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







                          STIMULUS OVERSIGHT:
                      AN UPDATE ON ACCOUNTABILITY,
                     TRANSPARENCY, AND PERFORMANCE

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

                                HEARING

                               BEFORE THE

                     SUBCOMMITTEE ON INVESTIGATIONS
                             AND OVERSIGHT

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                      WEDNESDAY, NOVEMBER 30, 2011

                               __________

                           Serial No. 112-53

                               __________

 Printed for the use of the Committee on Science, Space, and Technology





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


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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                    HON. RALPH M. HALL, Texas, Chair
F. JAMES SENSENBRENNER, JR.,         EDDIE BERNICE JOHNSON, Texas
    Wisconsin                        JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas                LYNN C. WOOLSEY, California
DANA ROHRABACHER, California         ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland         BRAD MILLER, North Carolina
FRANK D. LUCAS, Oklahoma             DANIEL LIPINSKI, Illinois
JUDY BIGGERT, Illinois               GABRIELLE GIFFORDS, Arizona
W. TODD AKIN, Missouri               DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas              MARCIA L. FUDGE, Ohio
MICHAEL T. McCAUL, Texas             BEN R. LUJAN, New Mexico
PAUL C. BROUN, Georgia               PAUL D. TONKO, New York
SANDY ADAMS, Florida                 JERRY McNERNEY, California
BENJAMIN QUAYLE, Arizona             JOHN P. SARBANES, Maryland
CHARLES J. ``CHUCK'' FLEISCHMANN,    TERRI A. SEWELL, Alabama
    Tennessee                        FREDERICA S. WILSON, Florida
E. SCOTT RIGELL, Virginia            HANSEN CLARKE, Michigan
STEVEN M. PALAZZO, Mississippi
MO BROOKS, Alabama
ANDY HARRIS, Maryland
RANDY HULTGREN, Illinois
CHIP CRAVAACK, Minnesota
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
                                 ------                                

              Subcommittee on Investigations and Oversight

                   HON. PAUL C. BROUN, Georgia, Chair
F. JAMES SENSENBRENNER, JR.,         PAUL D. TONKO, New York
    Wisconsin                        ZOE LOFGREN, California
SANDY ADAMS, Florida                 BRAD MILLER, North Carolina
RANDY HULTGREN, Illinois             JERRY McNERNEY, California
LARRY BUCSHON, Indiana               EDDIE BERNICE JOHNSON, Texas
DAN BENISHEK, Michigan
VACANCY
RALPH M. HALL, Texas




















                            C O N T E N T S

                      Wednesday, November 30, 2011

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

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

                           Opening Statements

Statement by Representative Paul C. Broun, Chairman, Subcommittee 
  on Investigations and Oversight, Committee on Science, Space, 
  and Technology, U.S. House of Representatives..................    18
    Written Statement............................................    19

Statement by Representative Paul Tonko, Ranking Minority Member, 
  Subcommittee on Investigations and Oversight, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    20
    Written Statement............................................    21

                               Witnesses:

Dr. Frank Rusco, Director, Natural Resources and Environment 
  Team, Government Accountability Office
    Oral Statement...............................................    23
    Written Statement............................................    25

Mr. Michael Wood, Executive Director, Recovery Accountability and 
  Transparency Board
    Oral Statement...............................................    48
    Written Statement............................................    50

Hon. Gregory Friedman, Inspector General, U.S. Department of 
  Energy
    Oral Statement...............................................    57
    Written Statement............................................    59

Hon. Todd Zinser, Inspector General, U.S. Department of Commerce
    Oral Statement...............................................    72
    Written Statement............................................    73

Ms. Allison C. Lerner, Inspector General, National Science 
  Foundation
    Oral Statement...............................................    87
    Written Statement............................................    89

Ms. Gail Robinson, Deputy Inspector General, National Aeronautics 
  and Space Administration
    Oral Statement...............................................    95
    Written Statement............................................    96

Discussion
  ...............................................................   105

              Appendix: Answers to Post-Hearing Questions

Dr. Frank Rusco, Director, Natural Resources and Environment 
  Team, Government Accountability Office.........................   120

Mr. Michael Wood, Executive Director, Recovery Accountability and 
  Transparency Board.............................................   127

