[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




                   INTERIOR, ENVIRONMENT, AND RELATED

                    AGENCIES APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION

                                ________

       SUBCOMMITTEE ON INTERIOR, ENVIRONMENT, AND RELATED AGENCIES
                  NORMAN D. DICKS, Washington, Chairman
 JAMES P. MORAN, Virginia           MICHAEL K. SIMPSON, Idaho
 ALAN B. MOLLOHAN, West Virginia    KEN CALVERT, California
 BEN CHANDLER, Kentucky             STEVEN C. LaTOURETTE, Ohio
 MAURICE D. HINCHEY, New York       TOM COLE, Oklahoma
 JOHN W. OLVER, Massachusetts
 ED PASTOR, Arizona
 DAVID E. PRICE, North Carolina     
                                    
 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Delia Scott, Christopher Topik, Julie Falkner,
                       Jason Gray, and Beth Houser
                            Staff Assistants

                                ________

                                 PART 8

              OVERSIGHT HEARING ON SMITHSONIAN INSTITUTION

 

                                ________

         Printed for the use of the Committee on Appropriations

                                ________





            
                   INTERIOR, ENVIRONMENT, AND RELATED
                    AGENCIES APPROPRIATIONS FOR 2010

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED ELEVENTH CONGRESS
                              FIRST SESSION

                                ________

       SUBCOMMITTEE ON INTERIOR, ENVIRONMENT, AND RELATED AGENCIES
                  NORMAN D. DICKS, Washington, Chairman
 JAMES P. MORAN, Virginia           MICHAEL K. SIMPSON, Idaho
 ALAN B. MOLLOHAN, West Virginia    KEN CALVERT, California
 BEN CHANDLER, Kentucky             STEVEN C. LaTOURETTE, Ohio
 MAURICE D. HINCHEY, New York       TOM COLE, Oklahoma
 JOHN W. OLVER, Massachusetts
 ED PASTOR, Arizona
 DAVID E. PRICE, North Carolina     
  
 NOTE: Under Committee Rules, Mr. Obey, as Chairman of the Full 
Committee, and Mr. Lewis, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Delia Scott, Christopher Topik, Julie Falkner,
                       Jason Gray, and Beth Houser
                            Staff Assistants

                                ________

                                 PART 8

              OVERSIGHT HEARING ON SMITHSONIAN INSTITUTION


 


                                ________

         Printed for the use of the Committee on Appropriations

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 54-504                     WASHINGTON : 2010







                                  COMMITTEE ON APPROPRIATIONS

                   DAVID R. OBEY, Wisconsin, Chairman

 JOHN P. MURTHA, Pennsylvania          JERRY LEWIS, California
 NORMAN D. DICKS, Washington           C. W. BILL YOUNG, Florida
 ALAN B. MOLLOHAN, West Virginia       HAROLD ROGERS, Kentucky
 MARCY KAPTUR, Ohio                    FRANK R. WOLF, Virginia
 PETER J. VISCLOSKY, Indiana           JACK KINGSTON, Georgia
 NITA M. LOWEY, New York               RODNEY P. FRELINGHUYSEN, New
 JOSE E. SERRANO, New York             Jersey
 ROSA L. DeLAURO, Connecticut          TODD TIAHRT, Kansas
 JAMES P. MORAN, Virginia              ZACH WAMP, Tennessee
 JOHN W. OLVER, Massachusetts          TOM LATHAM, Iowa
 ED PASTOR, Arizona                    ROBERT B. ADERHOLT, Alabama
 DAVID E. PRICE, North Carolina        JO ANN EMERSON, Missouri
 CHET EDWARDS, Texas                   KAY GRANGER, Texas
 PATRICK J. KENNEDY, Rhode Island      MICHAEL K. SIMPSON, Idaho
 MAURICE D. HINCHEY, New York          JOHN ABNEY CULBERSON, Texas
 LUCILLE ROYBAL-ALLARD, California     MARK STEVEN KIRK, Illinois
 SAM FARR, California                  ANDER CRENSHAW, Florida
 JESSE L. JACKSON, Jr., Illinois       DENNIS R. REHBERG, Montana
 CAROLYN C. KILPATRICK, Michigan       JOHN R. CARTER, Texas
 ALLEN BOYD, Florida                   RODNEY ALEXANDER, Louisiana
 CHAKA FATTAH, Pennsylvania            KEN CALVERT, California
 STEVEN R. ROTHMAN, New Jersey         JO BONNER, Alabama
 SANFORD D. BISHOP, Jr., Georgia       STEVEN C. LaTOURETTE, Ohio
 MARION BERRY, Arkansas                TOM COLE, Oklahoma
 BARBARA LEE, California
 ADAM SCHIFF, California
 MICHAEL HONDA, California
 BETTY McCOLLUM, Minnesota
 STEVE ISRAEL, New York
 TIM RYAN, Ohio
 C.A. ``DUTCH'' RUPPERSBERGER, Maryland
 BEN CHANDLER, Kentucky
 DEBBIE WASSERMAN SCHULTZ, Florida
 CIRO RODRIGUEZ, Texas
 LINCOLN DAVIS, Tennessee
 JOHN T. SALAZAR, Colorado          
   
                 Beverly Pheto, Clerk and Staff Director

                                  (ii)

 
     DEPARTMENT OF THE INTERIOR, ENVIRONMENT, AND RELATED AGENCIES 
                        APPROPRIATIONS FOR 2010

                              ----------                              --
--------

                                       Thursday, December 10, 2009.

              OVERSIGHT HEARING ON SMITHSONIAN INSTITUTION

                               WITNESSES

MARK GOLDSTEIN, GAO, DIRECTOR, PHYSICAL INFRASTRUCTUR TEAM
A. SPRIGHTLEY RYAN, SMITHSONIAN INSTITUTION, INSPECTOR GENERAL
DR. G. WAYNE CLOUGH, SECRETARY, SMITHSONIAN INSTITUTION
    Mr. Dicks. The Committee will come to order.
    I want to welcome our witnesses this morning from the 
Government Accountability Office and the Smithsonian 
Institution's Inspector General and Secretary. Our first panel 
will include Mr. Mark Goldstein, Director of the Physical 
Resource Team of the GAO, and Ms. Sprightley Ryan, Inspector 
General. After we hear their testimony and ask them some 
questions, I would like them to stay in the hearing room while 
we listen to testimony from Secretary Wayne Clough. We want to 
focus on recent reviews of governance and facilities, as well 
as other management control and collection care issues. We 
thank all of the witnesses for appearing here today.
    I am glad that we have a chance to have this hearing today. 
As most of you know, our Committee has had some serious 
concerns for how the previous Smithsonian Secretary was 
governing the Institution. We were particularly troubled by the 
major ethical and judgment lapses. The Smithsonian is a vital 
national cultural and scientific resource. The specialists, the 
museums and the varied educational programs such as the 
National Zoo are special to all Americans, and there is a huge 
federal investment as well for which taxpayers expect 
accountability and responsibility. To ensure these, management 
and leadership are critical.
    Today we will begin by focusing on governance issues at the 
Smithsonian. As a result of public and Congressional demands, 
the Smithsonian completed detailed reports on reforms 
identified by the Independent Review Committee and the Regents 
Governance Committee. We have tasked the GAO to evaluate the 
Smithsonian's progress at implementing these important reforms. 
Although the Institution has been quite responsive so far, it 
is our role to carefully monitor the progress and see where we 
can help encourage further reform implementation.
    The GAO physical infrastructure team review of the 
Smithsonian verifies that the maintenance backlog is huge and 
getting worse. This is not new information. We face this 
situation with many of our agencies. For years there have been 
reviews and concerns for degraded Smithsonian collections and 
failed buildings. Meanwhile, the Smithsonian continues to 
expand its facilities and its programs. There has been 
tremendous expansion of buildings at the Smithsonian during the 
past two decades. This noteworthy growth is happening while 
other facilities and vital collections, visitor services and 
scientific and cultural programs are stressed. The Committee 
needs to evaluate and understand what the Secretary and the 
Smithsonian are doing to prioritize efforts to improve this 
situation.
    Finally, I understand the Secretary has recently completed 
an involved strategic planning process to guide the Smithsonian 
for the next decade. I hope you will explain this process so 
that we may all better understand how the federal, trust and 
private portions of the Institution all interact and work 
together. This will help us better understand and evaluate 
further funding requests.
    Mr. Dicks. Before we begin, I want to ask my friend and 
ranking member, Mr. Simpson, if he would like to make an 
opening statement.
    Mr. Simpson. Thank you, Mr. Chairman. I want to join 
Chairman Dicks in welcoming each of you here today. I also want 
to offer my congratulations to our panel of witnesses for 
having the foresight to testify after we have actually 
completed our appropriations bill.
    Let me also commend Chairman Dicks for holding yet another 
hearing in his series of important oversight hearings on this 
Subcommittee. Oversight is one of the most critical functions 
of the Appropriations Committee, and Chairman Dicks has led by 
example all year long.
    Judging by a review of this morning's testimony and from 
candid conversations with Secretary Clough, it would appear 
that a new era of governance has emerged at the Smithsonian. 
Collaboration, accountability and transparency are an integral 
part of the fabric of today's Smithsonian. To the public and to 
those of us vested with oversight responsibilities over this 
cherished institution, this is good news.
    Before I yield back, I want to mention that our staff and 
the staff of this Committee had the opportunity to visit the 
Suitland campus earlier this week to observe and review some of 
the more than 100 million items in the Smithsonian's 
collection. I know they probably did not see all of the 
Smithsonian's 100 million items, but close to it. I am told it 
was an eye-opening experience, and I will follow-up with 
additional questions related to their visit as well as a 
variety of other subjects upon the completion of today's 
testimony. Thank you, Mr. Chairman.
    Mr. Dicks. I want to just add, I think that Secretary Wayne 
Clough has really made a major change and I feel very positive 
about the new direction. I just want to say that there was 
great concern but I think we are moving in the right direction. 
Our committee has been very supportive of the Smithsonian over 
the years and will continue to be, and our only concern was 
that we get this thing moving in the right direction. I think 
that is being accomplished.
    Mr. Mark Goldstein, please present your testimony.

                             GAO TESTIMONY

    Mr. Goldstein. Thank you, Mr. Chairman.
    Mr. Chairman and members of the Subcommittee, thank you for 
the opportunity to discuss governance and facilities-related 
issues at the Smithsonian Institution. Over the past several 
years, GAO has issued a number of reports on these important 
topics.
    The Smithsonian is the world's largest museum complex. Its 
funding comes from its own private trust fund assets and 
federal appropriations. The Board of Regents, its governing 
body, is responsible for the long-term stewardship of the 
institution. In recent years, GAO and others have documented 
significant governance and accountability breakdowns at the 
Smithsonian which could ultimately put funding and the 
organization's credibility at risk.
    In 2007, the Board of Regents' Governance Committee 
released a report recommending 42 governance reforms. In 2008, 
GAO found that the Board of Regents had implemented 30 of these 
42 reforms. GAO also had made four additional recommendations 
at that time.
    In response to a recent Congressional mandate, this report 
and testimony provides an update on the status of the 
Smithsonian's implementation of governance reforms recommended 
by the Board of Regents' Governance Committee and GAO. The work 
for this report is based on an analysis of Smithsonian 
documents, interviews with Smithsonian officials and a GAO 
report on Smithsonian governance. We are not making any new 
recommendations in this report or in the testimony that I am 
discussing this morning. I would add that the Smithsonian and 
its Board of Regents concurred with the findings of our report.

                   GAO SUMMARY OF GOVERNANCE REFORMS

    The findings of our report are as follows. First, since May 
2008, the Smithsonian has implemented nine reforms recommended 
by its Governance Committee in addition to the 30 it had 
implemented prior to May 2008 and one of four recommendations, 
but work remains on three reforms and on three recommendations. 
The nine Governance Committee reforms implemented since May 
2008 include efforts such as revising policies related to 
travel and expense reimbursement and event expenses, creating a 
regents' annual public forum, and clarifying roles and 
responsibilities of and developing an assessment process for 
the Board of Regents itself. It has not completed 
implementation of three governance reforms related to the 
Smithsonian's contracting policy, a comprehensive review of 
financial reporting and internal controls, and enhancing the 
role of the advisory boards.

                 IMPLEMENTATION OF GAO RECOMMENDATIONS

    Second, regarding GAO's May 2008 recommendations, the 
Smithsonian implemented GAO's recommendation to evaluate what 
actions it can take in the event of persistent neglect of 
duties by a regent but has not completed implementation of the 
following three recommendations. The Board took steps but did 
not implement GAO's recommendation to develop and make public 
its process for the selection, use and evaluation of non-
Regents. The Board of Regents posted on its website the 
process----
    Mr. Dicks. What is a non-Regent?
    Mr. Goldstein. A non-Regent is an individual who is on a 
committee of the Board of Regents to assist them to provide 
expertise and additional evaluative materials, particularly in 
areas where they may not have the expertise on the Board 
itself.
    Mr. Dicks. Okay.
    Mr. Goldstein. The Board of Regents posted on its website 
the process for selecting non-Regent committee members but did 
not make a final decision regarding a proposed bylaw to give 
non-Regent members of committees the same roles and 
responsibilities as Regents. The Board of Regents took steps to 
improve its relationship with stakeholders, including advisory 
boards. However, due to limitations of the efforts so far, such 
as their informal nature and the focus on dissemination of 
information from the Regents rather than two-way communication, 
several advisory board chairs with whom we spoke expressed 
concern that the Board of Regents still lacked a sufficient 
understanding of Smithsonian museums and other entities to 
govern as effectively as possible. The Board of Regents has 
indicated that in the future it plans to formalize two-way 
communications with the advisory committees to facilitate 
better interaction.
    Finally, the Board of Regents has not conducted a 
comprehensive evaluation of its reforms but plans to do it in 
fiscal year 2010.
    In conclusion, while the GAO believes that some additional 
work is required to complete the implementation of all 
recommendations, the Smithsonian has made considerable progress 
and has taken seriously efforts to rebuild public confidence 
and to ensure greater transparency and accountability.
    I would be pleased to respond, Mr. Chairman, to any 
questions you or the members of the Subcommittee may have. 
Thank you.
    [The statement and brief biography of Mark L. Goldstein
follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Dicks. I think we are going to hear from the Inspector 
General first. Ms. Sprightley Ryan, we will hear your 
testimony.

                      INSPECTOR GENERAL TESTIMONY

    Ms. Ryan. Thank you. Good morning. I appreciate this 
opportunity to testify about governance at the Smithsonian.
    While, as GAO remarks, the Smithsonian has made significant 
progress in governance reforms, it needs even stronger 
management control. The Smithsonian cannot fully realize its 
new strategic plan without improving management control. It 
needs to bolster its commitment to continuing reform and to 
careful stewardship of public resources. I will touch on three 
challenges: Financial discipline, better central oversight, and 
care of the public treasures at the heart of the Institution, 
its collections.

                          FINANCIAL DISCIPLINE

    First, financial discipline. The Smithsonian needs greater 
financial discipline, especially in high-risk areas such as the 
management of capital projects, financial reporting, 
implementation of the financial management system, use of funds 
and personal property accountability. In my written testimony, 
I have provided details on each of these. For now I am going to 
focus on the last two: Use of funds and personal property 
accountability.
    In our recent audit of facilities maintenance funds, we 
found that the Smithsonian took funds appropriated for 
facilities maintenance and applied them to unplanned capital 
projects. For two fiscal year 2008 capital projects, 
maintenance monies funded about $550,000 out of approximately 
$1 million obligated for the capital projects. Apart from the 
resulting accounting and reporting errors, we are concerned 
that the misapplication of these funds could ultimately 
increase overall facilities costs because these monies were not 
spent on needed maintenance. Unfortunately, we could not 
determine if there were additional instances where the 
Institution paid for capital projects with maintenance dollars 
because there was no documentation of these funding decisions.

                          MANAGEMENT CONTROLS

    These errors occurred because of a relaxed view of 
management control, one that prefers ambiguity that allows for 
discretion, without appreciating that ambiguity also creates 
confusion that allows for mistakes. Responsibility for funds 
control was dispersed. There was little common understanding of 
the purpose and rules governing funds control and there was no 
accountability for mistakes. Also, appropriate training, 
supervision and quality control were lacking.
    As for personal property, which includes everything from 
desks to laptops to trucks to telescopes, our just-issued audit 
again found a lack of discipline. Fortunately, recent changes 
in policies and procedures have substantially improved 
management of personal property, and the number of missing 
assets has declined significantly. Yet the Smithsonian needs to 
make even more progress. It did not hold individuals 
accountable for personal property losses, believing it could 
not do so without having employees sign forms acknowledging 
their responsibility for the items. Yet at the same time, the 
Smithsonian did not ensure that people completed these forms. 
The Institution has held only one person accountable for $40 
worth of the approximately $12.3 million worth of missing 
property in the last five years. Moreover, current policy does 
not hold unit managers directly responsible for enforcing 
personal property accountability because unit managers resisted 
such a rule, which brings me to the second challenge: 
Appropriate central oversight.
    There needs to be a shift in the interaction between the 
Smithsonian's central functions and its units. The units' 
autonomy is long-standing and nurtures vitality and creativity, 
but it also poses risks to the Institution's limited resources. 
Inaccurate accounting and reporting, inadequate project 
oversight and unacceptable risks to privacy are just some of 
the consequences of this decentralization. Functions such as 
procurement, information technology, information security, 
project oversight and accounting should not be subject to 
varying policy interpretations and operating practices.

                        COLLECTIONS STEWARDSHIP

    A third challenge in management control is stewardship of 
the collections. We were heartened to see the increase in the 
fiscal year 2010 appropriations for the Institution's 
collections care initiative. The collections are increasingly 
at risk. In previous audits, we focused on collection security 
and inventory controls and have found them lacking. In our 
recently begun audit at the National Museum of American 
History, we have expanded our scope to also look at the 
condition of the collections, particularly storage, which 
historically has had issues with environmental contaminants, 
moisture, crowding and other serious risks.
    Finally, I would like to comment on an overarching 
challenge to improving management control: The need for better 
internal marketing to explain that the purpose of management 
control is not to create paperwork, it is to reduce unnecessary 
risks and improve the operations and thereby protect 
Smithsonian resources. Nor is its purpose centralized power. 
Effective management control produces information needed to 
make difficult resource decisions. Strong management control 
reduces problems that cost money, for example, ensuring that 
laptops do not disappear; or problems that cause public 
embarrassment, for example, creating oversight that prevents 
lavish spending or ensuring that if a laptop does disappear, no 
sensitive information is lost.
    Finally, by fostering greater transparency and 
accountability, strong management control instills confidence 
in the Smithsonian, assuring its appropriators and donors that 
the Institution is a proper steward of its resources.
    I would be happy to answer any questions.
    [The statement and brief biography of A. Sprightley Ryan
follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                     PREVIOUS LAPSES IN GOVERNANCE

    Mr. Dicks. All right. Mr. Goldstein, we appreciate the GAO 
work on Smithsonian management. As you know, the Committee was 
very concerned about the management lapses of the previous 
Smithsonian leadership. We acted to get their attention to see 
that reforms would be implemented. What do you think were some 
of the largest problems that resulted from the governance 
lapses the Smithsonian experienced?
    Mr. Goldstein. I think the largest lapse, as the Inspector 
General alludes to as well, is a lack of management control 
that allowed leadership at the Smithsonian to essentially do 
what they wished to do unimpeded by a normal course of control 
and integrity that in many instances allowed certain----
    Mr. Dicks. Is this a lack of staffing? I mean, do they not 
have a strong----
    Mr. Goldstein. No, it was a lack----
    Mr. Dicks [continuing]. Comptroller or person who provides 
oversight on these expenditures of funds?
    Mr. Goldstein. It was not a lack of staffing per se, it was 
more of a lack of a willingness or desire or culture to achieve 
those objectives. That has happily been remedied. While they 
are still putting some of the internal controls and practices 
in place, they clearly have turned the corner and do feel that 
these are things that they are willing to do. They can use some 
additional training and probably some additional resources to 
ensure that the financial----

                      CONTROLS ON FUNDING PURPOSES

    Mr. Dicks. What about spending money on the wrong purpose--
if you are taking maintenance money and using it for capital 
projects? That is a misuse of the money, the way that Congress 
has provided the money. Is that not correct?
    Ms. Ryan. Yes, but we believe that----
    Mr. Dicks. Is it just not understood what is the difference 
maintenance and capital projects?
    Ms. Ryan. There was certainly some lack of communication 
down to the people who obligated the money of the importance of 
that difference, but we are satisfied that to the extent the 
Institution implements our recommendations, which they have 
agreed to do, the likelihood of this happening again will be 
minimal.
    Mr. Dicks. Mr. Goldstein, you indicate that the Smithsonian 
has made some progress but nevertheless it still has a number 
of management challenges that have persisted over many years. 
What do you think are the top two or three management and 
governance problems which still persist?

