

          Is defining an Integrated Technology and Tools Plan 
        (business infrastructure tools, knowledge bases, and 
        technologies) that describes an overall integrated technical 
        and information architecture for future systems and 
        capabilities in support of the agency's Business Processes.

    The outcome of NSF's Business Analysis will be a management and 
investment strategy focused on quality, efficiency, agility, and 
flexibility and was designed to realize the agency's Human Capital, 
Business Processes, and Technology and Tools goals.
    Major products from the Business Analysis were delivered at the end 
of FY 2003, including a complete baseline documentation of the agency's 
core business processes, a first version of an agency-wide human 
capital management plan, and a first iteration of an enterprise 
architecture. This work underscores two fundamental challenges facing 
NSF as it becomes a fully integrated organization capable of working 
both within and across intellectual organizational boundaries: (1) 
maintaining the highest levels of quality in merit review and the award 
process, and (2) maintaining flexibility while promoting appropriate 
agency-wide standards.
    During FY 2004, the Business Analysis effort addressed these 
challenges in a variety of ways. The Analysis identified alternative, 
more efficient methods for conducting the proposal review process that 
maintain the integrity of the process.

Q6.  What does NSF hope to gain from the results? Have any 
recommendations been made to date? If so, what were they and what 
changes has NSF undertaken in response?

A6. Based on Business Analysis findings, the Foundation will develop 
more formal procedures for managing the technical risk of awards and 
assessing the contribution of NSF-funded projects to the advancement of 
science and engineering. Currently, a series of opportunities for 
process improvement in both of the key business processes identified 
above are under review by agency management. Implementation is expected 
to begin this fiscal year.
    NSF also capitalized on Business Analysis work (e.g., an employee 
workload survey and analysis) to effectively implement alternative 
human capital management approaches to increase the use and 
effectiveness of the workforce. In 2004, as a result of Business 
Analysis findings, NSF laid the groundwork for conversion from a task-
based to a competency-based human resource management system and 
consolidated several hundred existing job titles into 40 job families. 
These changes directly link workforce planning, recruitment, 
development, and performance management activities to agency business 
strategy, and simplify and streamline these activities for NSF 
management and staff. The electronic jacket human capital pilot project 
identified a set of useful guidelines for change management at NSF that 
are being employed to facilitate the planning and introduction of new 
technologies and business process improvements.
    The Administrative Functions Study, currently under way, is 
designed to address the impact of rapidly changing work processes, 
shifts in workload, and advances in technology on the Foundation's 
ability to efficiently perform its administrative duties. The study is 
examining the distribution of administrative functions among staff in 
the S&E Directorates and will recommend strategies to better align 
those functions in support of the NSF mission. The study will evaluate 
existing NSF staffing models; identify new or modified staffing models; 
define competencies for positions in the new models; and propose high 
level migration strategies to assist Divisions and Directorates/Offices 
in transitioning, as appropriate, to any chosen model. Ultimately, the 
result is alternative career paths and new learning maps and training 
plans for NSF staff who wish to manage opportunities for future career 
development. Also likely is that this study, in conjunction with other 
business analysis work, will recommend the realignment of some 
administrative functions within or among Divisions/Directorates/
Offices.
    The Business Analysis also provided a framework for integrating 
NSF's information technology (IT) systems across the agency and 
establishing agency-wide standards for IT security, functionality, and 
application development. Recent focus has been on the development of 
Baseline and Target Architectures, the Information Technology 
Implementation Plan, and The NSF Technology Governance Framework. The 
baseline architecture includes a complete inventory of NSF's major and 
non-major systems; identification of business processes, sub-processes, 
applications, technology, and data deployed at NSF; identification of 
major areas of short and long-term improvements and recommendations; 
and an analysis of business processes and services to identify 
redundancies and opportunities to introduce efficiencies.
    The Target Technology Architecture, developed in 2004, focused on 
establishing the precepts of a service-oriented enterprise architecture 
(SOEA); provides a vision of NSF's future architecture; links together 
organizational goals, lines of business (BRM), Service/Capabilities 
(SRM), systems and technologies (TRM), data and people; and currently 
provides guidance for technology capital investments and several 
infrastructure initiatives including NSF's Portal, Directory Services 
and Identity Management.
    The Integrated IT Implementation Plan provides the links between 
the baseline and the target architecture and is described in terms of 
10 major IT projects. The IT Implementation Plan is currently being 
used to guide implementation decisions and sequencing of programs 
(e.g., the acquisition and implementation of expanded grants management 
capabilities via the Strategic Information Management and the NSF 
Identity Management and Directory Services system) and includes the 
constructs necessary to establish NSF's technology roadmap for the next 
five to seven years; essentially, the IT Implementation Plan includes 
the tools to ``operationalize'' NSF's Enterprise Architecture.

