    [Senate Hearing 109-926]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 109-926

              ROUND TWO: FEDERAL AGENCIES AND CONFERENCE SPENDING

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

                                    HEARING

                                   before the

                    FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
                         INFORMATION, AND INTERNATIONAL
                             SECURITY SUBCOMMITTEE

                                     of the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                   __________

                               SEPTEMBER 14, 2006

                                   __________

            Available via http://www.access.gpo.gov/congress/senate

           Printed for the use of the Committee on Homeland Security
                            and Governmental Affairs

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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                       SUSAN M. COLLINS, Maine, Chairman
    TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
    GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
    NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
    TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
    LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
    ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
    PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
    JOHN W. WARNER, Virginia

               Michael D. Bopp, Staff Director and Chief Counsel
                 Michael L. Alexander, Minority Staff Director
                      Trina Driessnack Tyrer, Chief Clerk

    FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND INTERNATIONAL
                             SECURITY SUBCOMMITTEE

                         TOM COBURN, Oklahoma, Chairman
    TED STEVENS, Alaska                  THOMAS CARPER, Delaware
    GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
    LINCOLN D. CHAFEE, Rhode Island      DANIEL K. AKAKA, Hawaii
    ROBERT F. BENNETT, Utah              MARK DAYTON, Minnesota
    PETE V. DOMENICI, New Mexico         FRANK LAUTENBERG, New Jersey
    JOHN W. WARNER, Virginia             MARK PRYOR, Arkansas

                          Katy French, Staff Director
                     Sheila Murphy, Minority Staff Director
                John Kilvington, Minority Deputy Staff Director
                           Liz Scranton, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Coburn...............................................     1
        Senator Carper...............................................    15

                                   WITNESSES
                          Thursday, September 14, 2006

    Lisa Fiely, Chief Financial Officer, U.S. Agency for
      International Development......................................     6
    Nina Rose Hatfield, Deputy Assistant Secretary, Policy,
      Management, and Budget, U.S. Department of Interior............     8
    Lee J. Lofthus, Acting Assistant Attorney General for
      Administration, U.S. Department of Justice.....................    10
    Michell Clark, Assistant Secretary for Management, U.S.
      Department of Education........................................    11
    Edward C. Hugler, Deputy Assistant Secretary for Operations,
      Office of the Assistant Secretary for Administration and
      Management, U.S. Department of Labor...........................    14
    Clarence C. Crawford, Chief Financial Officer, Office of
      Personnel Management...........................................    21
    Eugene Schied, Deputy Chief Financial Officer, U.S. Department of
      Homeland Security..............................................    22
    Jeffery K. Nulf, Deputy Assistant Secretary for Administration,
      U.S. Department of Commerce....................................    24
    Richard Holcomb, Deputy Chief Financial Officer, and Acting
      Deputy Assistant Secretary for Headquarters Operations, U.S.
      Department of the Treasury.....................................    26
    Charles R. Christopherson, Jr., Chief Financial Officer, U.S.
      Department of Agriculture......................................    27

                         Alphabetical List of Witnesses

    Christopherson, Charles R. Jr.:
        Testimony....................................................    27
        Prepared statement with attachments..........................   435
    Clark, Michell:
        Testimony....................................................    11
        Prepared statement with attachments..........................   250
    Crawford, Clarence C.:
        Testimony....................................................    22
        Prepared statement with attachments..........................   312
    Fiely, Lisa:
        Testimony....................................................     6
        Prepared statement with attachments..........................    36
    Hatfield, Nina Rose:
        Testimony....................................................     8
        Prepared statement with attachments..........................   148
    Holcomb, Richard:
        Testimony....................................................    26
        Prepared statement with attachments..........................   419
    Hugler, Edward C.:
        Testimony....................................................    14
        Prepared statement with attachments..........................   258
    Lofthus, Lee J.:
        Testimony....................................................    10
        Prepared statement with attachments..........................   170
    Nulf, Jeffery K.:
        Testimony....................................................    24
        Prepared statement with attachments..........................   378
    Schied, Eugene:
        Testimony....................................................    22
        Prepared statement with attachments..........................   334

                                    APPENDIX

    Chart entitled ``What Federal Employees Spend While Attending A
      Dopmestic Conference''.........................................    33
    Chart entitled ``What Federal Employees Spend While Attending A
      Foreign Conference''...........................................    34
    Chart entitled ``Federal Agencies and Conference Spending 2000-
      2006''.........................................................    35

              ROUND TWO: FEDERAL AGENCIES AND CONFERENCE SPENDING

                                  ----------

                          THURSDAY, SEPTEMBER 14, 2006

                                         U.S. Senate,
                Subcommittee on Federal Financial Management,
            Government Information, and International Security,
                                of the Committee on Homeland Security
                                              and Governmental Affairs,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 2:33 p.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Tom Coburn,
    Chairman of the Subcommittee, presiding.
        Present: Senators Coburn and Carper.

                  OPENING STATEMENT OF SENATOR COBURN

        Senator Coburn. The Subcommittee on Federal Financial
    Management will come to order.
        I want to welcome our guests. I want to apologize for being
    late. That is one of my sticklers, and we are a couple of
    minutes late. Senator Carper will be here for a short period of
    time. He has some other things that he has to take care of, and
    I am going to just start with out him.
        I want to explain to you why we are having this hearing,
    and it is not really about conferences and travel. It is really
    about, Can the American people trust us to be prudent in a time
    when we are spending $400 billion of their kids' money every
    year that we do not have?
        And I am reminded of President Roosevelt, prior to World
    War II, when he cut his own programs that he had instituted by
    23 percent to make sure we had the resources to do what was in
    the best long-term interest of our country. I am reminded of
    Harry Truman, who did the same thing for the Korean War. We did
    not fund the Korean War on the backs of our grandchildren.
        In an area where we have discretion, where leadership can
    make a difference, where we can make a difference by leading by
    example and have impact in every other area of the Federal
    Government, we ought to do so. And quite frankly, the
    leadership that I have seen is not doing that--and I am not
    just talking about this area. This is an area, because I think
    there is some waste, that if we concentrate on that and use as
    an example, we might, in fact, find other areas where we might
    not have to borrow money from our grandkids.
        So you see a couple of charts over there.\1\ It is not
    meant to embarrass anybody, and this is not about beating up on
    anybody today, but really having some examples. I came back
    from Iraq this weekend, and one of the problems that concerns
    me--I had two hotel nights, got to stay in really nice hotels.
    Was fed well, and the person that traveled with us, the
    military liaison, paid all our expenses, and everything else.
    There is $670 in these two envelopes of per diem, which is at
    the same rate that Federal employees get per diem, that is
    mine. Well, that is ludicrous. The only other trip I have taken
    as a U.S. Senator was China, and I turned back in $573. Well,
    nobody is required to turn that money in.
    ---------------------------------------------------------------------------
        \1\ Charts referred to appears in the Appendix on page 33-35
    respectively.
    ---------------------------------------------------------------------------
        So that says, first of all, there is a problem with per
    diems in excess. Second, it is not reported as taxable income
    when, in fact, it really should be. And, third, the idea that
    we have conferences and we pick the conference not on the basis
    of need, very often, but we pick the conference based on
    whether or not we can take some paid time off associated with
    it. And so the decision is made on where the conference is
    rather than on the necessity of having the conference.
        And I am not saying that is necessarily wrong. I understand
    the extreme need for you to bring people together and I know
    you cannot always do it on digital videoconferencing. I have
    done that between Geneva and here and Belgium and here. I have
    done a lot of that, and I know that sometimes the quality of
    that is not great. But the thing that is going before us is we
    are at war. And if the Members of Congress are not going to
    lead, you all can. You can set an example.
        We had two Departments, EPA and HHS, after our first
    hearing that set into place some very good requirements. And
    just a couple of things that I would put forward to you all as
    leaders is I think that some important questions ought to be
    asked--and you can get this from my staff--about conference and
    travel, and they are the following: Does the conference help
    further the Department's mission? Really, does it change the
    mission? Does it enable the mission? Could the information be
    shared through another means, such as videoconferencing or
    Internet? Is the location appropriate and is the location
    justified given the fact that we are in a time of war?
        What would the average American think about their tax
    dollars being spent on this conference at this location? What
    would they think?
        Now, we are going to put out all the ones that we think are
    somewhat questionable onto the Internet, and I am sure that
    most Americans are not going to agree that they are
    appropriate. They may be justified, but they are not going to
    agree. So we ought to create an expectation that we are frugal
    with their money for the future's sake.
        Is the number of employees attending justified? Does
    participation in the conference validate or endorse our foreign
    policy or our values or the Administration's policy? Or does it
    undermine it? Does the conference give a platform to ideas and
    panelists who undermine our American interests rather than
    support our interests? Is it a wise use of tax dollars when we
    have almost a $9 trillion debt, growing at a half a trillion
    dollars a year? And is it must-do for efficiency and economy
    for the Department?
        I know each of you are professionals. I know you are good
    managers. What I want to do is have you refocus an effort. With
    $1.6 billion on conferences--I have examples. I will not go
    into them. I will put my written statement into the record. But
    I think there are some highly questionable trips out there, and
    that means probably 85 percent are fine. And what I am talking
    about is the 15 percent that is not.
        When DHS is going to increase their conference spending 148
    percent this year, I think, their conference level, and
    others--the Department of Labor is the lowest in terms of
    increasing expenditures, but on average, we have seen a 14-
    percent increase on average per year in the last 6 years. That
    is with the data that we have today. And that is in spite of
    advancing technology.
        Can't we do better? Can't we manage it better? Can't we
    make better decisions? And can't each of us in the areas of
    influence on this one area, which sets the tone, can we not
    also change this process--and I know you do not set the
    process, and I assure you, I am going to change this process.
    But can we not make it accountable?
        Per diem money that is not spent ought to be turned in to
    the Federal Government when we are spending $430 billion under
    real accounting rules more than we have every year. It should
    not be to enrich people who take conference trips.
        With that, I will end my statement.
        [The prepared statement of Senator Coburn follows:]
                      PREPARED STATEMENT OF SENATOR COBURN
        Welcome to Round 2 of Federal Agencies and Conference Spending.
    This past February we held a hearing after an oversight investigation
    revealed that the Federal Government had spent over $1.4 billion on
    conference-related travel and meetings in the last five years. I called
    another hearing on this topic because this figure is set to increase by
    at least $300 million after 2006 totals are tallied. The ten witnesses
    appearing before the Subcommittee on Federal Financial Management have
    been called because they either have not provided information I
    requested about their fiscal year 2006 conference activity or their
    responses were late.
        I still have not received 2006 information from USAID or the
    Department of Agriculture. The Departments of Justice and Treasury
    submitted their data yesterday afternoon. Several of you informed my
    staff that people were on vacation in August so that is why you were
    unable to complete the request on time. However, when the information
    was due in early July, I don't see how August vacations are relevant. I
    hope that these agencies can assure us today that they'll submit final
    reports to this Subcommittee at the end of the month when the fiscal
    year concludes, and for those who have already responded, please update
    your information.
        I want to thank the Departments of Labor, Commerce and Treasury for
    submitting their testimony on time. The other seven witnesses were
    late. I set these deadlines so I can review your testimony ahead of
    time and we can have a productive session at the hearing.