                        DETERIORATED FACILITIES

    Mr. Goldstein. I think the biggest single challenge that 
the Smithsonian faces, which I believe the Smithsonian is 
certainly trying to remedy through its strategic planning 
process and through its upcoming campaign is to ensure that 
they have effective program in place to manage the 
deterioration of the facilities they have and to have an 
accountability for how they are going to provide effective 
leadership for the facility and its collections so the public 
is able to view them in the years to come. That is still its 
greatest challenge. They have taken--both the Institution and 
the Board of Regents, I think, have taken this much more 
seriously than when we began issuing our reports on these 
topics back in 2005, so to that extent, I think the culture is 
changing but they have some room to go still.
    Mr. Dicks. This is a problem we face across the government, 
I mean in terms of inadequate funding either in the President's 
budget or from the Congress, whichever way you want to look at 
it, to deal with facilities and some of the issues related to 
collections.
    Mr. Goldstein. I appreciate that.
    Mr. Dicks. But you point these things out and remind us 
that we are still not where we need to be on some of these 
issues, and I just want to make it clear that part of it is 
because of a lack of resources. It is not evil intent here, it 
is that we do not have the money to do everything. But I do 
believe that this idea--and we face this in many other areas, 
such as the Park Service where we want to continue to expand 
and do more things while at the same time we are leaving behind 
some issues that have not been dealt with that need to be dealt 
with. It is a prioritizing of funding, I think. What else would 
you say are two or three things that are left to be done?

               REGENTS RELATIONSHIP WITH ADVISORY BOARDS

    Mr. Goldstein. I do think because it came out both in their 
own recommendations as well as ours that getting a better 
handle on the relationship between the Board of Regents and its 
advisory boards is a really important endeavor. The new chair 
of the Board, as well as the Secretary have committed to doing 
this, but for a long time I think the museums did have somewhat 
of a disconnect from the Board.
    Mr. Dicks. Do they go in and brief the Board once a year or 
something like that about what they are doing?
    Mr. Goldstein. It is episodic.
    Mr. Dicks. It is not on a real schedule?
    Mr. Goldstein. That is correct. There is now a quarterly e-
mail that comes from the chairman of the Board, and as I 
indicated, the Smithsonian has committed to trying to formalize 
better two-way communications. In our discussions with advisory 
board chairs for the preparation of our report today, we talked 
to a number of them and they felt that they had seen 
improvements but they still felt that a lot of the 
communication was one-way and that they were not getting the 
opportunities to provide the regents with critical information 
on museums.
    Mr. Dicks. So whose problem is that? Is it the regents or 
the management?
    Mr. Goldstein. It is principally the regents. It is the 
relationship between the regents themselves and the advisory 
boards and the museums because clearly the regents do need a 
better understanding of the problems of the specific museums.
    Mr. Dicks. How many times a year do the regents meet?
    Mr. Goldstein. They meet four times a year.
    Mr. Dicks. Four times a year.
    Ms. Ryan. Plus committees.
    Mr. Dicks. Plus they have various committees.
    Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. You asked pretty much 
everything, but let me----
    Mr. Dicks. I left a few.

             FLEXIBILITY ON USE OF APPROPRIATIONS ACCOUNTS

    Mr. Simpson. I was just proud that there was not anything 
about the previous Administration in the testimony.
    Let me ask a question, though. Capital projects versus 
maintenance dollars: how much flexibility is there to move 
money between capital projects and maintenance dollars?
    Ms. Ryan. In theory, there is none because they are 
separate appropriations accounts, in my understanding.
    Mr. Simpson. Is that a mistake?
    Ms. Ryan. Is that a mistake?
    Mr. Simpson. I guess the reason I am asking that, is there 
ever a time that a maintenance project becomes a capital 
project when it starts off as a maintenance project?
    Ms. Ryan. It could in theory, and I am not an expert in 
this area but I do not think it is a mistake to separate them 
because the money would always go to the latest emergency 
rather than long-term planning for maintenance, for example, 
but that is my non-expert opinion. You would have to ask----
    Mr. Simpson. See, I have always wondered if we as Members 
of Congress or as any legislative body, whatever we do, if we 
get too particular in our appropriations, saying you can only 
spend a dollar here or there or there, and try to stovepipe 
things too much instead of setting goals and visions, whether 
it is the Smithsonian or any other agency of the federal 
government. Instead, perhaps we should say this is what we 
expect and if we are going to appropriate this amount of money 
to you, we expect you to use your expertise to decide how you 
are going to achieve these goals. If we do not appropriate that 
much, what are you going to be able to do, et cetera, et 
cetera, and then hold you accountable the next year for what 
you achieved, and if you fail to achieve those goals, we want 
to know why. But sometimes we sit here and say you can only--
you know, we will let you buy a phone system and we will let 
you buy something else over here and we will let you do these 
kinds of things and we try to manage with the appropriation 
dollars, and that is what kind of gets me between maintenance 
and capital projects in that if we have a vision of what we 
want the Smithsonian to become, we expect the Secretary, his 
staff and so forth to be able to use their vision to decide 
what to do in the area of maintenance and what to do in the 
area of capital projects instead of sitting back and going 
well, we got appropriated this much money for capital 
maintenance and we have got to do this project, oops, this 
turned into a maintenance project and oops, this turned into a 
capital project, how we are going to--you know, do they spend 
all their time trying to fit the dollars into this pie chart or 
whatever that we have created rather than doing their job. It 
is kind of an esoteric question. I do not know.
    Ms. Ryan. Well, certainly you are the appropriators. You 
can do what you think is right.
    Mr. Simpson. Thank you for that.
    Go ahead, Mr. Chairman.
    Mr. Dicks. Well, the only thing I was going to say is, you 
have the President's budget. The President's budget lays out 
what the President thinks should be done. Obviously we make 
adjustments in that but we are basically operating off a 
document that has come from the Smithsonian and they with OMB 
have developed it, and it seems to me that they have a 
responsibility to spend the money on the things that have been 
agreed to between the President's budget and Congress in terms 
of the appropriations. Not to do that is a mistake, and it is 
not legal.
    Mr. Simpson. That was not the question I asked. It is 
obvious that they have to spend the money according to how it 
is appropriated. I am suggesting--and this is not the first 
time. When I was the Speaker of the House in Idaho, we used to 
spend all the time on the appropriations committee deciding how 
the Department of Health and Welfare was going to spend every 
dollar, and we would debate whether they could buy a $14,000 
phone system in the legislature. That is not our job. We do not 
know whether that is what they need or not. What we know is 
what we want the Department of Health and Welfare to become and 
the job we want them to do. We hire people to achieve that 
goal, and we ought to hold them accountable for it and we ought 
to be able to have a budget process where they come in and sit 
down and say okay, if you appropriate us $10 million this year, 
this is what we can achieve with it; if you appropriate us $12 
million, this is what we will do; if you appropriate us $8 
million, this is what we will do, and have goals that we can 
look at. Then next year when you come in for your 
appropriations, say we gave you $10 million, this is what you 
said you would do, did you do it, did you do more, did you do 
less, why, why not, instead of getting down and deciding what 
kind of phone system you can buy. The problem is, we understand 
the phone system. We do not understand all the rest of it, so 
we debate the phone system. And I just said that we need to be 
more flexible in what we allow agencies, not just the 
Smithsonian but all agencies, to do the job and hold the people 
we hire to do the job accountable for the job that they do, and 
when we say--I can see, in fact, I almost cannot see a time 
when it does not occur when we have people that we have hired 
to do the job sitting down there saying gee, is this a 
maintenance project, when does it become a capital project and 
what is the difference between--and we all know, if you are 
going to build a new building, that is a capital project. If I 
am going to do something else to the building that needs to be 
repaired, is that maintenance or when does that become capital 
and which fund should it be coming from? We are spending all 
our time--I am not saying we are spending all our time. Well, I 
guess I did say that. We are spending a lot of our time trying 
to fit the definitions rather than do the job is what bothers 
me, and I appreciate your testimony and I think that we need 
the Inspector General and the Government Accountability Office 
to oversee these things to make sure that money is being spent 
appropriately.

                         PERSONAL PROPERTY LOSS

    It concerns me when you testify that $12 million of 
personal property has disappeared and is unaccounted for. What 
are we doing to find out where that $12 million of personal 
property is and what exactly it entails? What is it mostly?
    Ms. Ryan. It is a variety of things. As I said, it could be 
anything from a vehicle to a laptop, and as for what the 
Institution is doing to find the items that are missing, I do 
not know what they are doing now for the past items. I do know 
that their improved policies, and also by implementing our 
recommendations from our audit, which just came out this month, 
they will further reduce the number of missing items. It has 
gone down to I believe less than or around 1 percent of items 
accounted for, which is apparently, I am not an expert on this 
but apparently the industry standard and agency standard and 
they are going to be holding people more accountable for their 
individual items.
    Mr. Simpson. Are those mostly personal computers and that 
type of stuff?
    Ms. Ryan. Yes, and occasionally a vehicle. No telescopes 
that I know of.
    Mr. Simpson. That is pretty weird to have vehicles 
disappear.
    Mr. Dicks. In your statement you said--if you would yield a 
second?
    Mr. Simpson. Yes.
    Mr. Dicks. In your statement you said that there was 
resistance on the part of the managers to take personal 
responsibility. I know in the military they do this, and we 
still lose a lot of stuff in the military. But do you think 
that that is essential, that people who are the managers take 
responsibility for these items, at least----

                 MANAGEMENT CONTROLS AND ACCOUNTABILITY

    Ms. Ryan. Take responsibility for enforcing accountability, 
yes, absolutely, that is part of the whole management control 
issue that is such a challenge. There has to be an ethos. It is 
the tone at the top. You will be held accountable for stuff 
that our office loses, and that makes it less likely it will 
get lost, I believe.
    Mr. Dicks. Let us give Mr. Hinchey a chance.
    Mr. Hinchey. Well, thank you very much, Mr. Chairman, and 
thank you, both of you. It is a pleasure to be here with you 
and I just want to express my appreciation for what you are 
doing because I understand it is a pretty tough set of 
circumstances that you are engaged in and you are trying to 
make some significant progress, and I know that there are a 
number of issues that you have implemented that are important 
to the overall management of the Institution. I wonder if you 
could just tell us a little bit more specifically about some of 
the things that you have put into play and the ones that you 
think are the most significant reforms that you have brought 
about, what do you think they are going to do and how effective 
they are going to be.
    Mr. Goldstein. We have recommended and the Governance 
Committee at the Smithsonian itself had recommended a number of 
different things to put in place including changes to travel 
policies, to creating public forums to provide greater 
transparency of the actions of the Board, to achieving better 
efforts at contracting, to understanding Smithsonian business 
ventures and trying to bring that into line more with normal 
operating procedures at Smithsonian, and many of these things, 
as my testimony indicates, they have done. There are three or 
four outstanding things that they have yet to complete but they 
are working on them. Those include finishing contracting 
policies by writing contracting manuals, some of which they 
have completed, a few of which they have not, and improving 
financial reporting and internal control procedures. That will 
take additional resources, probably staffing resources perhaps 
as well as training. The Board had been somewhat concerned 
about that issue. And then as I indicated earlier, trying to 
improve interactions between the Board of Regents and the 
advisory boards.

                PROGRESS IMPLEMENTING GOVERNANCE REFORMS

    Mr. Hinchey. Well, that is pretty good because a lot of 
progress is being made apparently.
    Mr. Goldstein. Yes, sir, quite a bit.
    Mr. Hinchey. And there are still a few things that are 
still outstanding but nevertheless they are being worked on?
    Mr. Goldstein. That is correct, sir.
    Mr. Hinchey. What do you think that this Committee should 
be doing in order to help? I know that there were a lot of 
things that this Committee did last year and expanded this 
budget in some very, very positive and very effective ways to 
make some big changes, and I wonder what you might think should 
be some of the focus of attention in the upcoming budget for 
the upcoming year?
    Mr. Goldstein. Well, I think the kind of oversight that you 
are conducting today is important, asking GAO and the Inspector 
General at the Smithsonian to continue doing reviews of 
selected areas to make sure that the kinds of things being put 
in place are actually being implemented. For instance, the 
report that we have issued today, where we update our 
recommendations so that we can see which things the Smithsonian 
has put into place are helpful. We have not gone in at 
Congress' request at this point in time but certainly could to 
actually selectively evaluate whether or not these changes are 
actually making headway and whether they are being implemented. 
In other words, we have not gone in to take a sample, for 
instance, of travel vouchers or things like that. We have 
simply seen that the reforms are being put in place. But the 
next step would be over time to make sure through an auditing 
process that the things they said they were going to do they 
are actually doing and that they are doing well.
    Mr. Hinchey. Well, that is good to hear, of course, and I 
am not surprised because I know that the chairman of this 
Committee has made some very significant progress in focusing 
attention on the needs that really need to be addressed and to 
be addressed effectively, and I am sure that we will continue 
to do it under his leadership as this process goes on in the 
context of this next budget process, so thanks. Thank you very 
much.
    Mr. Goldstein. Thank you.

                         CROSS-UNIT INITIATIVES

    Mr. Dicks. Ms. Ryan, you have stressed the need for more 
cross-unit initiatives for the Institution to enhance 
management and control of its many autonomous units. What 
specific kinds of cross-unit policies, practices or programs do 
you think are most urgently needed?
    Ms. Ryan. Well, as I noted in my testimony, financial 
reporting, project management, use of funds, and just from the 
asbestos report that came out from the independent consultant 
that the Institution hired to look at its asbestos program, 
even there they note that one of the challenges to having a 
better asbestos management program is not only a lack of 
complete documentation but limited communication among 
departments and inconsistent messages to employees, which comes 
from the lack of cross-unit or what I would call centralization 
at the Institution. Oh, and I am sorry, if I add one other 
really important area, it would be information technology 
management and security.

                    INFORMATION TECHNOLOGY SECURITY

    Mr. Dicks. Well, how would you rate the quality of the 
information technology at the Smithsonian? Is it uneven? Is it 
unit by unit or museum by museum?
    Ms. Ryan. It is both a central system--I think it is quite 
good overall but there is variation. Again, there is not a 
complete authority in one central office. The chief information 
officer does not necessarily have authority over all the 
various museums. For example, some museums have their own 
websites and that is terrific but that means that sometimes 
security issues are not handled consistently throughout the 
Institution.
    Mr. Dicks. Have there been problems with hackers coming in 
or loss of sensitive information?
    Ms. Ryan. Yes, there have been, but not recently. The ones 
I am most aware of, there was one four or five years ago and 
then another one maybe a year ago but it is not something I 
would want to discuss in detail here. I would be happy to brief 
your staff.

                        CARE OF THE COLLECTIONS

    Mr. Dicks. What about the care of the collections? Now, you 
have done some work on that.
    Ms. Ryan. Yes.
    Mr. Dicks. Tell us about that. Tell us the good news and 
the bad news, if you can.
    Ms. Ryan. Well, the good news is, there is a terrific new 
facility out at Pennsy Drive. I cannot remember the exact name 
of it but it is part of the huge storage complex of the 
Institution and that some of the museums have state-of-the-art 
collections controls and we assume conditions, although we have 
not audited that yet so I am not comfortable giving any sort of 
assessment there. For example, National Museum of the American 
Indian, a new building, has just amazing facilities for the 
collections. The bad news is, the security is not always what 
it should be. That is something that we have looked at multiple 
times. The inventories are not conducted as often as they 
should be, and unfortunately, both those two issues are 
resource-related largely, although we believe they could do 
more if they approached the issues more systematically, you 
know, figuring out which parts to inventory or, for security, 
focusing on the high-risk items. You want to spend more on the 
Hope Diamond than you do on, arachnid samples, I suppose. And 
then the final issue, the condition of the collections, we are 
starting to look into that now.
    I will be happy to brief you as our audit progresses but we 
are especially concerned about storage. Again, in the asbestos 
report that was issued by the independent consultant, they talk 
about building 16 at Garber, which has restricted access 
because a lot of the collections have asbestos-containing 
material. They are enclosed in a protective structure, but that 
structure was built in the early 1980s so it is unclear how 
viable that still is, and there are other places as well that 
have contaminants that are going to have to be dealt with.
    Mr. Dicks. Is there a systematic program to do that?
    Ms. Ryan. I am not aware. I think the Secretary would be a 
better person to answer that.
    Mr. Dicks. We are going to ask him that.
    Mr. Simpson.

                        TRAVEL POLICY AND AUDITS

    Mr. Simpson. Just one other question. You mentioned travel 
audits and that type of thing. Is there any evidence that any 
of that has been misused funds or anything like that or is it a 
bookkeeping issue?
    Mr. Goldstein. We have not actually done those audits at 
this point so it would not be possible for me to tell you.
    Ms. Ryan. If I may, we have----
    Mr. Dicks. There was some history of lavish----
    Mr. Goldstein. But that is going back----
    Mr. Dicks [continuing]. Activities in the previous 
Administration.
    Mr. Goldstein. Clearly there were issues with how travel 
funds were used under the previous Secretary. We have not since 
that time gone back in to look.
    Ms. Ryan. Our office has, and we have not found any major 
problems.
    Mr. Dicks. What do you think of the new travel policy?
    Ms. Ryan. It is good. It is much better, and there is a 
much better----
    Mr. Dicks. And it is clear and understandable so that 
people who are traveling know what they can or cannot do?
    Ms. Ryan. I believe so. I am sure there are people who 
disagree but I think more importantly, the culture is changing. 
People understand and accept that yes, they have to be 
accountable for how they are spending the Institution's money, 
and that has been really good.
    Mr. Dicks. Thanks for all you guys do.
    Mr. Goldstein. Thank you very much.
    Mr. Dicks. Mr. Hinchey, any follow-up?

                INTERACTION BETWEEN SMITHSONIAN AND GAO

    Mr. Hinchey. Just briefly. The interaction between the 
Smithsonian and the GAO and sort of the oversight operations 
there, can you give us some insight as to how effectively that 
operation has been and what might be done to make it stronger 
and more effective?
    Mr. Goldstein. I have been doing audits of the Smithsonian 
for about six years now. As you know, we issued a number of 
important reports. We have always had extremely good 
relationships with the Smithsonian, with their Office of 
Governmental Affairs as well as with the Secretary's office. We 
have been able to obtain all the information that we need, and 
they have been very cooperative with us. They have always 
listened very carefully to what we have had to say, and have 
always accepted our recommendations and done pretty well in 
implementing them, so I think we have a very good relationship. 
It is not always the case with all the--you know, no one likes 
an auditor, but we have a good relationship with them. They 
have been very helpful to us in our work.

                          MAINTENANCE BACKLOG

    Mr. Hinchey. That is great. I am glad to hear that. I 
understand that there is a maintenance backlog that is pretty 
substantial, about $2 billion.
    Mr. Goldstein. About 2.5, the last time we looked at it.
    Mr. Hinchey. Can you give us some sense of priority as to 
what are some of the things that needed to be addressed most?
    Mr. Goldstein. There are a lot of major projects in really 
almost all of the museums. As I say, it has been two years 
since we have looked at it so I would hesitate to go into any 
detail, but the problems that they have largely remain and they 
have a capital plan that is in place that sort of incorporates 
both of their federal and their trust funds these days, which 
is a recommendation that we made several years ago so you could 
see transparently across all their museums the kinds of things 
that need to be fixed and the kinds of programs that they have, 
and they have a lot to do.
    Mr. Hinchey. A pretty uniform situation across the board?
    Mr. Goldstein. Most of the museums have some--these are old 
museums. Many of them have been around for a long time and 
there are a lot of issues that need resolving.
    Mr. Hinchey. Well, thanks very much.
    Mr. Dicks. All right. We appreciate your work and we thank 
you for your testimony here today and we look forward to 
continuing working with you.
    Mr. Goldstein. Thank you.
    Ms. Ryan. Thank you.

               TESTIMONY OF SMITHSONIAN SECRETARY CLOUGH

    Mr. Dicks. Now we are going to have Dr. Wayne Clough, 
Secretary of the Smithsonian, and this is his first testimony, 
I believe, before our Committee. We are going to put your bio 
and your entire statement in the record. Please proceed as you 
wish.
    Mr. Clough. Thank you. Thank you, Mr. Chairman, and thanks 
to the Committee for this opportunity to meet with you today 
and talk about the Smithsonian, an institution that is a great 
American institution and one that we all love and admire.
    I want you to know that we are committed at the Smithsonian 
in what we would call a new era of transparency and openness 
and to the sharing of information and also to communicating the 
appropriate values to all of our employees, and a big part of 
that is discipline and understanding values.