Hon. Gregory Friedman, Inspector General, U.S. Department of 
  Energy.........................................................   131

Hon. Todd Zinser, Inspector General, U.S. Department of Commerce.   143

Ms. Allison C. Lerner, Inspector General, National Science 
  Foundation.....................................................   148

Ms. Gail Robinson, Deputy Inspector General, National Aeronautics 
  and Space Administration.......................................   154


 
                    STIMULUS OVERSIGHT: AN UPDATE ON
             ACCOUNTABILITY, TRANSPARENCY, AND PERFORMANCE

                              ----------                              


                      WEDNESDAY, NOVEMBER 30, 2011

                  House of Representatives,
      Subcommittee on Investigations and Oversight,
               Committee on Science, Space, and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:07 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Paul Broun 
[Chairman of the Subcommittee] presiding.



                            hearing charter

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

               SUBCOMMITTEE ON INVESTIGATIONS & OVERSIGHT

                     U.S. HOUSE OF REPRESENTATIVES

                          Stimulus Oversight:

                      An Update on Accountability,

                     Transparency, and Performance

                      wednesday, november 30, 2011
                         10:00 a.m.--12:00 p.m.
                   2318 rayburn house office building




    Chairman Broun. Good morning, everyone. The Subcommittee on 
Investigations and Oversight will come to order.
    Welcome to today's hearing entitled ``Stimulus Oversight: 
An Update on Accountability, Transparency, and Performance.'' 
You will find in front of you packets containing our witness 
panel's written testimony, biographies, and truth-in-testimony 
disclosures. I want to welcome our witnesses here today. Thank 
you all for being here. I now recognize myself for five minutes 
for an opening statement.
    Welcome to the Investigations and Oversight Subcommittee 
hearing titled ``Stimulus Oversight: An Update on 
Accountability, Transparency, and Performance.'' This is the 
Subcommittee's third oversight hearing of the American Recovery 
and Reinvestment Act of 2009. The Subcommittee's previous 
hearings focused on monitoring the development of internal 
agency controls and reviewing external oversight mechanisms 
prior to money going out the door. Now that funding has been 
obligated and recipients are actually spending the money, it is 
important for this Subcommittee to take a step back and see if 
we can develop any lessons learned, any best practices, and 
identify any areas of concern that require additional review. 
With funding available for many more months, the agencies, the 
IGs, the GAO, the Recovery Board, this Subcommittee, and the 
American people will continue to monitor how this money is 
spent. To put this task into perspective, the Stimulus Bill 
contained roughly $787 billion, of which approximately $40 
billion was for science-related activities. This accounts for 
roughly the amount already appropriated for that fiscal year, 
essentially doubling the funding. Monitoring this funding is 
proving to be a daunting task for agencies and watchdogs.
    As we have seen in recent months, efforts by agencies to 
conduct the proper due diligence can be challenging for a 
number of reasons including external deadlines, insufficient 
training, or inadequate staffing or funding levels. A lot of 
attention has been paid to Section 1705 and the Loan Guarantee 
Program because of Solyndra and Beacon Power. While these 
certainly garner a lot of press attention, the fact that many 
of these loan guarantees were made in such a rushed fashion 
before the deadline makes me believe that we will see a lot 
more of the same.
    Separate from the Loan Guarantee Program, issues also exist 
in other areas like ARPA-E, DOE program offices like EERE, and 
Section 1603 payments. Additionally, potential areas of concern 
include facility construction at NIST and NSF and shipbuilding 
efforts at NOAA and NSF.
    Although there is certainly enough oversight work to go 
around, I am pleased to hear that a positive theme has 
developed as well. Funding for basic research at the Department 
of Energy's Office of Science, and NASA appears to have been 
administered quickly and efficiently. This may be because they 
simply used existing mechanisms to get funding out the door, 
accelerated existing work, or funded projects that were 
previously found to be meritorious.
    Much of the work done by the IGs, GAO, and the Recovery 
Board has focused on waste, fraud, abuse, mismanagement, 
transparency, and accountability--and rightfully so. A lot of 
the work done on accountability has focused on being able to 
track where money is going and for what purpose. While this is 
important, evaluations of accountability should also address 
whether the intended goals of the Act have been met using 
specific metrics. I hope the agencies, the IGs, GAO, and the 
Recovery Board can assist Congress in this endeavor as well.
    Regardless of whether you agree with the underlying Act, 
Congress has an obligation to make sure that if taxpayer money 
is going to be spent, it is done appropriately. Minimizing 
waste, fraud, and abuse is a nonpartisan endeavor, and I am 
sure we can all agree with that.
    Now, I recognize my Ranking Member from New York, Paul 
Tonko. You are recognized for five minutes, sir.
    [The prepared statement of Mr. Broun follows:]

