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


 
                  U.S. CAPITOL POLICE BUDGET CONCERNS 

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

                                HEARING

                               before the

                    SUBCOMMITTEE ON CAPITOL SECURITY

                                 of the

                           COMMITTEE ON HOUSE
                             ADMINISTRATION
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                 HELD IN WASHINGTON, DC, JULY 29, 2010

                               __________

      Printed for the use of the Committee on House Administration


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                   COMMITTEE ON HOUSE ADMINISTRATION

                ROBERT A. BRADY, Pennsylvania, Chairman
ZOE LOFGREN, California,             DANIEL E. LUNGREN, California,
  Vice-Chairwoman                      Ranking Minority Member
MICHAEL E. CAPUANO, Massachusetts    KEVIN McCARTHY, California
CHARLES A. GONZALEZ, Texas           GREGG HARPER, Mississippi
SUSAN A. DAVIS, California
ARTUR DAVIS, Alabama

                           Professional Staff

                      Jamie Fleet, Staff Director
               Victor Arnold-Bik, Minority Staff Director
                                 ------                                

                    SUBCOMMITTEE ON CAPITOL SECURITY

              MICHAEL E. CAPUANO, Massachusetts, Chairman
ROBERT A. BRADY, Pennsylvania        DANIEL E. LUNGREN, California


             HEARING ON U.S. CAPITOL POLICE BUDGET CONCERNS

                              ----------                              


                        THURSDAY, JULY 29, 2010

                  House of Representatives,
                  Subcommittee on Capitol Security,
                         Committee on House Administration,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 11:00 a.m., in 
room 1310, Longworth House Office Building, Hon. Michael E. 
Capuano (chairman of the subcommittee) presiding.
    Present: Representatives Capuano and Lungren.
    Staff Present: Jamie Fleet, Staff Director; Matt Pinkus, 
Professional Staff/Parliamentarian; Kyle Anderson, Press 
Director; Joe Wallace, Legislative Clerk; Darrell O'Connor, 
Professional Staff; Ryan Caimi, Intern; and Katie Ryan, 
Minority Professional Staff.
    Mr. Capuano. The hearing will come to order. The purpose of 
the hearing is to exercise the subcommittee's oversight 
function. In considering the Inspector General's audit of the 
Capitol Police budget, formulation process, significant 
problems were discovered earlier this year. The subcommittee 
would like some explanation as to what went wrong and how it is 
being corrected.
    Today we have I believe only two people testifying, Chief 
Morse and Mr. Hoecker from the Inspector General. And with 
that, I am going to forgo any introductory comments and yield 
to the ranking member.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE TIFF FORMAT]
    
    Mr. Lungren. Thank you very much, Mr. Chairman. This is an 
important hearing. We all agree the Capitol Police are a vital 
part of the operation here. They protect this institution, both 
the Members and the staff, as well as the millions of 
constituents who visit here every year, and we shouldn't forget 
that we have had members of our force that have lost their 
lives in defense of our safety. That is why I think it is so 
important that our oversight proceed.
    We are here to discuss concerns of the Capitol Police 
fiscal year 2010 and fiscal year 2011 budgets. After 
miscalculations were discovered earlier this year the Inspector 
General for the police performed an audit of the Department's 
budget formulation process.
    I would say let's be blunt, the audit does not reflect 
well, to say the least, on the financial and administrative 
management of the Capitol Police. The findings suggest that 
there was not an accurate formulation of the original fiscal 
year 2010 budget submission. And that these miscalculations 
unfortunately carried over into fiscal year 2011 budget 
formulation. When the revision of both budgets were resubmitted 
to the Congress, they too had errors. The root causes appear to 
be from a lack of adequate controls of the budget formulation 
process, inconsistent application of past budgetary practices 
and processes and ineffective management of the administrative 
division.
    So here we are, the expected shortfall for fiscal year 2010 
is somewhere between 3.8 and $5.1 million. And despite an 
amended fiscal year 2011 submission the Department is still 
expecting a fiscal year 2011 shortfall between 9.3 and $14.8 
million, $5.4 million more than stated in the amended fiscal 
year 2011 budget.
    With all due respect, I don't think those are small 
discrepancies. Furthermore, the report states that a potential 
shortfall exists in the funding of the radio modernization 
project. This project is one of the most important that we 
have. At every hearing that we have had I raised my concern 
about whether we can move forward on this more expeditiously, 
whether we have the proper funding. And I was disappointed to 
find that there is a question about that now.
    And I found it deeply troubling to read in the report, and 
I quote, ``Other matters came to our attention during field 
work which we believe resulted from behavior which was 
considered deficient or improper when compared with behavior 
that a prudent person would consider reasonable and necessary 
business practice given the facts and circumstances.'' The 
Office of Inspector General identified potential conflicting 
statements, procurement, time and attendance, pay and ethical 
issues.
    This is serious stuff. I hope we have a chance to go 
through this in some detail because I view this as a very 
critical report from the Inspector General. So I look forward 
to hearing from our witnesses and discussing the specifics of 
the report as well as any plans the Department has to address 
these issues and return the administrative office to one that 
exhibits integrity, reliability and professionalism, because 
that is what we would expect, it seems to me, from such an 
important agency.
    This is very serious, Mr. Chairman. I thank you for having 
this hearing. And I hope that we can find out what the problem 
is, how we solve the problem and how we go forward in the 
future. So thank you very much.
    Mr. Capuano. Thank you, Mr. Lungren, and before we hear 
from the witnesses I would like unanimous consent to place my 
full statement on the record and to keep the record open for 5 
days to receive any written questions or additional material 
from witnesses or other members.
    Without objection, that is so ordered. I guess we will 
begin with Chief Morse.
    [The statement of Chief Morse follows:]