                                  The Findings

          In a review of your conference data, a few things that
    caught my eye between location, attendance levels, topic and cost:
          USAID reported sending 3 people to Orlando for a
    conference they described as: ``workshops and networking for feds in
    D.C.''
          The Department of Labor sent 5 people to Vietnam for a
    conference on strategies for workforce development. They also sent
    someone to Hong Kong for an OSHA conference.
          The Department of Interior spent $722,000 to send 125
    employees to a 4-day conference just 70 miles outside of Washington,
    DC. That is about $5,800 per attendee. They could have sent each
    employee and spouse on a 7-day luxury cruise for the same cost.
          The Department of Agriculture sent 550 people to a Rural
    Development Conference in Oregon.
          DHS sent 842 FEMA employees to the National Disaster
    Medical Service Conference in Reno, NV this past April at a cost of
    $1.5 million. I looked at the program line up for this conference and
    attendees had free time after 4:30 p.m. every day. The first two days
    were all optional sessions. The conference website boasts the many
    pools, casinos, restaurants, go-kart tracks and shopping available for
    hotel guests.
          The Department of Treasury sent 11 employees to a series
    of wine seminars throughout California.
        My point in bringing up these particular conferences is
    teleconferencing and the use of email to exchange information virtually
    reduce the need for employees to travel to most of these conferences.
    Instead of sending someone to the Rotary Club meeting in St. Croix,
    Virgin Islands, the Department of Labor could have hopped on a
    conference call. Or instead of sending someone to Fiji for a maritime
    seminar, the Department of Homeland Security could have had the
    information presented at the meeting emailed back to them in America.
        One thought I had is that it might be cheaper to hold conferences
    here in Washington. I am not saying that all conferences are a waste of
    time and money. Some conferences are very necessary and that's
    precisely why I am interested in this topic, to make sure that we are
    using resources for things that are ``must-do's'' for the efficiency
    and economy of the Department.

                  Astonishing increase in spending since 2000

        I continue to be concerned about the amount of time, money and
    human capital the government spends sending people to these meetings
    and sponsoring the conferences themselves. Between 2005 and 2006 the
    agencies represented here today increased their conference spending
    almost 20 percent. After the Subcommittee brought this issue to your
    attention last year most of you continued to increase this type of
    spending. At the very least this type of spending should return to 2001
    levels and remain flat as that was the year American taxpayers began
    funding an expensive war.
        Since 2000, the government has spent almost $1.5 billion, a number
    that will be surpassed at the conclusion of this fiscal year. Given the
    number of holes in the data submitted to this Subcommittee, I am sure
    this number is much higher. But what is most astounding to me is the
    rate at which this spending has increased--some 70 percent in 5 years,
    or 14 percent a year.
        I note that between the witnesses today, some of you are below this
    average, and others exceed it. This was calculated using the latest
    available data.

          OPM: spending has declined.
          Interior: Couldn't submit complete data.
          Labor: 21% spending increase
          Agriculture: 53% spending increase
          Commerce: 57% spending increase
          Treasury: 96% spending increase
          Justice: 141% spending increase
          USAID: 147% spending increase
          DHS: 148%--which is pretty impressive for an agency that
    is 3 years old.
          Education: 261% spending increase.

        Above and beyond these enormous increases, I have to wonder about
    the loss in productivity within agencies when employees are out of the
    office and sitting at a conference out of town. On top of the
    conference and travel costs add in each day's salary when that employee
    wasn't doing his regular job. The loss of man hours is tremendous if
    you consider the fact that federal employees attend thousands of
    conferences a year.
        I also continue to be amazed that these large spending increases on
    conference travel--an activity that many see as a luxury rather than a
    necessity--have occurred during a time of war. Only one agency here
    today has reduced this type of spending. It used to be the case that
    government set priorities and cut back non-defense spending during war
    time. President Roosevelt cut non-defense spending by over 20 percent
    and several years later, President Truman cut non-military spending by
    28 percent. Today, things are different.

         Technology should reduce need for travel, especially by large
                                  delegations

        Technology is dramatically reducing the need for travel. In the
    modern telecommunications era, it is unnecessary to spend time and
    resources to finance so many conferences. Teleconferences and video
    conferencing, for example, can save money while allowing the same type
    of information sharing at a mere fraction of the cost. Yet, this is not
    the trend we see. Three Departments actually doubled the number of
    conferences they sent people to last year: Agriculture sent people to
    almost 800 last year; Commerce staff attended 900 conferences this
    year; and Education sent people to 600 conferences. DHS officials
    attended 660 last year and they will attend a whopping 2,217 this year.
    Last year USAID participated in 1400 conferences. For an agency of
    2,500 employees, I was shocked by this number. It will be interesting
    to see 2006 data when they submit it.

                             First hearing round up

        I am pleased to report that as a result of our first hearing, both
    HHS and EPA have issued internal conference directives to help
    supervisors manage conference requests and spending. EPA asks managers
    to consider email and videoconferencing options before attending a
    conference. They also ask staff to consider lower cost locations and to
    hold conferences on an 18-month cycle instead of annually. These are
    positive steps being taken by individual agencies that I hope to see
    more of in the very near future. But we won't know if these process
    changes are sufficient until we see conference spending at these
    agencies reduced next year. We'll all be back to find out.
        In February, at the first hearing in this series, a former
    government official informed the Subcommittee that many federal
    employees lobby to attend conferences in beach, resort, casino or
    European tourist destinations including the Virgin Islands, Paris, Las
    Vegas, Maui, Geneva, and Australia. Many who attend the conferences
    then use annual leave to stick around for a few extra days or weeks,
    essentially charging taxpayers the cost of a plane ticket for their
    personal vacations. In other words, the destination drives the decision
    to attend rather than the agency mission. This witness also reported at
    the hearing that there are few internal controls on conference
    attendance or spending and questioned the cost effectiveness of the
    array of conferences.
        I am still awaiting responses on specific conferences, but in terms
    of taxpayer funded vacations we found that:
          The Department of Commerce sent 31 people to Greece for
    the International Sea Turtle Symposium at a cost of $84,000. Between
    the 31 attendees, they took 81 days of annual leave.

                              Lack of transparency

        I hope this hearing prompts you all to increase transparency within
    your agencies. With increased transparency I believe many of these
    problems could be avoided. There should be a formal vetting and
    justification process for conference requests, especially when
    technology allows for teleconferencing and use of the Internet to
    exchange information.
        As we go forward, I would encourage agencies to be sure that every
    conference attended by Federal employees passes the following tests:

            (1)  Does the conference help further the Department's mission?
            (2)  Could the information be shared through another means such
            as a teleconference or the Internet?
            (3)  Is the location appropriate and justified? What would the
            average American think about their tax dollars being spent on
            this conference in this location?
            (4)  Is the number of employees attending justified?
            (5)  Does participation in the conference validate or endorse
            ideas or values harmful to American interests and culture?
            (6)  Does the conference give a platform to ideas and panelists
            who undermine American interests?
            (7)  Is this a wise use of tax dollars when we have an $8
            trillion+ national debt?
            (8)  Is it a ``must-do'' for efficiency and economy for the
            Department?

        Every conference should be readily defensible, on its face, to
    regular Americans in terms of topic, location and participants. The
    conferences must be related to the Department's mission. If annual
    leave is requested in conjunction with a conference, managers must
    scrutinize conference topic and consider value to agency's work and
    focus. I look forward to our discussion today.

        Senator Coburn. We will start with our first panel of
    witnesses by hearing from Lisa Fiely, Chief Financial Officer,
    U.S. Agency for International Development; Nina Rose Hatfield,
    Deputy Assistant Secretary, Policy, Management, and Budget,
    U.S. Department of Interior; Lee Lofthus, Acting Assistant
    Attorney General for Administration, Department of Justice; the
    Hon. Michell Clark, Assistant Secretary for Management,
    Department of Education; and Ed Hugler, Deputy Assistant
    Secretary for Operations, Department of Labor.
        Ms. Fiely, you are recognized.