                             STRATEGIC PLAN

    We have a new strategic plan. We think that is a very 
important one that was done in a historically different way 
than in the past and that we engage all elements of the 
Smithsonian as well as bring in outside experts to participate 
with us on that plan, and it in fact calls for us to work 
across disciplines instead of staying in our silos and 
particularly to use the latest technology to reach the American 
people in ways that we have not done in the past. In doing so, 
we also hope to extend our reach, and we have been having 
discussions with the Department of Education to help address 
the issues that face the K-12 system in our country. And to 
that end, we have been fortunate to receive a gift from one of 
our regents to hire a director of education for the Smithsonian 
to coordinate our efforts in that area.
    The new vision of our strategic plan calls on us to shape 
the future by preserving our heritage, discovering new 
knowledge and sharing our resources with the Nation and the 
world. Our strategic plan organizes our activities and focuses 
them under four areas, our grand challenges: One, unlocking the 
mysteries of the universe, which relates to the great work we 
do in astronomy and astrophysics; second, understanding and 
sustaining a biodiverse planet; third, valuing world cultures; 
and finally, understanding the American experience, what does 
it mean to be an American. These are areas of focus to help us 
identify where we want to track our efforts in the future and 
best utilize the resources that we do have. We also reaffirm 
the core values of integrity, responsibility and organizational 
excellence and so there was a major effort also put on what we 
call enabling mission and that is doing our work right with 
discipline. That was all part of the process.

                         RECENT ACCOMPLISHMENTS

    For many reasons, we are optimistic about the future of the 
Smithsonian. For example, last year our folks worked very hard 
and opened 90 new exhibits that were remarkable in their range 
and diversity. We had nearly 30 million visits at the 
Smithsonian last year, six million more than the year before. I 
think we serve the American public particularly well in times 
of economic need in a way that few others do. The National 
Museum of American History, which was opened a year ago after 
being closed for two years, has seen already more than 4.6 
million visitors, a 40 percent increase in visitation at this 
museum over past years. We have also had two free educational 
online conferences, webinars, in the past year, one on Lincoln 
and one on climate change. Experts from across the Smithsonian 
took part and with teachers and students all across the Nation 
and indeed the world. They could log on and participate.
    Mr. Dicks. Is that on your website regarding climate change 
and we can go take a look at that?
    Mr. Clough. That is correct, and it is archived and you can 
see all of our experts from different parts of the Smithsonian 
speaking to what they know about the topic.
    Mr. Simpson. What about the one on Lincoln?
    Mr. Clough. The Lincoln webinar is also there as well.
    So nearly 11,000 people participated in all 50 States and 
more than 180 countries. Hundreds of universities joined us as 
well as NGOs, nonprofit organizations and, importantly, a 
number of Girl Scout troops.
    Mr. Dicks. That is very important.

                          EDUCATIONAL OUTREACH

    Mr. Clough. And even my small, rural hometown of Douglas, 
Georgia, in the southern part of that State participated, which 
I am very proud of.
    In science, art, history, and culture we have much to 
contribute and we are finding new ways to do so. We are using 
social media to tell the Smithsonian stories and to connect 
with audiences we have not connected with. We know we do not 
connect well with certain demographics and we are working on 
that. So we have used websites and blog posts, and since 
October 1st we have had more than 130,000 video views on 
Youtube, 34,000 Facebook fans and 16,000 Twitter followers 
where we rank, incidentally, as one of the top five most 
visited museum sites in the world. We were even the most 
popular blog in the world in a story last September when our 
scientists who study mammals that are endangered discovered a 
giant breed of rat in Papua, New Guinea, and this rat actually 
turned out to be not any more handsome than a normal rat but it 
was quite engaging because it enjoyed being petted and it is a 
vegetarian. We actually have this specimen, but I decided not 
to bring it along today.
    Mr. Dicks. Thank you for that. We appreciate it.

                    GOVERNANCE REFORM IMPLEMENTATION

    Mr. Clough. We remain committed of course to the highest 
governance standards, and as you have heard, we are working 
hard with the GAO and with our IG to get at that issue and 
working with our regents, and we are proud of the fact that the 
GAO report had no further findings and that we have made 
progress on 39 of the 42 issues that we had, and we are 
committed to finishing that off.
    We also appreciate the good work done by our Inspector 
General and we are cooperating with her to implement the 
reforms in the various areas that she has reviewed so 
accurately, I think, for you today, concerns expressed by both 
of them that we are working hard to address. And in a larger 
approach to this, in addition to addressing point by point by 
point, which we will do, we are undertaking a best practices 
study. We should have that under contract at the beginning of 
the year so that we look at the entirety of the Smithsonian, 
and the issue of how we work together in this organization or 
do not work together and try to find ways not only to do our 
work correctly but also to use the money more efficiently that 
we have.
    Mr. Dicks. Universities are doing this too.
    Mr. Clough. Yes.
    Mr. Dicks. They have had this same problem. You have been 
an expert as head of Georgia Tech and provost at the University 
of Washington. They are not working between departments. I 
mean, we had a long, hard struggle with the intelligence 
community getting them to do this, and I just think the more 
interdisciplinary efforts you can have makes a lot of sense and 
utilizes all this talent you have.
    Mr. Clough. It does, and it creates what I call opportunity 
space where there are things we can do when we join our forces 
together that we cannot do if we stay apart, and so we are 
excited about that. That is what our plan certainly calls for, 
and it really makes a lot of difference in addressing some of 
the discipline issues that we heard about earlier.
    So our Board of Regents of course is aggressive about their 
reform agenda and joining forces with the management to try to 
get all those done, and I do believe the Regents are working 
hard on their end of these issues. They have held historically 
their first two public meetings, which were widely seen on 
webcast and well received, and in addition they are working 
hard on this issue of working with the advisory boards that was 
mentioned.

                        EFFICIENT USE OF FUNDING

    We are working hard too to get more efficient about the 
dollars that we receive, not only from the federal government 
but from the many private supporters that we have for the 
Smithsonian. The federal funding provided in fiscal year 2010 
for the facilities capital and facilities maintenance will 
allow us to improve the condition of the Smithsonian's 
facilities, to design projects and make progress towards 
industry-recognized standards for facilities revitalization and 
facilities maintenance. And of course, we did receive some 
funding, $25 million in funding from the Recovery Act, and we 
have obligated $22 million of that already, or 89 percent, with 
holding back a little bit for reserve for contingencies and we 
have created the jobs that we expected in that case. You may 
have seen the scaffolding on the grand old Arts and Industries 
Building next to the castle building that stimulus funding made 
possible. That is the first effort to begin to restore that 
building, and with the federal funds we have with fiscal year 
2010 we are beginning to work on the roof, which is a very 
complicated old roof structure, and repairing the masonry and 
working on some of the hazardous materials that are inside of 
this building. We developed a comprehensive program also, we 
think, for how this building might be used for the future.
    I certainly want to thank the Committee for the additional 
$2 million provided in the fiscal year 2010 budget to address 
the very important collections management issues for the 
Smithsonian, and those funds will go towards improved storage 
and additional conservation, and of course, we are continuing 
to grapple with the continued erosion that the chairman 
referred to of our curatorial staff that has occurred over the 
last decade, partly because of unfunded pay increases. I do 
also want to thank the Committee for the flexibility you 
provided by allowing the availability of the fiscal year 2010 
salaries and expenses appropriations an extra year.
    Again, the Smithsonian is entering a new era. We know we 
can help our Nation and the world face many of the grand 
challenges that lie ahead in science, education and issues of 
national identity. We uniquely have the capacity through the 
collective impact of our museums and science centers to tell 
the story of America, all of its hopes, it struggles, its 
triumphs, its contradictions and its courage. In today's 
challenging time, we think our mission is more important than 
ever before. We look forward to the future and working with 
this Committee and with all our stakeholders to make the 
Smithsonian the great institution it should be for the American 
people. Thank you again for the opportunity to be here.
    And finally, I know that you are very busy with all the 
work you have up here. Mr. Chairman, you were very generous to 
have your committee come down to the Smithsonian to see many of 
our facilities. We thank you for that visit. Our staff very 
much appreciated that visit. But we know since you are busy, we 
thought today we would bring the Smithsonian to you, and so 
what you have is an example of what we are doing with our 
digitization efforts, and so many of the Smithsonian treasures 
are right here captured on this thumb drive. It tells you a lot 
about our treasures that we digitized and we are busy using the 
digitization money to do more of this. In addition, it shows 
you all the different websites that you want to go to. You can 
even hear sounds from the zoo animals and download them onto 
your cell phone.
    [The statement and brief biography of G. Wayne Clough 
follow:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Dicks. We will do it. Well, thank you, and again, I 
want to say I personally appreciate your statement today and 
your energy and your enthusiasm and your new plan. I think they 
are terrific and I just see the Smithsonian doing better and 
better.

                    ASBESTOS SITUATION IN BUILDINGS

    Now, we have a few things we want to talk about. I want to 
ask you about the asbestos situation that was mentioned earlier 
at the Smithsonian and the article in the Washington Post 
today. As you know, many of us on the Hill are very concerned 
about potential asbestos dangers to workers and to the public. 
With the millions of visitors you receive and the hundreds of 
workers who are routinely modifying buildings for exhibits, it 
is essential that the Smithsonian take its asbestos situation 
very seriously. The consultant's report indicates that there 
continues to be record-keeping and training problems on this 
issue. The lack of employee training seems to be a common theme 
even in the business and financial system reviews we have 
examined. Please tell us about the asbestos situation, 
especially what you are doing to update records, test 
facilities and train employees on proper asbestos handling.
    Mr. Clough. Thank you. If you remember, we had an incident 
regarding a particular employee a while back and it triggered a 
reevaluation of our asbestos programs. My approach to that, 
working with our staff, was to say we will look at this in its 
largest sense. We want to approach this by bringing in an 
outside company that would review our policies and procedures 
overall to see if we have the right context, right framework to 
do the work and then secondly, we want to go down to where the 
rubber meets the road with our employees and let them tell us 
what they think as to whether or not they are really getting 
the training that we say we are going to deliver. But in the 
meantime, in addition to undertaking that study with an 
independent consultant, we undertook a number of activities 
ourselves. For example, we are reassessing the entire mapping 
of asbestos-containing materials, ACMs, as they are called, 
over the entire Smithsonian and it was recommended, for 
example, in the report that we do that every three years. We 
will do that. That is underway as we speak. Eight hundred 
people this year did receive asbestos training and we went 
through a screening process for anyone who felt they may have a 
health problem. That process continues but we think we are 
fully on track in that regard.
    The independent study that we commissioned, I asked that 
that report directly to my office, not to go through our safety 
office, and I think our safety office has many competent people 
but I want it to come directly to me, not to the safety office. 
I wanted them to be able to tell us if they felt we had 
problems in our safety office, and so that report now has been 
issued. We are reassured in many ways by that report. It does 
say that our overall framework and our overall policies are 
good. They meet the test of federal standards, which as they 
say are much better and much higher than you would find in most 
commercial applications. However, they did note a number of 
cases where we can improve in record keeping and in training 
and we are glad to hear that. We want to be a learning 
organization. This information we take to heart. So as soon as 
we got the report, we digested that report very briefly. We 
issued an e-mail to all of the Smithsonian employees saying 
that we had the report, it is posted on our website so any 
employee can read it, and we----
    Mr. Dicks. I think that is terrific.
    Mr. Clough. And we delegated to the head of facilities the 
task of taking each and every one of those recommendations from 
the safety consultant and getting back to me in February and 
saying exactly how we are going to address each one of those 
things. So we think there was a reassuring message in the 
report but at the same time we need to get more serious about 
how we document, how we record, and as the Inspector General 
has said, to get the Smithsonian to act as a whole on these 
issues that pervade the whole institution as opposed to 
treating them separately.
    Mr. Dicks. Now, with respect to the settlement reported 
today in the Washington Post, do you expect that there are 
other employees who also worked in the same kind of conditions 
and who may be seeking compensation?
    Mr. Clough. It could happen, and we do not know where that 
will actually go because we offered every employee at the 
Smithsonian first an opportunity to have a one-on-one session 
with an expert on asbestos issues in terms of their health, 
their physical health, and as I understand it, I think about 60 
people took us up on that, and then we offered them if they 
wanted to go further a full health screening on their health 
conditions, and I think about 50 people have undertaken that 
and we simply have not heard the outcome from that. There may 
be some who do feel that they have issues and obviously we will 
stand up to that test.
    Mr. Dicks. And so we do not know yet what the result of the 
medical testing is. Is that correct?
    Mr. Clough. To date, we have not heard anything back from 
anyone suggesting a problem but we may. As you know, asbestos 
is something that takes a while to wind out in terms of those 
issues.

                       SUITLAND FACILITY PROBLEMS

    Mr. Dicks. Now, we understand that the Garber facility, 
which our staff visited earlier this week, has a major asbestos 
problem. The asbestos in the storage facilities makes use of 
artifacts difficult and expensive. How large is this problem 
and what are you going to do about it and do we need to provide 
resources for that?
    Mr. Clough. It is a serious issue. This area is called the 
Suitland facility, the collections center, has within it some 
incredible state-of-the-art facilities which the federal 
government has helped us build, particularly to deal with 
assets and artifacts that require special care, for example, 
fish specimens and birds and all these things that you have to 
keep in alcohol, that kind of thing. We have moved all that out 
there so we have had tremendous improvement in collections care 
on that side. The Garber part of the facility is the oldest 
part. It was an old warehouse area and the Smithsonian has been 
using these warehouses to store things and it was discovered 
after some time that there was asbestos in this area and so 
they are isolated, and if you walk in you will see plastic 
everywhere to keep the asbestos from getting on the artifacts 
but it is not a good facility. Ultimately we would like to get 
out of Garber entirely. We would like to tear down all those 
old warehouses, they are far from state-of-the-art, and get out 
of Garber.
    Now, we were able to move a significant amount of the 
collections that were there into the new Pennsy facility that 
the Inspector General referred to. This is a state-of-the-art 
facility in Landover, Maryland, in sort of a light industrial 
area. It was done I think very cost-effectively and provided us 
with places to move some of the artifacts. Now, the Air and 
Space Museum has a large new facility and we will move some of 
that out to the Dulles facility or so-called Hazy Museum in 
their construction that they are doing now. So we are doing it 
step by step. Ultimately we need to tear all that down and get 
out of the Garber facility.
    Mr. Dicks. And that is a resource issue, right?
    Mr. Clough. Yes, it is.
    Mr. Dicks. You have to have the money in order to do that.
    Mr. Clough. Yes, it is.
    Mr. Dicks. Okay. So let us know about that.
    Mr. Simpson.
    Mr. Simpson. Thank you for being here today. I appreciate 
the job that you are doing. Your five-year plan requires a base 
funding increase of between 16 and 32 percent.
    Mr. Clough. Yes.

                      FUND RAISING BY SMITHSONIAN

    Mr. Simpson. Tell me about the--while that will not all be 
federal funding, a portion of it will be, is that an attainable 
goal? How is your fundraising going during these economic times 
and contributions to the Smithsonian and so forth during these 
times?
    Mr. Clough. That is a very good question. We are fortunate 
at the Smithsonian that people love the place and even though 
there was a point back last December when we wondered if we 
would meet what we set as a goal before the economy kind of 
went south, which is $120 million in private funding for this 
last year, we ended the year with $126 million. We were one of 
the few nonprofits I think in the country that made its goal, 
in fact exceeded its goal. We had a wonderful array of gifts to 
help us with a series of issues and to help us do more 
digitization, more educational outreach, in some cases even in 
collections to help us there. So we did well this year. Now, 
can we maintain it? We are actually setting a goal with the 
regents now that will be even higher than that. We think we 
need to ramp up what we are doing.
    In terms of resourcing the plan, I think the issue there is 
that we looked at it from the point of view of some flexibility 
in the goals. As you mentioned, it goes from 16 to 32 percent. 
So we could do what we need to do if we got a 16 percent 
increase in total budget but we could do a lot more if we got 
32 percent, and some of that depends on how good we are at 
fundraising. Some of it depends on what we will do in terms of, 
for example, being more aggressive about getting grants and 
contracts fulfilled from foundations and even from other 
government agencies for that matter. So we have a series of 
ways to do it. Finally, also redirection. We are doing that as 
we speak at the Smithsonian. We are taking resources that were 
spent in some areas and we are redirecting them to get the 
significant plan objectives done, so we will do a certain 
amount of redirection to accomplish that. The increase in 
revenue that we are looking for would be coming from roughly 50 
percent on the federal side and 50 percent on the private side, 
and that differs from our present ratio, which is more like 65/
35, 65 federal. We are going to try to become more self-
reliant. We are going to work hard to increase our own 
resources so we can get our work done. We speak to the federal 
side of it by saying these are the essential things we think 
the federal government should support. We are open every day of 
the year but one. We have 30 million visitors. We think that 
the federal government should support us with revitalization 
and maintenance money to address this amazing traffic that we 
get for the Smithsonian.

                          VISITATION INCREASE

    Mr. Simpson. It is kind of stunning that the amount of 
traffic increased by six million. What percentage was that?
    Mr. Clough. It went from 24 million to 30 million.
    Mr. Simpson. That is a huge increase at a time when the 
economy is really--I do not know if it is because the economy 
is down and people are starting to stay home and learn about 
America rather than travel abroad and those kinds of things. 
That is a stunning increase, and even though it might be free 
to go to the Smithsonian, it still takes money to come here.
    Mr. Dicks. And also the exhibits. The new things are really 
attractive, and it just shows you what you can do if you have a 
high-quality exhibit that people can go in and interact with.
    Mr. Clough. And we are working with the young people before 
they come to the Smithsonian to use the Web and become educated 
about what they are going to see. We are working with teachers. 
We call it the learning journey. And so they can actually work 
with a curator or one of our guides before they actually get 
here.

        NATIONAL MUSEUM OF AFRICAN AMERICAN HISTORY AND CULTURE

    Now, I will say one quick thing on the funding side. Some 
of that new funding relates to the National Museum of African 
American History and Culture. That is a big job that we have 
been asked to do and we welcome it. It is a $500 million 
proposition. We agreed as an institution to raise half of that 
and the federal government agreed to put up $250 million. This 
past year one of the slight problems was that in our 
revitalization budget, we had $125 million allocated to us but 
we were told to take $20 million out of that and use it for 
this new museum and we need, we think, to make that a fairly 
bright line that we do not want to punish the rest of the 
Institution to build the new museum.
    Mr. Dicks. Is that going to be an issue? There is talk of a 
Latino museum now. There are a lot of different groups, 
organizations, et cetera, so the American people would like to 
see the expansion of the Smithsonian. Are we in danger of 
expanding so fast that we endanger the rest of the Smithsonian 
with our funding?

                 NATIONAL MUSEUM OF THE AMERICAN LATINO

    Mr. Clough. I think it is and it is something that we all 
need to think about carefully because none of us want to be in 
a situation where we have these wonderful assets and we cannot 
maintain them. I think we have to be careful about that. I do 
believe that the plan that was laid out, if we can adhere to 
it, is a workable plan to get this new museum built, for 
example, and we appropriately maintain it. The Latino 
Commission is looking at whether there be such a museum and 
should the Smithsonian run it, and if so, where should it be 
located, and so we have made our resources available to them in 
terms of our expertise to understand what it takes to build a 
museum but that museum probably is eight to ten years away. It 
takes a long time to build a museum.

                   DIGITIZING SMITHSONIAN INFORMATION

    Mr. Simpson. One of the Smithsonian's initiatives is to 
digitize information on the 100 million-plus items in its 
collection. Does the Smithsonian have the technology currently 
to do that?
    Mr. Clough. I think we have a lot of the expertise. We do 
not quite have the staff that we need nor do we have the 
equipment that we want to use because I have tried to emphasize 
to our folks, if you look at our plan, it is a five-year plan, 
this is a massive task when you have 137 million specimens and 
artifacts and works of art, and it will take years actually to 
get this done, to get the complete job done. What I want our 
folks to be thinking about is what will the technology be five 
years from now in digitization. We do not want to do something 
that technology five years from now cannot read and use and so 
we need to think way ahead about where the technology gain will 
be, and in addition, as opposed to our great friends at the 
Library of Congress, we have mostly three-dimensional objects 
to digitize and we want kids when they are looking at some 
fantastic beetle or something or studying the biodiversity 
issues, want them to be able to take that image and turn it 
around, see it in three dimensions, not just see a flat image 
of it, so our task now is to get out ahead of the technology 
wave so that when we digitize, we truly have something that is 
engaging, people use and they can learn from.
    Mr. Dicks. Do you have a committee of people like from 
Microsoft or other great companies, Google, that advise you on 
where technology is going to be? Because it does change very 
rapidly.
    Mr. Clough. It is changing very rapidly, and we are going 
to set up a committee but we did last year something we called 
Smithsonian 2.0. We invited all the folks that were experts on 
the Web, there were 30 of them that came, mostly young people, 
who were experts on using the Web and took them back into our 
collections and we showed them all these wonderful things in 
the collections and we said how can get these things out, and I 
attended the read-out session. I heard 30 people tell me 30 
very interesting stories about what we should be thinking about 
doing to engage the young generation that do not read 
newspapers and use iPhones and so forth.
    Mr. Dicks. Do you have somebody that works for you that is 
an expert on these matters?
    Mr. Clough. Absolutely, and we have had two large-scale 
institutional efforts that have looked at Web access and looked 
at digitization. So we have an agreement, and as the Inspector 
General and Mark indicated, getting the Smithsonian to work as 
a whole on this, because we want to have the same standards. 
When the American people come to the Smithsonian, we do not 
want them to have to go through: What museum am I supposed to 
go to to get this? If you want to study Teddy Roosevelt, we 
have things about Teddy Roosevelt in six different museums. We 
do not want you to have to go through that. We want you to be 
able to just find it on the Web about Teddy Roosevelt and 
bingo, you get it all. We aggregate what comes out so 
everything we have in the Smithsonian about Teddy Roosevelt is 
in one place for you. And so Web access and making it easy for 
our visitors is a big challenge for us.
    Microsoft has been generous with us. They just gave us a 
very nice donation of equipment and a beautiful new technology 
called a surface technology that we will be using in our 
visitors center, and I visited Google, I visited Cisco. They 
both are very interested in working with the Smithsonian.

