[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
     ACHIEVING TRANSPARENCY AND ACCOUNTABILITY IN FEDERAL SPENDING

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


                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 14, 2011

                               __________

                           Serial No. 112-63

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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                      http://www.house.gov/reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 14, 2011....................................     1
Statement of:
    Devaney, Earl, chairman, Recovery Accountability and 
      Transparency Board.........................................     5
    Miller, Ellen, executive director, Sunlight Foundation; 
      Patrick Quinlan, chief executive officer, Rivet Software; 
      Kim Wallin, controller, State of Nevada; and Craig 
      Jennings, director of Federal fiscal policy, OMB Watch.....    32
        Jennings, Craig..........................................    53
        Miller, Ellen............................................    32
        Quinlan, Patrick.........................................    41
        Wallin, Kim..............................................    48
Letters, statements, etc., submitted for the record by:
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, letter dated June 13, 2011..........    79
    Devaney, Earl, chairman, Recovery Accountability and 
      Transparency Board, prepared statement of..................     8
    Jennings, Craig, director of Federal fiscal policy, OMB 
      Watch, prepared statement of...............................    55
    Miller, Ellen, executive director, Sunlight Foundation, 
      prepared statement of......................................    34
    Quinlan, Patrick, chief executive officer, Rivet Software, 
      prepared statement of......................................    43
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................    17
    Wallin, Kim, controller, State of Nevada, prepared statement 
      of.........................................................    50


     ACHIEVING TRANSPARENCY AND ACCOUNTABILITY IN FEDERAL SPENDING

                              ----------                              


                         TUESDAY, JUNE 14, 2011

                          House of Representatives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m., in 
room 2154, Rayburn House Office Building, Hon. Darrell E. Issa 
(chairman of the committee) presiding.
    Present: Representatives Issa, Jordan, Chaffetz, Lankford, 
Amash, Labrador, Meehan, DesJarlais, Gowdy, Farenthold, Kelly, 
Cummings, Towns, Tierney, Connolly, and Quigley.
    Staff present: Ali Ahmad, communications advisor; Robert 
Borden, general counsel; Will L. Boyington and Drew Colliatie, 
staff assistants; Molly Boyl, parliamentarian; Lawrence J. 
Brady, staff director; Benjamin Stroud Cole, policy advisor and 
investigative analyst; John Cuaderes, deputy staff director; 
Adam P. Fromm, director of Member services and committee 
operations; Linda Good, chief clerk; Christopher Hixon, deputy 
chief counsel, oversight; Hudson T. Hollister, counsel; Justin 
LoFranco, deputy director of digital strategy; Mark D. Marin, 
senior professional staff member; Tegan Millspaw, research 
analyst; Peter Warren, legislative policy director; Krista 
Boyd, minority counsel; Ashley Etienne, minority director of 
communications; Jennifer Hoffman, minority press secretary; 
Lucinda Lessley, minority policy director; Amy Miller, minority 
professional staff member; Dave Rapallo, minority staff 
director; Mark Stephenson, minority senior policy advisor/
legislative director; and Cecelia Thomas, minority counsel/
deputy clerk.
    Chairman Issa. The committee will come to order.
    The oversight committee exists to secure two fundamental 
principles. First, Americans have a right to know that the 
money Washington takes from them is well spent. And second, 
Americans deserve an efficient, effective government that works 
for them. Our duty on the Oversight and Government Reform 
committee is to protect these rights. Our solemn responsibility 
is to hold government accountable to taxpayers, because 
taxpayers have a right to know what they get from their 
government. We will work tirelessly in partnership with citizen 
watchdogs to deliver the facts to the American people and bring 
genuine reform to the Federal bureaucracy.
    And today's hearing, more than any other hearing of this 
year, is, in fact, about delivering on that promise, something 
that both parties and the American people know needs to happen. 
We need to create more transparency, more accountability in 
government.
    This week there is a bipartisan consensus forming over a 
new way forward in spending transparency. In recent months I 
have had numerous conversations with Republicans and Democrats, 
with Senate and White House officials about how we can fix this 
broken program: data transparency and the bill that I 
introduced yesterday, the DATA Act, to establish an independent 
body to track Federal spending, including grants, contracts, 
loans and agencies' internal expenses on a single platform with 
a consistent reporting standard.
    Vice President Biden also announced the administration's 
intent to support bipartisan reform efforts to achieve digital 
accountability. Let me make something clear: There is no 
difference in what the Vice President wants to accomplish and 
what I want to accomplish and, I believe we'll hear today, what 
Chairman Devaney wants to accomplish. There are differences in 
how we get from where we are with a labyrinth of failed or 
partially successful programs to one single accountability that 
is less burdensome and more effective for all the participants 
and for the American people.
    In a Gallup poll released last month, the vast majority of 
Americans blamed the problems in government on too much 
spending for unneeded or wasteful Federal programs. Seventy-
three percent of American adults are convinced that spending is 
the problem in Washington, and I'm part of that 73 percent. In 
fact, if American taxpayers knew the whole truth about Federal 
spending, the number would be much higher than 73 percent.
    Let us rest assured that when we get full accountability, 
when we reduce waste in government, we still will have a 
spending problem. However, currently the data that is 
established on Federal worksites--Web sites is unreliable, 
inaccurate, and, most importantly, incompatible and often 
opaque to those who need it most.
    Recent analysis by industry experts reveal that 
USASpending.gov has only 35--was only 35 percent accurate in 
fiscal year 2009, and that is only one Federal spending data 
base among many others.
    To manage multiple data bases and hope each of them gets 
better is to assume that the tried and true failures of the 
past will be the tried and true successes of the future. And 
while I oppose the President's trillion-dollar stimulus both in 
my vote and in my rhetoric, I continue to believe that Chairman 
Devaney and the efforts he has put into affordable trial 
technology is, in fact, the way forward, and revolutionary 
accountability and transparency can be achieved on building on 
top of a model that this committee asked for as part of our 
role in that stimulus and, in fact, the RAT Board has 
implemented.
    Let us not make any mistakes, there have been errors, and 
there have been failures that had to be corrected. And yes, of 
course, often the figures were figures no one wanted to hear. 
The cost of retaining a job might be artificially higher than 
we thought it was going to be. But the facts are the facts, and 
many of those high costs were real, while many needed 
adjustment, and Chairman Devaney got right on that, and we have 
a record of mistakes that were made being corrected. But 
ultimately a single reporting system over time can become more 
reliable than States and localities having to report to 
multiple agencies in different ways.
    Today we will hear from Chairman Devaney and other 
advocates of transparency through technology. And although our 
first and most important witness today will be Chairman 
Devaney, I want to know note that on the second panel we will 
have individuals who will talk about the burden that reporting 
gives them. And they will talk about it because ultimately our 
goal of a single transparent system is to reduce the burden. 
One system throughout government means you only have to learn 
it once. Multiple systems today mean that anyone who is 
accountable for more than one report, and most entities are, 
have to learn multiple systems. We want to end that today on a 
bipartisan, bicameral and, in this case, bi-branches of 
government.
    And with that I yield to the ranking member.
    Mr. Cummings. I want to thank the chairman for calling this 
hearing, and I want to thank and welcome our distinguished 
witnesses today.
    I want to begin by congratulating you, Mr. Devaney, 41 
years of service to our Nation, and very distinguished years. 
You said something when you first appeared before us when you 
got this new assignment, and I will never forget it as long as 
I live. You said, you know, I want to make sure the mechanisms 
are put in place so that people--so that we prevent them from 
doing the wrong things. And I thought that that was such--I 
said to myself that makes sense, and thank you for doing that.
    Democrats in Congress created the Board as part of the 
Recovery Act in 2009 to put in place some of the strongest 
transparency and accountability measures ever enacted. As a 
result, the ability to track Federal spending has improved by 
leaps and bounds. In addition to promoting job creation, 
economic activity and long-term growth, the Recovery Act 
fostered unprecedented accountability and transparency in 
government spending.
    Under the administration's implementation and Chairman 
Devaney's oversight, the Recovery Act has had historically low 
levels of waste, fraud and abuse. Today more than 80 percent of 
recovery funds have been awarded, and less than half of 1 
percent currently have open investigations. I look forward to 
hearing more from him on the Board's successes, lessons learned 
and best practices that could be applied elsewhere in 
government.
    I would also like to commend President Obama for his 
unprecedented efforts to increase transparency and 
accountability in government spending. Yesterday the President 
signed an Executive order that takes the model work of the 
Board and extends it across the Federal Government. The 
President's Executive order establishes a new Government 
Accountability and Transparency Board to provide strategic 
direction for enhancing Federal spending transparency and 
eliminating waste, fraud and abuse in Federal programs.
    The President directed the Board to report on guidelines to 
integrate systems that collect government spending data, 
improve reliability, and capitalize on the proven success of 
fraud-detection technologies. The Executive order also directed 
the Vice President to convene Cabinet-level meetings on agency 
efforts to make government work better, faster and more 
efficiently under the White House Accountable Government 
Initiative.
    We have also seen remarkable improvements in other Federal 
transparency efforts over the past several years. Web sites 
like USASpending.gov, Recovery.gov and the IT Dashboard have 
put more information on line than ever before about how Federal 
dollars are being spent.
    I applaud the President for continuing to advance the goals 
of transparency and accountability in government. Unfortunately 
budget cuts may force the White House to scale back plans for 
several open government initiatives. The recently passed fiscal 
year 2011 continuing funding resolution slashed the Electronic 
Government Fund from a proposed $35 million down to $8 million, 
putting some of those very Web sites I just mentioned at risk.
    I noted a number of transparency advocates and good 
government groups have criticized these cuts, including some of 
our witnesses here today. I look forward to hearing more from 
them on the potential of these cuts on open government and 
initiatives and efforts to root out waste, fraud and abuse.
    Mr. Chairman, I have said it many times already this year, 
and I will say it again: Transparency and open government 
should not be a partisan issue, and I know you agree with that. 
But protecting taxpayers' hard-earned money from waste, fraud 
and abuse is one of the most important issues that we deal with 
on this committee. I want to acknowledge the legislation you've 
introduced, and I applaud you for it, which would do many of 
the same things directed by the President's Executive order. I 
understand the Democratic staff of the committee had worked 
cooperatively with your staff in the last Congress on 
legislative efforts to improve Federal financial data 
standards, and I supported those efforts.
    In addition to your bill, every Member on this side of the 
aisle joined together in March to introduce H.R. 1144, the 
Transparency and Openness in Government Act, a comprehensive 
compilation of five component pieces of legislation that passed 
the House last Congress with broad bipartisan support, 
including your own. Since we introduced this legislation, 17 
organizations supporting transparency and openness in 
government, including some testifying here today, have endorsed 
the bill and called for swift bipartisan action by our 
committee.
    Finally, Mr. Devaney, it is quite a compliment to you to 
know that the work you've done will serve as a model perhaps 
not only for tomorrow, but for generations yet unborn. I look 
forward to reviewing your proposal and to working together on 
these issues, Mr. Chairman, and I yield back.
    Chairman Issa. I thank the gentleman.
    Members will have 7 days to submit opening statements and 
extraneous material for the record.
    We now recognize our first panel, it says, of witnesses; 
I'll say of witness. The Honorable Earl Devaney is chairman of 
the Recovery Accountability and Transparency Board. And to get 
your title fully, are you still, in fact, an IG on loan to that 
position?
    Mr. Devaney. I am an IG on loan.
    Chairman Issa. An IG on loan and one of our favorite IGs 
from his previous work at Interior.
    Pursuant to the committee rules, all witnesses will be 
sworn in. Mr. Devaney, will you please rise to take the oath.
    [Witness sworn.]
    Chairman Issa. Let the record indicate Mr. Devaney answered 
in the affirmative.
    Chairman, I won't even give you the introduction. You know 
the drill as well as anyone. You've been her many times. If you 
go over, no one is going to call the whistle on you, because, 
in fact, we're here to hear what you have to say.
    With that, you're recognized.