       TESTIMONY OF LISA FIELY,\1\ CHIEF FINANCIAL OFFICER, U.S.
                  AGENCY FOR INTERNATIONAL DEVELOPMENT

        Ms. Fiely. Chairman Coburn and distinguished members of the
    Subcommittee, I want to thank you for the opportunity to appear
    before you today to discuss USAID's use of conferences as a
    venue for learning, information exchange, and program
    implementation.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Fiely appears in the Appendix on
    page 36.
    ---------------------------------------------------------------------------
        I would like to start by giving you a brief description of
    what the U.S. Agency for International Development is and what
    we do. We are one of the premier bilateral foreign aid agencies
    in the world and the principal U.S. agency for delivering
    foreign assistance, with missions in over 80 countries. We are
    the chief foreign aid arm of the U.S. Government, and we have
    been in the development business for over half a century.
        USAID's current budget stands at more than $9 billion with
    those resources going through grants and contracts with
    hundreds of U.S. local and international nonprofit
    organizations and companies. The total official development
    assistance provided by the United States in 2005 came to $27.5
    billion, which was a near tripling of the ODA since 2001.
        USAID invests these resources in a wide variety of projects
    including malaria, HIV/AIDS, small business development,
    agricultural development, conflict resolution, rural
    electrification, microfinance, and many other activities. We
    also work with countries seeking to improve their economic
    governance structures to attract local and international
    private investment by reforming their fiscal, tax, customs,
    banking, energy, agriculture, and environmental policies.
        It is in our interest to work with host country governments
    that strive for democratic legitimacy and rule of law, and
    respect human rights. We are not the lenders like the World
    Bank or the IMF; rather, we put our resources to work on a wide
    variety of grass-roots projects in many different settings. As
    you can discern, as an Agency, we are all over the map
    literally as it applies to our locations, but figuratively as
    well, as it applies to our extremely varied nature of our
    programs as I have described them. I would dare to say that
    under our new framework, which our new Administrator,
    Ambassador Tobias, is currently putting in place, the Agency's
    programs will be more focused and defined; geographically,
    however, we will still be all over the map.
        Because of what we do and where we do it, it is very
    difficult to accomplish these initiatives using the normal
    business and operational paradigms. We have to deal with
    geographical physical distances, language barriers,
    communications barriers. Oftentimes the points we are trying to
    get across can so easily be lost in translation, and absent the
    physical presence and ability to see the disconnect or lack of
    understanding, an entire issue at hand can be lost. I say this
    as a backdrop to my discussion about the Agency's use of
    conferences.
        Oftentimes a conference or meeting is actually a venue for
    USAID to conduct program business. The interaction of key
    players in a worldwide environment is how we sell our product,
    and our product may very well be an understanding of the need
    for a particular intervention. Sometimes all that is standing
    between a program and a project working or not working is
    letting the folks know about the latest thinking in how it
    might be used to help their country's programs. Another example
    is in the Europe and Eurasia region where USAID sponsors
    conferences and workshops that seek to transfer knowledge from
    our ``graduate'' countries such as Poland to countries like
    Romania which are still in the process of transition. All of
    the conferences attended are not directly working conferences,
    but many of them are, and many others are used as training.
        We received your initial request for data back in February
    2006 and did not send an initial response until June 2006. This
    was totally unacceptable, and we recognize that. We should have
    been able to respond much quicker, but because we did not
    separately track conference information, we were forced to go
    out with a data call to our 80 missions worldwide to request
    the information. I can happily say that we have instituted in
    2007 a new expanded object coding system which will give us the
    ability to arrive at these numbers rapidly and systematically.
    Literally with the press of a button we can arrive at the
    dollar figures. The amounts which we reported to you earlier
    range from $3.5 to $8.9 million. Based on our 2007 requests, we
    are looking at an upper-limit figure of approximately $7.2
    million. This is a substantial reduction.
        I apologize that I do not have the data for you today on
    2006 numbers requested in your August 28 letter, but we just
    received this letter in my office on September 11, and we
    currently have a data call out to all of our missions. So we
    are in the process of gathering the 2006 and the 2007
    projections for you.
        If you were to ask me if all of the conference travel was,
    in fact, necessary, I cannot personally tell you that it was.
    But what I would point out is that the nature of what we do and
    where we do it makes conference meetings travel extremely
    expensive. I would further point out that at USAID money spent
    on attendance at or hosting of conferences and seminars is in
    direct competition with our program execution dollars. I would
    venture to say that as a head of office, our managers would not
    approve a frivolous conference at the expense of putting money
    on the ground where positive results can be measured to the
    Agency's favor.
        In the statement previously provided to the Subcommittee, I
    gave several examples of results we have derived from our
    participation in conferences. In the interest of time, I would
    like to just give one of those as an example, and that would be
    the United States as the main cosponsors of the International
    Partnership on Avian Flu. In the most recent conference held in
    Vienna in July 2006, the participating nations reviewed the
    international contributions to combat avian and pandemic
    influenza and agreed to focus on the critical countries such as
    Indonesia where donor assistance is desperately needed. The
    result was that an international coalition of donors mobilized
    approximately $40 million in assistance to Indonesia. This
    shows where we use conferences as a backdrop, as a venue to
    promote and successfully further our programs.
        In conclusion, at USAID we employ strict controls over both
    conference sponsorship as well as conference attendance. Our
    Agency policy requires that approving officials ensure that the
    ``minimum number of attendees needed to fulfill agency
    requirements are in attendance at any individual conference.''
    Further, in those cases where our Agency is the sponsoring
    agency, we require our offices to go out and get three
    estimates of the cost for various locations and go with the
    most economical estimate. We believe that our separate policy
    governing conferences coupled with the strict required
    approvals for hosting conferences lends strong stewardship in
    this area.
        In my 30-year career at the Federal Government, I have
    worked at several agencies--in fact, many of the agencies that
    you are paneling today. I have also been responsible for
    drafting conference policies at many of these agencies. I have
    seen conferences used as a work venue, a training venue, and as
    a reward venue in some agencies. There is no doubt that there
    is potential for abuse, which is why we have controls in place
    and why we at USAID welcome the constructive oversight on the
    part of this Subcommittee.
        Senator Coburn. Thank you very much.
        I want to welcome my Co-Chairman, Senator Carper, who will
    have to leave at about 3:30. So we are going to try to go
    through these panelists, and then he will have an opening
    statement as he asks questions.
        Ms. Hatfield.

    TESTIMONY OF NINA ROSE HATFIELD,\1\ DEPUTY ASSISTANT SECRETARY,
      POLICY, MANAGEMENT, AND BUDGET, U.S. DEPARTMENT OF INTERIOR

        Ms. Hatfield. Mr. Chairman, I am Nina Rose Hatfield, the
    Deputy Assistant Secretary for Business Management and Wildland
    Fire at the Department of the Interior, and I am pleased to be
    here today to discuss conference spending by Interior.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Hatfield appears in the Appendix
    on page 148.
    ---------------------------------------------------------------------------
        The Department of the Interior is the Nation's principal
    conservation agency. We are a large, decentralized agency with
    over 70,000 employees and 180,000 volunteers located at
    approximately 2,400 operating locations across the United
    States. The Department manages one in every five acres of the
    United States and maintains some 40,000 facilities.
        As this Nation's premier land manager, our very diverse
    mission inevitably places us amid conflict as different people
    have diverse aspirations for those 500 million acres of public
    lands that we manage. As guardian of thousands of buildings,
    roads, trails, research facilities, and scientific systems, our
    mission also triggers many basic management challenges.
        In conducting our jobs, we work closely with States,
    tribes, and local governments, particularly in seeking public
    input relative to our mission for the management of lands and
    resources. Much of our work involves meeting and collaborating
    with others. In the case of the U.S. Geological Survey, our
    science agency, there is a compelling need to work closely with
    academia. In many of our jobs, attending training and
    conferences is an important tool for employee development,
    learning, and sharing information.
        I also believe that the conferences in certain cases
    represent an indispensable tool for us in terms of promoting
    sound policy development and practice. Good policy for land all
    across the United States cannot always be developed in
    Washington, DC, and we believe that there are times when
    interaction with these impacted communities can help our
    decisionmakers identify options and craft more collaborative
    and effective solutions.
        In fiscal year 2000, Interior obligated about $209 million
    on total travel and conference expenses, or about 1.6 percent
    of our total obligations. In fiscal year 2005, we obligated
    about $210 million, or just under 1.0 percent of our total
    obligations. In 2000 dollars, this equates to about $188
    million, or about a 10-percent decrease. The fiscal year 2000
    total conference registration fees, they totaled $25 million.
    And in fiscal year 2005, that figure for conference
    registration fees declined to $23.3 million.
        We are committed to ensuring that our travel dollars are
    maximized by limiting attendance at meetings and conferences,
    using teleconferences and other alternatives to travel, and
    taking advantage of cost efficiencies in travel.
        While we believe that conference spending can help further
    the mission of the Department of the Interior, we also
    recognize our joint concern that conference attendance and
    spending should be appropriately controlled. And the Department
    of the Interior has made significant investments in a
    technological infrastructure that allows us to do
    videoconferencing and teleconferencing across the country. We
    will continue to use these electronic conferencing whenever
    possible to reduce the need for in-person attendance at
    training and professional meetings.
        We believe that in tough budget times, conference spending
    will continue to be reviewed carefully to ensure that it is
    contributing to mission-essential work, and we take every
    effort to make sure that we promote a very businesslike
    approach to conference planning and reduction of our agency
    costs.
        Our departmental policy demands that senior management
    monitor conferences closely. The Department of the Interior has
    a longstanding policy requiring that conferences involving 30
    or more employees be approved by the Program Assistant
    Secretary. At least one of our bureaus has a policy that
    requires approval for smaller meetings and conferences. We
    believe that this review ensures that our conferences are
    mission related and that the location and timing of the
    conference are cost beneficial.
        Now, since our systems do not track the specific data that
    you have requested, our staff is gathering details of
    conference information through data calls to our bureaus, and
    we will look forward to providing you further information in
    the next few weeks as we can get that information from our
    bureaus.
        We also look forward to assuring you, Mr. Chairman, that at
    Interior we are very accountable for how we are spending our
    dollars and that we are maximizing the way we use our dollars
    to make sure that we achieve the mission that we have for the
    American public.
        With that, I will look forward to any questions.
        Senator Coburn. Thank you very much. Mr. Lofthus.

       TESTIMONY OF LEE J. LOFTHUS,\1\ ACTING ASSISTANT ATTORNEY
         GENERAL FOR ADMINISTRATION, U.S. DEPARTMENT OF JUSTICE

        Mr. Lofthus. Good afternoon, Chairman Coburn and Ranking
    Member Carper. I thank you for the opportunity to appear before
    you today to discuss the issue of conference spending in
    Federal agencies. The Justice Department's leadership
    appreciates your interest in this topic and shares your concern
    for assuring the American people that their tax dollars are
    wisely spent.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Lofthus appears in the Appendix
    on page 170.
    ---------------------------------------------------------------------------
        By way of background, our conference travel is performed to
    support the Department's mission on the war on terror and our
    traditional emphasis on fighting crime and protecting our
    communities. Our multiple missions requires keeping our
    nationwide and global base of over 105,000 employees educated
    and trained and in close coordination with our State and local
    law enforcement partners. We accomplish these efforts using a
    variety of approaches, including enhanced information
    technology, training and technical assistance, and through
    participation in conferences arranged by DOJ components and by
    other organizations involved in law enforcement and terrorism
    prevention.
        Our DOJ-sponsored conferences have ranged in purpose from
    countering gang violence to preventing identity theft to
    delivering critical training in identifying and countering
    improvised explosive devices. These efforts have borne results
    in the form of substantial reductions in the level of violent
    crime, drug use, property crime, and in improved emergency
    preparedness.
        Our annual expenditures on conferences have ranged from
    $33.8 million in 2001 to approximately $42 million anticipated
    in 2006, with our highest annual expenditure--$58 million--
    occurring in 2004. Although these are significant expenditures,
    they are roughly two-tenths of 1 percent of our annual
    discretionary funding.
        It is also important to note a critical trend. Of the six
    larger DOJ organizations that typically spend over $1 million a
    year on conferences, only one organization--the FBI--has
    generally been increasing its conference spending. Conference
    spending in the non-FBI components of the Department of Justice
    has dropped by more than half since 2004. FBI's needs have
    increased legitimately as it pursues its transformation into
    its national security, counterterrorism, counterintelligence,
    and cyber crime roles.
        Let me briefly describe how we manage conference travel.
    Conference travel is generally approved by the individual
    components of the Department of Justice. Conference decisions
    are made, first and foremost, on whether the participation
    furthers the component's core mission. Second, we try to make
    use of alternative mechanisms such as videoteleconferencing
    where we can.
        For example, I am pleased to report that the Federal Bureau
    of Prisons estimates it has saved over $2 million this year by
    conducting over 8,000 videoteleconferencing sessions in lieu of
    traveling for in-person meetings or conferences.
        We also had a new policy implemented this year for all DOJ-
    arranged conferences held at non-Federal facilities, and those
    type of conferences are subject to my review and approval.
        The 2005 DOJ Reauthorization Act states that unless
    authorized in writing by the Attorney General or his designee--
    me--DOJ shall use for any predominantly internal training or
    conference only a facility that does not require payment to a
    private entity. The act also requires an annual report to
    Congress that details the events we hold in non-Federal
    facilities. Pursuant to this act, we issued a DOJ-wide policy
    earlier this year regarding use of non-Federal facilities. Our
    guiding principles are:
        First, minimize all conference costs and maximize the use
    of Federal facilities;
        Second, that the CFO approval must be obtained regardless
    of cost;
        And, third, that the locations or accommodations that may
    have the appearance of being lavish must first be approved by
    the head of the component making the request and then approved
    by me.
        With this new policy, we introduced a new online tracking
    capability that facilitates a prompt review by our finance
    staff of all non-Federal conference facility requests. As a
    result of implementing these internal controls, we assure
    conferences are necessary and that the site selections are cost
    effective. We maintain an online list now of approximately 60
    different government training locations for our component site
    selection consideration. This new policy was initially
    challenging to implement, but the process is now fully in
    place, and we estimate that these additional policies, this
    scrutiny has resulted this year in approximately $1.1 million
    in savings to the taxpayers.
        Conferences, used wisely, are extremely important to
    achieving our national security and law enforcement missions at
    the Justice Department.
        Mr. Chairman, this concludes my prepared remarks. I would
    be happy to answer any questions. Thank you.
        Senator Coburn. Thank you very much.
        Mr. Clark, thank you very much for being here.