  STATEMENT OF PHILLIP D. MORSE, SR., CHIEF OF POLICE, UNITED 
                     STATES CAPITOL POLICE

    Chief Morse. Chairman Capuano, Ranking Member Lungren, and 
other members of the committee, thank you for the opportunity 
to appear here today regarding the U.S. Capitol Police budget 
concerns. I would also like to thank you for your sustained and 
unwavering support for all the men and women of the United 
States Capitol Police.
    As you know, earlier this year the Department discovered 
that we had made a salaries calculation error in fiscal year 
2010 and 2011 budget requests, which has resulted in a 
projected fiscal year 2010 salary shortfall. As a result, the 
Department submitted a budget amendment for our fiscal year 
2011 budget request.
    Once I learned of the problem I took immediate action to 
assess the issue, coordinate with the Capitol Police Board, 
notify our oversight committees, stabilize our fiscal year 2010 
budget execution, and develop a plan to address the problem.
    As part of addressing the problem I asked my Executive 
Management Team to conduct an Investment Review Board to 
identify general expense funding for potential reprogramming to 
address the salary shortfall with a primary focus on 
maintaining our security and law enforcement mission and 
mitigating possible impacts on our workforce. This effort 
resulted in the set-aside of critical general expense funding 
sufficient to address the shortfall within our stated goal of 
mitigating those impacts.
    Additionally, the Capitol Police Board provided their 
technical experts to assist the Department in validating our 
2011 budget resubmission, as well as providing technical 
guidance on our efforts to address the 2010 shortfall.
    Further, the Government Accountability Office continues to 
provide its assistance and guidance to the Department in 
addressing outstanding audit recommendations and incorporating 
best practices into the Department's efforts to resolve our 
budget formulation issues.
    Concurrent with this effort, I asked the U.S. Capitol 
Police Inspector General to conduct an audit of our fiscal year 
2010 and 2011 budget formulation processes and provide me with 
a report as soon as possible so that I can take any necessary 
or immediate actions.
    Specifically, I requested that he take a look and validate 
the 2010 impact, review and validate the 2011 budget request 
and make recommendations to me on how to improve our processes 
so we could implement changes for our 2012 budget formulation 
process.
    The Inspector General has completed his audit and provided 
an audit report of his findings to me and the Capitol Police 
Board. His report contains several recommendations to assist 
the Department in strengthening its financial management 
practices, to include our future budget formulation processes. 
I have reviewed the report and its recommendations, and I 
generally agree with them.
    To address the recommendations with a focus on ensuring 
that this failure does not occur again, we are actively 
realigning our processes to adopt those suggestions from the 
report. We are developing standard operating procedures to 
formalize our budget formulation processes and we are working 
in a collaborative manner with the Capitol Police Board to 
implement their guidance and recommendations.
    Our focus is on ensuring that we have necessary people and 
processes in place to perform the financial management 
requirements of the Department in a fiscally responsible and 
transparent manner consistent with the expectations of our 
stakeholders and the public.
    In closing, I want to assure you that we understand the 
gravity of these issues that caused this problem and we are 
taking the necessary steps to correct them. While these issues 
have been significant, please be assured that we have taken 
every measure to mitigate the effort on our mission and our 
personnel.
    I appreciate the opportunity to appear before you today and 
I am happy to answer any questions you may have.
    [The statement of Chief Morse follows:]

    [GRAPHIC(S) NOT AVAILABLE TIFF FORMAT]
    
    Mr. Capuano. Thank you, Chief.
    Mr. Hoecker.