 STATEMENT OF EARL DEVANEY, CHAIRMAN, RECOVERY ACCOUNTABILITY 
                     AND TRANSPARENCY BOARD

    Mr. Devaney. Thank you, Mr. Chairman, Ranking Member 
Cummings, for those kind remarks, and members of the committee. 
I want to thank for the opportunity to appear before you today 
to share with you some of the Recovery Board's lessons learned. 
I will be glad to answer any questions you have after I finish 
my opening remarks.
    Mr. Chairman, I have given considerable thought to lessons 
learned from what I sincerely hope will be my last government 
assignment. What I would like to do today is to share with the 
committee 10 very specifics lessons learned that I feel could 
be incorporated into the way our government does business going 
forward.
    The first lessons learned is nothing motivates bureaucrats 
to act faster than a law with concrete deadlines. The 
longstanding culture of Federal agencies has been to take the 
path of least resistance and to take the longest time allowed 
to enact any change. I have found that agencies continually 
underestimate their capacities to get things done pursuing 
pilot after pilot with few long-lasting developments. In fact, 
there are so many ongoing pilots that I sometimes think of our 
government as a giant airline.
    The Recovery Act addresses this problem head on, requiring 
recipients to report the use of recovery funds within 180 days 
of enactment. This suggests to me that any new law imposing 
requirements on agencies should include firm and certain 
deadlines for implementation.
    Second that spending data can be collected directly from 
recipients with a high degree of accuracy. In the past, data 
entry about Federal spending was done solely by agency 
employees. The Recovery Act in its mandated recipient reporting 
changed that dynamic, proving that recipients of Federal 
funding could report just as accurately. Any future legislation 
should recognize this potential cost savings and call for the 
migration of all spending reporting from agencies to 
recipients.
    The third lesson learned is that this spending data can be 
quickly quality controlled, displayed and uniquely arrayed to 
achieve unprecedented levels of transparency.
    In the past, agencies in receipt of recipient-reported data 
would have spent excessive amounts of time scrubbing that data 
in the basements of buildings all over this town prior to 
releasing it. By the time of its release, the information would 
be outdated and meaningless. The Recovery Act required real-
time reporting with results made public within 30 days four 
times a year. And in the end the data was not merely published 
as a jumble of numbers in a hardbound catalogue that sits on a 
shelf somewhere, but was arrayed geospatially on Recovery.gov, 
making data available and understandable for all users.
    The fourth lesson is that the Federal Government 
desperately needs a uniform, governmentwide, alphanumeric 
numbering system for all awards. Currently each agency uses its 
own unique numbering system for contracts and grants. As we 
found during the recovery transparency process, these disparate 
award numbers make tracking Federal spending unnecessarily 
arduous and complicated. Every quarter there are mismatches 
when we try to align recipient reported award numbers on 
FederalReporting.gov to what the agencies have reported to OMB 
in our efforts to see who did and who did not report as 
required.
    The award ID numbering process must be simplified and 
standardized, perhaps akin to the credit card numbering system 
that we are all accustomed to.
    Fifth lesson is that new technology, particularly cloud 
computing, can play a critical role in the delivery and 
effectiveness of transparency and accountability. In April 
2010, the Board made the move to a cloud computing 
infrastructure for Recovery.gov, a groundbreaking event that 
allowed for more efficient computer operations and reduced 
costs. Cloud computing is a pay-as-you-go approach to 
information technology, permitting lower initial investments to 
start operations. It is also flexible enough to allow IT staff 
to add or subtract computing capacity as needs dictate. In an 
era of rooting out redundancies and inefficiencies, this 
condensing of systems could create an enormous savings to the 
American taxpayer.
    The sixth lesson learned is that transparency can cause 
embarrassment, which in turn causes self-correcting behavior. 
In February 2010, we began publishing on Recovery.gov a list of 
noncompliers, a list of shame if you will. That states the 
names of recipients who have failed to report as required. 
Users can see who the repeat offenders are. I'm happy to report 
that in the first quarter of 2011, the number of 2-time 
nonreporters is down to 17, and the number of 3-time 
nonreporters is down to 7. This is out of over 200,000 awards 
reported for the quarter.
    But perhaps the most important lesson learned is that 
transparency is a force multiplier that drives accountability. 
It has become abundantly clear to me that transparency is a 
friend of the enforcer and the enemy of the fraudster. With 
less--with more than 80 percent of the recovery moneys having 
been awarded, less than half a percent of all reported recovery 
contracts, grants and loans currently have open investigations. 
After nearly 2\1/2\ years, there have been only 144 
convictions, involving a little over $1.9 million. I am often 
asked why there has been so little fraud. I have little 
empirical evidence to prove it, but I believe that it is 
largely due to the transparency embedded in the Recovery Act.
    Number eight is that the goal--if the goal is prevention 
instead of merely detection, agencies and IGs both have a high 
degree of incentive to collaborate together. The Board strategy 
was to focus our efforts heavily on preventing fraud from 
occurring in the first place, not just detecting it after the 
fact. That is why the IG community has provided training for 
more than 130,000 people since February 2009.
    My observation has been that when the goal is fraud 
detection, IGs come to the table with a great deal of 
enthusiasm, while agencies seem less motivated. In overseeing 
these recovery funds, the Board has learned that when the 
common goal is fraud prevention, agencies and IGs are equally 
enthusiastic, and a remarkable collaborative effort takes place 
between the two.
    The ninth lesson learned is that the most valuable 
accountability module is one that provides equal access to both 
agencies and enforcers. The new analytical tools and 
methodologies developed in our recovery operations center have 
proven to be as valuable to the agencies as they have been to 
the IGs. I believe that a single repository for this 
accountability data, rather than mini recoverylike centers 
sprinkled around the Federal Government, would be a better idea 
and present a significant cost savings to the American 
taxpayer.
    Finally, there is the lesson that articulating success for 
prevention is a lot harder to do than for detection. Forty-one 
years ago I began my Federal career as a Secret Service agent 
learning how to protect our Nation's leaders. How do you 
measure success in that role? Certainly failure is easy enough 
to see, but how does one measure the real effect on a potential 
assassin that the Secret Service presence has?
    Now, toward the end of my government career, I admit I am 
still pondering the difficulties of measuring successes or 
preventing fraud or waste. How can we know how much fraud has 
been prevented by what the Board and IG community did during 
the recovery program? High fraud losses accompanied by front-
page stories and nightly news segments would have clearly 
signaled failure, but we may be left to wonder, as many of my 
former colleagues in the Secret Service do every day, about 
what success really looks like. All I can say for sure is that 
to date in a government spending program of more than $800 
billion, we have witnessed extremely low levels of fraud.
    Mr. Chairman, I have recently written a white paper 
reflecting the Board's successes and some of the lessons 
learned I have talked about here today. More importantly, this 
paper also lays out a template for how those lessons could 
possibly be embedded in the government's business practices 
going forward. I plan to put that paper up on Recovery.gov 
today.
    And this concludes my oral remarks, and I will now be glad 
to answer any questions you have.
    Chairman Issa. Thank you, Chairman.
    [The prepared statement of Mr. Devaney follows:]
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    Chairman Issa. In a perfect world the first person to ask 
questions would probably be Mr. Towns, who, if not for his 
chairmanship, the embedded role that you played wouldn't have 
been in the law. So I want to take an opportunity to thank him, 
because it was, in fact, his leadership that caused the kind of 
accountability you have an opportunity to show us.
    With that I'm going to waive going first and recognize the 
gentleman from Tennessee Mr. DesJarlais, if you're prepared.
    Mr. DesJarlais. Thank you, Mr. Chairman, and thank you, 
Chairman Devaney, for sharing those thoughts and wisdoms with 
us.
    I would like to start and ask you what some of the key 
differences between tracking spending using recipient 
reporting, as you and the RAT Board have done for stimulus 
money, and tracking spending using agencies reporting in the 
way USASpending.gov does.
    Mr. Devaney. Well, Congressman, I think we have discerned 
that recipient reporting is as accurate or more accurate than 
agency reporting. I think when recipients report directly, they 
have a parochial interest in getting it right.
    We built into our systems opportunities for checks and 
balances for agencies and recipients to think about what 
they've reported and change it if they had to. All those 
changes are totally auditable so we know what was changed and 
when it was changed. And we have a continuous open environment 
for people to change things, sometimes quarters after they've 
made a mistake. And our perspective is that citizens do come 
back, recipients do come back and change things because they 
simply don't want to be embarrassed. Everybody gets to see what 
they put in. It has been--I don't think I would have imagined 
that when we first started, but it's been a great lesson.
    Mr. DesJarlais. Do you believe that a permanent universal 
recipient reporting requirement is necessary to achieve 
transparency in Federal spending?
    Mr. Devaney. Well, I think given what I just said, I think 
the migration from recipient reporting to agency reporting with 
no loss in accuracy and potential savings costs would be a 
smart thing to do.
    Mr. DesJarlais. It would make it more accurate?
    Mr. Devaney. More accurate and save money.
    Mr. DesJarlais. Do you think that this would internally 
lead to greater accountability then on the part of Federal 
agencies?
    Mr. Devaney. I do. The more accurate the data, the better 
the opportunity for those of us who spend their time on 
accountability to get it right.
    Mr. DesJarlais. You're talking about some of the successes 
earlier. Can you please address the number of recipients who 
fail to report, and explain how the Board has managed to keep 
it so small?
    Mr. Devaney. Well, when we first--the first reporting 
period there were a lot of people that failed the report, and I 
take that to be a manifestation of a new system, a new idea, 
and people just not understanding. Several quarters later those 
numbers were down dramatically, and now, as I mentioned 
earlier, the amount of recipients that actually haven't 
reported two or more times is rather low, and three or more 
times is down to seven, and that's out of hundreds of thousands 
of awards. So, you know, it's 99.9 percent, which is, I think, 
good.
    Mr. DesJarlais. Do you believe that if Congress instituted 
a board that tracks spending on a larger level and not just 
stimulus spending that the rate of failure to report would 
remain that favorable?
    Mr. Devaney. I think it would. And I took note of the 
chairman's legislation that it has enforcement teeth in it. 
Unfortunately the Recovery Act, when it was created in a very 
short time period, forgot to put the enforcement pieces in it, 
and I think the chairman's legislation fixes that.
    Mr. DesJarlais. The Recovery Board has recommended a 
governmentwide system of award identifiers. Your testimony 
mentions uniform award IDs for all Federal agencies. Can you 
explain how this would simplify the tracking of Federal 
spending?
    Mr. Devaney. Well, it became very obvious to us early on 
that that every single agency has their own unique numbering 
system, probably some dating back to George Washington. So it 
was almost impossible for us to collect data from all of those 
various agencies, so we had to design our own data-
collectionsite. And then we have to--every time the reporting 
takes place, we have to deal with what we call mismatches. The 
numbers from what the recipients report to us differ from the 
numbers that the agencies tell us that they gave the money out. 
So it's a constant battle of trying to reduce those mismatches. 
It is very labor intensive, and it doesn't have to be that way. 
If we had a common single alphanumeric numbering system like a 
credit card, the transparency would be enhanced tremendously.
    Mr. DesJarlais. Thank you, Chairman Devaney.
    And, Chairman Issa, I yield back the balance of my time.
    Chairman Issa. The gentleman yields back.
    We now recognize the gentleman from New York Mr. Towns for 
5 minutes.
    Mr. Towns. Thank very much.
    Let me begin by saying to you, Mr. Devaney, thank you for 
the outstanding job that you are doing. And, of course, I 
remember you saying that transparency is harder to practice 
than it is to talk about, and, of course, I recognize that.
    You talked about the fact that embarrassing--you know, 
sometimes it brings about change in behavior. What are the 
complaints that you were getting from the ones that did not 
cooperate? Are they saying they did not have the resources to 
do what you're asking? What are they complaining about, those 
few that did not comply?
    Mr. Devaney. Well, the excuses were all over the board, 
sir. They ranged from the ridiculous to those that, quite 
frankly, probably involve some hardships. For instance, we had 
early on some tribes and some other recipients who simply 
didn't have Internet and couldn't comply that way, so we had to 
devise a system so they could get their reports in as well.
    I think the list of shame that we publish every quarter has 
worked well in getting those numbers down. We're down to seven. 
Some of those folks have filed lawsuits against the government 
for the audacity of the government asking them to report about 
what they did with the money that the government gave them. So 
it ranges from the, you know, absurd to some legitimate 
excuses.
    Mr. Towns. Let me ask you this: The enforcement legislation 
that is being put forth, do you think that's going to further 
help?
    Mr. Devaney. I do, I do. I think the enforcement piece 
that's in the bill will be very helpful. I think that there are 
some--as I read the bill last night, there are some civil 
remedies. It doesn't preclude any criminal remedies. But that's 
something that usually motivates people to comply with the law. 
And lacking that enforcement mechanism in the Recovery Act, I 
think some people took advantage of that.
    Mr. Towns. All right. Let me just say to the chairman and 
to the ranking member that, you know, I really appreciate your 
leadership in keeping this alive, and to you, Mr. Devaney, for 
your outstanding work.
    I notice you made a comment, I don't think--maybe some 
people didn't quite hear it, where you said this might be your 
last government assignment. I heard that, you know, and I want 
you to know that I hope that your next assignment will be 
teaching those to do what you've done so well.
    Thank you very much, Mr. Chairman. And on that note I would 
be delighted to yield to the ranking member.
    [The prepared statement of Hon. Edolphus Towns follows:]
    [GRAPHIC] [TIFF OMITTED] 71076.007
    