                      PRIVATE SECTOR CONTRIBUTIONS

    Mr. Simpson. Let me ask just one other question before we 
let Maurice ask some things. How much of your contributions do 
you get from the private sector to support the Smithsonian? How 
much of them are large contributions from major contributors 
and how much of them are small contributions from American 
citizens?
    Mr. Clough. Well, we get both kinds, and just recently, for 
example, the Gates Foundation gave us a $10 million grant for 
the African American History and Culture Museum. But we do have 
what we call subscribing memberships and we get a significant 
amount of funding, not nearly the big funding, but the nice 
thing about the subscribing memberships is that it is 
discretionary money. In other words, it allows us to make 
choices, and the Gates Foundation, wonderful gift, but they 
told us exactly what to do with it, whereas the subscribing 
memberships allow us to address problems and move around a 
little bit, so it may not be a big amount of money but it is 
money that allows us to move around a little bit and make 
decisions on our own.
    Mr. Dicks. Maurice.
    Mr. Hinchey. Thanks, Mr. Chairman.
    Mr. Clough. I should say 2,000 Americans make donations, 
small donations.
    Mr. Simpson. Do you find that number goes up or has gone up 
as we have digitized the collection and made it more widely 
known to the American citizens?
    Mr. Clough. We do not know quite the answer to that yet but 
we are tracking it because we are just getting very, very 
serious about this digitization and then making it available to 
people.
    Mr. Hinchey. Well, thank you very much. I am absolutely 
fascinated by what you have had to say and the way that you 
have answered the questions that have been put to you. It just 
generates more and more respect for you and what you are doing 
and a deep amount of appreciation. I very much appreciate your 
insight and the initiatives that you are taking based upon 
that, and I know that that will have a lot of positive effects 
on people all across this country. So all of this is very, very 
important and I am absolutely intrigued by those four things 
that you put forward with which you are focusing more than 50 
percent of the funding, and I think that so much of the 
operation that you are engaged in is very entertaining and very 
interesting but it is also very educational.
    Mr. Clough. Yes, it is.
    Mr. Hinchey. And the focus of attention in these four 
issues is going to I think accelerate that education even more 
and more, and I think they are critically important. Unlocking 
the mysteries of the universe, that is fascinating, and 
understanding and securing a biodiverse planet, all of these 
things are very critically important politically to this 
country right now too, and the interaction of this country with 
other countries around the world is critically important in so 
many ways and the understanding of the population of all that 
is American culture also is critically important. I think that 
what you are doing here is a great contribution to that.
    Mr. Clough. Thank you.
    Mr. Hinchey. I wonder if you might be interested in talking 
a little bit more about that, about any of those points and 
what you think is going to happen and how that is going to flow 
out.

                         EDUCATION AND SCIENCE

    Mr. Clough. Thank you. Well, first I would like to say 
thank you for your kind remarks, but I have got some folks with 
me here and there are another 5,000 at the Smithsonian who make 
the place work and they are wonderful people. They are 
passionate about what they do and so I am successful because 
they are successful, and my job is to make sure they can do 
their job.
    The grand challenges we think, it was an interesting 
process because we got lots of people together who had never 
met each other before in many cases. Again, as our IG 
indicated, we have 1,000 people that work in Cambridge, 
Massachusetts, on astrophysics and then we have 400 people 
working in Panama looking at tropical rainforest issues. Our 
tropical research institute has been there since the 
construction of the Panama Canal. They work diligently with the 
Panamanian government today. And we serve the needs of about 
2,000 visiting scholars who come to see us because they want to 
learn how we do biodiversity experimentation and observation. 
That has been spread around the world, incidentally, in 
something called the Smithsonian Institution Global Earth 
Observatory where we have relationships with 30 countries and 
we observe forests all over the world to look at issues like 
climate change and these kinds of challenges. So those kind of 
things are very important.
    But bringing these people together was a significant step 
because they could talk about what they are doing and begin to 
see how their efforts could be joined in some way, and as the 
chairman indicated, get more out of it than just the sum of the 
parts. It would be more than the sum of our parts. And so as we 
went through this process, it was as if you were focusing a 
microscope, and maybe that was not a good choice since the 
Inspector General said we might have lost one. But at any rate, 
it got sharper and sharper and sharper and so we ended up with 
these four areas and we are going to operationalize that by 
creating centers in each one of those areas that will bring 
together, aggregate the work of our units and our museums and 
our science centers towards these ends and get us to focus our 
funding. The centers will not be large administrative units, 
they will be very small but they will be facilitating units and 
so we think we are going to get private funding to help us get 
started with that. For example, we can take the work of our 
museums, like the National Portrait Gallery, the American Art 
Museum, the American History Museum, the National Postal 
Museum, the new Museum on African American History and Culture, 
the American Indian Museum, and aggregate those things to talk 
about what does it mean to be an American, which is becoming 
ever more important as our country becomes more diverse. What 
is the glue that makes us stick. And so there are these things 
like immigration. Many people, except for the first people, 
immigrated here and were looking for opportunity, and after our 
folks got here they had to struggle, so social justice, those 
kinds of things. And technology pervades America. What is it 
about us that makes us innovative? Understanding these things 
is very important. We think these are the exciting places to do 
business that we have not been able to get at before.

                             CLIMATE CHANGE

    Mr. Hinchey. Absolutely. I fully agree with you. I am 
really excited about what you are doing. Now, you mentioned the 
climate change and that is something that is critically 
important to us as well as to you and it is something that 
really has to be dealt with. I wonder if the interaction that 
you are talking about with regard to other countries in the 
context of climate change involves in any way such countries as 
China and Australia, for example.
    Mr. Clough. Yes, it does, particularly China. We have the 
Smithsonian Global Earth Observatory. We have four of those in 
China. We also have worked with them with our National Zoo 
through their panda initiative. We do work for them on habitat 
protection, and habitat obviously relates to climate change and 
the issues climate change will bring, which as you know will 
vary locally considerably, and so we are working closely with 
China. We work with Australia. We work with Brazil because they 
have rainforest issues that are different than those in Panama, 
different kinds of rainforest, and as you know, the earth is a 
wonderful, largely un-understood mechanism and so we hope we 
are contributing to better understanding of the big picture 
that drives the climate change and what its effects will be.
    Mr. Hinchey. Well, I think that contribution is absolutely 
essential and I hope that you continue to be very successful in 
that and the other things that you are doing. I appreciate it 
very much.
    Mr. Dicks. And some of the collections they have already 
help us understand the history of the planet and the changes 
that have occurred. There have been a lot of times in the past 
where we have had dramatic changes in climate. We have had a 
10,000-year period of time here where it has been relatively 
stable. That is not a given. And so, you know, there is a lot 
of history there and also looking into the future is a big 
thing.
    Mr. Hinchey. Absolutely.

              FORMER SMITHSONIAN BUISNESS VENTURES OFFICE

    Mr. Dicks. Let me ask a couple quick ones. The management 
problems that occurred several years ago at the former 
Smithsonian Business Ventures were some of the most widely 
publicized and most alarming. Can you tell us how the 
Smithsonian enterprises has changed the approaches your 
institution takes regarding managing moneymaking and corporate 
business arrangements?
    Mr. Clough. Yes. Well, they have been pulled more inside 
the Smithsonian so they are part of the team in many ways and 
so, for example, the Regents' oversight committee is now 
bringing the unit within the oversight of the Regents. They 
really did not have that oversight before. We have an entirely 
new staff there. All the leaders from the previous enterprise 
are gone and so we have new people there who I think are much 
more attuned to what we need to accomplish as an institution. 
So there is more oversight, there is more connection. Tom Ott, 
who is the CEO, if you will, of that unit sits in my cabinet so 
he is involved with all of the units of the Smithsonian so they 
are seen as part of the team as opposed to sort of someone 
outside there operating almost independently.
    Mr. Dicks. How significant is this? What kind of dollars 
are we talking about?
    Mr. Clough. Well, they generate in terms of income that 
comes to the institution that we can use, this past year they 
generated $27 million. It is a significant sum of money.

                ROLE OF REGENTS VERSUS ROLE OF SECRETARY

    Mr. Dicks. The GAO governance recommendations analysis 
focuses on the governance role of the regents. Can you help the 
Committee better understand how you see the role of the regents 
versus the role that you play at setting policy and managing 
the Institution?
    Mr. Clough. Well, I think it is one of those things where 
you have to strike a balance and I have to work closely with 
the chair and the committee chairs of the regents, and 
fortunately we have I think an excellent set of committed 
regents at this point, and as you know, Patty Stonesifer from 
your area, she is now the chair, and Patty and I talk once a 
week at least or more. In addition, they have nine committees 
now. They used to have five. They have nine committees and 
those committees meet regularly. So while the regents as a 
whole meet four times a year, all nine of those committees are 
going to meetings on another schedule to make sure business 
gets done. And then there is an executive committee and I meet 
monthly with the executive committee, and they stay in touch 
and we try to stay in sync on these issues. For example, they 
approve our goals and our measurable goals, like our new 
strategic plan, we will have a set of goals each year and a set 
of measurables and we will have a five-year set, and we have 
software called Share Point so we can enter in our progress on 
a very regular basis and we share that quarterly with the 
executive committee as to how we are doing to meet our goals, 
how we are spending our money, if we are ahead or behind, those 
kinds of issues. So it is a much more connected process today 
than it was in the past. And I tell people that the Smithsonian 
unfortunately had to learn this the hard way. Most nonprofits, 
most universities had taken almost all these measures into 
house and into hand some years back and the Smithsonian just 
had to get it done this way, which is not the right way and we 
still have work to do to make sure it has pervaded down to the 
Institution but we are doing well. Two thousand ten, 
incidentally, will allow us to add nine new people in the 
controls and oversight areas and particularly addressing what 
our Inspector General referred to as personal property 
management. We will have three new people there. We will have 
three new people who will look at the travel policies, which we 
think are now set well, and three new folks who will work in 
one other area in terms of accountability and oversight.

   RELATIONSHIP BETWEEN FEDERAL APPROPRIATIONS AND TRUST PORTION OF 
                              INSTITUTION

    Mr. Dicks. Because you have heard, Mr. Simpson brought it 
up, there continues to be a lack of understanding on the Hill 
and I think with the public at large on the relationship 
between the federal appropriations side of the Institution and 
the trust side. Can you please discuss how the trust works with 
the federal side and how the budgets and personnel work 
together and what additional things should this Committee know 
about this relationship?
    Mr. Clough. Well, our trust funding comes from a number of 
sources, and philanthropy would be one of those, our $127 
million. Now, that is not all cash that you spend. A lot of 
those gifts are in endowments and they mature over time. The 
Smithsonian Enterprise's $27 million comes into this trust 
fund. We do work for organizations like NASA and Department of 
Education where we offer our services to do things for them to 
get things done they cannot do. We operate, for example, two 
orbiting telescopes in space--the Chandra is one of those that 
we operate with NASA--and for them as a contractor and that 
kind of funding goes in what we call the trust budget so it is 
separate from appropriations basically, anything that is 
separate. The revenues from our stores and so forth are 
separate from it. Those are used in different ways to make the 
Institution operate. For example, if we do work with NASA, we 
have specified things that we have to do for NASA and for the 
payment for the services that we provide and so that is not 
funding that we can use at large at the Institution. So it is a 
little bit like a university, Mr. Chairman, in a way where they 
have a private funding side and then they have a state funding 
side where you have a state institution. I would say that for 
the federal government as I see its obligation from my 
perspective, one of those places would be again is where we 
provide a service, and that a service is typically not 
something that a donor or a business enterprise would support, 
and a good example of that is being open every day of the year 
but one and having 30 million visitors, and I think the federal 
government has an obligation to help us with support of our 
collections, support of the people that support the collections 
and maintenance of the buildings and revitalization of those 
buildings. Those would be examples of where I think the federal 
government should support the Smithsonian to do that kind of 
work.
    And then there are certain places where we will try to 
enhance. I like to tell people we are a leverage organization. 
When you provide us with dollars, where it is appropriate, and 
it has to stay on mission, we want to leverage those dollars to 
enhance the effect of those. And for example, all of our 
exhibits are supported by private funds even though the people 
that work in them may be federally funded but to actually hang 
those pictures on the wall or put those exhibits up and get the 
appropriate nomenclature and get it on the Web, that is all a 
private donation process.
    Mr. Dicks. It is.
    Mr. Clough. It is.
    Mr. Dicks. All right. Mr. Simpson.

                     MILITARY UNIFORMS COLLECTIONS

    Mr. Simpson. Just a couple other things. One is 
preservation of the collections. We have a Member of Congress 
who wanted to be here and give some opening testimony, not a 
member of this Sub-Committee. Chairman Dicks was graciously 
going to allow him to, do that but then he could not make it at 
the last minute but he is very interested in the military 
uniforms collection. As you know, some extra money went in to 
collections care because of his insistence that we address 
that. Could you tell me where that is and what is going to 
happen with that?
    Mr. Clough. Well, I had the pleasant opportunity last night 
to meet him and his wife at a Christmas party, a holiday party, 
and we had a little discussion. Obviously he is very interested 
in military history of this country as we all should be and the 
Smithsonian clearly needs to represent that part of our history 
well. He did I think suggest that those funds come for the 
military collection. They do need help and we are grateful but 
this committee I think wisely said let us think of it more 
broadly and so you provided us with $2 million more for 
collections care, part of which will be used certainly to 
address the issues associated with the military uniform 
collection. So it is going to good use and it is taking care of 
that particular problem as well as others.
    Mr. Simpson. I also appreciate the fact that you recognized 
the rest of your staff and the people who do the work at the 
Smithsonian. As anyone knows, whether you are a Member of 
Congress or Secretary of the Smithsonian, you are only as good 
as the people behind you and you do have some great people that 
work for you. They did a great job in keeping us, the 
Committee, informed and the staff and so forth. So we 
appreciate that and the people that work for you and the job 
that they do.
    Mr. Clough. Thank you. Well, I am very, very lucky. I can 
tell you, one of the things I have learned is how passionate 
the people are and how hardworking they are and how much they 
love their jobs.
    Mr. Dicks. Mr. Hinchey.

                    SMITHSONIAN AND GAO INTERACTION

    Mr. Hinchey. I do not think I have any more questions, but 
maybe one about GAO and how the interaction is going, how 
positive it is and how effective it is. Perhaps you want to say 
something about that.
    Mr. Clough. I think that Mark characterized that correctly. 
I think obviously we need to learn as an organization and we 
need to have outside entities and others tell us in areas where 
we may have become too ingrained to actually see where there is 
a problem. I think evaluating progress is a good thing where we 
can get a sort of report card. I am able to tell you we put in 
policies and procedures and we are doing these things but are 
we actually doing them? That is another question, and I think 
we need to be appropriately evaluated on that. We need to be 
open and accountable and so we welcome their participation with 
us.
    Mr. Hinchey. Well, I thank you very much.
    Mr. Chairman, thank you for this hearing. I very much 
appreciate your being here, Mr. Secretary.
    Mr. Clough. Thank you. My pleasure.
    Mr. Dicks. Well, again, thank you for the job you are 
doing. I think the difference in approach and attitude is very 
obvious and we are just glad the Smithsonian is in good hands 
and that you are enjoying this job and out there trying to make 
it a better place. We are going to support you in that.
    Mr. Clough. Thank you very much, and we certainly 
appreciate the support that you have given us. The budget was a 
very strong budget in fiscal year 2010. We could not be more 
grateful. I have an old friend that used to say--the fellow who 
is known as Father of Silicon Valley--give me a little more 
than my fair share and you will never regret it.
    Mr. Dicks. We will remember that.
  GAO Responses To Follow-Up Questions From December 10, 2009, Hearing

                     Questions from Chairman Dicks
              governance and management: general questions
1.  Mr. Goldstein, we appreciate the GAO work on Smithsonian 
management. As you know, this Committee was very concerned about the 
management lapses of the previous Smithsonian leadership. We acted to 
get their attention and see that reforms would be implemented. What do 
you think were some of the largest problems that resulted from the 
governance lapses the Smithsonian experienced?

GAO Response: As we pointed out in prior work (GAO-08-632), both the 
Smithsonian's Governance Committee and the Independent Review Committee 
(IRC) studies of the Smithsonian's governance published in June 2007 
highlighted some of the largest problems resulting from the governance 
lapses the Smithsonian experienced:

          Inadequate policies in place and insufficient 
        oversight of and knowledge among regents concerning executive 
        compensation, trust and federal pay systems, leave for senior 
        executives, conflicts of interest regarding service on for-
        profit boards, travel expenses, event expenses, activities of 
        Smithsonian Business Ventures, and internal financial controls;
          A lack of critical information and relationships 
        necessary to bring forward important issues and concerns and to 
        support vigorous deliberation and well-reasoned decision making 
        on the part of the Board of Regents (Board)--for example, 
        Smithsonian senior management lacking access to the Board, too 
        much control within the Secretary's office regarding the 
        information available to the Board and the Board's agenda, and 
        a lack of transparency and connection to stakeholders within 
        the Smithsonian (such as museum directors and advisory boards) 
        and to the public at large; and
          IRC's finding that there was insufficient action on 
        the part of the Board to demand critical information needed to 
        conduct adequate oversight of the Smithsonian. This problem was 
        linked to a number of issues, such as unclear roles and 
        expectations for citizen, congressional, and ex-officio 
        regents; a lack of engagement and participation by some 
        regents; unclear responsibilities of Board committees and a 
        lack of certain critical committees such as a fundraising 
        committee; a lack of diversity of skills and expertise needed 
        to conduct adequate oversight; inflexible size and structure of 
        the Board; and a lack of accountability of regents with regard 
        to their performance and to fulfilling their fiduciary duties.

2.  Mr. Goldstein, you indicate that the Smithsonian has made some 
progress, but never-the-less, it still has a number of management 
challenges that have persisted over many years. What do you think are 
the top two or three management and governance problems which have 
persisted?

GAO Response: As we stated in response to the previous question, most 
of the governance problems faced by the Smithsonian fell into three 
broad categories: Inadequate policies and procedures on such issues as 
compensation and travel, expense reimbursement; a lack of direct 
communication between the Board of Regents and stakeholders such as 
senior management and the advisory boards to ensure that the Board of 
Regents received information critical to effective governance; and 
issues related to the regents' roles and responsibilities and the Board 
of Regents' structure. In our recent work on the Smithsonian's 
implementation of governance reforms (GAO-10-190R), we assessed the 
extent to which the Smithsonian implemented governance reforms 
recommended by its Governance Committee and GAO related to these 
issues, but it is too to know the extent to which these efforts have 
improved the Smithsonian's governance.

3.  Mr. Goldstein, of the governance reforms which the Smithsonian has 
implemented, which aspects do you think are the most important at 
helping ensure sound, overall institution management?

GAO Response: It is our hope that all of the reforms that the 
Smithsonian has implemented will play an important role in improving 
the governance and management of the Smithsonian. The Smithsonian has 
implemented 39 of the 42 reforms recommended by its Governance 
Committee, including 8 reforms related to executive and ethics reforms, 
1 reform related to executive travel policies, 3 reforms related to 
policies on broader Smithsonian operations, 8 reforms related to the 
access of senior officials to the Board and level of information 
available to the Board, 5 related to transparency, 2 related to 
communication and stakeholder relationships, 5 related to roles and 
responsibilities of the Board or regents, 6 related to the Board's 
structure and composition, and 1 related to developing a regents' 
assessment process. The Smithsonian also implemented GAO's 
recommendation to evaluate what actions it can take in the event of 
persistent neglect of duties by a regent.

4.  Mr. Goldstein, of the governance reforms which still are not fully 
implemented, which do you think are the most important and urgent for 
the Institution to work on?