STATEMENT OF CARL W. HOECKER, INSPECTOR GENERAL, UNITED STATES 
                         CAPITOL POLICE

    Mr. Hoecker. Mr. Chairman, Mr. Lungren, my name is Carl 
Hoecker. I am the Inspector General for the United States 
Capitol Police. Thank you for inviting me here this morning to 
discuss our work with the Department's budget formulation 
process.
    As the Chief requested, my office conducted the audit of 
the budget formulation process. Our objectives were to assess 
whether the Department has adequate controls over the budget 
formulation process to ensure that accurate data is collected 
and developed.
    Two, to determine if staff complied with those controls 
during the formulation of the fiscal year 2010 and fiscal year 
2011 budget process.
    Three, if not, note the exceptions and root causes and 
finally determine the reasonableness of the fiscal year 2010 
and 2011 revised budgets for personnel compensation and 
benefits. Our scope included the original and revised amended 
fiscal year 2010 and 2011 budget submissions and processes/
controls utilized to formulate those submissions.
    The OIG found that the Department did not have adequate 
controls over the budget formulation process to ensure that 
adequate data was collected and developed. The Department's 
policies and procedures did not accurately document or define 
its budget formulation processes. And the budget execution and 
monitoring standard operating procedures are incomplete and 
outdated.
    During the formulation of the fiscal year 2010 and 2011 
budgets, the Department did not follow proven past practices or 
comply with prior controls over budget processes. During the 
formulation of the 2010 budget, the Department did not fully 
utilize its Force Development Process, nor did it apply the 
fiscal year 2009 format or consistently follow best practices 
for developing personnel compensation and benefits. We also 
noted noncompliance with fund control processes was permitted. 
As a result, the Department is at risk of requesting 
insufficient funding or overspending its appropriations.
    The OIG concluded the overarching root cause is the 
Department's administrative management has allowed inadequate 
financial weaknesses to persist, neglected to hold individuals 
accountable for implementation of GAO and OIG recommendations, 
and ineffectively managed its workforce.
    The OIG found that miscalculations, omissions, and other 
factors contributed to the insufficient budget submissions for 
fiscal year 2010 and 2011 resulting in a significant deficit 
for the Department. For fiscal year 2010 OIG projects the 
benefits and salaries and benefits budget shortfall to range 
between 3.8 and $5.1 million. This deferential depends upon 
actual attrition for the remainder of fiscal year 2010 and the 
impact of the Department's cost cutting measures implemented by 
the Chief. Since our projection for the budget shortfall is 
about $1.7 million less than the Department's, OIG believes 
that the fiscal year 2010 revised budget shortfall is 
reasonable.
    For fiscal year 2011, OIG projects that the salary and 
benefits budget shortfall to range between 9.3 and $14.8 
million. This is based on the Department's budget estimate 
submission and depends on the actual attrition and the 
Department's cost cutting measures. OIG's projection of the 
fiscal year 2011 shortfall is about $5.4 million more than the 
Department's $9.4 million.
    OIG made eight recommendations which provide a genuine 
opportunity to strengthen controls over processes involved in 
budget formulation. Specifically, OIG recommended that the 
United States Capitol Police establish a formal budget 
formulation and allocation process that links all costs to its 
mission, goals, and objectives within its strategic and human 
capital plans. This process should include written policies and 
procedures delineating each office's role and responsibility, 
to include specific methodology, sources of data and records 
management for calculating compensation of benefits.
    Also, the Capitol Police should establish a mechanism for 
the Investment Review Board and the Executive Management Team 
to review specific programs each year, evaluating their 
effectiveness, efficiency and how they contribute to achieving 
a specific strategic goal. The Department should implement and 
document processes, procedures, and controls to identify and 
help ensure that key funds control personnel are properly 
trained. The OIG recommended that the Chief evaluate whether 
the Department has appropriate leadership and management within 
the Office of Administration.
    This concludes my testimony. I will be pleased to answer 
your questions.
    [The statement of Mr. Hoecker follows:]

    [GRAPHIC(S) NOT AVAILABLE TIFF FORMAT]
    