    Chairman Issa. You second that?
    Mr. Cummings. I second that.
    Mr. Towns. On that note I yield back.
    Mr. Cummings. Just two questions, Mr. Devaney. The 
Democrats in Congress passed the American Recovery and 
Investment Act of 2009 to promote job creation, encourage long-
term growth, foster unprecedented accountability and 
transparency in government. The Recovery Act establishes and 
granted broad authorities to the Recovery Accountability and 
Transparency Board. Among them is the authority to issue 
testimonial subpoenas. Section 1524 says, the Board may issue 
subpoenas to compel the testimony of persons who are not 
Federal officers or employees, and may enforce such subpoenas 
in the same manner as provided for inspector general subpoenas 
under section 6 of the Inspector General Act of 1978. You're 
familiar with that; are you not?
    Mr. Devaney. I am.
    Mr. Cummings. And, Mr. Devaney, have you ever exercised 
that authority?
    Mr. Devaney. No, I haven't.
    Mr. Cummings. Given the fact that you never issued a 
subpoena for testimony and that you clearly have been very 
successful in identifying and eliminating and preventing fraud, 
waste and abuse, did you ever feel as though you needed that 
authority to appropriately achieve your mission?
    Mr. Devaney. I never personally have felt that way. I've 
been very fortunate to have in my Federal career rather sizable 
numbers of investigators, and we work very closely with the 
Department of Justice and always use the grand jury subpoena 
power. So I've never felt that way. I think there are some IGs 
who do feel that way, that it is needed, and I respect their 
views. I have stated before publicly that I've never used it 
and don't feel like I would.
    Mr. Cummings. Would you support legislative efforts to 
establish a permanent board modeled on the RAT Board to lead 
governmentwide efforts to improve Federal spending transparency 
and accountability that does not include testimonial subpoena 
authority?
    Mr. Devaney. I would probably support it either way. I 
think it really doesn't matter to me. I've never used it. It's 
in the Recovery Act. So I'm very anxious to see legislation 
creating a board that would do this very thing. And it would be 
up to the members of the board to use it or not use it.
    Mr. Cummings. Thank you very much. I yield back.
    Chairman Issa. I thank the gentleman.
    We now recognize the gentleman from Utah for 5 minutes. 
Would the gentleman yield for just a second?
    Mr. Chaffetz. Yes.
    Chairman Issa. Mr. Devaney, do you know whether or not the 
having that has ever been threatened or used? In other words, 
have any of your people working for you ever said, you know, we 
could compel testimony if you're not willing to give it 
voluntarily? Do you know whether that's ever occurred on your 
watch now or in the past when you have had it?
    Mr. Devaney. I don't think so. I think that there are other 
ways to get to that goal.
    Chairman Issa. Okay, thank you. I yield back.
    Mr. Chaffetz. Thank you for your service. I appreciate your 
coming to the committee a number of times and being so 
available.
    Let's go back for a moment to the award numbering system. 
Maybe it's just my simple way, but things like that just drive 
me crazy. That seems like something that could happen within an 
hour or two, okay, maybe a week. What is holding back--whose 
responsibility is this to do that?
    Mr. Devaney. Well, of course, each agency, as I mentioned 
earlier, has developed these systems over numbers of years, 30, 
40 years, so they have their own unique numbering systems. It 
means a lot to them. They are very reluctant to give it up. 
They would argue--the agencies would argue that it might cost a 
lot of money to retrofit their systems to adapt to a new 
numbering system.
    I think going forward we would like to do a feasibility 
study to see exactly what that problem is, whether it's as big 
as they think it is, and try and convince the agencies and OMB 
that this is an issue that's way past its time.
    Mr. Chaffetz. So the core responsibility for executing that 
and putting that in place would be the OMB?
    Mr. Devaney. OMB in conjunction with the agencies.
    Mr. Chaffetz. Do you have any--how massive a problem is 
this?
    Mr. Devaney. I don't underestimate the fact that some 
agencies are going to be outliers and are going to have to 
retrofit their systems to adapt to a new numbering system. I 
just don't think this is as big a problem as people try to make 
it out to be.
    Mr. Chaffetz. The Sunlight Foundation's been very good at 
clarifying and bringing some things out. This statistic they 
threw out, though, is quite stunning. Sunlight--325 programs 
had no reported information for all of fiscal year 2008, also 
stating that USASpending.gov reported accurate information for 
only 35 percent of Federal programs. Do you find that to be 
true, and how do we solve that?
    Mr. Devaney. Well, I can only speak for our site, and I 
think our site is extraordinarily accurate. I know that 
USASpending has had problems from the very beginning. I think 
the day they launched, they were talking about 50 percent error 
rate. So they make a good effort, and I think they've improved, 
but I think as long as they depend on the agencies to send them 
information that's been scrubbed, and changed, and not coming 
directly from recipients causes some of that inaccuracy.
    Mr. Chaffetz. So how do we solve that? Should it be more 
penalties for noncompliance? How do we solve that?
    Mr. Devaney. I think enforcement penalties are very 
helpful. I think the single alphanumeric numbering system would 
be helpful. I think migration from recipient reporting to 
agency reporting would be extraordinarily helpful. And I think 
that the reporting under the recovery program can be replicated 
in other spending.
    Mr. Chaffetz. Thank you, Mr. Chairman. I yield back.
    Chairman Issa. I thank the gentleman.
    We now recognize the gentleman from Virginia for 5 minutes. 
Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman, and welcome, Mr. 
Devaney.
    Mr. Devaney, the chairman's introduced some legislation 
sort of creating a new layer of oversight. What's your 
understanding of what that would do and how it would relate to 
the current structure you head up?
    Mr. Devaney. Well, my impression of the legislation is it 
is meant to replace--as you probably know, the Recovery Board 
sunsets in 2013, so I'm assuming that if the legislation were 
to pass earlier than that, it would replace the Board that I 
chair. But it certainly continues the work of the Recovery 
Board and makes a board a permanent--or as of 2018 a permanent 
board that will carry on the work that we've done.
    Mr. Connolly. How well do you think the work you've done 
has gone?
    Mr. Devaney. I think it has gone very well. There have 
been, as noted earlier, some mistakes along the way, but I 
think we've been able to correct those right away. And I think 
we've brought transparency and accountability to this money. 
It's a huge amount of money. There are low levels of fraud. I 
happen to think the transparency is the principal cause of 
that. And I think when you put transparency and accountability 
together, you get a great combination.
    We've also used new tools. We've created what we call a 
recovery operations center, which has used sophisticated 
analytical tools that heretofore have been used principally in 
the intelligence and law enforcement sectors. And the novelty 
of what we've done is that those tools are now being used on 
government spending, and the result has been quite, quite 
remarkable. It turns out that when you use those tools, and 
when you put together a good, competent analyst, you can 
actually interrupt fraud and prevent fraud from happening in 
the first instance.
    Mr. Connolly. The model--I mean, this model is unique; is 
it not? I mean, you were in the sense an experimental model, a 
new paradigm for transparency and oversight.
    Mr. Devaney. I think that's true, I think we were an 
experiment. I think if you talk about proof of concept, I think 
we've done it. And that's why I think this legislation makes an 
awful lot of sense. I also think that Vice President's--the 
President's Executive order yesterday makes sense as well.
    Mr. Connolly. Does your group also--you're tracking to make 
sure money is not misspent and there isn't fraud or waste. But 
do you also look at the other side of the equation, 
effectiveness, efficacy?
    Mr. Devaney. Well, we're certainly trying to make sure that 
waste doesn't occur as well fraud. I mean, we don't concentrate 
solely on fraud. A lot of the information that we develop in 
the recovery operations center, for instance, makes for good 
audits.
    Mr. Connolly. But do you also look at milestones in terms 
of achievement? So, in other words, if X number of dollars are 
meant to buy three locomotives in some kind of timeframe, that 
as a matter of fact that goal is met?
    Mr. Devaney. No, but my sense is that the individual IGs in 
those agencies do that job, but we don't as a board take that 
on.
    Mr. Connolly. You talked a little bit in your testimony I 
think about cloud computing and how it could actually lead to 
some savings for the Federal Government, including, I think, 
rental space and other kinds of savings and more efficiencies. 
Could you just expand a little bit on that and how cloud 
computing could help the government be more effective and to 
enhance transparency?
    Mr. Devaney. Well, there is obvious money savings to be 
had. I think when we first looked at it, we thought our little 
operation could save about three-fourths of a million dollars 
right away, and we could repurpose some of that equipment that 
we had into other areas. So there is a savings.
    The other thing I would say about cloud computing is it 
allows you to be more flexible and to expand almost like an 
accordion. If you need to do more, you can do more readily; you 
don't have to go out and buy more equipment, rent space and 
hire more people. So it's a technology that I think its time 
has come, and I think the government ought to move there. We 
were the first government enterprise to actually move to the 
cloud. That was heralded by the folks at OMB, and I think other 
agencies have followed.
    Mr. Connolly. And real quickly in the 10 seconds I've got, 
do you believe the private sector can do this more efficiently 
maybe than we can in the public sector?
    Mr. Devaney. Oh, I don't know. I think they certainly have 
been a leader there, but I think the government is slowly 
recognizing that we ought to be there.
    Mr. Connolly. Thank you, Mr. Chairman.
    Chairman Issa. You're most welcome.
    The gentleman from Pennsylvania Mr. Kelly.
    Mr. Kelly. Thank you, Mr. Chairman.
    I'm only going to take a minute, Mr. Devaney. I wanted to 
thank you. I've only been here 5 months--I'm over here, by the 
way. I'm the guy with the sunburn. It's really refreshing. And 
I look at your background. I love the fact that you're in a 
leadership coaching program. For someone who has only been here 
5 months, it is really a pleasure to sit and listen to somebody 
who has used great common sense and understands what a 
stewardship truly is.
    In our business there is an old saying, you have to inspect 
what you expect. And what you've been able to shed light on 
today in both your written testimony and your verbal, I just 
want to thank you. This is great value to the American 
taxpayers, which is why we're all here. So I want to thank you 
for that. And I just want to tell you it is really one of the 
most refreshing testimonies I've had since I've been here. I 
thank you for your service.
    And I heard what you said earlier the other gentleman had 
mentioned, that hopefully this is your last tour. I understand 
that. There is something to be said for that. But thank you so 
much for your leadership.
    And having said that I want to yield back my time to the 
chairman. Thank you, sir.
    Mr. Devaney. Thank you.
    Chairman Issa. I thank the gentleman for yielding.
    Chairman, I think to make the record straight I want to go 
through a line of thought. You said that what the Vice 
President is proposing--and you and I have both had meetings 
with the Vice President--you approve of. The President's 
Executive order you approve of. I appreciate that you like all 
or most of what's in our draft--or our legislation now.
    How do you envision that we get from the President's 
Executive order, which, if I understand it correctly, is a 
study to do X over the next 6 months; our legislation, which is 
intended to be pushed toward a particular set of goals with 
some specificity; Vice President Biden's history and oversight 
of your role; how do we bring that all together so that we get 
a permanent--Executive orders are not permanent--and well-
defined and bipartisan solution in that, let's say, 6 months 
time that the President has put out there----
    Mr. Devaney. I think both efforts move the ball down the 
field, and that's what I'm really excited about. I think the 
goal is common between the two. I think we're talking about 
eliminating redundancy, saving money, and doing it in the most 
transparent and accountable way we possibly can. So as I look 
at both things, I came away thinking they're both good.
    I think the--as I mentioned earlier today, I think that 
nothing works better than legislation with very firm dates in 
it. I really truly believe that. That's an observation not just 
from my time at the Recovery Board, but throughout my Federal 
career. I've seen bureaucrats change their mind about change 
and agree to do it once there's a law and they had firm dates.
    So I'm very excited about your legislation. I think the 
Vice President is trying to get the ball moving. And I think in 
large part the President's Executive order establishing this 
board is so we can do some things now, so we can take some 
lessons learned, so we can adopt some of the ideas I have and 
others have about trying to export what we've done throughout 
government, because it really would make things more efficient, 
and it really would save money, and I think the country needs 
that right now.
    Chairman Issa. Thank you.
    I was at Sears this past weekend, and, like you, I'm old 
enough--not that you're old--but I'm old enough to remember how 
Sears used to work, how Macy's, all of them, used to work. You 
used to have a tag either pinned or hanging from every piece of 
clothing and everything else you bought, and it had a now 
nomenclature, it said something, and sometimes it had a number. 
And every department had tags. And when you bought something, 
you had to put it--take it to a department where the person was 
knowledgeable of how to add that item up and price it. And you 
couldn't check out in one place, because ultimately each 
department had the expertise, they knew when was on special and 
so on.
    Last weekend I went through, and like we all have come to 
expect, there's a standard bar code on every product, you can 
go to any checkout, you scan that bar code, they know what the 
price is, they know what the discount is, they know all the 
aspects, it relieves it from inventory, and you leave the store 
with one credit card receipt. Isn't that really what you're 
asking for all of us who are ultimately customers and vendors 
of the government is that we get to that level of uniformity so 
that, in fact, everything gets to be easier to do with the 
government, whether you are, if you will, a vendor or a 
customer?
    Mr. Devaney. Yes.
    Chairman Issa. I'll take that as a yes.
    And with that I go to the ranking member for 5 minutes.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    You know, Mr. Devaney, I've told my staff at some point we 
move from student to teacher. And in listening to your 
testimony, I find it interesting that you didn't go where I 
thought you were going to go, but I saw you going there, when 
you talked about the Secret Service and prevention, making sure 
that the President, the others are safe. It is one thing to 
read a headline the day after and talk about what happened if 
harm came. It's another thing--and you don't get a headline for 
this--to make sure the same.
    And I was thinking--I was wondering how did you get there? 
In other words--I also tell my staff that there comes a point 
in time when you begin to face your own mortality--not you, 
just talking in general--and you begin to ask yourself, how do 
I make sure that I'm most effective and efficient in what I do? 
And I guess what I'm trying to figure out is how do we--it 
sounds like you have arrived at a point of effectiveness and 
efficiency. And I think you said it seems as if--I don't know 
what you were referring to, accountability in agencies, you 
said sometimes it's like a big plane or something like that. 
And it seems like so often we don't think we can get our arms 
around this because there are so many moving parts.
    So I'm trying to figure out with the Executive order, with 
the chairman's legislation, how do we get folks actually moving 
in that direction of effectiveness and efficiency and getting 
away from ``it-can't-be-doneness'' attitude or cultural 
mediocrity. I know that's kind of a broad question, but can you 
help us with it? How did you get there?
    Mr. Devaney. Well, I don't know if I'm there.
    Mr. Cummings. Oh, you're there.
    Mr. Devaney. I've made observations over the years that 
change in government is a difficult proposition. People don't 
normally embrace change in government. I've never been afraid 
of change. I don't believe in change just for change sake, but 
when it makes sense, when you can save money or eliminate 
redundancy, it strikes me that you have to change, and 
particularly in the circumstances we currently live in.
    So I think that both the Executive order and the 
legislation are going to cause people to understand the changes 
at hand, and we are moving in this direction smartly. So I'm 
encouraged by that. I had wondered whether or not the lessons 
learned in the Recovery Board would have been thought well 
enough to have been embedded in legislation and also in the 
Executive order, and I think I'm pleased that they seemingly 
have been. And I'm excited about the opportunity to see some of 
those things spread out in all government spending.
    Mr. Cummings. The issues of lesson learned, you talked 
about concrete deadlines, and I want you to tell us how 
significant that is, because I agree with you on that.
    The other thing that you talked about was technology. Do 
you think that we--do you think there's a technology that can 
even go further and be even more effective than what we now 
have? And what suggestions would you have to us for improving--
I mean, if you had to make some suggestions for improving the 
bill or improving the Executive order?
    Mr. Devaney. I don't think I'm ready to start making 
suggestions about improving either one of them just yet. I 
probably will have some thoughts later on.
    I think the technology opportunities are profound right 
now, and taking advantage of things like cloud computing or the 
geospatial technologies that we are using in Recovery.gov opens 
opportunities for the American public to actually, for 
instance, in the recovery program to drill down into their own 
ZIP codes or their own congressional districts and see exactly 
how that money is being used. I don't think that's ever been 
possible before for the American public.
    As an IG, if I want to understand where the money went, for 
instance, at the Department of Interior, I could have gone to 
the CFO and asked, but I doubt very seriously whether that 
person could have responded, certainly quickly.
    So the new technologies have enabled the government to 
begin to show the public of how their money's being spent. Now, 
they may not like what they see, but they have a right to see 
it.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Chairman Issa. Thank you.
    The gentleman from Oklahoma Mr. Lankford.
    Mr. Lankford. Mr. Devaney, welcome. Glad you're here, and 
thank for your testimony and your wisdom that you bring and 
your experience and background in this.
    Talk with you about a couple things here. The differences 
or the problems that you would see associated with trying to 
transition this from a one-time specific set of events, that is 
stimulus--as rapid as that was to ramp up, to learn quickly how 
to do it, and figure out how to do it and do it, but it is 
still a one-time event--and an ongoing, every year-type 
program. What do you see as the differences between those two 
in the reporting process?
    Mr. Devaney. Well, I think maybe I'll answer it this way. I 
think the--and it is a partial answer to the ranking member's 
question as well. The fact that we had a deadline--the Recovery 
Act called for these Web sites and the reporting all be done in 
6 months. The fact that we had that deadline drove us to 
accomplish it. Getting the agencies, OMB and the Recovery Board 
to be marching toward that goal probably would have not been 
accomplished had that deadline not been in the act. So I see 
legislation with concrete deadlines as they are embedded in the 
chairman's legislation as being a very good thing, because it 
leaves the discussion about whether we want to change out of 
the picture. Change is going to happen, and you only have a 
certain amount of time to do it.
    Mr. Lankford. Do you see an issue, though, with a one-time 
event like a stimulus versus an ongoing, year-after-year-type 
program; anything that you would be able to say to us, I think 
it works well, and regardless if it's year-after-year programs 
or one-time grant, it works the same?
    Mr. Devaney. Well, I think, as I mentioned earlier, I think 
the recovery program was a proof of concept. I think for those 
that had doubted that it could be done, we've now shown that it 
has been done, and it probably bodes well for future efforts.
    Mr. Lankford. Okay. Burden on recipients. Obviously this is 
a new layer of something that they have to be able to take on. 