Prioritizing New Personnel Hires

Q7.  In the past two years, NSF has requested and received slots for 50 
new employees. What are your priorities for the categories of new 
personnel you have hired to date and plan to hire in the near future, 
and how did you determine those priorities?

A7. NSF's priorities for new personnel are in the two categories below:
    Science and Engineering Staff--Science and engineering researchers 
and educators with extensive, relevant professional experience oversee 
assigned areas of the NSF portfolio. Their primary responsibilities 
are: a) to manage science and engineering programmatic resources within 
the context of NSF's Strategic Plan by developing forward-looking 
solicitations using a quality merit review process to identify the most 
promising projects; and b) to implement comprehensive award management 
and oversight procedures to ensure that the agency's investments 
contribute optimally to the Nation's scientific and engineering 
leadership. Duties also include representing NSF in the global science 
and engineering community, participating in program development and 
evaluation activities, coordinating with other organizations and 
stakeholder groups, and ensuring diverse participation in review and 
funding procedures.
    Business, Operations, and Information Staff--Business, operations, 
and information professionals create and support state-of-the-art 
business processes and procedures within the agency. They provide 
contemporary administrative leadership and support within NSF as well 
as the broader stakeholder community of grantee organizations, 
principal investigators, and reviewers. Additionally, they analyze and 
contribute to the development of agency policy, provide essential 
project management capabilities, and perform an array of administrative 
functions. These professionals uphold the agency's robust merit review, 
award, and financial management processes, monitor grants and 
cooperative agreements, implement and oversee the evolution of the 
enterprise architecture, recruit and train agency staff, and ensure the 
ongoing health and security of agency assets and resources, financial 
systems, and internal controls. Like science and engineering 
professionals who cross traditional disciplinary boundaries, the 
agency's business, operations, and information professionals provide 
both breadth of expertise across all business processes and procedures 
and depth in key existing and emerging technical, legal, and 
administrative areas.

Q8.  What role is the Business Analysis report playing in your 
decisions?

A8. The NSF Business Analysis played a key role in determining these 
staffing priorities. In FY 2002, NSF initiated a comprehensive, multi-
year Business Analysis study, the outcomes of which are informing 
Organizational Excellence investments for the foreseeable future. This 
study is a key element of NSF's Administration and Management strategy, 
a concurrent analysis of human capital, business practices, and 
technology, which is now part of the Organizational Excellence 
strategic goal.
    The Business Analysis identified Workload of Science and 
Engineering and Business, Operations, and Information Staff as a 
strategic area to be addressed by NSF. An increase in the volume and 
complexity of proposals impacts the effectiveness of Program Directors 
and other Science and Engineering staff. NSF proposal workload 
increased by 48 percent from 2000 to 2004; the volume of 
interdisciplinary proposals requiring cross-directorate coordination 
(e.g., nanotechnology, biocomplexity in the environment, and 
cyberinfrastructure) increased by more than 50 percent over a three-
year period. In addition, the agency-wide effort to improve the 
effectiveness of management and oversight of NSF awards increases 
workload demand on both Science and Engineering and Business, 
Operations, and Information staff across the Foundation.
    In hiring new staff to address these pressing and immediate needs, 
NSF continues to emphasize the recruitment and training of staff who 
are adept at crossing boundaries between disciplines, traditionally 
stove-piped career fields, and organizations. These individuals will 
both create and respond to emerging scientific and business 
opportunities. New staff members are contributing to the attainment of 
NSF's organizational excellence goal, enabling quality merit review, 
award management, and operations for an increasing number of proposals 
and increasingly complex projects.

Math and Science Partnership

Q9.  In May 2004, the Office of the Inspector General completed its 
audit of the Math and Science Partnership (MSP) Program at NSF. Among 
the findings, the audit determined that the contract for evaluation of 
the overall program had not been released and it appeared that 
milestones, target dates and deliverables for completing the evaluation 
were absent or still under development. The audit also found that some 
of the individual MSP projects did not have the systems in place to 
effectively evaluate their progress in improving teaching and learning.