        TESTIMONY OF MICHELL CLARK,\1\ ASSISTANT SECRETARY FOR
                MANAGEMENT, U.S. DEPARTMENT OF EDUCATION

        Mr. Clark. Thank you, Chairman Coburn and Senator Carper.
    Thank you for inviting the Department of Education to this
    hearing. My name is Michell Clark, Assistant Secretary for
    Management at the Department of Education. I appreciate this
    opportunity to testify on the Department's policies and
    practices as they relate to conference sponsorship, attendance,
    and related costs.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Clark appears in the Appendix on
    page 250.
    ---------------------------------------------------------------------------
        As public stewards, we have a special obligation to ensure
    that taxpayer dollars are spent wisely, appropriately, and in a
    manner consistent with congressional intent. We are fulfilling
    those goals.
        It begins with a strong policy on departmental travel. I
    have here the Department's official Handbook for Travel Policy.
    It does not make for exciting reading, but its common-sense
    rules illustrate our principles.
        The very first requirement is that travel will be
    authorized ``only when it is necessary to accomplish the
    Department's mission in the most effective and economical
    manner.'' Travel outside a 35-mile radius of the employee's
    daily commute must be authorized by the Department.
        A Travel Management Center makes all arrangements,
    searching for best values and Federal discounts. Use of an
    outside contractor for official travel must be justified in
    writing with a cost comparison. We also have strict policies
    regarding acceptance of payment for official travel from non-
    Federal sources. Such an acceptance must be approved by the
    Department's chief of staff with concurrence by the Ethics
    Division of the Office of the General Counsel.
        Under the Constitution, education is primarily a State and
    local responsibility. Much of our work entails person-to-person
    contact with our numerous State and local partners and
    stakeholders, the people who administer programs for 54 million
    K-12 and 22 million post-secondary students. One of the most
    effective ways to communicate with them is through conferences
    which enable us to interact with hundreds or thousands of
    people at a time.
        Take our Federal Student Aid (FSA), conferences. These
    conferences are a critical source of training for financial aid
    administrators. They allow us to provide more than 6,000
    participating schools with updates on changes to Title IV
    student aid programs and policy.
        For the past 2 years, FSA has hosted two Electronic Access
    Conferences per year--one in the East and one in the West--with
    plans to move to a single conference in 2008.
        Each conference is attended by as many as 2,500 customers
    who choose from up to 70 informative training sessions. FSA
    staff serve as session instructors and provide logistical
    support. They account for less than 10 percent of total
    conference attendees annually.
        We have also held conferences on the new IDEA legislation
    and regulations, helping State and local education officials
    learn about new provisions affecting students with
    disabilities. In addition, we have held conferences on the
    Title I program for low-income students.
        Hundreds of our educational partners and stakeholders
    attend workshops and confer with Department officials on a
    variety of subjects. These range from changes to Department
    regulations, to aligning instructional methods with State
    accountability standards, to providing choice and supplemental
    educational services to a greater number of families.
        Much of this recent conference activity was spurred by the
    passage of the No Child Left Behind Act, the greatest education
    accountability law in our Nation's history. These conferences
    actually improve accountability. They help stakeholders better
    understand how to increase academic achievement for all
    students. They also help grant recipients avoid missteps that
    could lead to costly program fraud, waste, or abuse.
        In the most recent fiscal year, about $6.3 million was
    spent on conferences, a figure that included normal staff
    salaries, which would have been paid regardless of the setting.
    By contrast, our Department's discretionary budget was more
    than $56 billion.
        Seventy-six percent of the conferences sponsored or
    attended by the Department staff between October 2004 and May
    2006 involved fewer than three Department employees. A total of
    67 conferences were held in the Washington, DC, area.
        We are using technology to further reduce the need for
    travel. Our use of videoteleconferencing has increased by 78
    percent since 2003.
        We recognize that accountability does not occur without
    transparency, and we are increasing our efforts. Our Office of
    Communications and Outreach has compiled information on annual
    conference attendance and sponsorship, coordinating with
    various offices to find ways to improve their management and
    administration.
        And Weekly Speaking Reports let our senior officials know
    who is going where and why, and how this contributes to meeting
    the Department's goals and priorities.
        As we continue to implement No Child Left Behind Act's
    accountability provisions, we must hold ourselves accountable
    as well. We are working hard every day to set a good example.
        Prior to 2001, the Department of Education had earned only
    one ``clean'' audit. We are about to receive our fifth
    consecutive. We were the first Cabinet Department to achieve
    ``green'' status on the Improved Financial Performance PMA
    scorecard. Our administrative expenses account for only about 2
    percent of our total budget. And in 2004, we received the
    Presidential Award for Management Excellence for improved
    financial performance.
        We are continuously searching for innovative new ways to
    accomplish our goals in the most effective and efficient
    manner. Those goals include measuring and improving academic
    performance, sharing best instructional practices, promoting
    global competitiveness, and reducing conference costs.
        We will continue to improve our financial management and
    oversight of policies governing conference and travel-related
    costs. And we are eager to work with the Office of Management
    and Budget and Congress every step along the way.
        Thank you very much for the opportunity to present.
        Senator Coburn. Thank you, Mr. Clark. Mr. Hugler.

     TESTIMONY OF EDWARD C. HUGLER,\1\ DEPUTY ASSISTANT SECRETARY
         FOR OPERATIONS, OFFICE OF THE ASSISTANT SECRETARY FOR
        ADMINISTRATION AND MANAGEMENT, U.S. DEPARTMENT OF LABOR

        Mr. Hugler. Senator Coburn and Ranking Member Carper, thank
    you for the opportunity to testify on behalf of the Department
    of Labor. My name is Ed Hugler, Deputy Assistant Secretary for
    Administration and Management.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Hugler appears in the Appendix on
    page 258.
    ---------------------------------------------------------------------------
        The Department of Labor is very proud of its record of
    fiscal restraint, management excellence, and of ensuring that
    every Federal dollar is well spent. The President's 2007 budget
    request is the lowest discretionary budget authority for the
    Department of Labor since fiscal year 1997. Between 2001 and
    2007, the Department's discretionary budget has declined by a
    cumulative 8.7 percent.
        At the same time, the Department of Labor remains the only
    Executive Branch agency to achieve a ``green'' status rating on
    the President's Management Agenda for all five initiatives.
    And, in addition, the Department has received nine consecutive
    clean audits of its financial statements from its Inspector
    General.
        Since 1993, the Department has had permanent authority to
    pay for attendance at meetings which are related to the
    activities for which we receive appropriations or which
    contribute to better management of those activities. With our
    focus on doing more with less, and on fiscal accountability,
    the Department has very structured controls around
    participation in and sponsorship of conferences to ensure that,
    in fact, they do clearly align in advance with the Department's
    mission, promote the accomplishment of our performance goals,
    and enhance the ability of our employees to better serve the
    public.
        Some of the criteria that we consider in approving
    conference participation include: Educating the public about
    the programs of the Department of Labor that enhance employment
    opportunities, business prosperity, and worker safety and
    health. We also consider promoting compliance by helping
    employers and employees better understand our labor laws. And
    we also look for opportunities to help workers acquire the
    skills that they need to be competitive in the 21st Century
    workforce.
        The Department also has very specific guidelines for
    conference selection. That would be for conferences that we
    sponsor. It includes cost comparisons and travel costs to focus
    attention on choosing the site that is in the best interest of
    the Federal Government. In addition, the Department has
    specific policies governing authorization of travel expenses
    for conference attendance. These guidelines ensure that
    managers only authorize travel that is necessary to accomplish
    the purposes of the government and include specifically
    consideration of budget constraints, adherence to our travel
    policies, and the reasonableness of expenses. And I might add,
    Dr. Coburn, that they also specify consideration of
    alternatives such as teleconferencing.
        Mr. Chairman, in response to your request, the Department
    of Labor has provided budget data on total obligations for
    conference activities in fiscal year 2001 through 2006,
    including estimates for the last 2 months of this fiscal year.
    That data shows that Labor obligations were $5.1 million to
    sponsor, cosponsor, or participate in conferences in 2005,
    which represented about four-tenths of 1 percent of the
    Department's total discretionary budgetary resources.
        For 2006, we estimate that conference-related obligations
    will decline to $4.7 million, a reduction of about 8 percent
    below the year-earlier level, and 28 percent below the 2003
    level.
        At this time we expect Labor's total obligations for
    conferences in fiscal year 2007 to be at or below the fiscal
    year 2006 levels.
        I thank you very much again for the opportunity to appear
    today, and I look forward to your questions.
        Senator Coburn. Thank you for your testimony. Senator
    Carper.