My--while I desperately want more transparency, I agree 
completely with your statements about fraud, that the more you 
allow people to be able to look in and be able to look over 
someone else's shoulder and say, why exactly is that grant 
funded that way and what is that, that helps tremendously.
    I also don't want to reduce the number of people competing 
for a competitive grant nor reduce the number of bidders in a 
contract situation. Talking about the burden on those 
recipients having to self-report, I do think that's going to 
drive away competition. Is it a reasonable amount of burden?
    Mr. Devaney. I think it is a reasonable amount of burden. I 
think it was a giant question when we first started, when we 
first were talking about recipient reporting versus agency 
reporting. I think the burden on recipients was the number one 
issue. It was an issue for the States. It was an issue for the 
recipients. It certainly was an issue for the OMB and for the 
Board, and we were very worried about that. As a result we 
stood up a very robust help desk so that when recipients came 
in to report for the very first time and several reporting 
periods after that, they had a lot of help.
    But after two or three reporting periods, we began to see 
that our help desk wasn't being used anymore, and anecdotally 
we hear from States and from recipients that they like 
reporting on FederalReporting.gov. I think what they would like 
best would only be to report to one place instead of multiple 
places. So I think if we get down to one place where they can 
report, and we use some of the technologies we used when we 
built FederalReporting.gov, or use that infrastructure, we 
won't have much of a burden on recipients.
    Mr. Lankford. Terrific.
    What other data would you suggest could be reported on 
that? For instance, if you complete a grant, the final 
research, the finished product, is that something that could be 
reported there as well so they're not only tracking how much 
was spent, but what the final product is that the Federal 
taxpayers paid for? Or the progress, as is mentioned before, is 
there a way to be able to track not only how much has been 
allotted to this, but what's happened so far so people can see 
this much has been allotted, this is what has been accomplished 
so far?
    Mr. Devaney. Absolutely. We do something like that right 
now. We ask recipients to tell us what stage the project's in. 
We could certainly collect almost any data you wanted to 
collect.
    You do get to a point where how much is too much, but on 
the other hand, if that's an important feature, we can build it 
in. We have the flexibility on the infrastructure we have right 
now to scale up to almost any amount of data to be collected.
    Mr. Lankford. So if we're doing a grant for a certain 
project that denotes some research to something out there, at 
the end of it we can also say, this was allotted, here is how 
it was spent, and here's the final paper that was presented at 
the end of it, and when the research was done, here it is. It 
wouldn't be an issue to be able to collect it all together.
    Mr. Devaney. Correct.
    Mr. Lankford. Terrific. Thank you very much. And with that 
I yield back.
    Chairman Issa. As you compare the grant application process 
with your reporting, which one's harder to do, the applications 
for competitive grants that you've seen over the years or your 
reporting?
    Mr. Devaney. Application for grants.
    Chairman Issa. Thank you. I kind of knew the answer to that 
one.
    We now recognize the gentleman from Pennsylvania Mr. Meehan 
for 5 minutes.
    Mr. Meehan. Thank you, Mr. Chairman.
    And thank you, Mr. Devaney, not just for your presence here 
today and the great work you are doing for the Recovery Board 
but for the great work you have done for a number of years as 
inspector general. I had the good fortune to work as a U.S. 
attorney and spent much time with some of your colleagues and 
appreciate the significance of their efforts, but oftentimes, 
as well, struggled with the reality that we would be oft just 
touching the corners sometimes of what we believed was out 
there.
    And I have been intrigued by your testimony about some of 
the tools you have been discussing that can greatly enhance our 
ability to search not just where we have been but in realtime, 
because your words, I think, to focus on preventing fraud from 
occurring in the first time, rather than detecting it after the 
fact.
    So can you tell me a little bit about the recovery explorer 
tool that you have been implementing and how that works?
    Mr. Devaney. Well, the Recovery Operations Center, which we 
established fairly early on, after about 6 months, utilizes 
analytical tools that, as I mentioned earlier, have been used 
heretofore in the intelligence world and in some law 
enforcement settings and applying them to spending.
    And if you think of fraud on a continuum where on one end 
of the timeline the fraudster is thinking about stealing money 
and the other end is sort of when he has it and he is running 
down the street, what we are trying to do is we are trying to 
push the ball further up toward the front end so that we are 
either preventing fraud in the first instance or at least 
interrupting it in the middle.
    Countless times we have been able to detect a company or an 
individual that has gotten money that probably shouldn't have 
been. It doesn't mean that they have committed a crime; it just 
means that we need to stop and look. So we have asked the 
agencies to stop the flow of money so that it all doesn't go 
out the door before we are able to prevent it.
    Now, as I mentioned earlier, it is difficult to articulate 
success in this area, how much you have prevented from 
happening. It is a lot easier for me to stand here and talk 
about the number of arrests or number of referrals to the 
Department of Justice. And that is what I have done for most of 
my career, played that, sort of, stat game. It is harder to 
articulate success in the prevention business. I struggle with 
it myself, but I know that--I know that I think we have 
prevented fraud in this instance.
    And I think transparency has a lot to do about it, but it 
is also about sort of a mind shift that IGs and other 
enforcement entities are having about not just detecting it but 
preventing it from happening.
    Mr. Meehan. What kind of data does it display when you are 
talking about the broad spectrum of information that is out 
there? Is there an intelligent aspect to this, in which it is 
looking for particular indicators or it makes available data 
that then somebody can mine with a specific purpose?
    Mr. Devaney. Well, we do have formulas and algorithms that 
we use to run against the data base, the 1512 data base, the 
recovery data base, if you will, that identifies anomalies for 
us. Once again, this doesn't mean necessarily that a crime has 
been committed or even that fraud has happened. It might mean, 
for instance, this would be a good candidate to audit, to have 
an IG do an audit on--not an investigation, but an audit. On 
the other hand, it might identify, as we do countless times, 
money going to somebody who is on the excluded parties list, 
because we have that data base in-house.
    I happen to think that one of the issues that is under way 
in government right now, being managed by OMB, is the do-not-
pay list. I happen to think that our platform could do the do-
not-pay list fairly soon. I think we have three of the data 
bases, of the five, right now. If we got the other two, we 
could probably stand that up maybe in a month or 2.
    So there are great opportunities here to have it 
centralized in one place so that both agency personnel can come 
into the Recovery Operations Center before they give the money 
out and that enforcers like IGs or the FBI or GAO can access 
information. And maybe on top of some of the other data bases, 
we have the law enforcement data bases that they would have 
access to.
    Mr. Meehan. And so you are talking right now about work 
that is done within your data system and monitoring the dollars 
that have been part of the Recovery Act. But my assumption here 
is this has tremendous applicability across the various 
agencies where we would be able to look at somebody that is on 
a do-not-pay list that might be doing work with two different 
kinds of agencies.
    Mr. Devaney. I think it does have that application, and 
that is what I am excited about, that we would take what we 
have done here and apply it to all government spending. We will 
be preventing billions of dollars of fraud, and we may be 
putting investigative bodies and U.S. attorneys out of 
business.
    Mr. Meehan. Well, there is plenty of work for all of us to 
do. When you talk billions of dollars, that makes a big 
difference. Thank you for your service and your forward 
thinking.
    Mr. Chairman, I yield back my time. Thank you.
    Chairman Issa. I thank the gentleman.
    We now recognize the gentleman from Illinois, Mr. Quigley, 
for 5 minutes.
    Mr. Quigley. Thank you, Mr. Chairman.
    Thank you for being here.
    Let me raise the issue of tax expenditures as it applies to 
these issues, if that is all right with you. Your thoughts on 
whether tax expenditures should be incorporated into this sort 
of executive order or into the new bill that the chairman is 
proposing or perhaps a separate bill, such as a transparency in 
government act? Your sense of the best way to move forward on 
that?
    Mr. Devaney. Well, I am reminded of a recent event where we 
had an IG, I believe, or GAO came out with a report that 
basically said that taxpayers who owed a lot of money were 
actually getting some of these awards. And the first question 
asked of us was, well, why didn't you detect that? And that is 
because, you know, there are prohibitions from the IRS of 
sharing with us taxpayer information.
    So I think perhaps the time has come for some waivers from 
that act. And I would love to see that, the ability for us to 
have a data base that had the individuals that owed tax money. 
We could keep that in a very secure environment, and we would 
have prevented money from going to tax recipients that owed tax 
money.
    Mr. Quigley. And the best way to do that, in terms of your 
sense of this bill or an executive order?
    Mr. Devaney. Well, I think it could be--it probably would 
be better done in legislation, because I think it is a law that 
causes the IRS to be prevented from sharing it with law 
enforcement.
    There is a proviso that that kind of information can be 
shared with GAO. And I, quite frankly, think, you know, even 
GAO would say that the IGs are just as responsible enough to 
have that kind of information.
    Mr. Quigley. Thank you.
    Thank you, Mr. Chairman.
    Chairman Issa. Would the gentleman yield?
    Mr. Quigley. Yes.
    Chairman Issa. Perhaps you can clear something up I am 
unclear on. There are tax expenditures, and then there are tax 
cheats, or detected tax cheats. If I understood correctly, the 
data base that potentially legislation would give you would be 
access to tax cheats, people who--not tax expenditures per se. 
It is a more narrow definition?
    Mr. Devaney. Right.
    Chairman Issa. Thank you.
    Mr. Quigley. Mr. Chairman.
    Chairman Issa. Oh. The gentleman reclaims his time.
    Mr. Quigley. Yes. And if I could yield to the ranking 
member.
    Mr. Cummings. I thank the gentleman for yielding.
    Mr. Devaney, as part of the continuing resolution for 
fiscal year 2011, budget negotiators slashed the Electronic 
Government Fund from a proposed $35 million down to $8 million, 
putting Web sites such as Data.gov, USAspending.gov, 
Performance.gov, and the IT Dashboard at risk of being shut 
down.
    Are you aware of those cuts?
    Mr. Devaney. I am.
    Mr. Cummings. Just yesterday, a coalition of transparency 
and open government groups wrote to the leadership of the House 
Appropriations Committee's Financial Services Subcommittee 
urging them to restore funding for the Electronic Government 
Fund. Their letter said this, ``Cuts to the E-Government Fund 
in fiscal year 2011 have already hurt successful projects. 
Needed upgrades to increase transparency and improve data 
quality have been delayed or abandoned, and two projects have 
already been terminated. These cuts are pennywise and pound-
foolish. The E-Gov Fund supports powerful tools for reducing 
waste, fraud, and abuse and for creating private-sector jobs. 
And given appropriate funding, these projects result in 
benefits far in excess of their cost.''
    Mr. Devaney, you have some practical experience with the 
technological tools for routing out waste, fraud, and abuse. 
You just talked about it, when you talk about the cloud system. 
Recovery.gov is one of our best examples of transparency-
enabled accountability. Do you agree on the importance of these 
Web sites for generating accountability?
    Mr. Devaney. I do. I have become a very aggressive advocate 
of transparency if you believe, as I do, that transparency 
drives accountability. Ultimately, you save money, and that 
money is far in excess of whatever we are talking about here.
    Mr. Cummings. And how big of a role do you believe 
resources should be? In other words, how important was it that 
the RAT Board had the kind of resources it did to start from 
scratch, build out a good system, and then continue to enhance 
and improve it?
    Mr. Devaney. Well, I think it was--I think it was a guess 
as to how much money we would have needed, and I think it was a 
very on-the-spot guess. And I think we are going to come in 
under our budget for 2\1/2\ years. But having said that, I 
think the pennywise, dollar-foolish might be apropos in this 
particular instance.
    Mr. Cummings. And looking back at the Recovery.gov, what 
are the resource limitations, if any, in extending this kind of 
system governmentwide, and how tall an order is that?
    Mr. Devaney. Well, with respect to money, I don't think it 
is actually much money. It is far below what people might 
imagine it to be. I think with a little extra money, the board 
would be able to use its existing infrastructure and sit some 
of these other systems on top of that and create a one 
platform, as the chairman mentioned earlier, that would do 
essentially the same thing that countless Web sites, collection 
display Web sites, across the government do now.
    Mr. Cummings. Thank you.
    Chairman Issa. Thank you.
    I will recognize myself. I guess I am what is left.
    Chairman Devaney, I am assuming that your--you will never 
forget this chart, nor will I.
    Mr. Devaney. It is memorable.
    Chairman Issa. Well, as I look at this chart--and not to be 
counter to the ranking member, because I share with him the 
frustration that, in this basket of cuts, we seem to be cutting 
before we, in fact, fill, if you will.
    But your proposal and what is intended out of our 
legislation and, quite frankly, what is intended out of the 
President's Executive order will ultimately save money on two 
fronts, won't it? One is, if you move to cloud computing, if 
you tell essentially all the agencies that we are going to have 
this single checkout place that is really good at checking out, 
that sets it up, that relieves that burden, other than 
transition costs, no matter what that cost is--and you are 
right, we shouldn't sit here and try to say it is $51 million 
or it is $5.1 million--isn't it inevitable that that cost, 
post-transition, is less than we spend on this labyrinth of 
information today?
    Mr. Devaney. Absolutely.
    Chairman Issa. Let me go through a couple of quick 
questions just in closing, because I think we should make the 
record clear on where we are today as government.
    Oh, okay. We may have one more questioner.
    Some years ago--and you have been in government for 40-plus 
years. Well, this was about 30 of those years ago. If you 
remember the scandal when they found out that the Federal 
Government, the largest purchaser of IBM Selectric typewriters 
in the world, paid more than the State of California paid for 
IBM's Selectric's contract--Selectric II or Selectric I. And 
there was no fraud. They simply bid two separate times, and 
California apparently was just a little better in the bid and 
IBM came in less. And the government didn't know about it until 
a whistleblower found out that, in a combined agency, that the 
State paid less for the same typewriter and that person tried 
to buy through the State to save money.
    It is now 30 years later. If we are paying for a Dell 
computer, if we are paying 20 different amounts, 
hypothetically, based on bids--and Dell computers would be a 
bad example. But if we do have these discrepancies between 
hundreds of different purchase prices on substantially or 
identically the same thing, do you have the resources in 
government or do you know of those resources that would call 
that out so that we could get the best and lowest price?
    Mr. Devaney. Well, offhand, I would say that, you know, the 
buying power is enhanced when you do things--when you 
centralize your buying. And so, if we take that map that you 
have up there and we reduce it to a reasonable picture with one 
platform, it would strike me that we could do it a lot cheaper, 
because we would eliminate all of the myriad of buying 
opportunities that are going on right now across the government 
and centralize it in one place and achieve the leverage that we 
would need over the vendors.
    Chairman Issa. So even though that is not the first 
generation of what you are doing, the idea that when people 
roll up what they are paying, that you can look and say, where 
are the anomalies and how much we are paying, where are the 
best values, that is pretty easy to do over the entire 
government but only if you collect it in one place?
    Mr. Devaney. Right.
    Chairman Issa. Well, let me ask one last question, and it 
is--I want a long answer. I am not setting you up for the 
``yes, sir.''
    Mr. Devaney. Okay.
    Chairman Issa. Historically, these reportings have been 
done by essentially Cabinet positions and sub-Cabinet 
positions. Both the President and we are talking about a single 
point.
    Are we talking in the best case about a single point that 
is independent? Or is there any other conceivable way that 
would be as good as an agency that did one and only one thing, 
which was to run this collection, enforcement, and analysis?
    Mr. Devaney. I think if you are referring to the membership 
of the board or what that would look like, I think that one of 
the observations I made as I look back on the 2\1/2\ years is, 
the all-IG board clearly indicates the independence that we all 
strive for and probably raises the public's perception 
tremendously that they are getting, you know, an honest shot 
here.
    I think, however, that to make things work, to actually get 
the job done, you have to have a synergy between a board and 
the Federal agencies and OMB. And a board that has that kind of 
mix on it I think would be a good idea. I think that if a 
majority or at least half of the members are IGs, it presents 
that, sort of, optics of independence that I think is 
important, as well.
    So I think the board that is contemplated in the law that 
you have proffered and also my understanding is the Vice 
President's--the President's Executive order, the Vice 
President's intention is to try to achieve that balance on that 
board, as well.
    Chairman Issa. So what you are saying is, no matter how we 
achieve the board, as long as it is independent and perceived 
legitimately to be independent, it can work. If it becomes 
captured by any one agency or entity, it loses its 
effectiveness.
    Mr. Devaney. I would be very careful about it being 
captured by any particular interest group.
    Chairman Issa. Thank you.
    The gentleman from Idaho, Mr. Labrador.
    Mr. Labrador. Mr. Chairman, I yield back the time.
    Chairman Issa. Okay.
    He meant to me.
    I am going to use this because I have asked my questions--
and I appreciate the gentleman yielding.
    This is not the last time you are coming before this 
committee. You may be out of office, but we will use our 
subpoena power to bring you back to get educated. You know, 
there are just some things we can't live without, and one of 
them is your advice and counsel. I know we would never have to 
use that. You have been very generous with your time, both at 
these hearings and anytime we have called on you for advice. So 
I want to thank you publicly for that.
    I want to pledge, on behalf of the ranking member and 
myself both, you are one of the few people that we agree on. We 
don't have arguments about the job you are doing. We want to 
see you succeed, and we want to see you have a legacy. So on 
behalf of the committee, thank you for your service, and we 
look forward to continuing to work with you in the future.
    And, with that, we stand adjourned--no, I am sorry--stand 
in recess. I was really getting choked up. We stand in recess 
as we set up for the second panel.
    [Recess.]
    Chairman Issa. We now recognize our second panel of 
witnesses.
    The Honorable Kim Wallin is the controller of the State of 
Nevada. And Nevada is one that I always have to get right 
because I want to say ``Nevada,'' and then I get yelled at.
    Mr. Patrick Quinlan is the chief executive officer of Rivet 
Software.
    Ms. Ellen Miller, a returning guest, is the executive 
director of the Sunlight Foundation.
    And Craig Jennings is the director of Federal fiscal policy 
but was not on my list here. But thank you, and welcome. And 
thank you for your work on OMB Watch.
    Pursuant to the committee rules, would all witnesses please 
rise to take the oath and raise your right hands?
    [Witnesses sworn.]
    Chairman Issa. Let the record indicate all witnesses 
answered in the affirmative.
    This panel is every bit as important as the first panel, 
but there are four of you, so we would ask that you very much 
summarize your entire statement to keep it within 5 minutes and 
allow time for questioning. Your entire written statement will 
be entered into the record.
    Ms. Miller.