GAO Response: While we are not in a position to prioritize the 
importance of the governance reforms that the Smithsonian has not yet 
fully implemented, we would point out that of the 46 reforms and 
recommendations we examined, 6 remain unimplemented. Specifically, of 
42 governance reforms recommended by the Smithsonian Board of Regents 
Governance Committee, 3 have not yet been implemented; of 4 GAO 
recommendations, 3 have not yet been implemented. We think that it is 
important that the Smithsonian continue to work on fully implementing 
all 6 of these unimplemented reforms and recommendations. These reforms 
and recommendations are related to the Smithsonian's contracting 
policy, a comprehensive review of financial reporting and internal 
controls, enhancing the role of advisory boards (one Governance 
Committee reform and a related GAO recommendation), a policy on the use 
of nonregents on Board of Regents committees, and a comprehensive 
evaluation of the Board of Regents' reforms.

5.  Mr. Goldstein, which of the incomplete reforms and GAO 
recommendations do you think this subcommittee should address through 
the appropriations process?

GAO Response: Although we have not assessed the Smithsonian's funding 
needs related to implementing governance reforms and recommendations, 
our prior finding that as of September 2007, the Smithsonian's cost 
estimate for facilities projects had increased to $2.5 billion through 
fiscal year 2013 clearly has ongoing funding implications. In addition, 
we reported that both the Smithsonian Chief Financial Officer (CFO) and 
members of the Board of Regents Audit and Review Committee expressed a 
need for increased staffing and other resources to effectively execute 
the Smithsonian's plan to improve internal controls. According to 
Smithsonian officials, the Smithsonian received funding in fiscal years 
2009 and 2010 to improve internal controls. We did not evaluate the 
Smithsonian's need for resources in this area.

6.  Mr. Goldstein, as you know, this Committee has had concerns about 
the Smithsonian's ability to prioritize among its many different 
scientific, cultural, educational, and visitor services. Do you get a 
sense that there is capability at the Institution's headquarters to 
prioritize among the many competing needs?

GAO Response: We have not assessed the Smithsonian's ability to 
prioritize among its different mission-related services and needs.

7.  Mr. Goldstein, your testimony repeatedly deals with the different 
roles that the Regents and the Smithsonian's Secretary play at 
providing policy and management for the Institution. What do you think 
are some of the key aspects that differentiate the Regents role from 
that of the Secretary's office and the various museum leaders?

GAO Response: As we state in our recently issued report (GAO-10-190R), 
according to Smithsonian officials, generally, the Board of Regents is 
responsible for setting Smithsonian policies and the Smithsonian 
Secretary is responsible for implementing those policies.

8.  While the Smithsonian seems to have turned the corner on some 
management issues, it still is engaged in several large expansions. For 
instance, the Congressionally mandated National Museum for African 
American History and Culture will be a major new facility that will be 
placed right near the Washington Monument in a critical Mall location. 
Given your examination of the Smithsonian's management, do you think 
the Institution is able to provide the careful oversight of such a 
major and critical capital project?

GAO Response: We have not assessed the Smithsonian's ability to provide 
effective oversight of major capital projects.
         facilities condition and deferred maintenance backlog
9.  Mr. Goldstein, I know that the GAO has not looked carefully at 
Smithsonian facilities for the past two years, but I want to get a 
sense of your impression of how they are managing the facilities 
funding they do get. Do you think the Smithsonian now has a decent, 
long-range plan for its many varied facilities?

GAO Response: We have not assessed the Smithsonian's long-range capital 
plan or facilities management since 2007. However, in 2007, we found 
that the Smithsonian's capital planning process incorporated many 
capital planning principles as defined by our prior work and the Office 
of Management and Budget. We also found that the Smithsonian's capital 
planning decision-making process was guided by a comprehensive 
assessment of facilities' conditions and needs and the identification 
of performance gaps between current and needed capabilities. We found 
that the Smithsonian's capital planning efforts included a review and 
approval framework with established criteria for selecting capital 
investments and a long-term capital investment plan. Furthermore, we 
found that each year, the central Smithsonian facilities group worked 
with the museums and other facilities groups to develop an annual list 
of new and previously submitted projects, which were prioritized for 
inclusion in the annual 5-year capital plan using a prioritization 
matrix.

10.  You have indicated that there is a maintenance backlog of well 
over $2 billion. Can you give the Committee a sense of where the 
largest portions of this backlog exist?

GAO Response: Based on work we did for our 2007 report (GAO-07-1127), 
the Smithsonian's then-estimate of $2.5 billion in facilities projects 
for fiscal years 2005 through 2013--which included revitalization, 
construction, and maintenance projects--included several main 
categories of work. The Smithsonian's estimated revitalization and new 
construction costs were driven in part by the need to modernize or add 
systems, such as fire detection and alarm and security systems, and to 
comply with newer life safety code requirements, such as those for 
handicapped accessibility to buildings and restrooms. Maintenance costs 
included staff costs, minor repair and maintenance projects, and other 
contracts, supplies, materials, and equipment for Smithsonian's 
maintenance program. In addition, we found that the Smithsonian's cost 
estimate for facilities projects through fiscal year 2013 had increased 
from about $2.3 billion in April 2005 to about $2.5 billion as of March 
2007, and that this increase was due to several factors, according to 
Smithsonian officials. For example, Smithsonian officials said that 
major increases had occurred in projects for the National Zoo and the 
Museum of American History because the two facilities had recently 
developed master plans that identified additional requirements. In 
addition, according to Smithsonian officials, estimates for 
antiterrorism projects had increased due to adjustments for higher 
costs for security-related projects at the Air and Space Museum. 
According to Smithsonian officials, the increase also reflected the 
effect of delaying corrective work in terms of additional damage and 
escalation in construction costs. We have not done the work to update 
this information since 2007.

11.  Of the large facilities maintenance backlog, how much of it is 
urgent for protecting safety and for protecting the collections? Are 
there still significant security concerns?

GAO Response: We have not done sufficient work to answer this question.

12.  Previous reviews of the conditions of the Smithsonian's priceless 
collections indicated that there are some serious lapses in the ability 
of the Smithsonian to protect these items for the long haul. Do you 
think there are particular facilities which this Committee should be 
particularly concerned about?

GAO Response: We have not done sufficient work to answer this question.
           Chairman Dicks Questions for the Inspector General
                           management control
1.  Ms. Ryan, I want to thank you for your work at the Smithsonian, 
which I think has been important at identifying previous governance 
lapses at the Smithsonian, and offering constructive recommendations 
for change. Your testimony stresses the importance of management 
control. The Smithsonian, with 19 separate museums, a major zoo, and 
numerous other scientific and cultural responsibilities, is quite a 
diverse beast. This is further complicated by the hybrid nature of its 
Federal and its Trust funding and management structure. How do you 
think the Institution's headquarters should increase its control while 
not overly interfering with the diverse missions of the various 
museums?

IG Response: Sustaining a sense of freedom and entrepreneurship is 
essential to a creative institution like the Smithsonian. Vigorous 
management control need not threaten these values. The Smithsonian 
should strive to have systems of management control that emphasize 
accountability at all levels; clear policy guidance that is kept 
current; meaningful training; and quality assurance efforts to test 
effectiveness of the controls. The Institution should further 
standardize major administrative processes across the board. Currently, 
some individuals who handle these transactions do so only part-time and 
their expertise, training and supervision are minimal. The Institution 
needs to provide better training and resources for administrative staff 
in budgeting, accounting, asset and inventory management, payroll, 
travel, and similar areas. Taking these steps will not threaten the 
diverse missions of the Institution but rather will provide more 
accurate and timely information that in turn will lead to better 
decision-making.

2.  Ms. Ryan, given your concern for increased management control, do 
you think this is an issue for the Regents to deal with, or is it 
primarily an issue for the Secretary and individual museum leaders?

IG Response: This responsibility lies with everyone at the Institution. 
The Secretary must lead, setting the tone at the top, communicating 
expectations, and holding everyone at the Smithsonian accountable. The 
Regents also have a role by setting overall policy and rigorously 
scrutinizing management decisions. Executives and unit heads should 
adhere to and enforce controls. And all employees should understand and 
embrace the controls.

3.  Ms. Ryan, one of your major themes is the need for better financial 
discipline. Do you think the Institution's headquarters and leadership 
has the ability and the interest to implement and use financial systems 
in annual and every day decision making?

IG Response: Smithsonian leaders have expressed a strong commitment to 
improving financial systems to enhance day-to-day operations. In our 
work on such topics as project management, inventory control, and 
budgeting and accounting we have found that managers uniformly seek 
more, and more accurate and timely, information. However, they do not 
always use ERP (the Institution's financial system) as fully as they 
could. And we continue to be concerned about the slow implementation of 
the final modules of the ERP, which will be essential to the success of 
mission-critical initiatives. We are hopeful that a new project costing 
system, for example, will provide reliable, timely information to 
better manage capital and other projects. We are also hopeful that the 
Institution will use the financial system in implementing the goals of 
its new strategic plan.

4.  Ms. Ryan, there continues to be a bit of confusion among the 
public, and here on the Hill, of the different roles of the Federal 
appropriations, and the Trust funding at the Smithsonian. I think this 
confusion existed in the Smithsonian castle in the past as well, 
leading to the major governance lapses of the previous Secretary. Do 
you think the Smithsonian leadership and employees have a clear picture 
of how this hybrid organization should operate?

IG Response: I believe the new strategic plan, which represents not 
only the vision of the Secretary but of multiple stakeholders 
throughout the Institution, is a significant step towards redefining a 
unified Smithsonian.

5.  Do you think the Smithsonian leadership should be more transparent 
with the Hill and the public on how the Federal and the trust areas of 
the Institution interact?

IG Response: More transparency is always better. In addition to 
providing more information to Congress, I believe the Institution could 
do a better job of explaining the various funding sources and how they 
are used in supporting the Institution's mission.

6.  Ms. Ryan, you mentioned that the Institution needs to have careful 
review and control of its major capital projects. Given the continuing 
expansion of the Smithsonian, do you think the headquarters has the 
ability to provide sufficient oversight of these capital projects?

IG Response: Our recent audit work has shown that the Institution has 
significantly improved oversight of capital projects. The Smithsonian 
can further step up its oversight by implementing the improvements it 
agreed to in response to our recent report on funding for capital 
projects. Clarification of authority and accountability over funding 
decisions, expanded training for financial decision-makers and 
accountants, revised and updated financial policies, and enhanced 
quality assurance are essential. Finally, an integrated financial 
system (such as the yet-to-be implemented costing module in the ERP) 
will let financial and accounting staff focus on oversight, not merely 
on inputting data.

7.  Ms. Ryan, another theme is your concern for how the Smithsonian 
uses its funds. You discussed a situation in which dispersed 
responsibility for how funds are used means that there is no 
accountability for errors. Do you think this situation is due to a 
leadership lapse or from insufficient or ineffective guidance from the 
budget division?

IG Response: In part, this situation stems from insufficient policy and 
guidance. Policy and guidance should express the values and 
expectations of the organization. The preference for loosely worded 
financial policy, ambiguous in its intent, contributed to dispersed 
responsibility for funding decisions and the resulting accounting 
errors. In addition, central office management did not take 
responsibility for overseeing the units, and the units, in turn, resist 
any centralized oversight. Improved guidance will tighten control of 
funds and accounting practices. Both central leadership and unit 
management must agree on the need for greater accountability and 
oversight.

8.  Ms. Ryan, a continuing theme I find when looking at the Smithsonian 
is the need for central oversight. You mentioned that there are various 
management inconsistencies that result from decentralization. What do 
you think are the main obstacles for the Institution to providing 
better oversight and increased accountability, while still allowing and 
encouraging the diverse missions to be accomplished?

IG Response: One big obstacle, as I mentioned in my testimony, is the 
resistance by the various units to central controls. Another important 
obstacle thwarting improved oversight and increased accountability is 
the lack of clearly defined authority for ensuring proper 
implementation of management control. In our work, we have found that 
key functional leaders either lack the authority to enforce procedures 
or are reluctant to do so. Similarly, we have found examples of 
obsolete policies that assigned responsibility for management control 
functions to outdated positions. The Smithsonian is, however, 
addressing these issues. In particular, the Institution is hiring a 
consultant to help examine the existing organizational and leadership 
structure. The study should be completed within the next year. Our 
office will monitor any changes that result, and we hope they will 
improve accountability and oversight while also promoting the core 
missions of the Smithsonian. And we will continue to press for timely 
policies, training, and communication of the authority of and 
expectations for all employees.
                         cross-unit initiatives
9.  Ms. Ryan, you have stressed the need for more cross-unit 
initiatives for the Institution to enhance management and control of 
its many autonomous units. What specific kinds of cross-unit policies, 
practices or programs do you think are most urgently needed? What role 
do you think this Committee should play at encouraging and enhancing 
such cross-unit approaches?

IG Response: Management controls over such functions as use of funds, 
property management, accounting, information technology and information 
security, and physical security are common to all Smithsonian units. A 
unified approach to such functions will serve the goals of the 
Institution. Consistent implementation of controls can only be realized 
through a firm commitment to do so by the Secretary and Under 
Secretaries, in cooperation with the units, through policies and other 
communications that set forth clear expectations, and through 
enforcement of the rules. The Committee could help advance such 
initiatives through continued oversight and through continued budget 
support for stronger pan-institutional administration, training, and 
information technology initiatives.

10.  Ms. Ryan, have you had a chance to look at the Institution's 
Information Technology applications? It seems to me that IT needs are 
more and more important these days, and that common, cross-unit IT 
structures can help force inter-unit coordination and compatibility. 
And, cross-unit IT systems are needed for better central management 
controls, as well as for efficient use of funds. What is going on with 
IT at the Smithsonian?

IG Response: Under the Federal Information Security Management Act 
(FISMA), which requires us to test controls that safeguard information 
and systems, we annually evaluate the effectiveness of selected 
Institution information security policies, procedures, and practices. 
There are several important Institution-wide IT systems that help 
support the missions, such as for timekeeping, travel, and certain 
financial functions under the ERP system. Unfortunately, as I noted in 
my written testimony, not all modules of the ERP have been implemented, 
and they will not be for a few more years. More needs to be done. For 
example, this is another area where authority is dispersed; the Chief 
Information Officer may lack the authority necessary to improve intra-
unit cooperation. I hope that the study I mention in my answer to 
question 8 will also help address this issue.
            management controls over care of the collections
11.  Ms. Ryan, your testimony mentions that there have been concerns 
from your office and from the Smithsonian's Office of Policy and 
Analysis that the collections may be at risk of theft or deterioration. 
My subcommittee provided a small funding bump-up in the last 
appropriations bill for collections management. Do you think that the 
Smithsonian has a decent handle on the condition of its collections and 
the needs for its protection and use?

IG Response: The Smithsonian does seem to understand the challenges of 
properly maintaining its collections. Unfortunately, the condition of 
the collections is an enduring problem: it stems from their vastness, 
age, and continual growth. It also results from the long-term and 
persistent decline in resources available for collections stewardship, 
caused to a great degree by the base erosion in funding that comes from 
the need to address mandated increases in other areas.

The Smithsonian recently began a pan-Institutional survey of 
collections stewardship, which will serve as a critical tool to assess 
the condition of the collections. Our preliminary work on the state of 
the collections at the National Museum of American History indicates 
that NMAH officials are using the tool to profile collection conditions 
candidly and comprehensively. We will continue to study the refinement 
of this assessment tool at NMAH and at other collecting units of the 
Smithsonian and plant to focus more of our audit work on stewardship of 
the collections. We will keep the Committee apprised of our findings.

12.  Given the large backlog in deferred maintenance at the 
Smithsonian, do you think the Institution has the ability to prioritize 
among the many varied demands and the very different kinds of 
collections and research needs?

IG Response: The Office of Facilities Engineering and Operations does 
produce a comprehensive, prioritized list of maintenance needs; 
problems arise when breakdowns or other events occur that could 
compromise safety (of the collections, staff, or visitors) that demand 
a reordering of priorities. In terms of maintenance versus programmatic 
needs, I think the Institution's new strategic plan would be the best 
gauge against which to measure the Institution's progress in addressing 
the perennial balancing it must do between the core missions (e.g., 
research and exhibits) and those aspects that support the core mission 
(infrastructure and administration).

13.  Ms. Ryan, you have had a chance to visit most of the Smithsonian's 
museums and research facilities. Can you give the Committee a sense for 
where you think the collections managers have done a good job, and 
where there are larger challenges?

Response: In our recent audit work at the National Air and Space Museum 
(NASM), while we found some issues regarding security devices, we also 
determined that the collections managers were able to promptly locate 
all items we sought and overall maintain good stewardship of the NASM 
collections. We have not done extensive audit work recently on other 
collections. However, it is clear that with the bigger ones, such as at 
the National Museum of Natural History and the National Museum of 
American History--where we recently started an audit of collections 
stewardship--there are numerous challenges. In addition to incomplete 
inventory records and accession backlogs, there are serious concerns 
about storage space, storage conditions, and environmental hazards 
ranging from asbestos contamination to insufficient humidity controls. 
These problems are long-standing and cumulative and require a 
significant investment of resources to address. As I noted in my answer 
to question 11, the Institution is taking steps to address them, such 
as through the development of the collections assessment tool, and your 
committee's generous $2 million addition to the FY 2010 budget for 
collections will also help. And as I mentioned earlier, we are 
increasingly focusing our audit work on collections stewardship. We 
will keep you informed our findings.

14.  Your report indicated that $12 million in personal property cannot 
be accounted for. Does this mean these items were pilfered? Do you know 
what the amount of non-accountable property is per year? How does this 
compare with other federal agencies and institutions?

IG Response: In our audit of personal property accountability, we 
deliberately chose to use the word ``missing'' to describe the personal 
property that the Institution cannot account for because we do not 
know, and the Institution does not know, what happened to the items. 
They may have been misplaced, they may have been discarded, they may 
have been pilfered--there is no way to know because until recently, the 
Institution had such poor recordkeeping and little accountability. I 
would also note that there is a significant amount of what is called 
``nonaccountable'' personal property, such as office and maintenance 
supplies, which we did not cover in our audit because we considered 
them relatively low risk and low cost. Accordingly, we did not (and 
could not) determine the overall value of missing property at the 
Smithsonian.

In the last couple of years, the value of personal property the 
Institution has found missing has declined significantly, to about 1 
percent ($1.1 million) of assets inventoried, compared to a 2006 value 
of about 5 percent ($7.2 million) of assets inventoried. (These 
inventories covered one-third of the Institution.) As for other federal 
entities, public reports indicate the Indian Health Services identified 
a minimum of $15.8 million in lost or stolen property from 2004-2007; 
the Department of Veterans Affairs was missing over $26 million in IT 
equipment in 2008; and NASA reported to GAO in 2007 that it had lost 
over $94 million in equipment over the previous 10 years. Obviously, 
the Smithsonian is not the only entity facing this challenge; GAO cites 
property acquisition and management in its 2009 High Risk List for the 
federal government.
     Chairman Dicks Additional Questions for Secretary Wayne Clough
              governance and management: general questions
1.  Dr. Clough, I very much appreciate you coming today. As we 
discussed previously, you know that this Committee had major problems 
with the governance and ethical lapses of the previous Secretary. I 
understand that the Institution has been diligent at implementing many 
of the reforms recommended by the Independent Review Committee and the 
Regents Governance Committee. Of the reforms that you have implemented, 
which do you think are the most important to enhance the management of 
the Institution?

Response: The increased attention that the Institution has paid to 
governance and accountability in the last few years has had a number of 
positive effects. We believe that it has reassured the American people 
that their resources are being used wisely and in a way that is in 
keeping with our status as a public trust. Secondly, it has provided us 
an opportunity to revisit a number of policies and practices and ensure 
that they reflect best practices in the federal and nonprofit sectors. 
Overall, the most important reform probably has been that we are now 
more consistent in providing a strong tone of accountability at the 
top, in explaining the rationale behind new regulations and policies, 
and in continually emphasizing the importance of individual 
responsibility for carrying out the Institution's mission in a fiscally 
prudent and ethical manner.

2.  The GAO indicates that some reforms have not been implemented. I am 
curious about your response to the GAO concern that the Board of 
Regents needs to have two-way communication with the various advisory 
boards. The GAO implies that the Regents may lack sufficient 
understanding of particular museums to govern effectively. Do you agree 
that the Regents may have insufficient knowledge of museums? What is 
your office doing to enhance the Regents abilities?

Response: As part of their governance reforms, the Regents look to the 
over 30 advisory boards to help them learn about operations at the 
museum or research center level. Over the past two years, the Regents 
have implemented a variety of methods to promote communications with 
the advisory boards and strengthen their partnership with them. Those 
steps, we believe, have greatly enhanced the Regents' understanding of 
the issues facing individual units. The Regents and I recognize, 
however, that good governance requires us to assess our progress 
regularly and reset goals to ensure we employ the best practices in 
non-profit governance. This includes continually improving 
communications between the Regents and the advisory boards. I would 
also point out that a number of the Regents serve on some of these 
advisory boards and a number of advisory board members have been added 
to Regents committees as well.