                  OPENING STATEMENT OF SENATOR CARPER

        Senator Carper. Thanks, Mr. Chairman. I have no statement.
    I think I would just like to get right to the questions, if
    that is OK with you.
        Thank you very much for being here and for your testimony
    today. Could we just sort of go from my left to my right, your
    right to your left, and let me just ask each of you to share
    with us one or two of your best practices that you think other
    agencies would be well to emulate as we try to restrain the
    growth of costs in conjunction with travel and conferences.
        Ms. Fiely. Sure. As I said earlier, anyone wanting to have
    their bureau or office host a conference, we have them go
    through a cost comparison and come up with three alternatives,
    and we go with the most economical alternative, taking into
    consideration not only the hotel and per diem costs of the
    actual location, but the actual flight costs of people that
    will be attending as well, since we are a worldwide
    organization. For example, oftentimes if you want to go to
    Africa, you have to go to Europe first, so it gets very
    expensive. So you have to figure out the various trails that
    people have to take.
        Also, in our office we have individual approval procedures
    within each bureau and office that are instituted on a
    procedural level, sort of like desk-type procedures that each
    office has to follow in getting approvals. We have an approval
    for over 30 folks, which I think you heard some of the other
    agencies have that, and that is also in the CFR that requires
    that.
        We have tried the use of telecommunications and
    teleconferencing. It becomes very problematic in some of the
    countries that we are located in because the bandwidth is just
    not there to avail ourselves. But we do try to take advantage
    of that whenever we can.
        Senator Carper. OK. Thanks. Ms. Hatfield.
        Ms. Hatfield. We do have a departmental policy that if it
    is going to be a conference of more than 30 people, the
    programmatic Assistant Secretary has to approve that. And as a
    part of the justification for doing that, the proponent of the
    travel would have to also supply information about the hotel
    rates, would have to provide estimates of airfare from various
    cities to look at the alternative that the official can select
    from in terms of whether or not--or which location we would
    actually have the conference in. And at the same time, the
    justification, as many of the others have indicated, does have
    to specify what the purpose of the conference is and how that
    does relate to our mission. And so all of that is done up front
    as a routine, and it has actually been the routine in the
    Department of the Interior for a number of years.
        In addition to that, as I said, we have invested in our
    bureaus to enable videoconferencing and teleconferencing across
    the country. Recognizing that a large part of our 70,000
    employees are located west of the Mississippi River, that does
    enable us to do a lot of business from Washington to our field
    locations.
        At the same time, we have also created the capability of
    having broadcasts so that we do some of our training by
    broadcast from a central location and have our employees
    actually take the training at their local location through a
    conferencing capability and television capability.
        So we have worked on that for some time because we have
    recognized that every travel dollar that is used is something
    that does take away from our capability to perform the mission
    on the ground. So we have been as innovative as we could about
    that.
        Senator Carper. Mr. Lofthus.
        Mr. Lofthus. Thank you, Senator. One of the things we have
    looked at in our organizations that have large field structures
    and that have a nationwide presence, we have looked very
    closely at the videoteleconferencing abilities of our
    organizations. The Bureau of Prisons, I already mentioned, is a
    heavy user; the FBI is a heavy user of teleconferencing; the
    U.S. Attorneys, and the U.S. Trustees. So we are trying to look
    for alternatives to going out and physically holding
    conferences and having people travel in at great expense. That
    has allowed us to take some organizations that traditionally
    had annual conferences to meet with their field offices and
    their field employees. They are now able to have those
    conferences in some cases every other year or maybe once every
    3 years, and that has been a tremendous savings, and I think
    that is one of the reasons you see the Justice Department
    overall travel and conference costs diminishing.
        Also, on a given outside schedule of training or conference
    event, we have a policy that limits the number of people from
    an individual office that can go to that event, so we do not
    have the entire office get up and go. We try to select one or
    two people who can go and then come back and share the benefits
    of the conference with others.
        Senator Carper. Good. Thanks. Mr. Clark.
        Mr. Clark. Thank you, sir. We have recently installed
    teleconferencing facilities within most of our regional
    locations that will help us with training, sharing information,
    etc., across the Department.
        The second thing that I would cite is that we have
    instituted an annual review by our Office of Communications and
    our Management Improvement Team that are looking at the
    spending for conferences and attendance and travel to ensure
    that we are getting the best use of the dollars that we have.
        We still believe that the program offices have the best
    understanding of the requirements, but we have instituted a
    department-level review to ensure that--and to look and
    hopefully identify opportunities for having, if you will,
    multi-purposes conferences within more than one program office
    participating.
        Senator Carper. Mr. Hugler, before you answer, let me
    telegraph my next and probably last question, and I am going to
    go back through your ranks and ask you to tell me where you
    think--you may have been talking about some of what I call the
    low-hanging fruit in some areas where you have made good
    progress. But let me come back and ask you where some work
    still is to be done in each of your departments that you are
    aware of, please. Mr. Hugler, if you would just respond to my
    first question.
        Mr. Hugler. Yes, I will. Let me presage my remarks with the
    fact that I have been in Federal service for nearly 30 years,
    so I have participated in many conferences, and I have
    authorized participation in many conferences.
        Senator Carper. Have there ever been any conferences when
    you have finished them you say, ``I am not sure that was really
    worth the money we spent''? I think I have.
        Mr. Hugler. I think I have, too, and I did not go back
    again. I agree with you. It looked good on paper, and it was
    not what I expected it to be. I think they were rare, but that
    did happen.
        I think the bottom line, though, is to have internal
    controls at the point the decisions are made whether or not to
    participate in the conference. I really think that is the
    bottom line. I think it is difficult to, if you will, legislate
    financial discipline. That needs to be part of an
    organizational culture. People need to understand that is the
    environment they are operating in, and I really do think that
    is the best solution to control spending as it relates to
    conference attendance.
        Beyond that, I think having the proper level of management
    review counts for a lot. I review travel authorizations, travel
    requests, conference requests, and am very picky about what
    gets approved because we do have limited resources.
        I think also it is very healthy to have what I will call
    strong audit controls so when I turn in a travel voucher I know
    it is going to get audited, and I know people have a checklist
    which they are going to check me against, and if I have asked
    for more than I am due, I am not going to get it and I am going
    to get asked why I submitted it. I think that also improves the
    environment.
        Beyond that, teleconferencing and videoconferencing, I
    think, is very successful internally to the Department of
    Labor. I myself participate in no fewer than probably three
    meetings a week that participants are conferenced into. So that
    works in my own personal experience, as does videoconferencing.
    That is a little more complicated inasmuch as you have to have
    compatible technology on both ends.
        But those would be the main things that I would commend
    attention to.
        Senator Carper. Good. Thanks. Mr. Chairman, do I have time
    to do the second question?
        Senator Coburn. Sure.
        Senator Carper. Good. Thanks.
        If we could come back, in no particular order, when you
    look at your own departments and areas where some work is still
    to be done, where there is some savings still to be found, what
    might those be? And if you cannot think of any in your own
    department--I hope you can, because I say it about my own
    office, and I said this when I was governor, too. Everything we
    do I know we can do better. And I suspect the same is true for
    you all.
        Ms. Fiely. I guess where I would come from on this one is
    it is not so much the conference fees. For the most part,
    conference fees are a minor portion of what it costs to go to a
    conference, and especially with our Agency being international,
    it is the travel cost. And I would say if anything were going
    to be looked at closely, it would be the travel regulations. I
    think right now in some cases the travel regulations tie our
    hands where we are going with city pairs and we could go out
    directly and get cheaper flights. There are ways to save money
    by being able to avail yourself, and in some cases the agencies
    cannot.
        Also, at least in the case of USAID----
        Senator Coburn. Let me interrupt you there. Can you tell us
    what we need to do so you can? That is a key--this is a common-
    sense thing.
        Ms. Fiely. Sure. I would like to be able to give you that.
        Senator Coburn. You cannot make a decision that saves us
    money because some Federal regulation keeps you from doing it.
        Senator Carper. Or a law.
        Senator Coburn. Or a law.
        Ms. Fiely. I would welcome an opportunity to give you
    something as a follow-on.
        Senator Coburn. I would very much appreciate that. Thank
    you.
        Ms. Fiely. Sure. I would like to put something together and
    get it to you.
        Senator Coburn. I would welcome that.
        Ms. Fiely. But that is where I think the real savings is,
    in restructuring the travel regulations and allowing people to
    take advantage of a lot of the savings that is out there.
        Senator Carper. All right. Thanks. Anyone else, please? No
    particular order.
        Mr. Hugler. I would just make one other suggestion. At the
    Department of Labor, we have used more and more training by
    computer over the Internet among our employees. Again, when we
    have requirements to train every employee in the Department of
    Labor, 16,000 or 17,000 people, that has the potential to be--
    not necessarily a lot of conferences, but certainly a lot of
    meetings and bringing people together, that can be avoided and
    very cost effectively avoided by what I will call computer-
    based training. We have annual requirements for all employees
    to receive certain training, and we have done that for the last
    several years over the Internet, and it does two good things.
    One is it allows the employees to take that training when they
    have the time. And, two, we have a record of when, and the fact
    that they completed the training. So both of those are very
    cost effective.
        Senator Carper. Thanks. Anyone else, please?
        Ms. Hatfield. That has also been true at Interior. We have
    really intensified the use of computerized training for the
    same reasons, especially when you have things like computer
    security training in which all of your employees have to have
    that training in order to continue to have access to their
    computers. We do that via the computer, and that does give us a
    record.
        I think that we have also tried as a management team to
    look at some internal policies, at things like not having
    multiple employees have multiple rental cars at the same
    conference and things like that, so that we would decrease the
    overall travel costs.
        So I think there are things like that that we continue to
    do.
        Senator Carper. Mr. Lofthus.
        Mr. Lofthus. I would just add one thing, which is in terms
    of the biggest payoff for us, I think it has come from simply
    more vigorous scrutiny of the necessity of the conference in
    the first place. I know when we were looking at proposed
    conferences that some of our organizations wanted to do this
    year, we looked at them and we asked some questions, and so far
    this year, we have canceled 13 conferences because of the view
    that they could be done through another fashion or maybe they
    are annual conferences and we can get away with doing them once
    every couple of years. And there is a real payoff there.
        Senator Carper. Thanks. Mr. Clark.
        Mr. Clark. I would echo some of the comments from others.
    We, too, have increased our use of the Internet to do the
    training that we do, for computer training, for our coop
    training, and for other areas, and we are looking for other
    opportunities to build other courses that we can do online.
        In addition, I guess I would encourage us to look at the
    use of electronic tools to manage conference attendance and
    travel so that we can do a better job of identifying issues up
    front and then being able to reconcile at the end or audit, if
    you will, at the end the amount that is paid and the number of
    attendees at the conferences, etc.
        Senator Carper. Thank you.
        Ms. Fiely gave us something for our to-do list, and I think
    she is going to come back to us in writing. And let me just
    ask, if you will, for each of you to put on your thinking caps,
    talk with your other colleagues with whom you work, and come
    back to us maybe in writing in the next week or so and tell us
    some things that we need to do or that we need to ensure that
    others do, maybe within the Executive Branch, to better realize
    the further savings opportunities that are out there.
        This has been most informative. Thank you to each of you.
        Senator Coburn. I would echo Senator Carper. We know you
    all have competence, and sometimes we are your greatest
    hindrance in doing what you know to do because there is some
    regulation or some assumption that you are not going to do it
    right, so somebody has put a regulation in to protect it. If we
    cannot trust our Federal employees, we might as well hang it
    up. And so what we have to do is put regulations out there that
    assume people are going to do the right thing, not assume
    people are going to do the wrong thing.
        And, on my staff, I know, you go to the travel office here,
    and then you get on the Internet right after that, and you can
    find oftentimes a fare 40 percent less than what the travel
    office just gave you, which was ``the best fare.'' And so we
    need to give you the flexibility to do your jobs. You are
    trained to do them. You are executive leaders. You know what to
    do. And we need to do that. So I would echo that.
        I want to make a couple of comments. We have had a 70-
    percent increase--well, we do not know what it is going to be
    through the end of this year, probably a 72-, 73-percent
    increase in conference spending. And yet the Federal Government
    has grown by 48 percent during that time. So there has got to
    be something here that we are missing that says why have
    conferences and conference spending--the other point--and that
    is what I want you to think about. And I understand USAID. We
    have done all this stuff in Africa on PEPFAR and AIDS and all
    this other stuff, and the Justice Department, I can understand
    that as well. But some things, for example, Interior, we have
    never been able to get your numbers. Yours are the first
    numbers we have been able to get. And part of that has to do
    with the management and accounting systems within Interior.
    They do not have the tools to get the numbers.
        Well, you cannot manage what you cannot measure, and so the
    President's Management Agenda is a key part in being able to
    control this as well as many other expenditures.
        Ms. Hatfield. If I might comment on that, sir?
        Senator Coburn. Sure.
        Ms. Hatfield. We have about 17 different financial systems
    operating at the moment, all of which are no longer supported
    by their vendor. So we are in the process now of trying to
    bring up a modern financial system for the Department so we
    will have a single system. And, undoubtedly, that effort is
    going to help us in terms of being more accountable in an
    easier fashion than having to do the kind of data calls that we
    are doing now to get that data.
        But I would point out that we have actually, to the extent
    that we can track it, reduced the overall costs that we are
    spending on conferences over the last 5 years. So I think that
    is indicative of the fact that we are very conscientious about
    it.
        Senator Coburn. Why couldn't my staff have that data,
    couldn't get it? The fact is when we inquire to get it, we
    cannot get it.
        Ms. Hatfield. It is very difficult.
        Senator Coburn. Your staff cannot give it to us, and so I
    would love to see those numbers.
        Because we are pressed for time--we do have a vote that is
    scheduled for 4 o'clock--I am going to be submitting to each of
    you very specific questions. I am highly concerned about some
    of the conferences that I have read about, some of the agendas
    of some of the conferences I have read about. And I am not
    going to put that out--it will become a part of the record in
    the questions that we ask, with no blame and no thought that
    anybody intentionally is wasting any money, but to get you to
    answer back, and let's make this--if we make small things--all
    the small things on significant issues, before you know it we
    will be declining the size of the Federal Government. We are
    making it much more efficient, and we are preserving future
    opportunity and the American dream for our grandchildren.
        I want to thank each of you for your testimony. We would
    like to have fairly prompt responses, if you can. If you can't
    respond promptly, just say, ``We can't respond promptly because
    it is going to be difficult for us to get this,'' and we
    understand that there are other issues that you are struggling
    with.
        Let me thank you for being here, and we will call forward
    the next panel.
        Senator Coburn. On panel two, we have Clarence C. Crawford,
    Chief Financial Officer, Office of Personnel Management; Eugene
    Schied, Deputy Chief Financial Officer, Department of Homeland
    Security; Jeff Nulf, Deputy Assistant Secretary for
    Administration, Department of Commerce; Richard Holcomb, Deputy
    Chief Financial Officer and Acting Deputy Assistant Secretary
    for Headquarters Operations, Department of the Treasury; and
    Hon. Charles R. Christopherson, Chief Financial Officer,
    Department of Agriculture.
        Welcome to you all, and you will be recognized for 5
    minutes, and then we will have questions. Mr. Crawford.