     What is the status of both the overall program evaluation and the 
evaluation of individual projects?

A9. On May 18, 2004, NSF released a Request for Proposals (DACS-040017) 
for the Program Evaluation of the Math and Science Partnership Program 
(MSP-PE). In September 2004 COSMOS Corporation, in partnership with 
Vanderbilt University, George Mason University and The McKenzie Group, 
was awarded the overall program evaluation contract. The contract 
specified the milestones, target dates, and deliverables necessary to 
accomplish the evaluation process at the program level. COSMOS has 
begun its work, which is ongoing.
    The overall program evaluation (MSP-PE) contract awarded in 
September 2004 is but one aspect of a much larger and more 
comprehensive package of MSP data collection and evaluation. The MSP-PE 
builds on and uses: (a) the existing MSP Management Information System 
(MSP-MIS), previously awarded by contract to Westat; and (b) the 
extensive quantitative and qualitative data collected and reported by 
each funded Partnership project since the project's initial funding. 
The MSP-MIS is a critical component of the overall MSP evaluation 
package, in that it brings consistency to the overall MSP data effort 
through the collection across all funded Partnerships of common 
quantitative and qualitative data, including student achievement data 
and teacher data. The MSP-MIS is the primary data source for the MSP-PE 
and, because of that function, its role in an overall MSP evaluation is 
at least as important as that of the program evaluation contract.
    For individual projects, the status of their evaluations is one of 
ongoing strengthening. Since the first awards were made at the end of 
FY 2002, the MSP has been incrementally increasing its oversight of 
project evaluation through the use of additional external review of 
evaluation plans and evaluator credentials, as well as through the 
ongoing critical site visits required of all Comprehensive MSP 
projects. The OIG Audit of the MSP program focused on a small sample of 
Partnership projects funded in the first competition. The Audit Report 
acknowledged (p.3) that NSF had been, in later solicitations, more 
explicit in articulating requirements about quantitative measurements 
and independent evaluators. Consonant with the nature of a Research and 
Development effort, all aspects of MSP evaluation have been continually 
strengthened since the program began.

Retention of Science and Engineers Majors

Q10.  Surveys of college freshmen show a high level of interest in 
science and engineering (S&E) fields, with approximately 25-30 percent 
of students intending to major in these areas. However, during the 
course of their undergraduate years, many students move out of S&E and 
into other majors or out of college.

      What is NSF doing to improve the retention of S&E majors, and how 
will these efforts be maintained in light of level or declining 
budgets?

A10. Many programs at NSF are aimed to improve the retention of 
undergraduate S&E majors. NSF supports many collaborative alliances 
between different types of institutions that are designed to provide a 
seamless transition for undergraduate students as they move through 
their initial years as majors in S&E fields. These programs and 
alliances are active in all 50 states, the District of Columbia, and 
three U.S. territories; at approximately 900 different universities; 
and with over 20,000 undergraduate students involved (FY 2004 data). 
Efforts will be made to continue the thrust of these programs and 
alliances in light of tight budgets and competing priorities.
    One of these programs is the STEM (Science, Technology, Engineering 
and Mathematics) Talent Expansion Program (STEP), which has a goal of 
increasing the number of students graduating with associate and 
baccalaureate degrees in STEM fields. Projects supported by STEP use a 
variety of creative approaches to attract and retain students in S&E 
fields. As an example of this program's impact, estimates are that the 
nineteen projects supported by STEP in FY 2004 will, by the end of the 
grant period, graduate 1,640 additional STEM majors annually beyond 
those graduated in FY 2003.
    NSF undergraduate scholarship programs, such as the Computer 
Science, Engineering and Mathematics Scholarship (CSEMS) program 
(funded by H1-B visa fees), the Federal Cyber Service: Scholarship for 
Service (SFS) program, and the Robert Noyce Scholarship program, help 
to retain science and engineering students who otherwise would not stay 
in college due to financial difficulties. The projects that supply 
student scholarships also provide mentoring and other academic and 
student-support programming that helps to retain students.
    NSF programs that address the quality of undergraduate education 
also potentially have an impact on the retention of undergraduate 
students in S&E fields. The Course, Curriculum and Laboratory 
Improvement (CCLI) program supports development of new S&E learning 
materials and tools and creative teaching methods and strategies that 
increase student learning. These new materials and approaches will 
engage a broader group of students, increase their academic success, 
and enhance retention of students. Similarly, the Advanced 
Technological Education (ATE) program provides grants to strengthen the 
education of students in technologically oriented associate degree 
programs.