In light of the guidance provided by GAO in its December 10, 2009 
report, my office will support efforts by the Regents to codify ways to 
further facilitate two-way communications between the Regents and 
advisory board chairs. Patty Stonesifer, the Chair of the Board of 
Regents, already sends quarterly reports to the advisory board chairs 
and meets personally with many of them to discuss issues facing their 
respective museums or research centers. Ms. Stonesifer and I will 
continue to hold an annual meeting with the chairs; next April, our 
agenda will focus on the launch of the national campaign.

The Regents employ many other tools to learn about the needs of the 
various Smithsonian museums, research centers and programs. Ms. 
Stonesifer meets routinely with my direct reports museum directors and 
other senior staff. The agenda for each Regents' meeting includes the 
opportunity for the Under Secretaries to present information on new 
acquisitions, programs and discoveries. The Regents' orientation manual 
was recently revised and now includes extensive information on all 
aspects of our operations. My office is keenly aware, however, that our 
role is to promote opportunities for independent and unfiltered 
communication between the Regents and the advisory board members, and 
not manage the content of that dialogue.

3.  I am concerned that the GAO has indicated that the reform 
recommendation concerning contracting policy has not been implemented 
yet. Isn't it very important for you to have clear, written agency-
specific policies and procedures that all of your museums and program 
must follow?

Response: It is very important to us that written uniform contracting 
policies and procedures are available and accessible to all SI 
employees. Pursuant to the Regents' Governance Recommendation 25, the 
SI wide contracting policy, Smithsonian Directive 314 (SD 314), was 
issued in June 2008. During the development of SD 314 it was determined 
that the most effective manner to implement the policies cited therein 
would be through an accompanying manual to address the various types of 
procurement and contracting activity. Work to establish the Procurement 
and Contracting Procedures Manual (PCPM) involves extensive SI 
stakeholder input and contracted assistance to ensure current processes 
and industry best practices are reviewed. All existing and examined 
practices pertinent to SI contracting will be incorporated into one or 
more of the seven parts of the PCPM, each addressing particular types 
of SI contracting activities or management oversight of SI contracting. 
The time it is taking us to develop the PCPM is not unusual considering 
the breadth of information we need to cover for it to be helpful to SI 
staff. Throughout the development of the PCPM SI staff have continued 
to have access to advice and existing or newly established guidance 
relevant to their procurement and contracting activities. All parts of 
the PCPM are on track to be completed during calendar year 2010.

4.  The management problems that occurred several years ago at the 
former Smithsonian Business Ventures were some of the most widely 
publicized and most alarming. Can you tell us how the Smithsonian 
Enterprises has changed the approaches your Institution takes regarding 
managing money-making and corporate business arrangements?

Response: Since the issuance of the Task Force report on Smithsonian 
Business Ventures (now Smithsonian Enterprises) in January of 2008, we 
undertook a significant and comprehensive restructuring of this 
business unit and we now have an entirely new administrative team. The 
results of this restructuring have been extremely positive. The changes 
to Smithsonian Enterprises (SE) included recruiting new leadership in 
the key positions of the unit, focusing on transparency and 
accountability, and realigning of emphasis not only on revenue-
generation, but also support of the mission of the Institution as well. 
Key to the success that the unit has enjoyed for the past two years 
have been the positive strides made in governance issues, transparency 
and communication.

Governance:

          All open Inspector General comments specific to 
        Smithsonian Enterprises were addressed and closed as of March 
        31, 2009. Open Audit comments are reviewed with the Regents' 
        Audit & Review Committee.
          Quarterly compliance reviews of SE travel and 
        purchase card activity have been implemented to ensure these 
        areas are controlled and comply with Smithsonian policy. SE's 
        compliance reports are issued to the Smithsonian Institution's 
        CFO.
          A full scope audit by an independent audit firm 
        (KPMG) has been in place for Smithsonian Enterprises since 
        fiscal year 2008. No material weaknesses or deficiencies were 
        identified in fiscal year 2008. Currently a KPMG audit of SE is 
        in process for fiscal year 2009. SE's audit findings from KPMG 
        are reviewed directly with the Regents' Audit & Review 
        Committee.
          As part of the Regents' Governance recommendation 
        #23, an assessment was conducted of SE's internal control 
        environment by Booz Allen and senior SI representatives 
        resulting in a ``green'' or low risk scoring.
          As part of Regents' Governance recommendation #20, a 
        complete review of all 112 existing SI policies was performed 
        by a joint SE and SI team with the goal of determining SE's 
        compliance. The determination was that SE was in compliance 
        with all but three existing policies relating to existing 
        financial systems previously approved and in use by SE. An 
        exception was subsequently approved by the Smithsonian 
        Secretary for each of these policies. Additionally, SE's 
        separately approved travel policy was retired and SE adopted 
        the Smithsonian's travel policy.
          As part of Regents' Governance recommendation #25, SE 
        executives are participating on a pan-Institutional team 
        currently drafting procedures specific to Revenue Generating 
        Contract procedures.
          As part of Regents' Governance recommendation #24, SE 
        has fully synchronized and is in compliance with the 
        Institution's Unified Compensation policy. SE's senior employee 
        compensation is submitted directly to the Smithsonian's Office 
        of Human Resources which reviews it directly with the Regents' 
        Compensation Committee.
          As part of Regents' Governance recommendation #22, 
        SE's annual budget processes are now synchronized with the 
        Smithsonian's budget planning schedule for the Regents. The SE 
        President presents the annual budget to the Regents' Finance 
        Committee for review and approval.

Communication and Transparency:

          Senior SI representatives attend monthly operating 
        reviews for each SE division.
          The SE CFO holds a monthly meeting with the SI CFO to 
        review SE financial performance, budgets and other relevant 
        controllership or compliance items.
          Quarterly financial reviews are held between SE, SI 
        and museum personnel on the health of individual museum retail 
        operations.
          Quarterly meetings with SE senior leadership and the 
        Institution's Strategic Advisory Committee (SAC) are held to 
        review strategic and tactical initiatives. The SAC is comprised 
        of senior leadership across several SI disciplines and serves 
        as a sounding board for SE management.
          An annual review with senior Smithsonian leadership 
        and museum directors is held to benchmark SE performance and 
        cost structures and review the new SE annual budget and 
        financial performance.
          The president of SE reports directly to the 
        Secretary, not to an independent board of directors as was 
        previously done. As such, the president meets with the 
        Secretary and his cabinet weekly, as well as other regularly 
        scheduled update meetings with the Secretary.

In summary, significant reforms have been implemented to improve 
governance of Smithsonian Enterprises' operations and business 
activities.
                       regents role in governance
5.  The GAO governance recommendation analysis focuses on the 
governance role of the Regents. Can you help the Committee better 
understand how you see the role of the Regents versus the role that you 
play at setting policy and managing the Institution?

Response: Over the past two years and guided by the best practices in 
non-profit governance, the relationship between the Regents and 
Secretary has evolved into a strong constructive partnership. The 
Regents, pursuant to the statutes establishing the Smithsonian, possess 
the legal responsibility for the governance of the Institution--
organizational oversight and policy setting, while delegating to the 
Secretary responsibility for managing operations and resources.

The benefits of this constructive partnership were particularly evident 
in the development of the Smithsonian's strategic plan. The Regents 
actively provided guidance on (and eventually approved) the plan's 
directions and then delegated to the Secretary the primary 
responsibility for its successful implementation. The Secretary is 
currently developing metrics to measure the progress of the plan 
against its goals and the Regents are committed to supporting the 
Smithsonian's efforts to ensure its success.

Another example of the partnership in action is the development of the 
Smithsonian's contracting policy. The Regents adopted a governance 
reform (#25) requiring that Smithsonian contracting practices promote 
integrity, fairness, and openness and delegated to the Secretary 
responsibility for the creation of a policy that reflected their 
guidance. As the GAO noted, the new contracting policy reflects the 
Regents' direction and we have made significant progress in completing 
handbooks and other materials that will complete the implementation of 
the policy.

6.  The one GAO-generated recommendation that the Institution has not 
implemented deals with a report to the Congress and to the OMB 
concerning an overall funding strategy for the Institution. Why has 
that not happened? What are you planning to do in this regard?

Response: In 2007 GAO recommended that the Smithsonian comprehensively 
analyze funding options and report to Congress and OMB on a funding 
strategy to meet the needs of its revitalization, construction and 
maintenance projects. Since then, we have identified and reviewed 
several mechanisms to increase private funding, including a gift 
``maintenance'' fee, special exhibition fees, energy savings 
performance contracts, public/private partnerships and public 
collection boxes. With the exception of the gift maintenance fee, all 
of these ideas have been implemented but have generated only minimal 
additional income. In addition, we are in the planning stages of a 
major national fund raising campaign which will be designed to raise 
funds to support the Institution in achieving the goals of our recently 
approved strategic plan, ``Inspiring Generations Through Knowledge and 
Discovery.'' The campaign will raise funds for a number of priorities, 
including revitalized exhibition space, new programs and exhibits, 
endowed positions, and new facilities, such as the National Museum of 
African American History and Culture. Despite the recent economic 
downturn, our donors remain committed to the Institution, as evidenced 
by the fact that we not only met but exceeded our overall fiscal year 
2009 fund raising target of $120 million, with a year-end result of 
$127 million. The new strategic plan will help us sustain and increase 
donor support. We will brief our stakeholders in the Administration and 
Congress when our planning for the National Campaign is complete. We 
have also formed an internal team of creative thinkers to come up with 
more ideas to increase non-federal revenue and will be exploring those 
ideas in depth in the coming months.
                        smithsonian trust funds
7.  Dr. Clough, as you have heard, there continues to be a lack of 
understanding here on the Hill, and I think with the public at-large, 
on the relationships between the Federal appropriations side of the 
Institution and the Trust side. Can you please discuss how the Trust 
works with the Federal side and how the budgets and personnel work 
together? What additional things should this Committee know about this 
relationship?

Response: As a general rule, the Smithsonian uses federal funds to 
sustain and maintain our facilities, to provide a safe and secure 
environment for our visitors, staff, and collections and to support key 
research and public programs where long term funding stability or 
leveraging are required. We use trust funds for development/fund 
raising activities; to support our research, exhibitions and education 
and public programs; to share in some of the operating costs of the 
Institution; and to leverage federal funding and fulfill public-private 
partnerships. Private funds have to be raised to put on exhibitions 
which amount to millions of dollars each year for the 100 or so 
exhibits we mount. Trust funds are frequently used to expand or improve 
facilities projects, when desirable and when the work can be done in 
conjunction with a federal renovation or revitalization project. A 
prime example is the historic Patent Office Building, which houses the 
Smithsonian American Art Museum and the National Portrait Gallery. In 
this case, federal funds were used to rehabilitate the existing, 
dilapidated building and trust funds were raised and used to create the 
exquisite enclosed courtyard which has become a wonderful addition to 
the museum experience. This type of federal-private partnership is 
crucial to building new museums; revitalizing facilities; broadening 
external collaborations to accomplish myriad research and education 
efforts; and creating and caring for exhibits.

Our people work side by side to achieve the Institution's goals and 
objectives. Functions that are uniquely trust, such as managing the 
endowment, fund raising, and operating retail stores, are performed by 
trust employees. Senior leadership executives serve at the discretion 
of the Secretary and are in trust-funded positions. Employees whose 
work is funded by donors, government grants, revenue-generating 
activities, and endowments are always appointed in trust positions.

8.  There seems to be a continuing theme in the various GAO and IG 
reports and what I hear elsewhere about a lack of access between the 
various senior Institution officials and the Regents, and with the 
Congress. Do you think there are barriers between various Smithsonian 
personnel and the policy setting Regents board and the Congress?

Response: One of the governance reforms implemented by the Board of 
Regents was to ensure that key internal gatekeepers have direct access 
to the Board. The Board of Regents' By-laws now provide that the 
General Counsel, Chief Financial Officer (CFO) and Inspector General 
(IG) attend all Board of Regents meetings and are invited to give 
presentations in executive session with the Regents, that the General 
Counsel also attends all Regents' committee meetings, and that the CFO 
and IG attend those Regents' committee meetings they deem relevant to 
their work. The By-laws also provide that the General Counsel and the 
CFO have the right and obligation to bring to the attention of the 
Regents and their relevant committees any issues of concern, and that 
the IG operates independently of all other SI officers. The agenda for 
each Regents' meeting includes the opportunity for the Under 
Secretaries to present information on new acquisitions, programs and 
discoveries. The Chair of the Board meets routinely with the 
Secretary's direct reports, museum directors and other senior staff. 
The Office of the Regents processes other staff requests for meetings 
with the Regents. Some Regents also sit on museum advisory boards.

With respect to senior officials' and other employees' access to 
Congress, many congressional offices have asked that all communications 
come from a single Smithsonian office, to avoid the confusion and 
inconvenience that can result from multiple voices. Management always 
consults with the relevant Smithsonian directors and staff when 
preparing responses to congressional inquiries and when developing 
presentations on Smithsonian issues for Congress. Where appropriate, 
Smithsonian experts participate in briefings given to Members and their 
staff on various topics. Members of Congress and their staff are 
routinely invited to tour our exhibits and facilities and to attend 
events, during which they meet Smithsonian staff in various areas. And, 
as do all citizens, Smithsonian staff have the constitutional right to 
express themselves freely to their elected representatives in Congress.

9.  The IG testimony stresses a need for greater management control and 
accountability for a whole host of business and program issues. Do you 
think it is important for leaders like yourself in the Smithsonian 
Castle to have greater control of the 19 museums and other facilities 
and programs?

Response: Everyone at the Smithsonian is responsible for ensuring our 
resources are managed in a manner befitting our status as a public 
trust. Although it is important for senior management to set a tone of 
accountability, in my tenure as Secretary I have stressed that leaders 
throughout the organization are accountable for promoting and upholding 
these values. Management should provide strong guidance and adequate 
training, but the day-to-day responsibility for ensuring that these 
expectations are being met should rest with those who are closest to 
these activities.
                          financial discipline
10.  The IG also stressed the need for greater financial discipline. Do 
you think the Smithsonian leadership and the top managers are serious 
about financial management? Are you able to use the financial systems 
to help manage and prioritize various competing program needs?

Response: The Smithsonian leadership and top managers are serious about 
financial management and have emphasized the need to strengthen 
financial management by enhancing internal controls in the 
Institution's strategic plan. As you know, management completed its 
review of 23 of the Institution's critical financial processes and has 
been focused over the past year on implementing improvements to address 
the five processes identified as high-risk. The Institution has 
reformed its policy directives review process to ensure policies are 
developed in a timely manner, and is about to issue several critical 
policy directives and procedural manuals regarding the use of funds and 
procurement that will strengthen management control. Other improvements 
will result from the hiring of new staff that were funded in the fiscal 
year 2010 appropriation and implementation of new training programs. 
The ten positions that were approved in the fiscal year 2010 
appropriation will strengthen the management of personal property 
assets, procurement oversight and policy compliance, and improve 
financial reporting. In addition, the Institution is contracting for a 
best practices study that will result in improvements to the 
Institution's management structure and decision-making processes. We 
remain focused on improving the financial system to enhance efficiency 
and reduce the errors that result from manual processes. Project 
costing, cash management, and grants modules will be implemented in 
fiscal year 2010.

The Inspector General issued recommendations in her recent audits of 
personal property accountability and facilities maintenance funds to 
strengthen financial management. The Institution's leadership takes 
these recommendations seriously and is working to implement them. Two 
of the recommendations to provide training to staff involved in real 
property transactions and to instruct units to complete the appropriate 
property accountability forms have already been closed. A task force, 
composed of staff from several offices including budget, accounting and 
facilities, has been formed to focus on the recommendations stemming 
from the facilities audit. Though management disagrees that maintenance 
funds were improperly used for capital-related projects. Work has begun 
to develop and communicate a formal policy on the proper use of 
maintenance and capital funds for unplanned requirements, to improve 
documentation of funding source decision and rationale, and improve 
training for those who authorize the use of Federal funds.

The Institution uses its financial system to manage competing program 
needs. By monitoring spending and program accomplishments, the 
Institution is able to shift funds from programs that are progressing 
more slowly than planned to programs with a more urgent need. Having 
just completed a strategic plan, the Institution is working to 
incorporate the priorities and structures of that plan into the 
financial system. Once this is done, the financial system will become 
even more helpful in managing competing program priorities.

11.  The IG indicated that the decentralized nature and management of 
the Smithsonian is a real obstacle to better oversight and 
accountability. To what extent can the personnel in the Castle be more 
effective at bringing accountability and consistency, as appropriate, 
to the many different museums in the Institution?

Response: The Smithsonian is a stronger organization overall because of 
the unique and individualized missions of its museums, research centers 
and programs. Clearly certain processes benefit from more centralized 
coordination when there are efficiencies or enhanced oversight that can 
be gained through consistency. Other activities are better managed at 
the unit level. This balance between central and unit control of 
activities is one that is revisited periodically to ensure that the 
current balance is one that is best for the Institution. We are about 
to embark on a wide-ranging assessment of our organizational structure 
to ensure that we are set up in a way that will enable us to carry out 
the objectives of our new strategic plan. As part of this review, we 
will also look at some core processes to ensure we are following the 
best practices and enabling our mission most effectively. We are 
hopeful that this review, which will be aided by expert consultants, 
will result in improvements to our management structure and decision-
making processes and will produce some cost-savings.

Also, we are using a teamwork approach with all of the units to reduce 
barriers to productivity and to allow for ideas to be developed 
anywhere in the Institution. We have developed a number of cooperative 
task forces made up of individuals from across the Institution to look 
at issues such as travel, the capital campaign and improving trust 
funds.

12.  What level of centralized control is appropriate?

Response: As stated above, the Smithsonian is a stronger organization 
overall because of the unique and individualized missions of its 
museums, research centers and programs. Clearly certain processes can 
benefit from more centralized coordination when there are efficiencies 
or enhanced oversight that can be gained through consistency, but there 
are other activities that are better managed at the unit level. This 
balance between central and unit control of activities is one that must 
be revisited periodically to ensure that the current balance is one 
that is best for the Institution.

13.  How do you use your financial management systems to provide 
accountability for your many diverse units? Do you have a policy of 
providing additional program funding for the better performing units 
and reductions for units which have not performed? Which management 
metrics can you use across so many different programs and museums?

Response: One of the goals of the Institution's strategic plan is to 
improve the allocation of resources based on Institutional priorities, 
cost effectiveness and demonstrated value. The Institution has several 
processes by which it holds diverse units accountable for meeting their 
program goals. The Secretary establishes his annual goals at the start 
of each fiscal year and the Board of Regents affirms them. The 
Secretary then holds his management team accountable for achieving 
them. Each quarter, the Institution's leadership completes a status 
report that outlines what progress has been made in achieving these 
goals. In the annual budget process program managers align their 
funding requests with the Institution's strategic plan. Requests will 
receive consideration for funding based upon the extent to which that 
funding will further the objectives of the strategic plan. In addition, 
units are required to establish their budgets at the start of each 
fiscal year through the Smithsonian Operating Plan in which they 
document risks and opportunities to achieving the year's goals. 
Management reviews this plan against actual performance during a mid-
year review. The mid-year review provides an opportunity to review the 
planned expenditures for the remainder of the year and identify any 
lower-priority expenditures that can be deferred so that funds can be 
devoted to higher-priority expenditures. Units that have performed well 
throughout the year and have identified high-priority needs will be 
``rewarded'' with these funds at year-end.

The metrics used to measure performance are laid out in the strategic 
plan and include the following:

          Dollar amount of external funding from peer-reviewed 
        research grants and contracts
          Number of peer-reviewed/refereed publications in 
        priority research areas
          Number of strategic partnerships and collaborations
          Number of physical visits to Smithsonian museums, the 
        National Zoo, and Smithsonian traveling exhibitions
          Number of visitors using online resources

14.  Does the Smithsonian have different financial management and 
accountability tools for your Federal versus your Trust funds and 
programs?

Response: The Institution uses the same financial management and 
accountability tools described in the answer to Question 13 for its 
Trust funds, and all Trust revenue and expenditures are tracked in the 
same financial system. The gifts, grants, and contracts the Institution 
receives are considered restricted funds and are held to additional 
standards and reporting requirements as agreed to with the donor or 
sponsor.

15.  Dr. Clough, now that you have been at the Smithsonian for nearly a 
year and a half, what have been some of your bigger surprises? What 
area of your work are you most proud of so far?

Response: One surprise to me has been the breadth, depth and 
contribution of Smithsonian science and scholarship to the larger 
questions of the day, including understanding climate change, 
uncovering the origins of the universe and preserving and appreciating 
our history and cultural heritage. Part of that surprise was learning 
how the Smithsonian reaches across America and to the world through our 
research stations, museum affiliations, traveling exhibits and 
collaborations with other organizations. I have been impressed with the 
talent and dedication of our staff. We handled 9 million more visitors 
this year and provided the American public free high quality exhibits 
and programs. During a time of great fiscal uncertainty, our value 
resonated with a lot of people and visitor numbers are proof of that. 
During this initial period, I have also made a concerted effort to 
visit every Smithsonian museum and most of our research locations in 
the U.S. and abroad so that I can better communicate about the 
incredible education and research work of this Institution. I was also 
surprised to learn how important our large numbers of volunteers are to 
helping us maintain our vast collections and educate visitors. In my 18 
months here I have already given several 40-year service pins to 
volunteers. Their dedication and that of our full time staff is 
essential.