    TESTIMONY OF CLARENCE C. CRAWFORD,\1\ CHIEF FINANCIAL OFFICER,
                     OFFICE OF PERSONNEL MANAGEMENT

        Mr. Crawford. Thank you, Senator Coburn and Senator Carper.
    In the interest of time, I will just summarize my points.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Crawford appears in the Appendix
    on page 312.
    ---------------------------------------------------------------------------
        Senator Coburn. Good.
        Mr. Crawford. We are happy to be here on behalf of the
    Office of Personnel Management. We are happy to be here to be
    able to testify before you. My Director, Linda Springer, is a
    former CFO in the private sector, so she is very much committed
    to ensuring that OPM spends taxpayer dollars wisely and that we
    use those funds to carry out our mission, which is to ensure
    that the Federal Government has an effective workforce.
        OPM supports the prudent use and participation in
    conferences, those conferences that actually help to improve an
    employee's ability to do his or her job.
        As a central agency, we receive numerous requests to
    present or to participate in conferences. Director Springer has
    made it very clear to the senior staff to scrutinize every
    conference. Supervisors understand that they are to make sure
    that the conference makes good business sense, make sure that
    it supports our mission, and make sure that we send the right
    person.
        To complement our efforts in this regard, we have also
    implemented a new strategic plan. We are in the process of
    changing our culture and instilling sound financial management
    throughout OPM. In large measure, that is why we have been able
    to manage our conference spending at about 4 percent of our
    personnel compensation cost.
        In 2004, we made a decision to change the way we sponsor
    conferences. Rather than continue to host a number of
    conferences throughout the year, as we have done in the past,
    OPM decided to consolidate our conferences and offer one
    Federal human capital conference, and that conference is held
    about every 18 months. And we have found that to be an
    effective way to deliver information to the human capital
    community. In addition, we obviously are webcasting. We are
    posting things on the Web. We are doing videoconferencing as
    well.
        Our conference spending for 2004 was $358,000, for 2005 it
    was $331,000. We are expecting this year to have it come in at
    about $327,000. We are projecting conference spending for 2007
    to be $177,000.
        Mr. Chairman, we would be happy to take any questions that
    you have.
        Senator Coburn. You have said enough. Music to my ears. Mr.
    Schied.

    TESTIMONY OF EUGENE SCHIED,\1\ DEPUTY CHIEF FINANCIAL OFFICER,
                  U.S. DEPARTMENT OF HOMELAND SECURITY

        Mr. Schied. Thank you, Chairman Coburn, for this
    opportunity to testify before you today on travel and
    conference spending at the Department of Homeland Security. I
    will briefly summarize my statement that I have submitted for
    the record.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Schied appears in the Appendix on
    page 334.
    ---------------------------------------------------------------------------
        Travel and conference attendance are important and
    necessary to DHS' fulfillment of its mission. Secret Service
    agents travel regularly to fulfill their protective
    responsibilities. FEMA employees travel and spend extensive
    time away from home when responding to disasters. Air marshals
    travel daily to protect our aviation transportation system. As
    I am sure you agree, travel expenses are necessary to DHS.
        Travel costs related specifically to conferences are a
    relatively small portion of our overall budget and a small
    portion of our travel budget.
        Senator Coburn. Let me interrupt you for a minute to make
    sure you understand. This is not about legitimate travel within
    your agency. This is about travel and conference costs.
        Mr. Schied. OK. Conferences are an important part of DHS'
    outreach efforts with our other Federal, State, local,
    international, and private sector partners. Often this involves
    travel outside of Washington to meet with those partners in
    homeland security. DHS' participation in conferences can be a
    cost-effective way for DHS to communicate with our
    stakeholders.
        I know that appropriate discretion must be taken and used
    in deciding when to travel to conferences. I believe I share
    the Subcommittee's concerns that conference dollars must be
    spent judiciously, limited to necessary government
    participation. Policies governing employee travel are the
    responsibility of the CFO. In his testimony yesterday before
    the House Government Reform Subcommittee on Government
    Management, Finance, and Accountability, DHS CFO Norquist
    outlined financial management improvements DHS is pursing,
    including people, policies, processes, systems, and assurance.
    Three of these five areas are important to how we are trying to
    improve our oversight of conference spending.
        First, DHS is in the process of building a comprehensive
    set of financial management regulations to govern DHS-wide
    financial management operations. We need to develop one DHS way
    of conducting financial management, including policies related
    to travel and conferences.
        DHS has management directives that specifically address
    travel for office government business and attendance at
    conferences and meetings. The current management directives on
    conferences encourage DHS employees to participate in
    conferences as a means of exchange and communication of ideas
    and knowledge; however, the directive recognizes that
    attendance must be prudent, relevant to the employees' job
    performance, and beneficial to the mission of DHS.
        We will be supplementing the new policy with a guidebook
    that outlines questions that approving officials and travelers
    should contemplate when choosing to attend conferences.
        The second area of improvement needs to be our ability to
    oversee travel spending through information systems, and as you
    mentioned, sir, to the last panel, you cannot manage what you
    cannot measure. Producing the type of information requested by
    this Subcommittee for DHS is a very manual-intensive process,
    which explains much of our delay in responding to your
    information requests. Manually intensive processes I find are
    also much more prone to error and inconsistency in reporting,
    which is why to date the Department has only been able to
    provide partial information for fiscal year 2006. While some of
    the data, such as total travel spending, writ large, is
    relatively easy to obtain through the Federal accounting
    classification, salary costs and other costs associated
    specifically with conference attendance is not readily
    extractable from our automated financial systems.
        The final area in which we need to improve is in the area
    of assurance. DHS must have in place a means by which we can
    test the policies and procedures that we have to assure that
    our internal controls are well designed and operating
    effectively. Managers cannot assume that the controls are only
    working well just because the auditors do not tell us to the
    contrary, and so to this end, the CFO is creating a CFO's
    assurance team that will test the processes and validate
    effectiveness of controls such as those over financial
    conference attendance.
        Mr. Chairman, DHS is very committed to the responsible
    stewardship of the taxpayer's dollars entrusted to us by
    Congress. We know the dollars are limited, the DHS mission is
    large, and we must take steps to assure that we are putting
    their dollars to the best use. Most of the travel spending is
    necessary to the mission and, likewise, conference attendance
    can be an important tool by which we communicate with the
    public and our partners in protecting the homeland. However, we
    recognize travel and conference attendance, as with all things
    that we do, has its vulnerabilities to waste and abuse. It is
    the responsibility of the CFO's office to promulgate travel and
    conference policy and, thus, also to monitor the spending in
    ways that we can ensure our policies are effective.
        Thank you for the opportunity to share this information,
    and I look forward to your questions.
        Senator Coburn. Thank you. Mr. Nulf.