    Mr. Capuano. Thanks, Mr. Hoecker.
    Chief, do you trust Mr. Hoecker?
    Chief Morse. I have read the report and the recommendations 
and have reviewed the----
    Mr. Capuano. No, Chief, do you trust the man?
    Chief Morse. Yes, I have no reason to distrust him.
    Mr. Capuano. Do you trust his judgment?
    Chief Morse. Yes.
    Mr. Capuano. Do you trust his professionalism?
    Chief Morse. Yes.
    Mr. Capuano. Chief, you are a great cop. I think you have 
done a great job as far as the policing aspect of it. I feel 
very safe as a Member of Congress. I think this is the safest 
place on Earth because of what you and your staff have done.
    Mr. Hoecker is a professional accountant, a professional 
Inspector General. The issues here have nothing to do with the 
actual policing of the Hill. I am not questioning you on that. 
These issues are administrative. His training to me is 
unquestionable, in fact more training than I could imagine.
    If he were questioning you on police deployment, I would 
ask him the same questions. The questions are on financial 
management. None of us can know all things about what we do. I 
am a former mayor. I had to do everything just like you have to 
do everything. I couldn't do everything, I couldn't be the 
police chief, the fire chief, the DPW commissioner, the city 
auditor, and on and on and on. I had to delegate those things 
to people who were qualified in their role.
    When the Inspector General says something and when now 
after a year and a half, depending on when you measure the 
time, we are now into our third serious financial problem that 
I am aware of, two years of personnel items and personnel items 
in any budget, particularly in the police department, in this 
case 80 percent, that is not unusual, that is typical. And now 
the radio program, of which I have been a strong proponent on 
every measure, at every step. Now we are in problems 
financially, not on problems of the radio but financially on 
the radio issue.
    Chief, I have got to tell you, here is my strong advice to 
you: Take Mr. Hoecker's report and say, yes, sir. Several 
places here you disagreed. On funds availability control you 
say that you have actually accomplished certain things that the 
IG then comes back and says you didn't. You didn't provide us 
documentation.
    The report also questions--questions the relationship, the 
way the IG's office has been treated by certain people in your 
department. I understand the normal human nature when being 
questioned by somebody who might not say good things about 
whatever it is you are doing is to be defensive, but honestly 
it all comes back to you. You are the Chief. This isn't the 
first time we have had a similar, a comparable issue in just 
the last couple of months. When there is a problem, you say 
yes, sir. And I would strongly say that if the roles were 
reversed and you were saying you should have 14 cops on the 
corner and you should say no, you shouldn't, you should have 
some other number, I would be on your side because you are the 
professional police officer.
    He is the professional accountant. Do what he tells you. Do 
it quickly. I have got to tell you, personally, on a personal 
basis, I am tired of this. I think I have done everything I can 
to defend the Department's record since I have been on this 
committee, and I will continue to do so because I think you 
have been great on many different levels. We have certain 
disagreements, but they have been fine. I am tired of defending 
this issue. As a matter of fact, I won't do it anymore. And I 
won't do it anymore because I don't mind human error, everybody 
makes mistakes. I am not measuring somebody by the mistakes 
they make, unless they are repeated. This is a repeated mistake 
and the reaction to the mistake has been typical defensiveness 
as opposed to simply saying, okay, we screwed up, we will fix 
it as you say to fix it.
    Honestly, I am a little bit concerned and personally 
disappointed in the fact that we are here on this issue again 
today. This is not a new issue.
    As a matter of fact I want to ask you, as I understand it, 
according to the report in March 2009, was the first alerting 
to wait a minute, your budget isn't 80 percent. It was 80 
percent of personnel last year, now it is only 65 percent of 
personnel this year. Honestly, that should stick out as a red 
flag to anybody. I do my own office budget every year. I know 
what my personnel numbers are. They fluctuate a little bit, but 
really not much. Mine is in the same range, about 80 percent. 
If all of a sudden I did my numbers and it came up with 65 
percent on a personnel basis I would say, yeah, I must have 
missed something. If you knew--when did you--when did it come 
to your attention that there was some serious questions? Now 
was this March 2009 commentary made to you or to one of your 
staffers?
    Chief Morse. That was not made to me, but to one of the 
staff, I believe.
    Mr. Capuano. Did staff alert you to it?
    Chief Morse. No.
    Mr. Capuano. Here is the problem, holding your personnel 
accountable. There are lots of different ways to hold people 
accountable, but if you have a staff that is being asked that 
question, that then didn't react to it and didn't bring it to 
your attention, that is a problem. That is a staff who is not 
protecting you, and not protecting the Department, and not 
protecting the Congress and not protecting the taxpayer.
    Again, I don't want to--personally I am not focused on the 
mistakes. Mistakes get made every day and in every profession, 
everywhere. My focus is on the reaction to those mistakes when 
they become aware--when you become aware of them or when 
somebody who should tell you becomes aware of them.
    As I understand it, there still has been no suggestion on 