An accomplishment of which the entire Smithsonian can be proud is the 
development of our new strategic plan. We went through a very 
intensive, wide-ranging, bottom-up process including over one thousand 
stakeholders from both inside and outside the Institution. In those 
discussions we identified the Smithsonian's strengths and resources, 
and tightened the focus of our efforts on those areas where we can make 
the strongest contributions to public life. Our strategic vision 
captures the relevance of the Smithsonian in helping our citizens and 
the world understand key science, history, art and culture issues and 
describes how the Smithsonian will engage more diverse audiences with a 
refocused education program. The Smithsonian will serve as a laboratory 
to create models and methods of innovative informal education and link 
them to the formal education system. In addition, through technology, 
we will make our vast collections more accessible to all. I am 
confident that this new plan will help us broaden access and reach new 
audiences, both in Washington, DC and around the country. The plan has 
been very well received, and I'm pleased to say that it has already 
generated significant donor interest.
              facilities maintenance condition and backlog
16.  The GAO physical infrastructure team review of the Smithsonian 
verifies that the maintenance backlog is huge and getting worse. This 
is not new information. For years, there have been reviews and concerns 
for degraded collections and failed buildings. At the same time, the 
Smithsonian continues to expand its facilities and its programs, while 
older facilities and vital collections, visitor services, and 
scientific and cultural programs are stressed. Can you give the 
Committee some background on what you as Secretary and chief executive 
of the Smithsonian are doing to prioritize your efforts and improve 
this situation?

Response: The optimal funding for the capital and maintenance program 
of an annual $150 million and $100 million respectively, based on 
industry standards and reviewed by GAO, has yet to be secured, but we 
are grateful for the steady upward progress that has been made in 
approaching that level of support. While substantial improvements have 
been made, particularly at the National Museum of American History, the 
National Museum of Natural History, and the National Zoological Park, 
many vital facilities needs remain. We have a rigorous prioritization 
system, which is essential, especially when the Smithsonian has been 
asked to initiate new facilities and programs, such as the National 
Museum of African American History and Culture. Other footprint growth 
has largely been a result of our efforts to improve the care and 
security of our valuable collections, as well as to comply with 
appropriate standards and codes as we revitalize existing spaces. We 
are watching this closely, with recognition of the burden it places on 
our facilities operations and maintenance.

Prioritization is the product of two major inputs. First, our 
facilities staff assesses needs on an annual basis, with priority 
coding that values health and safety improvements first, critical 
systems replacements and code improvements next, and deferrable 
functional improvements last. Second, the project prioritization is 
reviewed initially with program staff to coordinate timing, funding and 
access with research, exhibits and other Institutional initiatives. 
Then it is vetted and approved by the Institution leadership, including 
the Regents' Facilities Committee. In this way, we will address 
visitor, staff and collections safety first and foremost, while 
reflecting program priorities as articulated in the Strategic Plan for 
fiscal years 2010-2015.

17.  I expect that by now you have visited most of the Smithsonian's 
museums, facilities and other program offices. What do you see as the 
most pressing facility issues for the Smithsonian? What will be the 
Federal and what will be the private and trust role at dealing with the 
most urgent facilities needs?

Response: I have made over 90 visits to our units here in Washington, 
DC and all over the world. The most pressing facility issues for the 
Smithsonian are:

    1.  To correct long-standing deficiencies at our largest and most 
visited facilities in concert with the development of public programs 
that support the Strategic Plan;
    2.  To design and construct the National Museum of African American 
History and Culture by 2015;
    3.  To reopen the Arts and Industries Building as a Gateway to the 
Smithsonian;
    4.  To support Smithsonian tropical research and environmental 
science with the construction of state-of-the-art laboratory 
facilities.

The Smithsonian has maintained consistently that the revitalization of 
existing buildings and landscapes, all of which serve the public, is a 
Federal responsibility and our capital and maintenance programs are 
built around that understanding. At the same time, we vigorously seek 
and receive private funds for the programs and research, public events 
and exhibits that define our mission.

18.  Given the huge backlog in your maintenance needs, is it 
appropriate for the Smithsonian to accept new, additional 
responsibilities?

Response: The Smithsonian does not seek new, additional 
responsibilities. When tasked with doing so by Congress, such as in the 
creation of the National Museum of African American History and 
Culture, the Smithsonian does its best to fulfill that mandate.
asbestos concerns: additional questions for secretary clough at today's 
                                hearing
19.  Mr. Secretary, I want to ask you about the asbestos situation at 
the Smithsonian and the article in the Washington Post today. As you 
know, many of us on the Hill are very concerned about potential 
asbestos danger to workers and to the public. With the millions of 
visitors you receive, and the hundreds of workers who are routinely 
modifying buildings for exhibits, it is essential that the Smithsonian 
take its asbestos situation very seriously. The consultant's report 
indicates that there continue to be recordkeeping and training problems 
on this issue. The lack of employee training seems to be a common 
theme, even in the business and financial system reviews we have 
examined.

Please tell us about the asbestos situation, and especially, what you 
are doing to update records, test facilities, and train employees on 
proper asbestos handling.

Response: The comprehensive review of the Smithsonian's asbestos 
management program was recently completed by URS, an independent 
contractor, to assess compliance with applicable Federal, state and 
local regulatory requirements and industry best practices. The SI's 
asbestos policies and specifications were found to be typical of 
policies prepared by Federal agencies, which oftentimes far exceed 
those of commercial entities. The Institution also conducted an 
internal review of its programs to ensure compliance with applicable 
regulatory requirements and best practices. Recommended modifications 
determined as a result of both the URS and internal assessments are 
being evaluated and, as appropriate, will be incorporated into existing 
policies and procedures.

Records pertaining to asbestos locations, quantities and condition 
throughout the Smithsonian are being updated as part of a comprehensive 
asbestos-containing material (ACM) assessment and re-survey, conducted 
by Aerosol Monitoring and Analysis (AMA), an independent environmental 
consulting firm. This initiative commenced in November 2008 and 
included requirements that the contractor reconcile data/information in 
existing asbestos survey reports and compile all abatement records into 
an electronic database; correlate all existing ACM information into a 
geospatial database that interfaces with the Smithsonian's work order 
management system; perform and document ACM inspections, prioritizing 
inspected areas requiring abatement; post applicable ACM warning signs; 
perform assessments for suspect ACM not identified in existing reports; 
and perform bulk sample collection and analysis of suspect materials.

With respect to ACM training, over 800 SI employees have received 
asbestos awareness training thus far during 2009. In September of this 
year, a memorandum was also forwarded to each facility/museum director 
outlining asbestos notification, training and work practice 
requirements, soliciting their assistance in identifying, with 
published guidelines, other staff needing this important training. 
Exhibits staff from the National Air and Space Museum also completed 
16-hour asbestos operations and maintenance training requirements and 
follow-up, certifying them to conduct Class III asbestos-related tasks. 
Records for contractor-provided training for Class III workers are 
maintained at the affected facilities. Records for facility/
organization specific asbestos awareness training provided by 
Smithsonian staff are maintained centrally and at the affected 
facilities/organizations. Records of general awareness training 
provided to staff interested in learning about asbestos-containing 
materials are maintained centrally.

20.  Today's Washington Post reported that outside construction firms 
working at the Air and Space museum were told in plan specifications 
that wallboard joint compound contained ``less than 1 percent'' 
asbestos, meaning that special OSHA-required precautions did not need 
to be taken. However, the Smithsonian's own analysis from 1992 shows 
that the wallboard joint compound contains more than 1 percent, meaning 
the special procedures were required. Is the Smithsonian today telling 
AIR AND SPACE contractors that there is more than 1 percent asbestos in 
the wallboard joint compound?

Response: Over the course of the past year, we have revised our 
contract specifications to remove any ambiguity that existed previously 
between standards promulgated by EPA and OSHA. All contractors are 
advised of the presence of asbestos-containing materials (ACM) in 
buildings where those materials may be disturbed as part of their work. 
Similarly, all contractors who may disturb ACM are required to have the 
appropriate level of EPA-accredited training and jurisdictional 
licensure that certifies their awareness of proper safe work practices 
when disturbing and/or handling ACM. All contractors working in NASM 
are advised of the presence of the asbestos-containing joint compound 
and are required to follow all OSHA required safe work practices and 
precautions when tasks may disturb the material. The work-safe 
practices reinforcement starts with the project managers for capital 
projects, starting with the concern and notification of possible 
exposure to the design group. That information is conveyed within the 
design documents. The construction group then reinforces at the pre-bid 
walk thru, the preconstruction meetings and progress meetings. By 
definition, asbestos-containing materials are those that contain 
greater than 1% asbestos.

21.  With respect to the settlement reported today in the Post, do you 
expect that there are other employees who also worked in the same kind 
of conditions and who may be due compensation?

Response: The settlement reported in the Washington Post released an 
individual employee's claims arising out of his employment with the 
Smithsonian, but did not resolve his Federal Employees' Compensation 
Act (FECA) claim for asbestosis. That employee's FECA claim was 
accepted by the Department of Labor. The Smithsonian is not aware of 
additional claims similar to the settled claims. With regard to 
asbestosis, one other employee's FECA claim currently is pending with 
the Department of Labor (DOL). DOL, not the Smithsonian, decides such 
claims. It is possible that other employees or former employees may 
file FECA claims. In general, an employee or former employee has three 
years from the time he or she becomes aware of a work-related injury to 
file a FECA claim.

22.  I understand that last March, when this issue came up, the 
Smithsonian offered medical testing and treatment for employees. What 
has been the result of that medical testing?

Response: In March 2009, the Smithsonian offered free medical screening 
evaluations as well as consultations with an outside expert on 
asbestos-related disease to all current and former museum employees. 
Sixty-eight (68) individuals contacted Smithsonin medical staff for 
screenings and possible referral to the outside expert. Of those, 46 
individuals requested and were given referrals to the outside expert; 
it was left to the employee to schedule the appointment. To date, 32 
individuals have scheduled appointments with the outside expert. That 
process is drawing to a close with one individual awaiting an 
appointment. Of the 31 individuals who consulted with the expert, five 
individuals so far have been diagnosed with asbestos-related disease, 
specifically pulmonary asbestosis. Among the five individuals, three 
are former employees and two are current employees. Each of them 
reported to the independent expert a work history which suggests 
possible exposure to asbestos prior to 1990. Some reported work 
histories which suggest significant likelihood of exposure associated 
with previous employment or military service going as far back as the 
1960s. All current and former employees having actual disease findings 
as well as three individuals with no evidence of asbestos-related 
disease, but with histories of exposure warranting follow-up medical 
testing in three to five years, are being offered follow-up 
appointments with OHS staff. During these appointments, OHS staff 
provide further information and explanation of the expert's findings. 
Current and former employees with disease findings are referred to the 
Office of Human Resources to discuss procedures for filing an 
occupational illness claim with the Department of Labor, if desired. 
Current employees needing routine and ongoing follow-up medical testing 
are advised that they can be followed by the Smithsonian's OHS. Former 
employees needing such testing are advised to follow up with their 
private physician.

23.  We understand that some of your older facilities, especially such 
storage as at the Garber facility, which staff visited earlier this 
week, have major asbestos problems. The asbestos in these storage 
facilities makes use of artifacts difficult and expensive. How large is 
this problem? What are you going to do about it?

Response: A small percentage of our storage facilities at Garber have 
asbestos-containing insulation in place that is in varying stages of 
disrepair. The insulation, which may have been sprayed or troweled on, 
is contained behind either double layers of polyethylene sheeting or 
corrugated steel walls. Access to these buildings and artifacts is 
controlled by trained museum staff. Work in these buildings that may 
disturb ACM is restricted to staff who have been trained in proper work 
procedures for handling asbestos-contaminated articles and who have the 
proper personal protective equipment needed to safeguard against 
potential asbestos fiber exposures. I plan to close the Garber Facility 
in the long run, as soon as we can develop facilities to replace those 
at Garber.

More than 90% of the Smithsonian's million and a half square feet of 
collections storage space is rated in optimal or acceptable condition. 
The revitalization or replacement of the remaining unacceptable space 
appears in the ten year program of capital requirements with priority 
given to spaces occupied by staff and visitors.
                    collections care and conditions
24.  Many different reports and evaluations all indicate that there are 
legitimate concerns for the Smithsonian's ability to provide proper 
care for many scientific and cultural artifacts. Where in the 
Smithsonian do you think there are the most urgent needs for improved 
collections care? Where is the Smithsonian in pretty good shape?

Response: Over the past few years, the Smithsonian has made incremental 
progress in improving collections care across the Institution. A number 
of our facility-related projects have directly improved collections 
storage, preservation, and access--such as the opening of the state-of-
art facility at Pennsy Drive in Landover, Maryland and consolidation 
there of collections from disparate storage locations; completion of 
POD 5 at the Museum Support Center in Suitland, Maryland, and the move 
of all alcohol collections from the National Museum of Natural History; 
pending completion of POD 3 at MSC for collections requiring high-
quality environmental conditions and special security (artworks and 
physical anthropology) and ultra-cold or liquid nitrogen storage (cryo-
collections); and the pending completion and move of collections at the 
Cooper-Hewitt, National Design Museum to an off-site storage and 
conservation facility.

In addition, we have taken a pragmatic and systematic approach to 
improving the stewardship of Smithsonian collections, including the 
following: initiated a pan-Institutional collections assessment to 
inform long-term strategic plans and priorities for collections care; 
addressed the Smithsonian Inspector General's audit recommendations 
regarding deficiencies in collections inventory and security at the 
National Museum of Natural History; continued to replace obsolete 
storage cabinetry and housing materials across the Institution that are 
currently detrimental and hazardous to the collections, staff, and 
researchers, by purchasing compact storage equipment and stable 
materials; conducted collections-level assessments, preservation 
surveys, and inventories to establish priorities and strategic plans 
for the allocation of collections care resources; and stabilized and 
conserved specific collections at risk of loss or damage.

In fiscal year 2009, the Smithsonian initiated an Institution-wide 
collections assessment adapted from a survey tool used by the National 
Museum of Natural History. The resulting data and assessment 
methodology, currently being evaluated and refined, will guide long-
term strategic plans for collections care, identifying areas of need 
and improvement, establishing priorities, and providing a practical 
framework for the allocation of collections care resources. Based on 
the initial assessment data, priority collections care needs include:

          Continued purchasing of compact storage units and 
        housing for collections across the Institution, as well as 
        replacing substandard cabinetry and materials, with particular 
        focus at the following museums: National Museum of Natural 
        History, National Museum of American History, National Air and 
        Space Museum, and the Cooper-Hewitt, National Design Museum.
          Stabilizing, rehousing, and inventorying of specific 
        collections at risk throughout the Smithsonian, including film 
        and photographic collections, botanical and marine mammal 
        specimens, military history objects, fossils, meteorites and 
        minerals, anthropological artifacts, textiles, works on paper, 
        space history objects, graphic arts, new media, cryo-
        collections, and paper-based archival collections.
          Relocation of collections currently stored in 
        substandard conditions at the Garber Facility in Suitland, 
        Maryland.

25.  The GAO and others have talked about a specific financial total 
for the facilities backlog. Do you have any idea about the backlog in 
collections care? What would it cost, over how many years, to bring the 
most urgent collections into decent shape?

Response: As mentioned above, the Smithsonian initiated Institution-
wide collections assessment in fiscal year 2009 adapted from a survey 
tool successfully used by the National Museum of Natural History. 
Currently, the data and assessment methodology is being evaluated and 
refined. The resulting data will identify and quantify areas of need 
and improvement, establish ranking priorities, and determine associated 
costs.

26.  Does the Smithsonian have a rigorous system to determine which 
collections are the most important, and which could be given away? Are 
you able to give low priority artifacts away to other museums?

Response: Yes. First of all, each Smithsonian collecting unit is 
required to develop and implement a written collections management 
policy and a collections plan to ensure the proper development, 
acquisition, preservation, documentation, use, and disposition of its 
collections based on the mission, strategic plan, and programmatic 
goals of the Smithsonian and the individual unit. Collections 
management policies establish general principles, authorities, and 
standards that govern the collections activities of the collecting 
unit, including acquisitions and deaccessioning. Collections plans 
provide a rationale for the collections and direct decision-making 
regarding acquisition, deaccessioning, resource allocation, and other 
aspects of building and sustaining the collections. Together, they 
ensure logical, responsible collections growth by establishing well-
defined goals and priorities that guide collections activities.

In order to provide responsible management of the collections, 
potential acquisitions undergo a rigorous selection and review process. 
Smithsonian collecting units actively assess the degree to which 
potential acquisitions and existing collections are consistent with the 
mission and goals of the unit; enhance objectives in exhibition, 
research, or educational programs; and can receive appropriate care and 
preservation. Prudent collections management also includes judicious 
review, evaluation, deaccessioning, and disposal of existing 
collections to refine and improve the quality and relevance of the 
collections. Collection items selected for deaccessioning because they 
are duplicative, redundant, of lesser quality or have insufficient 
relationship to the mission and goals of the collecting unit are often 
donated or transferred to other museums and non-profit educational or 
research institutions.
              american recovery and reinvestment act--arra
27.  The Smithsonian received $25 million in the American Recovery and 
Reinvestment Act earlier this year. Please refresh our memory regarding 
how you have used these funds, and what your progress has been at 
getting work done promptly.

Response: The Smithsonian is very grateful for the $25 million in ARRA 
funds that permitted us to address high priority revitalization in 
three categories:

        1.  Arts and Industries Building--$4.6 million Exterior Masonry 
        Repair, Selected Interior Demolition and Hazardous Material 
        Removal
        2.  National Zoological Park--$9.7 million Fire Protection, 
        Medium Voltage Equipment, Repair Bridges, Renew Roofs, Replace 
        Barns
        3.  SI-wide Revitalization--$10.7 million High Voltage 
        Equipment, Backflow Preventers, Emergency Generators, 
        Elevators/Escalators

Progress as of December 1, 2009 was:

        Obligated--$21,879,269
        Outlayed (Expensed)--$6,306,555 (28 percent expensed denotes 
        significant work/progress toward completion)
        Percentage of Projects Started--100% (16 projects total)
      legacy fund and the arts and industries building restoration
28.  The fiscal year 2010 appropriations act redirected $30 million of 
previously appropriated funds intended for various cost-share 
facilities projects to now be used to restore the Arts and Industries 
Building on the National Mall, if matched with private funds. Please 
tell us more about how and when you plan to use these funds, and what 
your immediate plans are for this building. How long will it take to 
get Arts and Industries open and useful again? What are your plans for 
its use?

Response: We are moving forward with renovation of the Arts and 
Industries Building. With federal funds provided in the fiscal year 
2010 Interior bill ($12.6 million) and the American Recovery and 
Reinvestment Act ($4.6 million), we are beginning roof replacement, 
repairing the masonry, removing hazardous materials and removing some 
interior partitions.

In consultation with some of the most imaginative experts in the 
country, who are donating their services, we have developed a 
comprehensive program for the content of the building, and are hard at 
work to actualize that program with dynamic and exciting designs. When 
it reopens, ideally in 2015, the Arts and Industries Building will 
serve as a gateway to the Smithsonian and provide an intersection 
between our education program and the four Grand Challenges identified 
in our new Strategic Plan. We have evidence of major donor interest, 
especially with regard to the innovative technology we will deploy in 
order to create a truly exciting experience for our visitors, both in 
person and online. I am confident the new language of the Legacy Fund 
will be a great incentive for donors.

The goal in the rehabilitation of this building is to learn from the 
``green'' technologies of the past and make the building a showplace 
for the future, incorporating sustainable features for energy 
reduction, and use of natural day lighting and water capture from the 
2.2 acre roof for reuse in garden irrigation.
                    scientific and cultural programs
29.  Your strategic plan is pretty clear that science is a big part of 
what the Smithsonian is all about. I think that fact is not fully 
appreciated here on the hill, or with the public. I know that your 
science programs are first rate, but it is not clear to me how the 
Smithsonian coordinates and integrates its science programs with other 
Federal science providers, such as the USGS and elsewhere. What will 
you do to better explain the role of the Smithsonian in various 
scientific disciplines?

Response: The Smithsonian coordinates its science programs with other 
federal science providers through national and international scientific 
planning processes at the institutional level, as well as collaboration 
at the project and scientist level. In a number of cases, including 
NOAA's National Marine Fisheries Service, scientists from other 
government agencies are assigned to work in the Smithsonian to use the 
National Collections as a major part of their jobs. This unheralded 
interagency collaboration has been going on for well over 100 years and 
results in both reduced costs to the government and better integrated 
science. In recent years, the Smithsonian has increased its involvement 
in interagency processes under the National Science and Technology 
Council and State Department processes. In addition to participating in 
many subcommittees and working groups, we co-chair the Interagency 
Working Group on Scientific Collections and the Task Team on Earth 
Observations. We also participate in National Research Council 
activities such as the Decadal Surveys in astronomy, and international 
activities such as those of the OECD Global Science Forum and GEO/GEOSS 
in Earth observations.