    TESTIMONY OF JEFFERY K. NULF,\1\ DEPUTY ASSISTANT SECRETARY FOR
              ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE

        Mr. Nulf. Good afternoon, Chairman Coburn. Thank you for
    the opportunity to testify before you on behalf of the
    Department of Commerce on the topic of conference spending in
    Federal agencies.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Nulf appears in the Appendix on
    page 378.
    ---------------------------------------------------------------------------
        Your requests for information and the invitation to speak
    to you today have focused attention on an area that, for the
    Department of Commerce, not only is an important element in
    mission support and employee development, but also presents an
    opportunity for savings at a time when we are trying to do more
    with fewer resources.
        In furtherance of sound management and as a result of
    current and coming budgetary constraints, the Secretary and the
    Deputy Secretary have instructed the Department's Presidential
    Appointees and Heads of Operating Units to direct resources to
    mission-critical activities, and to do so by taking a hard look
    at what is expended on administrative functions. All elements
    of the Department have been charged with meeting our program
    responsibilities efficiently and effectively while reducing the
    amounts spent on non-essential activities. Our bureaus report
    to the Deputy Secretary on a quarterly basis regarding their
    performance in this and other areas.
        The Department of Commerce is a diverse organization, as
    you know, largely scientific, with numerous compelling
    responsibilities. It is essential for the employees working
    towards accomplishing the Department's missions to have a
    current understanding of developments in their program areas.
    Commerce employees predict the weather, manage the Nation's
    fisheries, allocate radio spectrum, and we create better ways
    to measure everything from the structure of atoms to the
    flammability of buildings. Our employees help American business
    learn how to expand markets for their products, count people
    for the census, and support the Nation through the provision of
    economic information such as quarterly reports on international
    trade activity, residential construction and sales, and the
    gross domestic product.
        Participation at critical conferences furthers these
    mission-related activities by providing continuing education
    for our scientists, our engineers, economists, and other
    professionals. Conference attendance also furnishes venues
    where the exchange of ideas in an intellectually stimulating
    environment can lead to new solutions to problems faced by our
    country and the world. We believe that investment in conference
    attendance, balanced with sound stewardship of taxpayer
    dollars, is necessary for the Department to meet its
    responsibilities to U.S. citizens and the world community.
        The Department is a large organization with extremely
    varied responsibilities. We have in place no single policy that
    governs conferences and related activities, nor do we have a
    line item in our budget for conferences or a conference
    spending ceiling to restrict expenditures in this area. We have
    confidence that our managers are making prudent decisions
    regarding which conferences to attend and who should be
    attending them. We do recognize our affirmative obligation to
    restrain resources expended on travel in general and conference
    attendance in particular. Concurrently, we recognize that in
    austere financial times, conference spending is among the top
    candidates for reduction and offers an opportunity for savings
    that can be applied to mission-essential work.
        Although Commerce Department spending increased rapidly
    between fiscal years 2000 and 2003, as you know from the
    information we provided in January, our conference expenditures
    decreased in fiscal year 2004 and fell again in fiscal year
    2005, the most recent year for which we have complete data. In
    examining the available 2006 data, we have identified several
    indicators that we consider positive in terms of the efficient
    use of taxpayer dollars for conferences.
        Among these: The single most frequently used geographic
    area for conferences attended by Commerce employees is local--
    right here in the Washington metropolitan area.
        There also is a relatively small number of Commerce
    attendees--five or fewer--that have attended 87 percent of the
    conferences in which Commerce employees are involved.
        Conferences sponsored or cosponsored by the Department
    typically are held in cities where the sponsoring organization
    is located, thereby minimizing travel expenditures as well as
    overall costs.
        As an example, of 69 conferences sponsored by NIST, only
    three were held outside of Washington, DC, or Boulder,
    Colorado, which is where all their employees are located at.
        This is not to suggest that we do not participate in
    conferences held in locations perceived to be more exotic.
    Indeed, the North Pacific Marine Sciences workshop, sponsored
    by NOAA, was held in Hawaii, but this was truly the most
    economical place for this event to occur. Similarly, NOAA's
    cosponsored Gulf of Mexico Alliance meetings were in New
    Orleans and Naples, Florida, both on the Gulf Coast.
        The fiscal year 2006 conference spending data that we have
    collected indicates a continuing downward trend in conference
    spending. To date, the Commerce Department has spent $7.8
    million on conference-related activities in fiscal year 2007
    and 2006. This is about 62 percent of our fiscal year 2003
    high. Projections for fiscal year 2007 suggest that conference-
    related spending will drop further, to around $7.5 million.
    These figures are good news, but we remain interested in
    identifying where we might continue our reduction efforts.
        Mr. Chairman, we appreciate and share your concern that
    current technology be used to bring people together for
    electronic conferencing. The Department will continue to seek
    creative means to leverage its ability to video- and
    teleconference in order to reduce, as much as possible, the
    need for in-person attendance at training and professional
    meetings. Consistent with that objective, we have created
    within the Department an online Learning Management System that
    now provides our employees desktop access to over 1,600
    training courses. This, of course, will not take the place of
    professional conferences, but it certainly is an economical
    approach to professional development.
        Mr. Chairman, thank you very much for the opportunity to
    share with you this information about what we are doing at the
    Department of Commerce, and I look forward to answering your
    questions.
        Senator Coburn. Thank you. Mr. Holcomb.

        TESTIMONY OF RICHARD HOLCOMB,\1\ DEPUTY CHIEF FINANCIAL
    OFFICER, AND ACTING DEPUTY ASSISTANT SECRETARY FOR HEADQUARTERS
              OPERATIONS, U.S. DEPARTMENT OF THE TREASURY

        Mr. Holcomb. Chairman Coburn, thank you for the opportunity
    to appear before the Subcommittee today.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Holcomb appears in the Appendix
    on page 419.
    ---------------------------------------------------------------------------
        The mission of the Department of Treasury is to promote the
    conditions for prosperity and stability in the United States
    and encourage prosperity and stability in the rest of the
    world.
        Communication is the key to our relationship with the
    individual American taxpayer and the corporate entities that
    between them provide the bulk of the revenue that supports the
    business of our government. We use a variety of media to
    communicate our messages in support of the governmental
    activities for which we are responsible.
        We make use of conferences to broadcast and explain matters
    to individuals as well as corporate bodies that relate to
    changes in tax law, tax collection, banking and thrift
    procedures, and commodities regulation. Consequently, the vast
    majority of the conferences we sponsor are either Internal
    Revenue Service or Alcohol and Tobacco Tax and Trade Bureau
    events that focus on taxpayer advocacy, small business
    practitioner forums, or on a specific sector such as the wine
    and alcohol industry.
        The Taxpayer Advocacy Panel within the IRS listens to
    taxpayers, identifies taxpayers' issues, and makes suggestions
    for improving Internal Revenue Service services and aiding with
    customer satisfaction. The Taxpayer Advocacy Panel acts as a
    two-way conduit focusing on taxpayer advocacy as well as
    providing a venue for raising issues by citizens. There are
    seven geographically based area boards aligned with the current
    Taxpayer Advocate Service areas. These area boards address
    local issues and schedule outreach activities. Issue
    committees, with nationwide membership, identify and work
    servicewide issues and are closely linked to the Wage and
    Investment and Small Business/Self-Employed program owners.
        A major part of TTB's mission is to have its industry
    members voluntarily comply with rules and regulations. Part of
    this can be accomplished through field presence via tax audits
    and product integrity investigations. Another very effective
    tool to reach voluntary compliance is to inform our industry
    members of what is expected of them. TTB seminars allow us to
    reach a wide audience and give industry members the
    instructional tools that are necessary to successfully meet the
    Federal rules that apply to their businesses. These events
    represent a cross-section of industry producers, wholesalers,
    and/or importers. They provide outreach to industry members who
    are geographically dispersed across the country and a platform
    for information sharing and learning about current issues and
    trend in the marketplace.
        These seminars attract active permittees, those interested
    in obtaining permits, industry trade associations, industry
    lawyers, and State regulatory agencies. Attendees are able to
    obtain relevant information on Federal rules and regulations
    that apply to their businesses, ask specific questions that
    pertain to their daily activities, receive updates on the
    latest issues that apply to their activities, and important
    contact information. The end result is a better understanding
    of their roles as permit holders and increased voluntary
    compliance with Federal law. It also allows TTB employees to
    hear firsthand the issues and concerns that our industry
    members have pertaining to the regulation of alcohol and
    tobacco products.
        We consider conferences and seminars as vital to our
    understanding and to taxpayer understanding of the rules and
    regulations of tax law and trade code. We consider there is
    nothing more important than an informed public, particularly
    where it involves taxation and compliance.
        We regret the delay in providing the requested information
    that you and your office sought. Our financial databases do not
    distinguish between types of business trips and do not cross-
    reference other business expenses. We intend to develop a
    system that will be more responsive to your and our needs in
    the future and will provide us with a positive business tool in
    safeguarding the money entrusted to us by the American public.
        This completes my prepared remarks, and I look forward to
    answering your questions.
        Senator Coburn. Thank you very much, Mr. Holcomb. Mr.
    Christopherson.