how to reprogram the money this year or next year, is that 
correct or is that out of date?
    Chief Morse. Our reprogramming has been sent to the Capitol 
Police Board for review today. And we expected for it to be 
accomplished at this time because we now have a pretty good 
outlook on what the remaining funds requirements would be. And 
we certainly wanted to be as close as we could be so that we 
would not be adverse to our general expenses any more than we 
needed to be. So we are now prepared to move our reprogramming 
letter forward.
    Mr. Capuano. With the indulgence of the ranking member, Mr. 
Hoecker, would you say now, knowing what you know now after the 
inspection, after the reports and the give and take, should we 
leave the financial functions of the Capitol Police within the 
Capitol Police or should they be moved into an independent 
entity?
    Mr. Hoecker. One sense tells me that is way above my pay 
grade, sir.
    Mr. Capuano. I just asked you a question. That makes it 
within your pay grade.
    Mr. Hoecker. Right, sir. I think the police with a little 
help can get it done this year and can move forward. Since we 
have issued the report we have seen some progress on the 
recommendations and, for instance, there was a control that was 
not in place. When we were at the exit interview talking to the 
Chief about that control, shortly before that, they had 
reinstituted that control. So there are indications that they 
are taking this serious and they have formed a team I believe 
to go in there and to proceed on the fiscal year 2012 budget.
    Mr. Capuano. Has the cooperation between the Department and 
your office been improved?
    Mr. Hoecker. Yes, sir, and I can clarify.
    Mr. Capuano. Has it been improved sufficiently?
    Mr. Hoecker. Yes, sir. I didn't want you to misunderstand 
our report, and perhaps it could be better written in that 
respect, but there were a couple of folks that were not 
truthful, we believe, not forward, not cooperative. This was 
not from the Chief's office.
    Mr. Capuano. Are they still in place?
    Mr. Hoecker. Yes, sir.
    Mr. Capuano. Not truthful. Did I hear you correctly?
    Mr. Hoecker. We have reason to believe that they withheld 
information from us, sir, yes.
    Mr. Capuano. Not truthful? Chief, accountability. Not 
truthful? I understand defensiveness. Not truthful to the 
Inspector General? To your own Inspector General? That is 
acceptable behavior within the Department?
    Chief Morse. No. Lying is not acceptable.
    Mr. Capuano. Those people are still in place? How do we 
know that once they lied to the IG once they won't do it again?
    Chief Morse. Well, before I can make personnel decisions 
with respect to conduct or performance, I have to be given all 
the facts in order to evaluate that. And at this point I do not 
believe that the Inspector General has all the information with 
respect to his findings to submit to me yet. So----
    Mr. Capuano. Mr. Inspector General, is that accurate?
    Mr. Hoecker. Yes, sir, it is. We have initiated a number of 
investigations and we will finalize those investigations and 
report them to the Chief so that he can take appropriate 
action, if action should be taken.
    Mr. Capuano. Chief. Somebody lies on their application to 
be a Capitol Police Officer. They are automatically rejected 
out of hand; is that correct?
    Chief Morse. Yes, sir.
    Mr. Capuano. Somebody lies to the Inspector General. If 
they are found after fair investigation and fair review, what 
happens to them.
    Chief Morse. I believe that statutorily if they lie to the 
Inspector General it can be a criminal offense, and then of 
course if that were to be forwarded then we would wait for the 
legal process to be completed.
    Mr. Capuano. Sir, I respect that, I am not looking to 
convict somebody prior to the appropriate process. But again I 
am going to end where I started. Chief, I am begging you, I am 
begging you, take the IG's report and just do it. Do it as 
quickly as you humanly can, and anybody who stands in the way 
get rid of them or at least begin the process of getting rid of 
them. Please don't make us have to come back here on this 
again. The next thing I hear from the IG I want to hear that 
you have implemented all the suggestions he has made.
    Chief Morse. If I could just for the record, I would like 
to show you the actions that we have taken, the immediate 
actions with respect to the audit and the corrective actions 
that we plan to implement in the future.
    The first thing and immediate thing that I did was take 
charge of the situation and mitigate any impact to security or 
law enforcement or personnel to the police department.
    Mr. Capuano. Chief, hang on one second. Honestly, it is not 
me you have to answer to. I am not a CPA, I am not a certified 
forensic accountant. He is. And if he tells me you have done 
sufficiently, that is really all I need to hear. I am not 
qualified to judge whether you have.
    Chief Morse. Okay.
    Mr. Capuano. I will be very clear. I think you know me well 
enough to know by now that if I didn't think you were an honest 
person or a capable or a qualified or a truthful person I would 
say so. I do. I think you have a good heart and I think you 
want to do the right thing. But I also think you have been 
dragging your feet on this issue. I am trying to say very 
clearly stop dragging your feet. Do what he tells you to do. 
And if there are people in the way, get rid of them. Whatever 
it takes, do it. If he says you have done it, fine by me. If he 
says you haven't done it, no disrespect intended, I am going to 
side with him on financial matters. I will side with you on 
police matters every day of the week. Listen to him, don't come 
back to us.