       Prepared Statement of Subcommittee Chairman Paul C. Broun

    Good morning. Welcome to the Investigations and Oversight 
Subcommittee hearing titled ``Stimulus Oversight: An Update on 
Accountability, Transparency, and Performance.'' This is the 
Subcommittee's third hearing on oversight of the American Recovery and 
Reinvestment Act of 2009.
    The Subcommittee's previous hearings focused on monitoring the 
development of internal agency controls, and reviewing external 
oversight mechanisms prior to money going out the door. Now that 
funding has been obligated, and recipients are actually spending the 
money, it is important for this Subcommittee to take a step back and 
see if we can develop any lessons learned, any best practices, or 
identify any areas of concern that require additional review. With 
funding available for many more months, the agencies, the IGs, the GAO, 
the Recovery Board, this Subcommittee, and the American people will 
continue to monitor how this money is spent.
    To put this task into perspective, the Stimulus Bill contained 
roughly $787 billion, of which approximately $40 billion was for 
science-related activities. This accounts for roughly the amount 
appropriated for that fiscal year, essentially doubling the funding. 
Monitoring this funding is proving to be a daunting task for agencies 
and watchdogs.
    As we have seen in recent months, efforts by agencies to conduct 
the proper due diligence can be challenging for a number of reasons 
including external deadlines, insufficient training, or inadequate 
staffing or funding levels. A lot of attention has been paid to Section 
1705 and the Loan Guarantee Program because of Solyndra and Beacon 
Power. While these certainly garner a lot of press attention, the fact 
that many of these loan guarantees were made in such a rushed fashion 
before the deadline makes me believe that we will see a lot more of the 
same. Separate from the Loan Guarantee Program, issues also exist in 
other areas like ARPA-E, DOE program offices like EERE, and Section 
1603 payments. Additionally, potential areas of concern surround NIST's 
research facility construction account and NOAA's procurement, 
acquisition, and construction account.
    Although there is certainly enough oversight work to go around, I 
am pleased to hear that a positive theme has developed as well. Funding 
for basic research at the Department of Energy's Office of Science and 
NASA programs appear to have been administered quickly and efficiently. 
This may be because they simply used existing mechanisms to get funding 
out the door, accelerated existing work, or funded projects that were 
previously found to be meritorious.
    Much of the work done by the IGs, GAO, and the Recovery Board has 
focused on waste, fraud, abuse, mismanagement, transparency, and 
accountability--and rightfully so. A lot of the work done on 
accountability has focused on being able to track where money is going 
and for what purpose. While this is important, evaluations of 
accountability should also address whether the intended goals of the 
Act have been met using specific metrics. I hope the agencies, the IGs, 
GAO, and the Recovery Board can assist Congress in this endeavor as 
well.
    Regardless of whether you agree with the underlying Act, Congress 
has an obligation to make sure that if taxpayer money is going to be 
spent, that it is done appropriately. Minimizing waste, fraud, and 
abuse is a nonpartisan endeavor that I am sure we can all agree with.