   STATEMENTS OF ELLEN MILLER, EXECUTIVE DIRECTOR, SUNLIGHT 
  FOUNDATION; PATRICK QUINLAN, CHIEF EXECUTIVE OFFICER, RIVET 
 SOFTWARE; KIM WALLIN, CONTROLLER, STATE OF NEVADA; AND CRAIG 
     JENNINGS, DIRECTOR OF FEDERAL FISCAL POLICY, OMB WATCH

                   STATEMENT OF ELLEN MILLER

    Ms. Miller. Thank you, Mr. Chairman. Thank you for inviting 
me to attend the hearing today. And I thank all the members of 
the committee also.
    My name is Ellen Miller, and I am co-founder and executive 
director of the Sunlight Foundation, a nonpartisan nonprofit 
dedicated to using the power of the Internet to catalyze 
greater government openness and transparency. We take our 
inspiration from Justice Brandeis' famous adage that sunlight 
is said to be the best of disinfectants.
    The Sunlight Foundation focuses on transparency and 
accountability for government by developing data bases, tools, 
and policies that eliminate the influence behind 
decisionmaking. We want citizens to understand the outcomes of 
government decisions. We want them to be able to hold 
government accountable for its work.
    We have long been involved in improving Federal spending 
transparency. We funded the first publicly available data base 
of government spending, FedSpending.org, that was developed by 
the nonprofit organization and my colleague on this panel's 
organization, OMB Watch. We have followed earmarks, analyzed 
grants and contracts, scraped the House disbursements, 
identified Federal subsidies, and dug into tax expenditures. 
Recently, we have spoken out against Congress' deep cuts in 
funding for E-government programs.
    Yesterday was quite the day for government transparency. 
The chairman introduced a sweeping transparency bill, the DATA 
Act, that would transform how we track Federal spending, 
establishing an independent body to track it all on a single 
Web site requiring the use of consistent, governmentwide 
standards. This new Federal Accountability and Spending 
Transparency Board would oversee a successor site to 
USAspending.gov.
    While the creation of the FAST Board will garner the lion's 
share of attention, the effort to create governmentwide 
financial data reporting standards should not be overlooked. 
Indeed, the Sunlight Foundation supports another piece of 
legislation, the Public Online Information Act, that promotes 
the creation of governmentwide data standards and sets up an 
entity with similar responsibilities.
    And here is more good news. Apparently the White House 
agrees with the President--agrees with the chairman--sorry--and 
vice versa. Yesterday, the White House announced an Executive 
order that appears to contain some of the same elements as the 
chairman's legislation. Because of these recent developments, 
we would like to submit additional written testimony on the 
chairman's bill for the record, if that is agreeable.
    Chairman Issa. Without objection, so ordered.
    Ms. Miller. We all agree on a few basic principles: 
Government spending must be transparent. As citizens engage 
with government online, they must be met step by step with 
tools that empower them to track every dollar the government 
spends. We are cautiously optimistic that technology makes this 
dream obtainable. And we all appear to agree that we need an 
independent board to do that, one such as the DATA Act and the 
White House Executive order have outlined.
    We need this because of the structure of government. OMB, 
for example, has multiple and sometimes conflicting 
responsibilities. It has the nonpolitical task of enforcing 
Federal financial reporting requirements, but it also must 
strive to avoid creating political problems for the President. 
And this is true whether we are talking about a Republican or a 
Democratic administration. These responsibilities clash when it 
comes to publicly criticizing agencies for their failings, such 
as when they do not fully report their spending.
    I have previously testified before this committee about our 
analysis of grants reported in USAspending.gov. We had 
identified almost $1.3 trillion in spending that failed to meet 
one of the three basic metrics we use: timeliness, 
completeness, and accuracy. But OMB has done little to correct 
the problems that we uncovered. When we recently revisited this 
analysis for 2010, the problems had not abated. And although 
much of the fault lies with the agencies, it is OMB's 
responsibility to publicly identify data quality problems and 
work to resolve them.
    In providing genuine accountability for government 
spending, the government must keep in mind three principles: 
First, transparency is government's responsibility. Second, 
public information must be online. Third, data quality and 
presentation matter. Data should be made available online in a 
timely fashion so that it can be easily found and reused by 
anyone, subject only to commonsense limitations.
    I applaud the committee's attention to these matters and 
thank you for the opportunity to discuss them with you today. 
And I am looking forward to your questions. Thank you.
    [The prepared statement of Ms. Miller follows:]
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    Chairman Issa. Thank you.
    Mr. Quinlan.