    TESTIMONY OF CHARLES R. CHRISTOPHERSON, JR.,\1\ CHIEF FINANCIAL
                OFFICER, U.S. DEPARTMENT OF AGRICULTURE

        Mr. Christopherson. Chairman Coburn, I appreciate the
    opportunity to give testimony concerning conference attendance
    and expenditures at the U.S. Department of Agriculture. The
    USDA is a diverse and complex organization with programs that
    touch the lives of all Americans every day. Our six strategic
    goals for 2005 through 2010 are to: Enhance international
    competitiveness of American agriculture; enhance the
    competitiveness and sustainability of rural and farm economies;
    support increases economic opportunities and improved quality
    of life in rural America; enhance protection and safety of the
    Nation's agriculture and food supply; improve the Nation's
    nutrition and health; and protect and enhance the Nation's
    natural resource base and environment.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Christopherson appears in the
    Appendix on page 435.
    ---------------------------------------------------------------------------
        In order to achieve these goals, the Department leverages
    the services of a vast number of entities. These entities
    include State and local governments, colleges and universities,
    school districts, community organizations, faith-based
    organizations, associations, other Federal agencies, and
    international-based organizations. Conferences are very
    important in the communication, training, and coordination
    needed to deliver the regulations and requirements of hundreds
    of programs.
        The USDA has a formal travel policy that includes
    conferences. As the Chief Financial Officer of the Department,
    the policy is under my administrative responsibility. The
    Department's policy and available funding in the individual
    agencies provide the checks and balances on the sponsoring and
    attending conferences.
        In late August, we provided data on conference attendance
    and costs for the time period between 2001 and fiscal year
    2005. In 2005, the Department's expenditures for conference
    fees equaled approximately $22 million. The costs for
    conferences is approximately 0.02 percent of our total
    expenditures.
        Conferences at the USDA are mainly sponsored by its
    agencies for outreach or training of employees, States,
    colleges and universities, and communities. During 2005, the
    outreach and training conferences accounted for 72 percent of
    total attendance.
        Two groups that I would like to highlight for this
    testimony are our mission areas responsible for Natural
    Resources and Environment and Research, Education, and
    Economic.
        The Natural Resources and Environment mission area includes
    the Forest Service and the Natural Resources Conservation
    Service, NRCS. The 2002 farm bill vastly increased funding for
    conservation by authorizing increased spending for several
    programs under prior farm bills and establishing two additional
    programs.
        While NRCS activities benefit all of the people in all the
    Nation, the primary customers are individuals that make natural
    resource and management decisions on non-Federal lands. These
    include farmers, ranchers, and other members of the private
    sector; units of government; and not-for-profit organizations.
    NRCS partners with other 3,000 local conservation districts to
    assist in implementing its programs. Targeted conservation
    areas and management practices change often. These changes are
    due to various regional management requirements, new research,
    certain conservation practices, natural events, and legislative
    changes. In addition, NRCS has been impacted by a large amount
    of employee retirements in 2004 and 2005. To address critical
    training needs NRCS held ``regional training boot camps'' in
    2005.
        Research, Education, and Economics (REE) is responsible for
    the research and statistics covering the full breadth of the
    Department's programs. Their research benefits the lives of
    Americans and provides competitive advantages to our products
    in the world market.
        REE does not act alone in its research. It is accomplished
    in partnership with universities and other institutions. Much
    of the travel in this mission area involves coordination and
    collaboration with other scientists, institutions, and
    organizations. This enables the REE mission area to be far more
    efficient in carrying out its responsibilities of research,
    education, and economic activities. Such collaboration through
    conferencing avoids excessive duplication and enhances
    efficiency and effectiveness. In addition, our scientists are
    widely recognized for their unique and high level of expertise
    and are in active demand by various groups and organizations to
    share their knowledge and expertise at conferences and
    meetings.
        About one-fourth of the conferences we attend are sponsored
    by non-USDA groups. The subject matter of these conferences is
    geared towards historically disadvantaged groups, State
    government, nutrition, conservation, science, information
    technology, foreign marketing, and safety.
        To help reduce expenses and continue to educate our
    greatest resource, the Department has developed and implemented
    an electronic education medium, AgLearn. This year the system
    has been used by 69,000 employees to complete 1,422 different
    training courses. The Department understands the value and cost
    savings that AgLearn provides as its primary education source
    for USDA employees.
        The Department uses conferences and other methods to
    support the requirements of the mission areas. Due to the
    diversity and breadth of our programs, our conference
    attendance is located across the United States.
        We believe that transparency into the Department's
    expenditures is very important. We have set this as a goal in
    our strategic plan as well. Through our Financial Management
    Modernization Initiative, we have addressed the need for
    electronic approvals and detailed centralized information for
    management. During this initiative, we will include an
    evaluation of our current policies and procedures, including
    the approval of underwritten and attended conferences.
        I appreciate this opportunity to testify and would welcome
    any questions.
        Senator Coburn. Thank you. I thank each of you.
        Let me just go through a couple things. Secretary, the
    budget for conferences and spending in the year 2000 for the
    Department of Agriculture was $6,600,000, and you just told me
    it was $22 million in 2005. That is almost a 400-percent
    increase in conferences, when we are having the biggest budget
    deficits that we have had in our history. Explain that to me.
        Mr. Christopherson. Well, there are a couple of issues
    there. One, I would say our 2001 numbers were difficult to
    obtain, at best, and may not be fully correct. I think you will
    see that as you get into 2002, you see numbers that are more
    respectful to what----
        Senator Coburn. I actually quoted you a 2000 number, not a
    2001 number. And you are saying that is a questionable number,
    too?
        Mr. Christopherson. As we went back, correct. We actually
    run our nine general ledger systems. All of them, as you have
    heard from other members, they are not supported by their
    vendors anymore. We have travel vouchers at probably close to
    6,000 to 7,000 different offices in which we accumulate data,
    and we are addressing this through our modernization effort,
    but we are not quite there yet.
        Senator Coburn. Good enough. Treasury, according to the
    numbers that I have, went from--it doubled from 2001 to 2005.
        Mr. Holcomb. Correct, sir. Yes, sir.
        Senator Coburn. OK. How much digital videoconferencing do
    you all do on a lot of this training? Are you utilizing that?
        Mr. Holcomb. Sir, the cost increase was in large part
    driven by the IRS' increase in Taxpayer Advocacy Panel meetings
    and outreach to taxpayers in their geographical regions. It
    reflects the IRS' effort for education and positive marketing.
        Senator Coburn. Well, let me clarify that. Then that should
    not be included in conferences. That is part of your function.
    A conference is not where you go to teach somebody else. It is
    where you go to learn from somebody else. And I think we need
    this clarification. This is a real important thing. If you are
    carrying out your mission by teaching the American citizens and
    the recipients of your Department information where you are
    holding the conference for them, I am not as concerned about
    that as I am us going for us. And so if you can clarify some of
    those numbers, I think it would be important.
        Mr. Nulf had said you all do not have a line item for
    conferences.
        Mr. Nulf. That is correct.
        Senator Coburn. And it is interesting to me--and your
    statement was, I believe, that you feel comfortable with your
    management of conferences--Hawaii Association of Land
    Surveyors, Honolulu, Hawaii. Niederberg Auction and Wine
    Conference, South Africa.
        Mr. Nulf. Yes, sir.
        Senator Coburn. You feel real comfortable that those two
    are necessary for you all to carry out your function and that
    the employees that took that did not take extra time off to use
    the Federal Government's airfare to go to South Africa or
    Hawaii?
        Mr. Nulf. Correct, sir. The Niederberg Wine Conference, one
    attendee was there from ITA, who was based in South Africa,
    sir. It cost the government approximately $378, and that is
    actually a reflection of that person's compensation during the
    course of the day.
        We have 378 employees primarily based at NOAA in Hawaii,
    sir, for the conferences that----
        Senator Coburn. But this was not a NOAA--or I guess it
    would have been if it is land survey, satellite survey.
        Mr. Nulf. Yes, sir.
        Senator Coburn. OK. All right. Good answers.
        DHS, from what I can see, conferences at the Department of
    Homeland Security have doubled in terms of dollars and
    quadrupled in terms of numbers. Is that accurate?
        Mr. Schied. I do not necessarily think that would be
    accurate for the reason of, again, going back, some of the data
    we have reported in past years I think is spotty. I think some
    of the information, again, like I said in my testimony, for
    2006 is also--we are having--still having a challenge getting
    together information, getting a common set of definitions
    across all our components so that, as you just pointed out,
    some of what we have reported is conferences where we go out
    and reach out to others. So sorting through that to try and get
    an apples-to-apples comparison is still challenging for us.
        Senator Coburn. Well, that is 2005 to 2006. That is 2.5
    times, from 6.1 to 15.4, and from 600 conferences to 2,200
    conferences.
        Mr. Schied. The data for 2005 did not include--I am pretty
    sure did not include the largest conference organization within
    DHS, which is the Coast Guard. We were unable in 2005 to get
    information from them. They are included in the 2006
    information, and they are close to a third, if not a half of
    the information that we have provided to the Subcommittee for
    2006.
        Senator Coburn. That is fair. I am going to be here 4 more
    years, so the idea that we do not have the data today, that
    does not work next year when we have another hearing. We have
    got to know. And I will say that to the staff that are here
    from the previous testifiers. We are going to get good numbers,
    and we are going to follow them, and you all are the chief
    financial people that manage that. And I am fine with that.
    That is a legitimate reason to have a difference that is
    explainable. It will not be next year, and it will not be the
    year after that, and it will not be all the way up to 2010.
        Why wouldn't the Coast Guard have provided how much money
    it spends on conferences?
        Mr. Schied. Sir, I do not know why it was not reported for
    2005. For 2006, they were able to get it and it was reported.
        Senator Coburn. OK. Well, we will submit questions to you
    all. We would love to have quick turnaround. I am going to
    release to the press my summary that my staff has done for me
    on this last year. As a matter of fact, I will tell you what I
    will do. I will not release it to them yet. I will release to
    you first, and you straighten this out where we are wrong in
    terms of individuals, where you think we have made a wrong
    assumption, because we cannot know what you know. That is part
    of what this is. And then after that, then we will release to
    the press some areas of concern we have. We will not do that
    until you have had a chance to look at it and justify it.
        We will submit questions. Again, the question that has to
    be in your mind--and this is different. OPM is going the other
    way. The Department of Labor is going the other way. Think
    about the fact that we are spending money on conferences at
    twice the rate the Federal Government is growing, and that is
    something we cannot sustain. And I would also suggest in my--I
    have an accounting and production management degree and ran a
    good size business for a period of time. My experience is that
    if you put something that has to be accounted for on paper,
    people watch it. And I would suggest a line item on travel-
    related expenditures and conference expenditures in every
    Department of this Federal Government.
        Again, I am going to go back and say probably 85 percent of
    everything we are doing absolutely has to be done. I do not
    have any criticism of that. If we can save 15 percent
    everywhere in the Federal Government in everything that we do,
    we preserve the future for our kids.
        The other thing--and I did not get a chance to say it to
    the others--I want to thank you for your service. A lot of
    people will not step up and do what you do, will not take--we
    have this attitude. We have fantastic Federal employees in this
    country. The biggest problem is Congress will not let them
    manage, and we do not let information flow up from the actual
    people through the management to get the best value for our
    money. So it is not about you and it is not about being
    critical of individuals who are serving this government. It is
    about how do we all work together to make the best future we
    can for the next couple of generations?
        So I want to personally thank each of you for your service,
    as well as the other panel, and say I look forward to working
    with you. We are going to do this again next year, so bone up
    and send it out, and let's get it online. My hope eventually--
    you all know that the Federal Financial Accountability Act
    passed. We are going to know every penny you spend everywhere,
    and it is going to be online starting in 2008 so that the
    American taxpayers are going to see how much you spend on
    conferences and with who and where, and it is all going to be
    out there. And when the blogosphere gets a hold of it, the
    justifications are going to get tough. And so the
    justifications had better be right before it gets out there.
    And that is what you all--you want good accountability. You
    want to walk home at night and say, ``We did a great job for
    the American people.'' And I believe you do, and I believe that
    is your intent. We have just got to get better at managing this
    financial crisis that is coming at us. And it is big. And if
    you think you do not have enough money to manage now, you wait
    until 2012 because that is when it is going to hit and
    everybody is going to get squeezed big time.
        Thank you all for your service and for being here and
    preparing for our Subcommittee hearing. Thank you. The hearing
    is adjourned.
        [Whereupon, at 4:03 p.m., the Subcommittee was adjourned.]

                                A P P E N D I X

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