    Mr. Tonko. Thank you, Mr. Chairman. Thank you to our 
distinguished witnesses. You are all busy people and thank you 
for sharing your time with us.
    Public investment in innovative technologies and 
infrastructure not only creates jobs; it lays the foundation 
for further private sector job creation. The American Recovery 
and Reinvestment Act made a significant difference in stopping 
the precipitous loss of nearly 800,000 jobs per month that 
occurred prior to its enactment. Without the Recovery Act, 
millions more Americans would be facing unemployment and we 
would indeed be months further behind in the admittedly 
sluggish economic recovery.
    According to the Congressional Budget Office's August 2011 
report, the Recovery Act increased real GDP by .8 percent to 
2.5 percent, and it increased the number of full-time 
equivalent jobs by between 1.4 million and 4 million compared 
to no Recovery Act effort for the second quarter of calendar 
year 2011. That is positive news. But the American economy is 
not out of danger yet. Economic growth is still weak, and job 
creation is still far below what is required to provide 
employment for all who need a job.
    Recovery Act funding was significant but it is not 
realistic to expect some $840 billion to compensate for the 
loss of over $10 trillion worth in wealth that we experienced 
at the end of 2008. Because of the huge disparity of these 
figures, it is imperative that Recovery Act dollars be spent 
efficiently and effectively. That is why we are here today.
    I have several concerns about the Recovery Act funds, and I 
hope our witnesses can shed some light on these matters. First, 
it looks as if too much of the money has still not been 
invested. Federal agencies have distributed it; yet it remains 
uncommitted by the recipients. We need to create at least seven 
million jobs to get back to full employment. If these funds are 
not being spent, they cannot fuel the job creation that we 
need. I am looking for a solution. We all are looking for a 
solution. And I hope that our witnesses today have some advice 
about how to get that uncommitted money moving to create more 
jobs and to fuel a more robust level of economic growth.
    Second, I worry about the size of public exposure in some 
of the loan programs that are operated at the Department of 
Energy. Grants and contracts that lead to direct expenditures 
carry with them risks limited by the value of the award, risks 
that can be minimized through sound management by experienced 
staff, and DOE has a long history of managing grants and 
contracts.
    In contrast, the Department of Energy's Loan Guarantee 
Program is relatively new. Loan guarantees are for much greater 
amounts of money than an average grant or contract and 
therefore carry billions of dollars in risk. DOE's relative 
lack of experience with this authority and limited experience 
with assessing market conditions and commercial risks should 
increase our scrutiny of awards provided under this program. 
All investments carry some risks and we should be willing to 
take them where there is opportunity for significant benefits 
or advances, but the Department should do all it can to ensure 
these awards will result in successful outcomes.
    While the press is focused on the loan to the solar company 
Solyndra, the fact is that other DOE loans may be just as 
risky. Particularly in the nuclear sector, taxpayers' financial 
exposure dwarfs that of the Solyndra loan. Just one of these 
nuclear energy loans is 16 times the size of the award made to 
Solyndra. Markets can shift against these mega-projects just as 
easily as they shifted against the far more modest solar 
project that went bankrupt. I hope that the Department is 
taking steps to reevaluate the size of its commitments in the 
Loan Guarantee Program and the challenges that face those 
investments.
    Finally, I look forward to hearing whether there are 
meaningful lessons about managing the public's money that 
should be applied to all federal spending based on the 
experiences of our Recovery Act. The effort to bring an 
unprecedented level of transparency to spending may suggest new 
expectations for all governments--all government funding 
rather--in the future. We do not want to cripple agencies in 
their ability to make awards and manage them through burdensome 
requirements; nor do we want to discourage companies and 
individuals from working with our government. If we can build 
on the best of the Recovery Act's lessons, it would make our 
government more accountable and transparent to the public.
    Mr. Chair, I believe you have brought the right people 
before us today to address these issues, and I look forward to 
their testimony. Thank you.
    [The prepared statement of Mr. Tonko follows:]