The Smithsonian has been developing better means to highlight our role 
in various science disciplines, and continuing to do so is a major 
emphasis of the new Strategic Plan. The Office of Public Affairs has 
designated a press officer to focus on this challenge and works closely 
with the Office of the Under Secretary for Science in promoting science 
at the Smithsonian, including a new science web site oriented for the 
general public, and regular briefings on science for the news media. We 
have been hosting more meetings and conferences as part of our 
outreach, for example, organizing recent scientific symposia on topics 
such as rates of tropical extinction and high profile international 
events such as the GEO plenary and Antarctic Treaty 50th Anniversary 
Summit in November 2009.

30.  Does the Smithsonian have a significant role in climate change 
research given your extensive biological, geological, and 
paleontological expertise? Are you coordinating with other Federal 
agencies, such as those funded in the Interior bill?

Response: Smithsonian research provides key data, theoretical advances, 
and testing of new measurement methodologies in the larger federal 
climate change research program. We work closely with other agencies on 
much of the research and coordinate with these agencies through the US 
Global Change Research Program and the US Group on Earth Observations 
under the National Science and Technology Council. While the 
Smithsonian does not itself do integrated climate modeling (a job of 
other organizations), our work on carbon sequestration, forest 
dynamics, coastal and marine ecology, atmospheric composition and the 
long view from paleontology all integrate into the models and parameter 
development. The strength of the unique contribution made by 
Smithsonian research comes from the long-term understanding of the 
natural baselines and the study of how individual species and 
ecosystems respond (historically and currently) to climate change and 
habitat change.

An example of our work in carbon sequestration and forest dynamics is 
SIGEO, a global observational platform that we lead with 20 other 
nations to observe the response of forests to climate change.

Also, through the Smithsonian Online Education Conference: Climate 
Change, participants, alongside scientists and curators, explored 
Smithsonian research and collections related to the evidence, impact, 
and response to climate change.
                      personal property inventory
31.  The Inspector General's recent report indicated that $12 million 
in personal property cannot be accounted for. Does this mean these 
items were pilfered? Do you know what the amount of non-accountable 
property is per year? How does this compare with other federal agencies 
and institutions?

Response: There is no evidence that any property was stolen. In the 
past, when the Institution researched unaccounted-for items, we have 
generally found that lapses in documentation, not theft, had led to the 
unaccounted-for status. This is not to say that theft can be ruled out 
completely. The IG has found weaknesses in our personal property 
accountability system, while noting that ``the Smithsonian has made 
significant improvements to its personal property management in several 
ways.'' The IG has made recommendations for additional improvements to 
the system, and management has accepted those recommendations and is 
working to implement them. Our fiscal year 2010 federal appropriation 
includes funding to hire three FTEs who will be dedicated to personal 
property management. According to the IG, in fiscal year 2009, 1% of 
property was missing and 1% was unrecorded. The General Services 
Administration (GSA) is the federal entity primarily responsible for 
issuing personal property management regulations and procedures. GSA 
has not issued comprehensive guidance on this issue, but instead refers 
federal entities to private sector resources. The Smithsonian's rate of 
2% missing or unrecorded property compares favorably with the industry 
standard of 2% issued by the American Society for Testing and Materials 
International (ASTM International), Standard E2221-02, Standard 
Practice for Administrative Control of Property.

The SI goal of no more than 2% inventory variance representing loss 
(missing) and unrecorded (items found that have not been recorded in 
the ERP PeopleSoft Financial System) personal property assets as a 
result of inventory verifications is consistent with ASTM's asset 
management standards. These include performance standards, practices, 
metrics, and methods of effectiveness for the conduct of management and 
administration activities for durable and movable assets (personal 
property management).

                 Questions From Ranking Member Simpson

                     Questions for Secretary Clough

                             climate change
1.  Climate Change: The Interior Appropriations conference report 
provided nearly $400 million for climate change related work. Nearly $7 
million has been provided to the Smithsonian. As I've said throughout 
this 2010 process, it's been difficult to see whether or how all of 
these federal climate change efforts are coordinated and strategically 
focused. Precisely what is the role of the Smithsonian with regard to 
climate change research? What type of coordination do you have with 
other federal government agencies to avoid duplication of efforts?

Response: Smithsonian research provides key data, theoretical advances, 
and testing of new measurement methodologies in the larger USG climate 
change research program. We work closely with other agencies on much of 
the research and coordinate with these agencies through the US Global 
Change Research Program and the US Group on Earth Observations under 
the National Science and Technology Council. While the Smithsonian does 
not itself do integrated climate modeling (a job of other 
organizations), our work on carbon sequestration, forest dynamics, 
coastal and marine ecology, atmospheric composition and the long view 
from paleontology all integrate into the models and parameter 
development. The strength of the unique contribution made by 
Smithsonian research comes from the long-term understanding of the 
natural baselines and the study of how individual species and 
ecosystems respond (historically and currently) to climate change and 
habitat change.
                 smithsonian priorities and new museums
2.  Smithsonian priorities: There will always be tremendous interest 
among various constituencies to build even more Smithsonian museums. 
The National Museum of the American Indian, I believe, is the newest 
museum. The National Museum of African American History and Culture has 
been authorized by Congress and this project is in its early stages. 
I'm hoping that Eva Longoria will be calling soon to encourage my 
support for the National Museum of the American Latino. Do we ever 
reach the point where we say, ``We're done building museums until we 
can better maintain what we already have?'' Is it unreasonable to 
suggest that we address unmet needs of the Smithsonian--like 
digitization of records and preservation of historic collections--
before taking on new, costly projects?

Response: The Smithsonian does not propose new museums. We are focused 
on managing what we have, and our highest priority is the care of 
existing museums, collections and programs. However, when Congress 
enacts legislation that requires the Smithsonian to build and operate a 
new museum, we do our best to meet that mandate. With your help, we are 
also devoting resources to digitization and preservation of historic 
collections, which will help us broaden access and reach new audiences.
                              collections
3.  Preservation of collections: Earlier this week, our Committee staff 
visited your campus at Suitland and saw firsthand how some of the 
Smithsonian collections are being stored and preserved. I know that 
progress has been made in building state-of-the-art storage for some 
collections but am also told that many of the Smithsonian's prized 
possessions are being stored in several dilapidated buildings at the 
Garber site which are in severe need of repair and restoration. Do you 
expect your fiscal year 2011 budget request to include funding for 
addressing these needs for collections in these buildings?

Response: Constructed between the late 1940s and early 1960s, the 
Butler-style buildings at the Garber Facility in Suitland, Maryland, 
were originally designed as temporary 25-year structures. Although some 
buildings have been renovated, many have long passed their useful 
lifespan, are structurally compromised, and are substandard facilities 
for storing collections. Environmental conditions are inadequate and 
hazardous to the collections while overcrowding severely restricts 
physical access, preservation, and use of the collections.
Recently, the Smithsonian has taken a number of corrective actions to 
improve the care of collections from the National Museum of American 
History and National Air and Space Museum which are stored at Garber:

      Last year, the National Museum of American History (NMAH) 
completed the move of portions of their collections stored at Garber 
and two other off-site locations in Virginia to the new Pennsy Drive 
collections storage facility. However, NMAH's storage space at Pennsy 
Drive is now fully occupied.
      The National Air and Space Museum (NASM) has upgraded 
micro-climate storage containers and rehoused the space suit and 
aviation clothing collections stored at Garber, thereby improving their 
overall preservation and access.
      The pending completion of Udvar-Hazy Center Phase Two 
will enable NASM to move 75 percent of the Museum's collections from 
Garber to a state-of-the-art collections storage facility.

Improving the care and preservation of collections currently stored at 
the Garber Facility is and will continue to be a priority for the 
Smithsonian. Future budget requests will support the relocation of 
collections currently stored in substandard conditions at the Garber 
Facility and the development of the site to address the long-term 
storage needs of the Smithsonian.
                                outreach
4.  Smithsonian outreach beyond the Beltway: One of the laudable goals 
of your strategic plan is to open the resources of the Smithsonian to 
millions of people including minorities, people in rural areas (which 
is appealing to a state like Idaho), and other underserved populations. 
Can you provide for us your vision of how this is achieved? Do you have 
any specific timelines for achieving these goals? To what extent will 
the Smithsonian depend upon philanthropic giving versus federal 
funding? What are the total costs involved?

Response: In the implementation of the strategic plan, we intend to 
continue and expand our longstanding initiatives to reach out to the 
people of the United States and around the world. We will build upon 
the strengths that already exist, including our Smithsonian Institution 
Traveling Exhibition Service (SITES), now in its 58th year, which 
currently circulates over 50 exhibitions each year to all 50 states on 
a wide variety of topics. SITES is a national leader in developing 
exhibitions that celebrate our diverse cultural heritage as well as 
scientific and technological innovations, and exhibitions currently in 
development and being circulated highlight the lives and achievements 
of African Americans, Latinos, Asian Pacific Americans, Native 
Americans, and others. Another key initiative is SITES' Museums on Main 
Street (MoMS) program: SITES travels to the underserved populations of 
rural America and places its exhibits in non-traditional venues, such 
as community centers, libraries, and shopping malls. As we go forward, 
we hope to enhance and augment our outreach through exhibitions around 
the country.

SITES works in concert with our Smithsonian Affiliations Program; with 
over 160 affiliates in 41 states, Puerto Rico, Panama, and the District 
of Columbia, the Affiliations Program goes far beyond the Beltway to 
bring Smithsonian programs, exhibits, and expertise to museums and 
cultural institutions throughout the country. Latest data indicate that 
over 7,500 Smithsonian artifacts have been displayed by Affiliates. In 
addition, numerous Smithsonian scholars have participated in programs 
in science, history, and art education at Affiliate locations; 
workshops, internships, and visiting professionals programs have 
enriched the careers of staff in affiliated institutions.

In addition to SITES and Affiliations, many other programs take the 
Smithsonian beyond the Beltway to millions of people, many of these 
programs are delivered via Smithsonian websites. Web-based delivery 
systems and Web 2.0 interactive technologies, Smithsonian on-line video 
conferences, webinars, and museum-to-school distance learning 
initiatives all show us enormous potential for the future. Our 
partnership with the Council of Chief State School Officers (CCSSO) and 
our on-going programs with State Teachers of the Year are also 
important conduits for reaching all 50 states. We recently began a 
series of Smithsonian Education Online Conferences. These free 
conferences and archived sessions reached over 10,000 people in all 
fifty states and over 80 countries, representing a diverse audience. 
The conferences focus on topics in science, history, culture, and art 
and are based on Smithsonian research and collections.

All of our educational resources are available on 
SmithsonianEducation.org, including lessons plans, digitized images, 
downloadable tours, and website links. Teachers and parents can easily 
find educational resources using a search engine that links resources 
to state educational standards and topics of interest.

The Smithsonian's National Science Resources Center, in partnership 
with the National Academies (National Academy of Sciences, National 
Academy of Engineering, and National Institute of Medicine) offers 
leadership development programs and resources designed to improve K-12 
science education. We are working with the Department of Education and 
CCSSO to deliver these and other education programs to underserved 
populations.

In implementing our strategic plan, we plan to use information 
technology initiatives to share our vast collections and extensive 
research. We need to develop the enterprise systems and shared 
resources and services to deliver our assets via a technological 
framework that will enable users everywhere to experience the 
Smithsonian. Funding from federal and outside sources, both dollars and 
in-kind gifts, will be needed to accomplish our goals.

5.  Educational programs: Your testimony highlighted many of the 
Smithsonian educational programs available to students of all ages. 
What is the extent of your outreach to local school districts, 
colleges, universities, and other avenues for learning? Do you have 
specific educational outreach geared specifically to seniors? Or, if 
I'm not in school, but am curious by nature and don't have the means to 
travel to Washington, DC, how does one become aware of these 
opportunities?

 Response: The Smithsonian has a memorandum of understanding with the 
Council of Chief State School Officers (CCSSO) that details how the two 
organizations work together to deliver Smithsonian content to school 
districts throughout the country. One outcome is recruiting Teachers of 
the Year from across the country to serve as Smithsonian Ambassadors, 
offering local workshops on how to access and use Smithsonian 
resources. In addition, Smithsonian in Your Classroom, filled with 
content essays and classroom-ready lessons, is mailed semi-annually to 
all public and private elementary and middle schools in the United 
States and Department of Defense Education Authority, and current and 
back issues are also available on line. The Smithsonian American Art 
Museum, in partnership with the Department of Defense Education 
Activity, provides professional development, curriculum resources and 
videoconferences for K-12 teachers and students in schools for children 
of military service members located on bases in the U.S., Europe, and 
the Pacific.

For the past 24 years, the Smithsonian's National Science Resources 
Center (NSRC) has leveraged the research and expertise of the 
Smithsonian and the National Academies to develop much needed science 
education materials for the classroom in partnership with government 
agencies, academic institutions, corporations, and museums. NSRC 
materials are now used in K-12 science programs in more than 1,200 
school districts, representing 30% of the U.S. student population, or 
19 million students.

For outreach to colleges and universities, the Smithsonian hosts over 
1,000 college students annually, representing all fifty states, who 
take part in internships across the Institution. In addition, the 
Smithsonian has a ten-year partnership with Montgomery College in 
Maryland to offer faculty seminars and professional development 
opportunities and is currently exploring offering these same 
opportunities to college faculty across the country through online 
courses. Hundreds of opportunities for graduate, predoctoral, 
postdoctoral and senior fellowships are available through the Office of 
Fellowships, which posts opportunities for research and study on-line 
at http://www.si.edu/ofg/fellowopp.htm and circulates them to 
universities around the country. More than 110 of such opportunities 
were awarded in 2009.

For outreach to seniors, the Smithsonian Education Online Conferences 
are available to anyone interested in the topic. Based on registration 
from previous two conferences, many seniors participated individually 
or through organizations such as Garden Clubs, VFWs, and senior 
centers. In addition, to better serve families, the Smithsonian 
publishes a Grandparents' Guide with suggestions for enhancing 
intergenerational museum visits.

All of these opportunities are promoted on www.si.edu and 
www.SmithsonianEducation.org, and in Smithsonian magazine, Smithsonian 
in Your Classroom, Go Smithsonian (our museum guide), education e-
newsletters sent to teachers, and various types of social media.
                      arts and industries building
6.  Arts Industries Building/National Museum of African American 
History: The renovation of the Arts and Industries Building and the 
construction of the National Museum of African American History and 
Culture are two major undertakings. What are the timelines and costs 
involved for each project? How is the Smithsonian budgeting for these 
endeavors? Has an ultimate use been determined for the Arts and 
Industries Building once the renovation is completed?

Response: The timelines and cost estimates are outlined on the table 
below.

------------------------------------------------------------------------
                                   Arts & Industries
                                    Building (AIB)          NMAAHC
------------------------------------------------------------------------
FY10............................  Design--complete    Design--kick-off
                                   Roof, Windows,      design, complete
                                   Structure, bid      three concept
                                   and award; write    alternatives;
                                   scope for Core      complete
                                   phase of work.      Environmental
                                                       Impact Statement.
                                  Construction--comp
                                   lete Exterior
                                   Masonry Repairs
                                   and Selected Demo/
                                   Hazmat.
FY11............................  Construction--begi  Design--complete
                                   n Roof/Windows/     35% construction
                                   Structure.          documents.
                                  Design--award and
                                   begin Core; award
                                   and begin
                                   Interior
                                   Outfitting and
                                   Exhibits.
FY12-15.........................  Construction--comp  Design--complete
                                   lete Roof/Windows/  100% construction
                                   Structure; bid      documents.
                                   and award Core,
                                   begin Core.
                                  Design--completed.  Construction--begi
                                                       n site work,
                                                       begin building.
FY15............................  Construction--comp  Construction--comp
                                   lete 100%           lete 100%
                                   exhibits.           building;
                                                       complete 100%
                                                       exhibits.
                                  Reopen as           Open Museum.
                                   Smithsonian
                                   Gateway.
Total Project Cost..............  $200-300 million..  $500 million.
------------------------------------------------------------------------

The revitalization of the Arts & Industries Building and the design and 
construction of the new National Museum of African American History and 
Culture are major undertakings that require thoughtful consideration of 
the effort and the impact their construction has on the rest of the 
revitalization needs of the Institution. Both projects will require 
substantial private funds. By law, the construction costs of NMAAHC are 
to be split equally between Federal and privately raised Trust sources.

For AIB, the Federal responsibility is for the preservation and 
rehabilitation of the historic structure; therefore, as design 
progresses and costs are developed, those costs are reflected in the 
capital program. We are at the earliest stages of planning a campaign 
to secure private support for the contents and outfitting of the 
building. Fortunately, thanks to the American Recovery and Reinvestment 
Act, we are moving forward with $4.6 million in current construction to 
repair the exterior masonry and remove hazardous materials and some 
interior partitions, and the fiscal year 2010 federal budget provides 
$12.6 million to begin replacement of the roof. In addition, the fiscal 
year 2010 federal budget provides $30 million for the Legacy Fund and 
directs that funding to the Arts & Industries Building, on condition 
that we match it with privately raised funds.

In consultation with some of the most imaginative experts in the 
country, we have developed a comprehensive program for the content of 
the building, and are hard at work to actualize that program with 
dynamic and exciting designs. When it reopens, the Arts and Industries 
Building will serve as a gateway to the Smithsonian and provide an 
intersection between our education program and the four Grand 
Challenges identified in our new Strategic Plan. We have evidence of 
major donor interest in the innovative technology that we will deploy 
to create a truly exciting experience for our visitors--in person and 
online. I am confident the new language of the Legacy Fund will be a 
great incentive for donors.

Smithsonian's goal in the rehabilitation of this building is to learn 
from the ``green'' technologies of the past and make the building a 
showplace for the future. We will be incorporating sustainable features 
for energy reduction, and the use of natural day lighting and water 
capture from the 2.2 acre roof for reuse in garden irrigation.

7.  Smithsonian annual attendance: In your testimony, you noted that 
your attendance was roughly 30 million visitors during the last fiscal 
year, an increase of nearly 6 million visitors. To what do you 
attribute this remarkable increase? Is that a record number of visits 
for one year?

Response: Six million additional visitors brought us back to a level of 
attendance last seen before 9/11. We believe the increase is 
attributable to several factors. The National Museum of American 
History reopened to the public in early fiscal year 2009 after being 
closed for two years. The Presidential Inauguration in January 2009 
provided a sizeable increase in attendance. Also, Smithsonian museums 
opened 90 new exhibitions during the year. We also believe that the 
release of the feature film ``Night at the Museum--Battle of the 
Smithsonian'' generated additional attendance. It was an excellent 
year, but fiscal year 2009 visitation was not an all-time record. Our 
highest visitation was in fiscal year 2001, when we recorded 33.7 
million visitors.


                               I N D E X

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                                                                   Page
American Recovery and Reinvestment Act--ARRA.....................    96
Arts and Industries Building 


Asbestos Concerns 


Biography: A. Sprightley Ryan....................................    42
Biography: G. Wayne Clough.......................................    65
Biography: Mark L. Goldstein.....................................    27
Climate Change 


Collections: Condition and Care 


Controls on Funding Purposes.....................................    43
Cross-Unit Initiatives 


Deteriorated Facilities..........................................    43
Digitizing Smithsonian Information...............................    71
Education and Science............................................    73
Efficient Use of Funding.........................................    54
Facilities Condition and Maintenance Backlog 


Financial Discipline 


Flexibility on Use of Appropriations Accounts....................    45
Former Smithsonian Business Ventures Office......................    75
Fund Raising by Smithsonian 


GAO Summary of Governance Reforms................................     3
Information Technology and Security..............................    49
Management Controls 


Military Uniforms Collections....................................    77
National Museum of African American History and Culture..........    70
National Museum of the American Latino...........................    70
Opening Statement of Chairman Dicks..............................     1
Opening Statement of Mr. Simpson.................................     2
Outreach 


Personal Property Inventory and Loss 


Previous Lapses in Governance....................................    43
Questions from Chairman Dicks 


Questions from Mr. Simpson.......................................    98
Recent Accomplishments...........................................    52
Relationship between Federal Appropriators and Trust Portion of 
  Institution....................................................    76
Role of Regents 


Scientific and Cultural Programs.................................    97
Smithsonian and GAO Interaction 


Smithsonian Governance and Management Reform 


Smithsonian Implementation of GAO Recommendations................     3
Smithsonian Priorities and New Museums...........................    99
Smithsonian Trust Funds..........................................    88
Strategic Plan...................................................    52
Suitland Facility Problems.......................................    68
Testimony of GAO 


Testimony of Inspector General 


Testimony of Smithsonian Secretary Clough 


Travel Policy and Audits.........................................    50
Visitation Increase