    I think I have to yield to the ranking member, thanking him 
for his indulgence.
    Mr. Lungren. Thank you very much, Mr. Chairman. I would 
reiterate the chairman's comments about the quality of service 
from the police force that we are getting from the standpoint 
of policing. I think the Chief is doing an excellent job and I 
would be upset if he left because I think we have a very 
professional force. I think the men and women in uniform here 
do a tremendous job under very difficult circumstances.
    Having said that, I am, as I mentioned in my opening 
statement, very disappointed with the administrative side of 
things.
    Mr. Hoecker, I want to hone in on some of your comments 
here. You said in your prepared statement that the OIG 
concluded that the overarching root cause is that the 
Department's administrative management has allowed inadequate 
financial weaknesses to persist, neglected to hold individuals 
accountable for implementation of Government Accountability 
Office and OIG recommendations, and ineffectively managed its 
workforce.
    What are you talking about when you say the Department's 
administrative management?
    Mr. Hoecker. That would be the CAO, everything under the 
CAO's office.
    Mr. Lungren. The CAO within the Department?
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. That is a pretty strong set of findings that 
you made here. Inadequate financial weaknesses to persist; in 
other words, they did not take your previous recommendations 
into account. That is the Administrative Management Team; is 
that correct?
    Mr. Hoecker. What I meant by that, sir, was every year we 
do a financial statement audit and in 2005 and 2006 we 
combined--2004 and 2005 were combined, fiscal year 2006 was 
standalone, fiscal year 2007 and fiscal year 2008. Each year 
there has been material weaknesses. Material weaknesses means 
that--this is in terms of internal controls, that means that 
there is a control that is not working properly and the 
auditors are not satisfied that that will not prevent errors or 
misstatements.
    Mr. Lungren. So you would expect if you point that out that 
that would change for the next audit, wouldn't you?
    Mr. Hoecker. Yes, sir. I would expect an organization would 
get the financial statement report, look at the internal 
controls report that is contained therein, and focus on 
clearing any kind of material weaknesses.
    Mr. Lungren. You say neglected to hold individuals 
accountable for implementation of Government Accountability 
Office and OIG recommendations. What do you mean?
    Mr. Hoecker. Well, sir, there are the plans to clear 
recommendations to provide evidence to the auditors and it 
appeared to us that this schedule, they had target dates, and 
instead of meeting those target dates for whatever reason the 
target date just kept on shifting. Combined with that is that 
we found nothing in the performance evaluation of individuals 
involved that linked strategic plans, strategic goals, and also 
improving financial operations and clearing open 
recommendations. We found none of that in the performance 
evaluations or in the performance standards.
    Mr. Lungren. You are talking about individuals within the 
administrative management side of the House?
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. We are not talking about sworn officers?
    Mr. Hoecker. No, sir.
    Mr. Lungren. Ineffectively managing the workforce, that is 
within the Department's Administrative Management Team?
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. I am very, very concerned about a statement 
about identifying potential conflicting statements, procurement 
time and attendance, pay and ethical issues. That covers a 
range of things. Can you tell me what you are talking about 
there?
    Mr. Hoecker. Well, sir, we have initiated a number of 
investigations to address those. When we were conducting this 
audit we came across these various issues and they at least 
seemed to be some type of misconduct either at least something 
in the Department's rules of conduct, a deficiency there or 
perhaps worse. But that is what we are looking at in our 
investigation.
    Mr. Lungren. Are these sworn officers?
    Mr. Hoecker. No, sir.
    Mr. Lungren. This is the administrative side of the house.
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. In your final statement, of the four 
recommendations you made you say, the OIG also recommended the 
Chief evaluate whether the Department has the appropriate 
leadership and management within the Office of Administration. 
What do you mean?
    Mr. Hoecker. I mean that the Chief should look at the whole 
CAO's shop, look and see if the right skill sets are present, 
look and see if the right leadership traits are exhibited by 
the individuals through the whole administrative function.
    Mr. Lungren. You say earlier in your testimony, the 
formulation of fiscal year 2010, 2011 budgets, the Department 
did not follow its proven past budget practices. What do you 
mean by that?
    Mr. Hoecker. Well, sir, fiscal year 2009, although budgets 
are estimates by definition, fiscal year 2009 seemed to work. 
The people, the stakeholders were generally happy with that, we 
didn't have a shortfall, it worked. What did not happen was 
they did not use the fiscal year 2009 as a go by, as a sample 
of this is our target. What I also mean by that is two budget 
officers ago, a budget officer prepared a document. This 
document spelled out exactly how to prepare personnel 
compensation and benefits and it resides in the electronic 
document system for the Capitol Police. That was not used 
during the fiscal year 2010 and the fiscal year 2011 budget 
submissions.
    Mr. Lungren. When you say budget officers, is that a person 
or a personnel spot within the administrative side of the 