Questions submitted by Representative Darlene Hooley

Graduate Fellowships and Traineeships

Q1.  NSF has increased the size of stipends for graduate fellowships 
and traineeships to $30,000 per year.

     What has been the effect on numbers of applications for 
fellowships and traineeships as a result of increasing stipends, and in 
particular, the effect on the number of applications from individuals 
from under-represented groups?

A1. The total number of applications for the Graduate Research 
Fellowship (GRF) has consistently increased in recent years. The number 
of applications from women and minorities has also increased, although 
in differing proportions. Between 2002 and 2004, applications from 
women rose by 35 percent and from under-represented minorities by 27 
percent. However, it is important to note that as a percentage of the 
total applicant pool, women and minorities decreased slightly during 
the same period. (The program is able to report numbers representing 
only those who identified themselves as members of under-represented 
groups).
    The overall GRF offer acceptance rate (percentage of students who 
accept the GRF award) has increased with the increase in stipend 
levels.




    While an overall increase in applications accompanied the 
improvement in the absolute amount of stipends, other factors may 
account for the increase. This includes economic factors and the 
relative size of the NSF stipends as compared to other fellowships.

Q2.  On what basis do you determine the proportion of funding for the 
fellowship program versus the traineeships programs? How do the goals 
of these two types of graduate support programs differ?

A2. The goals of the NSF fellowship program and the two traineeship 
programs are complementary. They seek to attract high quality domestic 
students to study in the science and engineering fields and to broaden 
and strengthen their preparation for career success.
    Within the Division of Graduate Education, budgets for the 
traineeship and fellowship programs are fairly close, reflecting the 
importance of both approaches to furthering NSF's goals in the 
preparation of future scientists and engineers. In 2005, the NSF budget 
is $96.53 million for the Graduate Research Fellowships (GRF) program 
and $118.86 million for two traineeship programs ($68.97 million for 
the Integrative Graduate Education and Traineeship (IGERT) and $49.89 
million for the Graduate Teaching Fellows in GK-12 Education (GK-12); 
both of these programs make awards to institutions, not directly to 
individuals).
    Fellowships are awarded to individuals directly and they are 
portable. Students submit applications to NSF for awards to support 
their masters and Ph.D. graduate study. Over 9,000 applications are 
submitted annually to the GRF program; approximately 950 new awards are 
made each fiscal year.
    For fellowships, panels of experts review applications. Selected 
students may take the award to an appropriate institution of the 
student's choice. If the student is studying in the U.S., the award is 
given to the institution annually and consists of a $30,000 stipend for 
the student and $10,500 for the cost of education that remains with the 
institution. If studying abroad, the award is provided directly to the 
student.
    Traineeships are awarded in clusters as part of a grant to an 
institution. The institution selects students to participate as 
trainees. Both IGERT and GK-12 provide the same amount as the GRF 
program for stipends and cost of education allowance. The GK-12 program 
emphasizes communication skills and prepares graduates to share their 
scientific expertise with a wide audience and for a variety of 
scientific careers. IGERT traineeships prepare graduate students to be 
the scientists and engineers of the future, prepared for careers of the 
21st century.

Q3.  Does NSF have a goal for the proportion of fellowships and 
traineeships relative to graduate research assistantships, which are 
funded under individual research grants?

A3. The National Science Board has addressed the issue of distribution 
of support for graduate students on a number of occasions. The 2003 NSB 
report The Science and Engineering Workforce: Realizing America's 
Potential includes conclusions drawn by a 1996 NSB Task Force on 
Graduate and Postdoctoral Education (1996). Specifically, the Task 
Force reported that, ``. . .despite extensive study, we find inadequate 
data to compel a recommendation of a major shift in funding mode among 
fellowship, research assistantships, teaching assistantships, and 
traineeships for supporting graduate education in science and 
engineering'' (National Science Board, The Science and Engineering 
Workforce: Realizing America's Potential, p. 25, 2003).
    The proportion of fellowships and traineeships relative to graduate 
research assistantships is determined to a major degree by the number 
and size of research grants. Changes in the budget for NSF's Research 
and Related Activities account are accompanied by similar changes in 
the number of research assistantships supported because they are 
important features of those grants. University applicants for research 
grant funding often include graduate student funding in their 
proposals.
    Research assistantships are not restricted to U.S. citizens and 
have no specific stipend requirement; by contrast, fellowships and 
traineeships are restricted to U.S. citizens or permanent residents and 
require a specific stipend plus an amount budgeted for tuition and 
fees. NSF supports (indirectly) almost five times as many students with 
research assistantships as fellowships and traineeships. Because 
fellowships and traineeships are typically not given for the full 
duration of a graduate student's doctoral education, recipients of 
fellowships and traineeships often work as research assistants at some 
point during their doctoral studies.