                  STATEMENT OF PATRICK QUINLAN

    Mr. Quinlan. Chairman Issa, Ranking Member Cummings, and 
distinguished members of the committee, my name is Patrick 
Quinlan. I am the CEO of Rivet Software in Denver, Colorado. To 
date, our company has helped over 1,300 of the top public 
companies in the United States transform the way they 
communicate their financial information to the public via the 
SEC. Thank you for the opportunity to give testimony today on 
how to better leverage technology to achieve transparency and 
accountability in Federal spending.
    The legislation that Chairman Issa has introduced and has 
been supported by the Vice President and the President in their 
own Executive order requires the board to designate consistent 
data standards for Federal spending information. Data standards 
are nonproprietary and a way of creating efficiency across data 
bases for true transparency, similar to the barcodes that you 
mentioned earlier.
    In essence, a demand for transparency is also a demand for 
accountability. To accomplish this goal, we must start with a 
data standardization, as was discussed by the honorable Mr. 
Devaney and by you, Congressman Issa, such as XBRL, which is 
eXtensible Business Reporting Language. It is governed by an 
international nonprofit consortium and similar to HTML. XBRL 
makes documents' content machine-readable and instantly 
available for research. It is an open standard owned by no one 
but used by over 44 countries to manage data efficiently and 
accurately.
    Our government operates one of the largest data warehouses 
in the world but fails to turn that data into real information. 
In effect, we are constraining innovation, wasting funds, and 
obscuring information, all in the name of data transparency.
    Noble initiatives such as Data.gov and USAspending.gov look 
good but are nonfunctional. They claim data is available and 
accessible, but if you cannot get an accurate answer, then it 
is not real information. On the other hand, Recovery.org's data 
is incredibly powerful once converted into XBRL.
    At Rivet, we have developed a taxonomy creator to impose a 
new data structure on the Recovery.gov data set. We can 
instantly determine, as an example, grant spending as distinct 
from loans and contracts by quarter and disbursed from the 
Department of the Interior to my State of Colorado, a search 
that would have required multiple manual steps using the 
current XML format. The point being, we must find more 
opportunities to mandate data standards, and XBRL is the data 
standard to help us get there.
    So what can this committee do to create true transparency 
in Federal spending? First, look at the SEC for best practices. 
They have set and enforced the data standard using XBRL, which 
has developed a self-funded industry. The SEC's 2008 visionary 
mandate for XBRL has created at least 15 companies and roughly 
1,500 jobs.
    Finally, here is an extra bonus. By passing this 
legislation, you will be creating jobs. With access to this 
tagged, accurate data, entrepreneurs will create tools with 
uses we cannot even imagine today. You will form a new, self-
funded industry, creating thousands of high-tech jobs, and 
achieve true transparency and accountability. XBRL has the 
potential to become a tool as effective as the military's GPS 
technology. Now look at the myriad of applications, businesses, 
jobs, and tax dollars generated that have been created by 
leveraging this data.
    The benefits of this new technology are lower costs, 
increased sharing, and enhanced communication. Federal fund 
recipients already spend too much time and money on compliance 
and reporting. Early XBRL adopters know that standardization 
makes compliance easier and reduces work. Many public companies 
have already saved money in both their internal and external 
reporting systems thanks to this technology.
    In conclusion, for us to move forward as a country, grow 
high-tech, and reduce the massive deficit, we must stop dealing 
with fuzzy numbers and start tracking where and how our money 
is spent. We stand ready to use the public government data to 
help people make better decisions as soon as the data is using 
the right technologies. But I hope it will not be just us doing 
that; the field will be wide open for new tech companies to 
make this data and make this more valuable.
    On behalf of my company in Denver, the thousands employed 
by our industry, and the millions of Americans we serve, I 
thank you for the opportunity to be a part of this discussion. 
We wholeheartedly endorse Chairman Issa's bill, and I will be 
happy to answer questions.
    [The prepared statement of Mr. Quinlan follows:]
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    Chairman Issa. Thank you, although you can go longer. As 
long as you are talking like that, it is okay.
    Ms. Wallin.

                    STATEMENT OF KIM WALLIN

    Ms. Wallin. Good morning, Mr. Chair, ranking member, 
members of the committee. For the record, I am Kim Wallin, 
Nevada's State controller. I am also the former global chair of 
the Institute of Management Accountants, who was one of the 
early adopters and founders of XBRL.
    This morning, I want to talk to you about how grant 
reporting can be improved through standardization and using a 
widely used, freely available, interactive data standard.
    Standardization is an important piece for improving 
transparency and accountability. In order to be able to compare 
apples to apples, the Federal Government needs to standardize 
what is being reported from agency to agency. To give you an 
example, the Department of Agriculture classifies fuel in 
lawnmowers as a ``supply'' and fuel in trucks as ``fuel'' or 
``travel.'' Other agencies call fuel ``fuel'' or ``supplies.''
    In 2004, there was a document that started the framework 
for standardization across agencies. It is called, ``Uniform 
Data Elements and Definitions for Grant Budgeting and Financial 
Reporting, Version 1.'' So we won't be starting from scratch.
    XBRL is a standard that I recommend for using for grant and 
contract reporting and other reporting requirements under the 
proposed bill. XBRL is nonproprietary and widely accepted. It 
complies with accounting principles and can be easily updated 
as new requirements come along. XBRL is about using good 
business best practices.
    XBRL is not a software or a product; it is a format for 
data that gives it structure and meaning. It is a standard that 
can be incorporated into software tools, much like how the HTML 
standard is used for building Web pages.
    Let me share with you Nevada's experience with XBRL. A few 
years ago, the Department of Agriculture in our State was 
testifying and asked if they could have standardized reporting. 
Immediately I looked at XBRL because it is about standardized 
reporting. We conducted a case study where we took their two 
larger EPA grants and used XBRL to do the grant reporting. 
Before XBRL, it was taking 2 weeks to prepare the report. Under 
XBRL, the report preparation was reduced to a day or even an 
hour. XBRL helped meet the goals of the Department of 
Agriculture, which were timely and accurate data, stronger 
internal controls, reduced costs, standardization, and seamless 
data exchange. Additional benefits were that it was scalable 
and adaptable.
    A big concern from the State's perspective to implement 
this new proposed legislation is the cost of compliance. I 
haven't had an opportunity to talk to my peers in NASACT on 
what they think the additional cost would be.
    Besides asking for money to help the States comply with the 
additional reporting and oversight, we need to find a way to 
streamline and eliminate redundant reporting and standardize 
the grant reporting requirements between all agencies. One way 
we could reduce the cost of compliance, the reporting burden, 
at the same time improve transparency and accountability, would 
be to have a single repository where States would report.
    I envision this being similar to a white paper I wrote on 
using XBRL for the Nevada Business Portal. With the Business 
Portal, businesses only have to register in one place, and all 
their business registrations and tax reporting requirements can 
be fulfilled at that one site.
    Many countries around the world are going to these very 
efficient portals. Australia now has a governmentwide portal, 
and they estimate filers are saving an estimated $800 million 
annually on compliance costs. If States could report through a 
similar single repository, the Federal agencies could go to 
that repository and generate the reports that they need. This 
would eliminate the redundant reporting and multiple formats 
that States are currently required to do. This will save 
millions of dollars in compliance costs for the States, as well 
as freeing up resources to allow for more time to do analytics 
and reduce improper payments.
    By using XBRL, the Federal agencies would be able to 
generate the reports that they need and not have to spend 
millions of dollars buying rigid proprietary systems. They 
would have more time to spend on analytics, to look for fraud, 
waste, and abuse.
    Had XBRL been used for ARRA reporting, it would have 
reduced compliance costs for the States, improved data 
integrity, and provided for more transparency. When States 
began reporting under the ARRA requirements, the Recovery Board 
was still making changes to the template an hour after the 
reporting site opened. This caused errors to be made on the 
State side. Had they been using XBRL, they could have made 
changes behind the scenes, which would not have impacted the 
States.
    To give you an example of what I mean, the FDIC has been 
using XBRL for their bank call reports for many years. When the 
FDIC decides to change what they want to see in the call 
report, they change it on their reporting site. Banks don't 
have to go in and change their systems, and oftentimes they 
don't know anything has even been changed. The FDIC saw the 
error rate go from having 30 percent errors to zero and data 
quality improving from a low of 66 percent to now 95 percent, 
and reporting time decreased from weeks to a day.
    XBRL goes beyond reporting and provides the mechanism to 
sort through mountains of information and to help governments 
to make informed decisions. Using XBRL will improve 
transparency, accountability, and give citizens and government 
officials alike better access to how we are spending taxpayer 
dollars and what we are doing with it.
    Thank you very much for the opportunity.
    [The prepared statement of Ms. Wallin follows:]
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    Chairman Issa. Thank you.
    Mr. Jennings.