house.
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. You find that a little odd that they would not 
follow the practices that worked in prior years?
    Mr. Hoecker. I do find that unusual, sir.
    Mr. Lungren. You say that during the formulation of the 
2010 budget the Department did not fully utilize its Force 
Development Process. You used capitals for that, Forced 
Development Process. Is that a specific term of art or a 
specific program? What is that and what was not followed?
    Mr. Hoecker. Yes, sir. The Force Development Process 
developed by the Chief, I believe in 2006, and perhaps the 
Chief can expound on that a little bit more, but the way I 
understand that process, if they have a new initiative they 
have a group of senior people in the Department to evaluate the 
environment, the risks, the cost and what is required and what 
they are trying to achieve by this new initiative. And that is 
applied to the general expense areas. What we found in fiscal 
year 2010 is that they weren't using that. And we found an e-
mail that asked why aren't you using that and then from the e-
mail traffic we saw that they had done a modified version of 
Force Development.
    Mr. Lungren. E-mail from whom to whom?
    Mr. Hoecker. Um, it was from the Chief to the 
administrative section, sir.
    Mr. Lungren. So the Chief asking why this wasn't utilized?
    Mr. Hoecker. Yes, sir. Yes, sir.
    Mr. Lungren. Then you say a failure to follow past best 
practices for developing the personnel compensation and 
benefits. What do you mean by that?
    Mr. Hoecker. That is the fiscal year 2009 standard, if you 
will, that they used and also the document that resides in the 
Hummingbird system, which is their document retrieval system.
    Mr. Lungren. And that was not followed?
    Mr. Hoecker. It was not, sir.
    Mr. Lungren. And you also noted noncompliance with the 
funds control process. What does that mean?
    Mr. Hoecker. The funds control process, what we mean by 
that is it is funds availability control. And what that means 
is that I want to expend these funds, I want to buy this piece 
of equipment, or I want to hire this person at this level. What 
this funds control is, it asks the budget folks do we have 
enough money to pay this. That was lifted in June of 2009.
    Mr. Lungren. Lifted, you mean removed?
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. Not utilized anymore.
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. Let me ask you this, if you were a new 
administrative officer coming into this department and you saw 
these things, what would you do? 
    Mr. Hoecker. What I would do, sir, is scrub each process 
from the bottom up.
    Mr. Lungren. And if you followed--if you noted that 
something had worked in prior years and was not followed then 
subsequently, what would you do as administrative officer 
coming in and seeing that?
    Mr. Hoecker. I would certainly ask a lot of questions as to 
why didn't we and how are we going to--and if I thought that 
that was not a good answer, I might say that well, we are going 
to use it this year.
    Mr. Lungren. Chief, you have heard the testimony here of 
the Inspector General. It seems to me we have got some real 
problems on the administrative side of the house so how--look, 
I know you are burdened--let's see, not burdened. I know you 
are constrained by certain requirements with respect to 
personnel decisions. I realize the system and the way it works, 
but what is your response to what appears to be some real 
problems, insufficiencies, difficulties on the administrative 
side of the house?
    Chief Morse. Well, I think also in the audit report, and I 
just want to focus on this a minute, is that when I became 
Chief I had a vision and a challenge to the organization that 
we would have repeatable business practices, that we would be 
transparent, that we would validate everything that we would 
do. We built that into our strategic plan, we built that in as 
we developed our Human Capital Plan. We put in an internal 
program called Force Development, which helps us formulate a 
budget that is specific to the threats that we face so that we 
have the adequate resources and personnel and technology to 
address the critical needs of the campus, to keep it safe, and 
to keep our personnel well equipped and well trained.
    So we had those processes in place. Those processes were 
used to help us develop a clean financial statements. They 
helped us achieve a 2009 budget that was a good budget and that 
focused on all those issues. So we were very pleased in the 
direction that we were going, how we had incorporated this into 
our overall strategic plan, our Human Capital Plan. It was the 
practice of the agency. And as you have noted, our operations 
side has worked extremely well. We have had tremendous 
successes with that, as well as the administrative side with 
leasing vehicles as a new type of program where we save money 
and we recycle vehicles. The truck interdiction program to keep 
the campus safe.
    So those are all programs that come from an assessment of 
how we can do better, how we can enhance what we have, how we 
can save money doing it and how we can be at most efficient. I 
don't know why someone chooses at any level to not follow the 
direction, the business processes that have made us so 
successful.
    Mr. Lungren. Should it take us having hearings for 2 years 
to get to this point?
    Chief Morse. No. This is very disappointing to me as well.
    Mr. Lungren. Well, it is more than disappointing to me. You 
know, to use an old football analogy you can have the best Xs 
and Os in the game, if your team can't execute it, it doesn't 
do a doggone bit of good. And no one has executed the Xs and Os 
on the administrative side. I mean that may be simple language 