High-End Computing and Cyberinfrastructure

Q4.  How have the findings and recommendations of the interagency High-
End Computing Revitalization Task Force influenced your fiscal year 
(FY) 2006 budget decisions, and how does high-end computing, 
particularly making leading edge supercomputers available to the 
research community, fit into your cyberinfrastructure plans?

A4. High-end computing (HEC) is one essential component in the national 
cyberinfrastructure. HEC systems and services are critical to 
discovery, learning, and innovation in many science and engineering 
domains. Consequently, NSF remains firmly committed to making HEC 
resources and services available to the open science community. 
Recognizing that research challenges in different science and 
engineering domains are best served by different HEC systems, the 
agency pursues an architectural diversity strategy for HEC. For 
example, leading-edge HEC systems configured with high input/output 
bandwidth and moderate interconnect latencies meet the data-intensive 
computational challenges inherent in many biological and biomedical 
fields. The needs of the climate modeling and cosmology/astrophysics 
communities are best met with tightly-coupled leading edge HEC 
architectures configured with high interconnect bandwidths.
    Since the HEC needs of the national science and engineering 
communities are diverse, NSF currently supports a range of HEC systems 
and related services provided via a number of provider organizations, 
including the National Center for Atmospheric Research, the National 
Center for Supercomputing Applications, the Pittsburgh Supercomputing 
Center, Purdue University, the San Diego Supercomputing Center, and the 
Texas Advanced Computing Center. Some of the resources provided by a 
number of these organizations have been integrated into the NSF-funded 
Extensible Terascale Facility (ETF). ETF uses advanced technology to 
provide a unified user environment in which researchers and educators 
can easily access a variety of cyberinfrastructure architectures and 
services, including HEC, that are furnished by spatially distributed 
providers. Other cyberinfrastructure resources, including some HEC 
resources, are provided by these organizations outside of ETF--these 
resources remain accessible through the traditional access mechanisms 
with which researchers and educators have become familiar.
    The High-End Computing Revitalization Task Force (HECRTF) report 
``A Federal Plan for High-End Computing'' describes alternative 
approaches and planning strategies for three HEC components: HEC 
Research and Development, HEC Resources, and Procurement. Some of the 
approaches and planning strategies discussed are more directly relevant 
to NSF's cyberinfrastructure plans than others. However since HEC is a 
key element of cyberinfrastructure, all are likely to have some bearing 
on NSF's future cyberinfrastructure activities.
    The agency recognizes that effective interagency coordination and 
collaboration is essential to progress in HEC. NSF continues to work 
closely with its sister agencies on HEC issues. Most notably, NSF staff 
are working with colleagues at the Department of Energy (DOE). The two 
agencies are partners in the ETF (DOE is providing resources to the 
open science community via NSF's ETF platform), and are collaborating 
in the investigation of the leadership-class Cray Red Storm HEC system 
currently being deployed at the Pittsburgh Supercomputing Center by 
NSF, and at Sandia National Laboratory (SNL) by DOE. The architectures 
of these systems are slightly different due to the classified nature of 
the work to be done on the SNL-deployed system, but many features are 
identical. As another example, NSF staff remain fully engaged in 
collaborations with DARPA in that agency's High Productivity Computing 
Systems program.

Cyberinfrastructure

Q5.  Have you developed, or are you developing, an NSF-wide plan to 
first identify and then to meet the cyberinfrastructure needs of the 
scientific and engineering research communities? What are the roles and 
responsibilities of the Computer and Information Science and 
Engineering Directorate and the other scientific directorates in 
developing the plan, budgeting for it, and implementing it?