            Prepared Statement of Ranking Member Paul Tonko

    Thank you, Mr. Chairman.
    Public investment in innovative technologies and infrastructure not 
only creates jobs, it lays the foundation for private sector job 
creation. The American Recovery and Reinvestment Act made a significant 
difference in stopping the precipitous loss of nearly 800,000 jobs per 
month that occurred prior to its enactment. Without the Recovery Act, 
millions more Americans would be facing unemployment, and we would be 
months further behind in the admittedly sluggish economic recovery.
    According to the Congressional Budget Office's August 2011 report, 
the Recovery Act increased real GDP by between .8 percent and 2.5 
percent and it increased the number of full-time equivalent jobs by 
between 1.4 million and 4.0 million compared to no Recovery Act effort 
for the second quarter of calendar year 2011.
    That is positive news, but the American economy is not out of 
danger yet. Economic growth is still weak and job creation is still far 
below what is required to provide employment for all who need a job. 
Recovery Act funding was significant, but it is not realistic to expect 
$840 billion to compensate for the loss of over $10 trillion in wealth 
we experienced at the end of 2008. Because of the huge disparity in 
these figures, it is imperative that Recovery Act dollars be spent 
efficiently and effectively. That is why we are here today.
    I have several concerns about the Recovery Act funds, and I hope 
our witnesses can shed some light on these matters.
    First, it looks as if too much of the money has still not been 
invested. Federal agencies have distributed it, yet it remains 
uncommitted by the recipients. We need to create at least seven million 
jobs to get back to full employment. If these funds are not being 
spent, they cannot fuel the job creation we need. I am looking for a 
solution. I hope that our witnesses today have some advice about how to 
get that uncommitted money moving to create more jobs and to fuel a 
more robust level of economic growth.
    Second, I worry about the size of public exposure in some of the 
loan programs that are operated at the Department of Energy. Grants and 
contracts that lead to direct expenditures carry with them risks 
limited by the value of the award--risks that can be minimized through 
sound mangement by experienced staff, and DOE has a long history of 
managing grants and contracts.
    In contrast, the Department of Energy's loan guarantee program is 
relatively new. Loan guarantees are for much greater amounts of money 
than an average grant or contract and therefore carry billions of 
dollars in risk. DOE's relative lack of experience with this authority 
and limited experience with assessing market conditions and commercial 
risks should increase our scrutiny of awards provided under this 
program. All investments carry some risks and we should be willing to 
take them where there is opportunity for significant benefits or 
advances, but the Department should do all it can to ensure these 
awards will result in successful outcomes.
    While the press has focused on the loan to the solar company 
Solyndra, the fact is that other DOE loans may be just as risky. 
Particularly in the nuclear sector, taxpayers' financial exposure 
dwarfs that of the Solyndra loan. Just one of these nuclear energy 
loans is 16 times the size of the award made to Solyndra. Markets can 
shift against these mega-projects just as easily as they shifted 
against the far more modest solar project that went bankrupt. I hope 
that the Department is taking steps to reevaluate the size of their 
commitments in the loan guarantee program and the challenges that face 
those investments.
    Finally, I look forward to hearing whether there are meaningful 
lessons about managing the public's money that should be applied to all 
federal spending based on the experiences of the Recovery Act.
    The effort to bring an unprecedented level of transparency to 
spending may suggest new expectations for all government funding in the 
future. We do not want to cripple agencies in their ability to make 
awards and manage them through burdensome requirements, nor do we want 
to discourage companies and individuals from working with the 
government. If we can build on the best of the Recovery Act's lessons, 
it would make our government more accountable and transparent to the 
public.
    Mr. Chairman, I believe you have brought the right people before us 
to address these issues, and I look forward to their testimony.

    Chairman Broun. Thank you, Mr. Tonko. I appreciate the 
accolades. That is the nice thing about this Committee. We are 
working in a bipartisan manner.
    If there are Members who wish to submit additional opening 
statements, your statements will be added to the record at this 
point.
    At this time, I would like to introduce our panel of 
witnesses. First is Dr. Frank Rusco, the Director of Natural 
Resources and Environment Team at the U.S. Government 
Accountability Office; Mr. Michael Wood, the Executive Director 
of the Recovery Accountability and Transparency Board; the 
Honorable Gregory H. Friedman, the Inspector General, the U.S. 
Department of Energy; the Honorable Todd Zinser, the Inspector 
General of the U.S. Department of Commerce; Ms. Allison Lerner, 
the Inspector General of the National Science Foundation; and 
finally, Ms. Gail Robinson, the Deputy Inspector General of 
NASA.
    As our witnesses should know, spoken testimony is limited 
to five minutes each--if you would please try to contain your 
remarks to that five minutes--after which the Members of the 
Committee will each have five minutes to ask questions. Your 
written testimony will be included in the record of the 
hearing. It is the practice of this Subcommittee on 
Investigations and Oversight to receive testimony under oath. 
Do any of you have any objections to taking an oath?
    Let the record reflect that all witnesses shook their head 
from side to side indicating in a common way that they do not 
have an objection.
    Also, you may be represented by counsel. Do any of you have 
counsel here today?
    Mr. Wood? Okay. Hon. Zinser, do you have--no. Ms. Lerner?
    Ms. Lerner. I have an attorney with me.
    Chairman Broun. Okay. Let the record reflect that all 
except for Ms. Lerner and Mr. Wood have no counsel and that 
those two individuals do indeed.
    If all of you would now please stand and raise your right 
hand. Do you solemnly swear or affirm to tell the whole truth 
and nothing but the truth, so help you God?
    Nodding, okay. I didn't hear the female voices, though. 
Okay. Good. Let the record reflect that all the witnesses 
participating have taken the oath.
    I now recognize our first witness, Dr. Rusco. You are 
recognized for five minutes.