but it looks to me that is how I would summarize Mr. Hoecker's 
report. Would you agree, Mr. Hoecker?
    Mr. Hoecker. Yes, sir.
    Mr. Lungren. So with all due respect, knowing what the 
rules are and knowing you have to be careful of what you say 
and knowing it takes a long time to make changes, frankly this 
report cries out for change on the administrative side. And I 
hope that will take place sooner rather than later. And I hope 
that the tried and true practices that Mr. Hoecker has outlined 
that you took pride in putting in place will be followed.
    Goodness, it would be really tough if we were standing here 
and you would be with a great big question mark over your head 
and so would Mr. Hoecker, gee, we don't know what to do, there 
has been a screw up but we don't know what to do. And yet we 
know what to do. It is what you did before apparently. The 
practices they had in 2009 were good ones, Mr. Hoecker. Am I 
stating you correctly?
    Mr. Hoecker. 2009 worked, yes, sir.
    Mr. Lungren. Okay. Well, I think that is all I have to say.
    Mr. Capuano. Thanks.
    Mr. Hoecker, I just want to follow up on something that you 
mentioned to Mr. Lungren in response to one of his questions. 
If I heard you correctly, I think it was 4 or 5 years in a row 
there was material weaknesses in the annual audit?
    Mr. Hoecker. Yes, sir.
    Mr. Capuano. Were they the same material weakness?
    Mr. Hoecker. It started out with two and that was financial 
management has always been a material weakness, and the second 
one that was always consistent was payroll processing. Those 
were consistent among all those years, sir.
    Mr. Capuano. And just though you understand and I think I 
understand, I want to be clear, in my experience material 
weakness is a professional term of art used by accountants. 
What it really means to me at the end of the annual audit it is 
the auditor basically saying, hey, you have a problem, red flag 
warning, do something about it.
    Mr. Hoecker. That is very fair.
    Mr. Capuano. And in my experience if you get the same, I 
mean there are different things you can do, you can get a 
different material weakness for something new, but if you get 
the same one for 2 years in a row, that generally ends up in 
a--if not that year at least in the third year, generally ends 
up in a qualified report, is that not your experience?
    Mr. Hoecker. Well, it depends if they feel comfortable 
about the way the financial statements are represented. If they 
feel comfortable, they will render the opinion that is clean as 
we call it as unqualified. But it is entirely possible that 
because of material weakness it could cause errors and mistakes 
in the financial statement reporting. That is exactly right, 
sir.
    Mr. Capuano. And these annual audits were done internally 
or by external auditors?
    Mr. Hoecker. They were done by an external audit firm that 
works under contract for my office, sir.
    Mr. Capuano. Same external auditor for those 5 years?
    Mr. Hoecker. Yes, sir.
    Mr. Capuano. In today's world don't we generally change 
auditors on a regular basis?
    Mr. Hoecker. We do. Yes, sir, we do. However, USCP has only 
had one clean opinion. So I think where that really comes into 
play is where you wouldn't want 5 years of a clean opinion or 6 
years, whatever the magical number is, and then you would 
probably switch.
    Mr. Capuano. So we are pretty much due for a switch?
    Mr. Hoecker. We are, sir. And I think we are going to a 
single legislative auditor; it has to with the migration of the 
financial system to the Library of Congress.
    Mr. Capuano. All right. Thank you, Mr. Hoecker.
    I don't think I want to pursue today the current radio 
situation, but it is my understanding we have had one major 
outstanding issue now for 6 months, that every time my office 
asks about this issue we get told we are right on the verge of 
getting it fixed or getting it addressed, and yet it is not 
addressed.
    Chief, just on the one issue on the backup location, are we 
any closer to resolution than we were 6 months ago?
    Chief Morse. My most recent briefing on the leasing 
negotiations is that they have addressed all issues and will 
have some sort of resolution with--on paper with regard to 
negotiations this week or as late as Tuesday. Now, I don't want 
to misrepresent any facts there. There is a representative from 
my--who is the Director of the Office of Information Systems, 
who is in the audience, but that is where I think we stand now 
on those issues----
    Mr. Capuano. I respect that, but I have heard something 
similar to that now for week after week after week after week 
and just note that not now, but when we get back in September 
if this issue is not resolved I am going to expect a plan B. I 
think that is a reasonable expectation after 7 months because I 
still believe based on your recommendations that I still trust 
that the radio program is absolutely essential and it has to 
get done, and we can't allow lease negotiations to hold us up 
much longer. Is that fair?
    Chief Morse. Yes, sir, that is.
    Mr. Capuano. Chief, I am going to end with one simple 
question. With all the financial issues that you have, again I 
have made myself clear and Mr. Lungren has been clear as to 
where we want to go, but I want to be very clear for the 
record, in your opinion, even with the financial problems you 
face this year and next financial fiscal year, do you believe 
that Capitol Hill is safe?
    Chief Morse. Yes, I do.
    Mr. Capuano. I do, too, but I just wanted to hear you say 
it.
    We are all set. Thank you, Chief and Mr. Hoecker, very 
much.
    [Whereupon, at 11:43 a.m., the subcommittee was adjourned.]
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