A5. In March 2005, NSF established the Cyberinfrastructure Initial 
Implementation Working Group (CIIWG) consisting of representatives from 
all research and education directorates and offices, and including the 
Director of the Division of Shared Cyberinfrastructure (SCI) from the 
Computer and Information Science and Engineering (CISE) Directorate. 
The CIIWG is charged to identify roles and goals for NSF's 
cyberinfrastructure investments, and to recommend management structures 
and strategies needed to support integrative and long-term planning 
that will lead to the development of an NSF-wide Cyberinfrastructure 
Plan.
    In preparing these recommendations, the CIIWG is to ensure the 
involvement of NSF program staff from all offices and directorates, to 
receive input from science and engineering research and education 
communities, and to frame the recommendations to build on past and 
current investments. The CIIWG will also provide insight into the 
current context of NSF efforts with respect to the activities of 
others, including research and education communities, other agencies, 
commercial enterprises, and international activities.
    Recommendations from the CIIWG will be used to develop the NSF 
management structure that will carry out long-term planning and 
management of NSF's cyberinfrastructure investments. The CIIWG report 
will be reviewed and considered for implementation by a newly 
established Cyberinfrastructure Council (CI Council). This council 
consists of the Assistant Directors heading each research and education 
directorate and office. Dr. Bement chairs the group. The CI Council 
will establish policy, principles, and priorities for the NSF-wide 
cyberinfrastructure investments and approve the integrated NSF 
cyberinfrastructure plan that will be established and implemented 
through the NSF-wide integrated management structure. The NSF plan will 
include investments through research and education directorates, 
offices, and the SCI Division in CISE. This management structure will 
be in place early in the summer of 2005.

National Nanotechnology Initiative

Q6.  The Nanoscale Science and Engineering priority area received an 
increase of 32 percent for FY 2005 and seeks a two percent increase for 
FY 2006. However, the breakout of funding for the initiative by 
research directorate shows a 40 percent decrease in funding in the 
Social, Behavioral and Economic Sciences Directorate from FY 2004 to FY 
2005 to a level of only $1.56 million. The FY 2006 request is frozen at 
that level.

     Explain why research related to the societal implications of 
nanotechnology appears to be de-emphasized within NSF's nanotechnology 
research program.

A6. In FY 2006, funding for the Nanoscale Science and Engineering 
priority area declines, consistent with the planned phase-out of the 
priority area. At the same time, funding for the National 
Nanotechnology Initiative (NNI) activities increases by about two 
percent. The NNI funding request for FY 2006 has been re-organized 
based on Program Component Areas (PCAs) to align it with the NNI 
Strategic Plan published in December 2004. The PCA component on 
Ethical, Legal, and other Social Implications (ELSI) will be funded 
through several directorates. SBE is funding societal implications at 
an increasing level, with $5.5 million estimated for FY 2004, $7.4 
million estimated in FY 2005, and $7.5 million requested for FY 2006.
    The SBE Directorate's funding for ELSI includes a specific program 
solicitation that has remained at $1.56 million from FY 2004 through FY 
2006. However, additional funds for societal implications of 
nanotechnology are funded through core programs in SBE. These are 
expected to increase in FY 2006 in competition with other core 
proposals. SBE spent about $2.59 million for nanoscale science, 
engineering, and technology projects in FY 2004.
    The FY 2006 NSF request for societal dimensions of nanotechnology 
includes not only the ELSI program component area but also includes 
environmental, health and safety (EHS) and educational components. FY 
2006 funding for the societal dimensions of nanotechnology as a whole 
will increase to a total of $60 million.
                   Answers to Post-Hearing Questions
Responses by Mark S. Wrighton, Chairman of the Committee on Audit and 
        Oversight, National Science Board; Chancellor, Washington 
        University, St. Louis

Question submitted by Chairman Bob Inglis

Q1.  How does the Deputy Director for Large Facility Projects fit into 
the National Science Board's processes for selection and oversight of 
Major Research Equipment and Facilities Construction projects?

A1. The National Science Board feels strongly that the Deputy Director 
for Large Facilities Projects (LFP), Office of Budget, Finance, and 
Award Management must have significant oversight and coordination 
responsibility for the construction and financial management aspects of 
all LFPs. The Board has previously discussed this issue with the 
National Science Foundation Director, Dr. Arden Bement, who has 
confirmed to the Board that the LFP Deputy Director position does have 
oversight authority for construction related and financial management 
of LFPs. The Board is currently completing a report on its own 
oversight responsibilities with respect to major research facilities, 
which will be implemented this fall. This report with include all the 
steps on how the Board approves and monitors these projects as they go 
through their life cycle, and the role of the Deputy Director for LFPs 
in that process.