                  STATEMENT OF CRAIG JENNINGS

    Mr. Jennings. Chairman Issa, Ranking Member Cummings, 
members of the committee, my name is Craig Jennings, and I am 
the director of Federal fiscal policy at OMB Watch, an 
independent, nonpartisan watchdog organization. Thank you for 
inviting me to testify today on this important topic on 
spending transparency and ways to improve it. We want to 
commend this committee for holding today's hearing and for 
efforts to increase access to accurate spending data.
    In general, we are very supportive of proposals to 
strengthen public access to government spending information. 
And such transparency is a nonpartisan issue, as demonstrated 
by the bipartisan co-sponsorship of the Federal Funding 
Accountability and Transparency Act of 2006, the unfortunately 
acronymed ``FFATA,'' where two Senators with different 
ideological backgrounds worked closely together to draft and 
advocate for the bill. We hope a similar approach is taken with 
the Digital Accountability and Transparency Act [DATA Act].
    On June 9th, we were given a summary and section-by-section 
of the DATA Act, along with a briefing by committee staff. 
However, we did not receive a copy of the legislative language 
during that briefing and, therefore, cannot comment about the 
DATA Act with any specificity. As with all legislation, the 
devil is in the details. Accordingly, we look forward to 
reviewing the legislative language and working with Chairman 
Issa as the bill moves through the House.
    Since it was formed in 1983, OMB Watch has focused on 
bringing greater accountability to our Nation's spending. We 
played a leadership role in the passage of FFATA. We also 
developed FedSpending.org, a Web site that implemented many of 
the goals of FFATA by providing online searchable and 
downloadable tools to monitor much of the Federal Government's 
spending. Because of its success, FedSpending was licensed to 
the Federal Government and came USAspending.gov.
    In other words, OMB Watch has nearly 30 years of policy and 
practical experience with bringing greater accountability to 
Federal spending. And based on our experience, OMB Watch can 
recommend the following to drastically improve Federal spending 
transparency.
    First, improve data quality by publishing Treasury data. 
Agency-reported obligation information is not the most accurate 
when it comes to how much was actually spent--that is, outlays. 
The best spending data comes from the Department of Treasury, 
the Nation's checkbook. That data should be made available 
online and compared to recipient reports.
    I should also note that USAspending.gov per se does not 
have data quality issues. Rather, the Federal Assistance Awards 
Data System [FAADS], one of the two data sources that are 
displayed on USAspending.gov, is what is at issue here. 
Replacing USAspending.gov with something else will do nothing 
to fix the Federal spending data quality unless the problems 
inherent in FAADS are addressed.
    Two, establish a unique entity identification system. Each 
recipient of Federal funds should be uniquely identified across 
all data systems in government. We need to know if the Acme, 
Inc., that received a contract from the Pentagon is the same 
Acme, Inc., that received a ``poor contractor'' review by 
State, is the same Acme, Inc., that appears in EPA's Toxics 
Release Inventory.
    It seems obvious, but there is no unique identifier system 
throughout government, and the current system used within 
USAspending.gov is deeply flawed. Without a comprehensive, 
universal unique identification system, Federal spending 
transparency will be hamstrung. This unique ID must include, at 
a minimum, the parent company ID, headquarters, and facility.
    Third, shine a light on the shadow budget of tax 
expenditures. In 2009, the Federal Government spent $556 
billion in grants and $538 billion in contracts, as reflected 
in USAspending.gov. By comparison, the government spent an 
estimated $1 trillion in fiscal year 2009 through tax 
expenditures, which is not monitored by USAspending.gov.
    To see why tax expenditure transparency is necessary, 
consider that the home mortgage interest deduction and Section 
8 housing vouchers are both designed to help Americans afford 
homes. From a housing policy standpoint, there is little 
difference between these two policies. But from a reporting and 
performance measurement standpoint, there is a world of 
difference.
    And, finally, with respect to the preliminary information 
that we received on the DATA Act, I would say that the success 
of the Recovery Board was largely related to the funding it 
received from Congress. USAspending.gov has never received 
dedicated funds. Congress needs to provide funds sufficient for 
the Federal Accountability and Spending Transparency Board to 
do its important work, and Congress should view this 
appropriation as an investment.
    We are generally supportive of the creation of a separate, 
independent agency charged with supporting Federal spending 
transparency. OMB Watch believes that the Recovery Board has 
been exemplary in overseeing the Recovery Act transparency, and 
we would be pleased if a successor to it carried on its powers 
and its work for all of Federal spending.
    We are concerned, however, that the FAST Board would be 
sunset. Additionally, USAspending would, under the act, also--
or would go away. And we think that millions of dollars 
shouldn't be used to reinvent the wheel.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Jennings follows:]
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    Chairman Issa. Thank you.
    I recognize myself for the first round of questioning.
    You know, Mr. Jennings, hopefully, as we negotiate with the 
administration on bringing together all these plans, 
expenditures, particularly Treasury expenditures, will, in 
fact, be part of a manager's amendment in a final bill. As you 
can imagine--and I think this is not a surprise to any of you--
we can only go so far in proposing. We need to make sure that 
we keep the President and his administration where they mostly 
are now, which is on board in concept.
    But having said that, Ms. Miller, I am going to ask you a 
particular question. One of the conceptual differences that has 
existed that we are trying to narrow is this whole question of 
OMB and our belief--and I think you share this with us--that 
they have an inherent conflict, that they will never, in fact, 
be the bad guys in the room insisting on enforcement.
    Do you want to elaborate any more on what the other--I 
mean, if we don't get an independent board, what do you see 
happening if OMB were to take this over under the present 
structure of their multiple missions?
    Ms. Miller. Well, I think proceeding without an independent 
agency would be a waste of time.
    And I think, also, the good news is, the administration 
does appear to agree with you that these kinds of 
responsibilities with respect to monitoring spending, putting 
it online, making it accessible for everyone, must be created 
in an independent agency.
    And I would certainly agree with Chairman Devaney's comment 
earlier this morning, that the most effective way to make this 
happen is to pass a law to make it happen.
    Chairman Issa. Yes, he was very supportive of the body he 
was before, and I am glad to hear that. I need to be with him 
with the President one time as he says that, too.
    Mr. Quinlan, you mentioned fuel, or it was mentioned, the 
multiple reporting of fuel. But with your software and 
particularly using something like XBRL, wouldn't it be true 
that people could report fuel for automotive use, truck use, 
bus use, lawnmower use, and it could be aggregated so that one 
report would say, I just want to look at all fuel; another one 
could actually break it down? Isn't that one of the advantages 
of that kind of strength the metadata gives you to build tools 
so that you can look at, for example, fuel reported multiple 
different ways but, ultimately, the user could determine what 
they wanted to see in a way that was meaningful to them?
    Mr. Quinlan. That is correct, Mr. Chairman. And it goes 
back to the conversation that Chairman Devaney had, as well as 
Ms. Wallin, that it all starts with a common taxonomy. You need 
to create one accounting structure across the Federal 
Government to ensure that fuel is fuel.
    But this is where XBRL can be helpful in the transition 
process. By going in and mapping against that initial common 
taxonomy, we don't have to wait for everybody to make the 
change. We can start by mapping each individual Cabinet's 
accounting structure or reporting structure directly into the 
newly created government structure, and we can start that 
reporting immediately. So XBRL and mapping allow that 
transition to happen seamlessly.
    Chairman Issa. Now, Ms. Wallin, I agreed with everything 
you said, but I was concerned at one part of your statement 
where you talked in terms of increased costs of reporting. Is 
it possible that if we do this right, other than transition 
costs, that we are actually driving down costs for your State? 
Don't you see your vendors, your customers, your constituents 
reporting to you and reporting to us often?
    And, additionally, don't you see yourself reporting as a 
State to multiple agencies? If we could reduce your reporting 
to one unified report or at least any given activity only being 
reported one time, wouldn't that save you money?
    Ms. Wallin. Mr. Chairman, yes, it definitely would save us 
money. It would reduce the redundancy that we have. It would 
reduce the confusion that you have. And it would give you the 
transparency that we need because all the information would be 
in one site. So I agree with that. So we just have the 
incremental costs of the transition.
    Chairman Issa. Now, I am going to ask a closing question to 
all of you, and it is deliberately off of what we are all 
talking about, government vendors and so on. But I am a 
Californian. So, unlike Nevadans, I file a big income tax 
return to the State of California. And I have always wondered 
why I have to file two separate reports, why I don't report one 
time and let the Feds and the State that have to, in fact, 
verify each other's figures and deductions for us as 
Californians, do their work. I understand separations.
    If we were to have a common platform for Nevada, doesn't 
that give you the ability in any aspect of your work to form 
compacts with the other States and gain access to information 
that might be proprietary to them but ultimately of interest to 
you reciprocally? Isn't that one of the values of a single 
reporting, is that, assuming you are given access, you can get 
information that, today, you would have to go to your adjacent 
States, go through disparate data bases to try to get 
information that you both may need in common?
    Ms. Wallin. Mr. Chairman, yes, I agree. If you take 
Australia, with their governmentwide business portal, that is 
what they have done. An individual goes to file their taxes 
there, and it takes--actually, their software system has XBRL 
built into it, and they go and file with their unique 
identifier, and that takes care of all their filing: their 
payroll reports, their local prefecture reports, everything. 
And it is the sharing of data.
    We are using XBRL in our debt collection area here in the 
State, and we are actually going to start sharing the 
information with cities and counties to collect.
    So the more commonality we can get, the more powerful we 
can be. And it reduces the cost of compliance. You would only 
have to file one return one time.
    Chairman Issa. Thank you.
    Mr. Quigley.
    Mr. Quigley. Thank you, Mr. Chairman.
    Mr. Jennings, you brought up the issue I did with the first 
panelists, and that was tax expenditures. Obviously, you 
support putting this information online. But I guess the bigger 
issue is, I am not sure most of the American public understands 
what tax expenditures are, their significance in policy, the 
fact that they are not even within the budget.
    So I am not sure just putting them online is enough. For 
you and other panelists, including Ms. Miller, your 
recommendations to elevate the awareness and understanding of 
the tax policy issues that go with tax expenditures, the lack 
of transparency, and how else can we let the world know about 
them?
    Mr. Jennings. Well, I think the first thing about tax 
expenditures is just putting them alongside and making them 
analogous, as they are, to Federal spending programs that are 
often debated within Congress, that come up in news reports. 
When they are put on equal footing in terms of reporting and by 
considered by Congress as doing the same thing--one just 
happens to be a check written to an individual, one just 
happens to be done through the Tax Code--I think that would put 
them on the same footing as spending and make them equally 
well-known as spending.
    And the way it is done right now is that the IRS is running 
a massive subsidy program, and all the information stays within 
IRS by law, some of it totally appropriate--personal 
identifiable information, etc. But the vast majority of it 
could be moved outside of the IRS and under the jurisdictions 
of committees that are responsible for their analog spending 
programs. And as we move that debate into broader budget 
discussion, I think it will become equally well-known.
    Mr. Quigley. Ms. Miller.
    Ms. Miller. I would certainly agree with Mr. Jennings' 
remarks. I mean, I think for the Sunlight Foundation, 
transparency for tax expenditures is very important, for the 
obvious reasons. We are focused on transparency for government 
data across the--you know, beyond the spending arena, which is 
the subject of this hearing. And we think the more information 
that is put online, the more that Members themselves and, 
certainly, members of the public can begin to understand the 
very nature of what government looks like, what it costs to run 
government, what government's priorities are, as shown through 
tax expenditures. And so this is a general public education 
effort.
    But I also agree with Mr. Quinlan, that the more of this 
information that is put online in parsable formats, also 
creates new businesses, things that we cannot even imagine. So 
there is a multiple purpose in moving all public information to 
being made available online in parsable formats.
    Mr. Quigley. But you don't just think it should be online. 
You believe that information like this should be within the 
Federal budget as well?
    Ms. Miller. Yes, we do think it should also be available as 
part of the Federal budget.
    Mr. Quigley. Mr. Quinlan.
    Mr. Quinlan. I agree with Ms. Miller. And you can't just 
have reporting be the last mile. Reporting has to start at the 
beginning of the process. So, again, by creating a common 
taxonomy that all areas of government report against and 
ensuring at the beginning of the budgeting process that that 
process is available actually would allow the American taxpayer 
to become a part of that discussion.
    The importance of financial communication begins with who 
understands the discussion that is happening. And I think right 
now it is very much the American Government hears the 
rhetoric--sorry--the American people hear the rhetoric that 
comes out of it, but they are not able to go in and see for 
themselves what the rhetoric is about. And, again, that is what 
a common taxonomy and XBRL can do for the discussion and for 
the outcome of that.
    Mr. Quigley. How do you address this enormous quantity of 
information, though? I mean, there is sometimes just too much. 
How do you, given what you are trying to accomplish here as 
panelists and in your everyday lives, bring that down to a 
workable amount of information that folks can grasp and 
understand?
    Ms. Miller. Well, the Sunlight Foundation spends quite a 
bit of time both advocating for data to be put online in raw, 
machine-readable formats, but we also spend a huge amount of 
our time and effort in creating tools for people to have access 
together. And some of those tools actually mash data sets 
together to make it more understandable for citizens.
    And so that is the job, in many cases, of the private 
sector. It happens to be the heart of Sunlight Foundation's 
mission as well, which is to build tools to take different data 
sets and to enable citizens or journalists to make sense of 
them as well. But if you don't have the raw data, then you have 
nothing to start with.
    Ms. Wallin. Congressman, actually, with using XBRL, the 
beauty of it is, Google just became a member of the XBRL 
International consortium. And they are going to be putting 
together tools so people can use it to parse the data how they 
want to see it.
    When the Recovery Board did their report and put it online, 
they determined how they thought the U.S. citizens wanted to 
see the data, and that is the only way you could see it. With 
XBRL, people can go and extract that data and put it into any 
type of format that makes sense for them. That is the true 
power of it.
    So it is put into a format that, there is lots of 
information out there, but XBRL gets it into the format that 
you want to see it in and how you want to look at it.
    Mr. Quinlan. And if I could add one last comment to that?
    Mr. Quigley. Of course.
    Mr. Quinlan. I think to argue that it shouldn't be done 
because it may be too big is I do not believe the correct 
approach. When you look at what HTML has done for the searching 
of words on the Internet--so all of the information, or a great 
deal of the information that is in the Internet today was 
available pre-1995. The difference is, HTML allowed you to come 
in and tag a word and define what it is so people could search 
on it. And the amount of information available on the Internet 
is probably the one thing in the world that is actually larger 
than the Federal budget.
    Mr. Quinlan. Thank you.
    Chairman Issa. Yeah, we are only talking trillions. You are 
talking peta.
    Mr. Quinlan. Huge.
    Chairman Issa. Mr. Labrador.
    Mr. Labrador. Good morning.
    Ms. Wallin, can you please give us some detail about the 
current burden of Federal reporting that State and local 
governments are dealing with?
    Ms. Wallin. Well, part of the thing when we started with 
the stimulus, we had to go and report a lot of the same 
information to the agencies as well as to the Recovery Board. 
So you have the duplicative reporting. And then they started 
asking us to do the sub-recipient monitoring. Some of the 
smaller agencies, they didn't have the resources to try to do 
that. And I will admit that, in our State, we are doing the 
best we can. Could we do better? Yes.
    And when we started out with the stimulus dollars with the 
additional reporting, we were really not given any additional 
resources to do that. The money to recover our costs for doing 
the compliance was to be recovered through the SWCAP, the 
Statewide Cost Allocation Plan. In many cases, a lot of the 
agencies were already at their ceiling of the amount of money 
that could be charged for overhead. And so you just have to try 
to absorb it. Well, with States' budgets being--our State is 
struggling. We really didn't have the money there, and it took 
away money from other programs and what have you.
    I think the biggest problem is the duplication, the 
redundancy of the reporting. If we could just go into one site 
and do it one time, I think it would make a lot more sense. And 
then, also, the confusion--this agency wants this, this one 
wants this--have that standardization. Because when you have 
the laws and you have people changing from one place to 
another, people are like, oh, they want this, they want that. 
And sometimes we ask our questions, why do you even need this, 
what do you do with it? Nothing. So----
    Mr. Labrador. Okay. So do you think this will change under 
a standardized system if the DATA Act were enacted?
    Ms. Wallin. Congressman, yes, I do believe that it will 
change if we have a single portal, a single repository where we 
report, if we use standardization, if we use interactive data 