Questions submitted by Representative Darlene Hooley

Q1.  The National Science Foundation (NSF) budget request funds only 
close out costs for the Math and Science Partnership Program. This 
action is exactly counter to the recommendation of the National Science 
Board (NSB) in NSB-04-42, which was issued following the initial 
proposal to end the program in the FY 2005 budget proposal. Has the 
position of the Board changed from that expressed in its statement from 
last year, and if not, does the Board intend to press for continuation 
of the Math and Science Partnership Program?

A1. The National Science Board reaffirms its previous statement (NSB-
04-42), and continues to support the Mathematics and Science 
Partnership Program at NSF as essential to the development of stronger 
linkages between K-12 and undergraduate education, and for the 
advancement of knowledge on what is effective in STEM education. NSF 
has long-term experience in such large-scale experiments in K-12 
education in STEM fields through its Systemic Initiatives.

Q2.  In general, what is the current position of the NSB on NSF's role 
in K-12 math and science education and does the Board support a policy 
change that would lead to the de-emphasis, or abandonment, by NSF of 
instructional materials development and teacher training and 
professional development activities?

A2. The NSB has stated its support for high quality teacher training 
for K-12 STEM teachers, improvements in instructional materials 
development, and professional development in its reports, Failing Our 
Children (1998) (NSB-98-154) and Preparing Our Children (1999) (NSB-99-
31) and reaffirmed them in the Board's recent report, The Science and 
Engineering Workforce: Realizing America's Potential (2003) (NSB-03-69) 
as critical to world leading capabilities in STEM fields for our future 
workforce.

Q3.  The FY 2006 budget request makes a substantial cut (-43 percent) 
in the education research component of the Research, Evaluation and 
Communication division in the Education and Human Resources 
Directorate. In its December 2003 report to Congress, ``Fulfilling the 
Promise,'' the National Science Board stated that a ``particularly 
urgent need'' included support for research that enhances understanding 
of learning and teaching at the K-12 and undergraduate level. Explain 
how this budget decision squares with the Board's statement of 
priorities.

A3. The NSB policy positions on K-12 and undergraduate education in the 
2003 report to Congress are consistently affirmed by the Board in its 
policy studies on education and the workforce. In its written testimony 
to this Subcommittee on Research, the Board states: ``We. . .know that 
the education of all our citizens in the fundamentals of math, science 
and engineering must be addressed if the U.S. is to remain eminent in 
S&T when we enter the 22nd century.'' Though the budget request of 
$5.605 billion is a 2.4 percent increase over the FY 2005 budget, it is 
nevertheless below the level of the 2004 NSF operating budget. Should 
the subcommittee determine that additional funds, beyond the 
Administration's request, can be made available to NSF in FY 2006, the 
Board recommends among its top priorities support for a strong and 
growing role for NSF in the Nation's investment in science and 
engineering education. The most recent NSB study on the K-16 system, 
Preparing Our Children (1999) (NSB-99-31), states: ``The Board believes 
that stakeholders must develop a much-needed consensus on a common core 
of mathematics and science knowledge and skills to be embedded 
consistently in classroom teaching and learning'' and recommends, 
``Overall, the investment should increase--by the Federal Government, 
private foundations, and other sponsors--in research on schooling, 
education systems more generally, and teaching and learning of 
mathematics and science in particular. To focus and deepen the 
knowledge base, an interagency Education Research Initiative, led by 
NSF and the Department of Education, should be implemented. It should 
be distinguishable as a joint venture within the agencies' respective 
research missions, and cooperatively funded.'' The more recent Board 
report, The Science and Engineering Workforce: Realizing America's 
Potential (2003) (NSB-03-69) reaffirms ``the necessity of a strong 
curriculum in mathematics, science, engineering and technology from the 
earliest grades to build the knowledge needed by citizens and members 
of the workforce'' and recommends that, ``To improve effectiveness of 
precollege teaching, stakeholders must collaborate to. . .support 
research on learning that better informs K-12 mathematics and science 
curricula and pedagogy development.'' The Math and Science Partnership 
Program and other education research programs at NSF are designed to 
address these objectives. NSF will focus the remaining resources on 
priorities for education research; however, there is no question that 
reduced funding for research will likely reduce the advances in 
knowledge that would otherwise be possible with higher levels of 
support. The Board expects to issue a formal letter to Congress on this 
issue at its May 2005 meeting.