standards such as XBRL.
    The nice thing is, when the government, if you change the 
laws on what you want to see or how you want to see things, the 
States don't have to go in and reprogram their systems. You 
guys just do it on your reporting site. And so that would be a 
huge savings for the States.
    Mr. Labrador. All right. Thank you.
    Ms. Miller, as you know, President Obama signed an 
Executive order establishing a government accountability and 
transparency board. Do you think there are significant 
differences between the proposed DATA Act, which would 
establish the FAST Board, and President Obama's new Executive 
order? And if you do, what are those differences?
    Ms. Miller. We have not yet had a chance to review either 
the chairman's legislation or the White House Executive order 
in detail. But I had asked earlier if I could submit some 
additional remarks, and we will include those comparisons in 
those additional remarks.
    Mr. Labrador. You said in your testimony that transparency 
is the government's responsibility. How do you believe the 
government has fulfilled this responsibility, especially with 
such efforts as USAspending.gov?
    Ms. Miller. I think there have been significant--really, 
truly significant strides in this administration's efforts at 
creating a transparent and open government. I believe it could 
be done faster. I think it could be done better.
    I think one of the reasons that Sunlight supports the 
creation of an independent agency, the expansion of the RAT 
Board is because we think it could be done better if you have 
this independent entity, particularly on the spending side of 
things.
    You know, the new technology is really quite a marvel. The 
number of people who are going online to receive information, 
the numbers are increasing astronomically. So, while I think 
the administration has taken significant steps, we need to go 
much further much faster. And this legislation, of course, 
would put many of the reporting responsibilities into law with 
enforcement mechanisms that we think are very important.
    Mr. Labrador. All right. Thank you.
    Mr. Chairman, I yield back my time.
    Chairman Issa. If the gentleman would yield?
    Mr. Labrador. Yes.
    Chairman Issa. Going back, because we have an unusually 
great amount of expertise on XBRL here, just a quick question. 
If all the States--we will take Nevada for example. If all of 
your data was in XBRL format, and multiple agencies wanted 
multiple information, isn't it essentially true that if you had 
all the information in a data base, even if you had extraneous 
information, under XBRL if you did a complete dump, they are 
still only going to get what they asked for because the rest of 
it is simply not going to be--they are not going to see it 
because they are not looking for it.
    So isn't that one of the strengths of this kind of data 
base, where you have the wealth of metadata, that as long as 
you give them what they want, whether you give them a little 
extra, or one agency is looking for only a part of what another 
agency is looking for, isn't that what the beauty of it is, 
that Mr. Quinlan and your State can easily get what they want 
without having to--one dump does it all?
    Mr. Quinlan. That is absolutely correct, Chairman Issa. 
And, actually, there are two parts to that answer.
    One is, if the data is all there, you are then able to ask 
the question that you want of the data and be able to identify 
what you are looking for.
    And that also then goes to the private sector. What will 
happen is, when that data is available, just like Google was 
the window into all this HTML data that existed, there will be 
entrepreneurs throughout this great country that will create 
tools that will enable the media, will enable regulatory 
agencies, will enable State agencies to go in and take the 
questions that they have and ask it of that metadata.
    Ms. Wallin. Mr. Chair, that is correct. And one of the 
things that you have is you have your taxonomy, which defines 
the definition of your data. So Agency X over here can have 
their taxonomy for education, you can have a taxonomy for 
Department of Agriculture, and they can pull what they need 
from it.
    Chairman Issa. Thank you.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Jennings and Ms. Miller, as you know, budget 
negotiators recently slashed funding for the Electronic 
Government Fund in the continuing resolution of fiscal year 
2011 from a proposed $35 million down to $8 million. It's been 
reported that these cuts are putting Web sites such as 
Data.gov, USASpending.gov, Performance.gov and the IT Dashboard 
at risk of being shut down.
    I know that both of your organizations joined a coalition 
of transparency and open government groups on a letter sent 
just yesterday to the leadership of the House Appropriations 
Committee Financial Services Subcommittee urging them to 
restore funding for the Electronic Government Fund. The letter 
said in part, ``The E-Government Fund has a proven track record 
of successful transparency, projects that have delivered 
efficiency improvements and increased government 
accountability. For instance, USASpending.gov and the IT 
Dashboard have helped to root out government waste and 
inefficiency and recently led to the elimination of some $3 
billion in failing technology projects.''
    Your letter goes on to list several other Web sites aimed 
at improving transparency and accountability and promoting 
public participation and collaboration.
    I ask unanimous consent, Mr. Chairman, that their letter be 
placed in the record.
    Chairman Issa. Without objection, so ordered.
    [The information referred to follows:]
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    Mr. Cummings. Mr. Jennings and Ms. Miller, can you 
elaborate on the impact of the dramatic cuts to the E-Gov Fund 
for fiscal year 2011 and talk about the impact of potentially 
maintaining those cuts for fiscal year 2011?
    Mr. Jennings. Certainly. I think one of the things that the 
Nation's chief information officer highlighted in a letter to 
Congress is the fact that needed improvements to data quality 
are going to have to be foregone because they don't have the 
money to do it. There is, again, also other Web sites that were 
coming up that were intended to help employees within the 
Federal Government share and exchange information and come up 
with better ideas on how to do things, and that sort of 
collaborative element with a pilot won't be continued.
    So I think we are already kind of seeing as a reduction of 
funds happens that these efforts are really hindering progress 
that was being made, and now it has just stopped.
    Mr. Cummings. And the two things that you just mentioned, 
what are the significance of those? You just mentioned two 
things there, that lack of money might cause two problems you 
just mentioned. And how significant is that, those problems?
    Mr. Jennings. Well, certainly the data quality issue is 
hugely important, and I think it's one of the main reasons for 
this hearing and for the DATA Act. It's really hard to 
understate the importance of getting the right information to 
the public. I mean, that's how we base our decisions on 
multiple things, policy, who to fine for fraud, what kinds of 
programs should be extended or ended, however that may be.
    Mr. Cummings. Ms. Miller.
    Ms. Miller. I want to remind everyone of one thing that 
Chairman Devaney said about the establishment of his board. He 
said you guessed at the right number, and having the resources 
at hand enabled him to really lift that agency into being an 
effective agency within 6 months. It was actually rather 
remarkable.
    Knowing what that right number is is a bit of a guess, 
although we now have more experience with that. But there is no 
question that the figure is somewhere between $8 million that 
causes the administration to begin to reduce what it puts on 
line or freeze what's on line and $32 million that they 
proposed. I'm not--I don't know the answer to that, it's really 
hard to estimate it, but I think the committee must dig deeply 
into that to make sure that, if it is indeed serious about 
creating this new board and be serious about government 
transparency, that there is adequate money to make that happen.
    Mr. Cummings. So in other words, we have to be careful, 
because if you put too little money in it, you don't--you lose 
your effectiveness and efficiency, and you spent money--I'm not 
trying to put words in your mouth, but that sounds like what 
you're trying to say. You spent money--in other words, you had 
to spend enough to get--sort of like a bicycle. The old 
bicycles, you have to catch the chain and priming the pump, but 
if you don't prime it enough, you don't get anything, but 
you've expended a lot of energy.
    Ms. Miller. That's precisely correct. And again, we've all 
heard the stories of the $3 billion that have been saved 
because of the IT Dashboard. We know we don't have to spend 
$2\1/2\ billion building these Web sites.
    So again, figuring out--taking the time to figure out what 
it does cost, recognizing the enormous potential for cost 
savings on the other side once the information is standardized, 
the Web sites are built, the citizen access is provided. And 
lawmakers as well as citizens themselves will have access to 
this and demand the accountability that's necessary.
    Mr. Cummings. Well, certainly I'm sure we all, I think all 
of us, want to make sure that we spend the appropriate amount 
of money so that we can have the effectiveness and efficiency 
that we want. We understand that there will be savings and 
whatever. But we definitely don't want to spend too little and 
at the same time don't want to spend too much. So I guess you 
have a good point there. Some kind of way we've got to find the 
right point.
    Ms. Miller. Right. Well, we do have some experience now in 
terms of the cost of building some of these Web sites from 
which we can learn, and I think the estimates can be within a 
reasonable range.
    Mr. Cummings. Thank you very much.
    Chairman Issa. I'm going to recognize myself for a quick 
second round. Because the ranking member and I have agreed on a 
great deal here today and probably would agree on almost 
everything, but I want to ask a question that is not intended 
to be confrontational, but just because I voted for an overall 
package that did make those cuts. And it wasn't that I didn't--
that I wanted to make the cuts, to be honest. I would have 
preferred we just leave those numbers where they were. But 
everyone was having cuts made that they wanted to make as a 
sacred cow, and that was one that we were very upset about on 
our committee.
    But, Ms. Miller, if I asked you to find enough Web sites 
that you've seen over the years that look good, but provide no 
real effective data, in other words they are mostly puff data 
sites, wouldn't you be able to find more than enough that, in 
your opinion, if you had to make a priority, you could shut 
down to grab that money? That's asking you as someone who looks 
for meaningful data and sometimes finds it and sometimes 
doesn't.
    Ms. Miller. Well, I think the problem with the data sites 
that are out there that make your eyes hurt, and you arrive at 
a Web site and you think, heavens, what am I supposed to do 
with this, how do I search anything, those are Web sites from 
the last century. Just because----
    Chairman Issa. Last millennium perhaps.
    Ms. Miller. The last millennium perhaps, the last century 
not being so long ago.
    But I wouldn't suggest shutting those down, I would suggest 
improving them, because the data--there is a lot of data that 
is available on line which is practically unusable. So the real 
challenge, I think, for us is to figure out what is our 
priority for fixing these, because this data set that took our 
staff 4 days to find on mining safety--there was such a data 
set, but it took us 2 or 3 days to find--what are the 
priorities for fixing these sites so they're actually usable? 
So I might actually end up actually going in the other 
direction, spending more money to identify these data sites, 
establishing some priorities, particularly with respect to 
accountability data.
    Chairman Issa. Sure.
    Let me go one more, and I'm going to stay with Ms. Miller 
if I could. You have the challenge that you have to work with 
what we bring you. I have the challenge that I have to figure 
out how not to start by simply saying, whatever it takes, I'll 
pay. Chairman Devaney did not have whatever it took; he had a 
very small budget, he had a very small amount of time. In 6 
months, with less money than the other Web sites that we're 
talking about, and with less time than they've had since they 
knew that they were probably going to deal with budget cuts, he 
was able to prove things could be done, including cost savings 
that I personally watched and gone through with their people 
how they found the particular wrongdoing and stealing of 
Federal funds.
    So in a sense wouldn't you agree that if we're going to get 
the additional funding back to pay for the transition and the 
ultimate better working sites that you want, wouldn't you say 
that it has to be part of a grand bargain where you say, and, 
oh, by the way, we want you to use best practices so we know 
it's the minimum amount of dollars? That includes XBRL, cloud 
computing and some of the other givens.
    Ms. Miller. Yes, I would certainly agree with that. In 
fact, if my memory serves me correctly, we were quite critical 
of the contract that was let to build the RAT Board. It seemed 
like an enormously expensive contract. In fact, maybe compared 
to other government contracts it wasn't that expensive. But 
there also has to be--I mean, there has to be a leader like 
Chairman Devaney at the head of these agencies who understands 
what it does cost and what the time implications are.
    But we would certainly agree with you. There are cost 
savings. We don't want to spend too much, but we have to figure 
out how much is enough to stand these sites up and have the 
data available that we think is most important.
    Chairman Issa. Well, with that, Mr. Ranking Member, I'll 
recognize you in a second, but I want to tell you that I agree 
with you that we need to get that money back, and I would hope 
that we both work on a strategy to get that money back by 
having a plan that the President signs on to, the Vice 
President endorses, you and I work on, we get a few Senators, 
and we show where this transition money gets us where Chairman 
Devaney wants us and where I know you want to be.
    With that, you're recognized.
    Mr. Cummings. Thank you, Mr. Chairman.
    First of all, in answering--in responding to what you just 
said, I'm in total agreement. I'll join with you in trying to 
make sure we get the funds to keep those funds. It is just so 
very, very important. In our mission statement one of the major 
lines is that we want to make sure that the people's money is 
spent effectively and efficiently. And this just seems to be a 
case that just cries out for striking the right balance so that 
we have sufficient funds. So I'm in total agreement, and I 
pledge today to work very closely with you to accomplish that.
    I want to just pick up on something that--going back to 
what the chairman was talking about, just all this technology 
and how it all plays here. The Federal Government spends nearly 
$80 billion annually on information technology, including 
software, computer equipment and network devices that help the 
government run more effectively and efficiently. Earlier this 
year Federal Chief Information Officer Kundra, Administrator 
for Federal Procurement Policy Daniel Gordon, U.S. Intellectual 
Property Enforcement Coordinator Victoria Espinel issued a 
memorandum for chief information officers and senior 
procurement executives on technology neutral. The memorandum 
sought to remind agencies of the government's policy of 
selecting and acquiring information technology that best fits 
the needs of Federal Government, including being 
technologically and vendor neutral. I think this is an 
important principle not just for the Federal acquisition 
community, but for Congress to keep in mind when crafting 
legislation as well.
    And this I'm getting to, this is what I want to ask. I ask 
all the panelists if they agree and why or why not. And it's my 
belief that in general the Federal Government lags far behind 
the private sector in technological development and 
advancement. I could imagine a scenario where we believe we're 
on the cutting edge of something, and as much time as it 
usually takes to thoughtfully craft legislation, negotiate with 
colleagues and the administration, see the bill become law and 
then be enacted over time, this is a long process, the cutting-
edge technology has already been surpassed by something newer 
and better. Technology that we have today, this morning, is 
outdated this evening. So I hope that any efforts to improve 
Federal spending transparency and accountability through 
governmentwide data standards keep that in mind. I would just 
like for you to comment on that, Mr. Quinlan, and any others of 
you, and how do we keep up?
    Mr. Quinlan. So again, I'm going to use the HTML example 
because it is one, and technology does change very rapidly. 
HTML has been at the core of word search for over 20 years now. 
XBRL does for numbers what HTML does for words and, most 
importantly, is a completely open standard. Nobody owns it. Any 
company, whether a small entrepreneurial organization like ours 
or the largest technology companies in the world such as 
Google, anybody can work on that. And so it is a standard that 
will stand the test of time. It is a standard that, as Ms. 
Wallin spoke to, has been used by 44 countries around the world 
because it does allow for true transparency without ownership. 
That is why our founder Mike Rohan chose that as the technology 
10 years ago, and we very much agree about that, and I 
appreciate your question.
    Mr. Cummings. Anybody else?
    Yes. Mr. Jennings.
    Mr. Jennings. With respect to technology and the comparison 
to the private sector, it's a little hard to deal with the 
Federal Government. There's different things going on both in 
terms of mission and the kind of information they deal with.
    First off I would just say that some agencies are much 
better than other agencies in the technology that they use, and 
I think it would be good to look at those agencies to see why 
it is they are able to harness such technology.
    The second point is that technology is not the problem for 
a lot of the issues when he talk about Federal spending 
transparency. There are cultural issues that agencies have to 
get around to being open.
    The second thing is there are conceptual issues in terms of 
when we talk about spending, what are we spending on. I know to 
get a little philosophical for you, it's what is a program? A 
program is different when it's appropriated than when an 
obligation is made than when it appears in the Treasury 
statements. There are different things that money gets attached 
to, and that has to be wrestled with.
    As I mentioned before, there's also the issue of the unique 
identifier problem, that there isn't a unique identifier for 
entities much less anything else in the Federal Government that 
extends not just within the executive branch, although that is 
a big problem, but also reaching back into the legislative 
branch in which decisions are made on how to fund things. So do 
we want to fund childhood nutrition? What are those programs 
within childhood nutrition? We need to understand all of that 
and how they relate and be able to see that within the data.
    Mr. Cummings. Thank you very much.
    Chairman Issa. I thank the gentleman, and I thank our 
witnesses for being very helpful. It's always hard to follow 
Chairman Devaney, but you showed very well that you were up to 
the task. Once again, thank you.
    We stand adjourned.
    [Whereupon, at 11:56 a.m., the committee was adjourned.]

                                 
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