Q4.  Under the Administration's funding projects for NSF, which are for 
flat or declining budgets, what factors will the NSB consider in 
determining the appropriate balance between support for research 
projects versus support for major research facilities and other 
research infrastructure? In general, is there a target level for the 
proportion of the budget devoted to research infrastructure versus 
research project support?

A4. In view of the increasing importance of infrastructure to 
performing cutting edge science and engineering, maintaining excellence 
in federally funded research requires a higher level of funding for 
infrastructure support. For that reason, the Board recommended in its 
recent report, Science and Engineering Infrastructure for the 21st 
Century: The Role of the National Science Foundation (2003) (NSB-02-
190), ``Increase the share of the NSF budget devoted to S&E 
infrastructure in order to provide individual investigators and groups 
of investigators with the tools they need to work at the frontier'' and 
argues with respect to the NSF budget for ``a share closer to the 
higher end of the historic range (22-27 percent).'' However, the Board 
has further argued that the higher infrastructure investment should be 
addressed through growth of the NSF budget, rather than reducing 
research project support.
    At the request of Congress, and consistent with Board discussions 
during our recent retreat, the Board will undertake the development and 
establishment of a new vision for NSF for the 21st century. This 
visionary document will also include overarching goals with both long- 
and short-term priorities, and address the balances between research 
projects and facilities support, that take into account federal fiscal 
realities. We expect to work closely with the NSF Director and finalize 
this effort by the end of 2005.
                   Answers to Post-Hearing Questions
Responses by Christine C. Boesz, Inspector General, National Science 
        Foundation

Question submitted by Representative Darlene Hooley

Q1.  Your testimony included the statement that ``realignment of 
certain management priorities would ease some of the burden'' in the 
absence of having all the resources otherwise needed by NSF to address 
its post-award administration challenges. What are some examples of 
realignment that you had in mind?

A1. The business of the National Science Foundation (NSF) is funding 
basic research and educational initiatives in science, mathematics, and 
engineering. Over the years NSF management has focused on pre-award 
activities, improving the application process and streamlining review 
activities. NSF has invested in high-quality electronic communications 
and processing systems that are the backbone of its operations. 
However, NSF has not applied the same rigor to developing a robust 
post-award monitoring process. NSF has relied heavily on the goodwill 
of its institutional partners for the day-to-day monitoring of NSF 
grants. While this strategy has merit, it is not enough to safeguard 
the billions of tax dollars that NSF invests in research and education.
    NSF has put in place an Award Monitoring and Business Assistance 
Program, with limited coverage of its award portfolio. By focusing on 
high-risk awards, the effort is too narrow and the effect is limited. 
NSF could broaden the scope of its monitoring activities by 
implementing cost-effective monitoring procedures such as desk reviews 
of reports from awardees and computer assisted screening of A-133 
audits.
    It is my judgment that NSF needs a minimum of five qualified 
individuals dedicated to post-award administration. An annual budget of 
approximately $1 million would be needed to support these individuals 
for salaries, benefits, normal office requirements, travel, and 
contractor services to assist in the monitoring function. These five 
individuals would coordinate the myriad functions that constitute post-
ward administration. They would draw on other NSF program and financial 
personnel as needed to carry out their monitoring functions.
    Current management priorities include a Business Analysis study 
that is costing NSF approximately $12 million dollars. This project 
started in FY 2002 and yet NSF is still deciding on what and how to 
implement improvements in the work force. This effort at strategic 
planning has actually become an obstacle to taking urgently needed 
actions. Therefore, my first suggestion is to reallocate resources from 
this effort to pay for contract services, travel and other necessary 
monetary expenses associated with post-award administration.
    In addition, because of efficiencies gained by moving payroll 
functions to the Department of Interior, four full-time equivalent 
positions could be used for post-award administration. Another full-
time equivalent position could become available by realignment of the 
existing financial personnel responsible for indirect rate negotiation 
and audit resolution.
    NSF has repeatedly stated that it has a shortage of personnel. An 
alternative approach would be to re-program $1 million from science, 
engineering, and education projects to establish this unit. The 
benefits gained would be cost-effective in that fewer dollars would be 
misspent by awardees.


                              Appendix 2:

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                   Additional Material for the Record





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