            STATEMENT OF DR. FRANK RUSCO, DIRECTOR,

            NATURAL RESOURCES AND ENVIRONMENT TEAM,

                GOVERNMENT ACCOUNTABILITY OFFICE

    Dr. Rusco. Thank you. Chairman Broun, Ranking Member Tonko, 
and Members of the Committee, I am pleased to be here today 
along with my colleagues in the oversight community to discuss 
GAO's oversight of Recovery Act spending on science-related 
programs.
    This year, the Congressional Budget Office estimated that 
the Recovery Act's combined spending and tax provisions would 
cost approximately $840 billion. More than $40 billion was 
targeted for science-related programs, and the bulk of that 
went to DOE. In March 2009, GAO testified before this Committee 
about GAO's approach to conducting Recovery Act oversight, and 
we highlighted several research and development programs that 
deserve special attention from the relevant Inspectors General.
    Under the Recovery Act, GAO was tasked with the 
responsibility to conduct bimonthly reviews and other reports 
on the use of Recovery Act funds, and we have so far--well, 
including this testimony--issued 132 reports and testimonies on 
Recovery Act-related issues.
    My statement today will provide a brief update of the 
science-related funds that have been obligated and spent by 
DOE, Commerce, NASA, and NSF. I will also provide several 
examples of the kinds of challenges that science-related 
programs faced in implementing the goals of the Recovery Act.
    According to Agency officials, the majority of science-
related Recovery Act funding has been obligated. Specifically, 
as of September 30, 2011, DOE had obligated about 98 percent of 
its $35 billion. DOE reported that it had spent about $19 
billion, or 54 percent, of this funding. Commerce received $1.4 
billion in science-related funding, obligated almost all of it 
and had spent about $900 million, or 64 percent. NASA received 
$1 billion, obligated it all, and had spent 95 percent. And 
lastly, NSF received $3 billion, obligated it all, and had 
spent about 46 percent as of September 30.
    All the programs we audited in the course of our Recovery 
Act work faced challenges, especially in the early months. For 
example, DOE's Weatherization Program received almost $5 
billion, a 20-fold increase over the program's typical annual 
appropriation. The Weatherization Program faced problems 
adjusting to this greatly increased scale of funding. 
Specifically, it took the program time to issue guidance and 
force recipient States and territories to establish market 
wages for weatherization workers as required under the Davis-
Bacon Act. This delayed the first large dispersal of funds to 
States and territories. DOE, the States, and territories also 
faced challenges in scaling up the workforce and providing 
training for workers new to the weatherization work.
    In some cases, the Recovery Act represented the first time 
a program received funding. For example, EERE's Energy 
Efficiency and Conservation Block Grant Program, which received 
$3.2 billion in Recovery Act funds, was essentially starting 
from scratch, and some of the challenges it faced reflected 
this. Specifically, we found in our April 2011 report that the 
EECBG program was not always collecting needed information from 
recipients to verify that these recipients were in compliance 
with federal oversight and reporting requirements. This program 
also faced challenges in measuring the outcomes of EECBG 
funding, including measures of reduced energy use.
    DOE has also wrestled with calculating and reporting jobs 
created, a requirement of the Recovery Act. For example, DOE's 
Environmental Management Office, which received almost $6 
billion in Recovery Act funding, has publicly reported three 
vastly different job creation figures ranging from 5,700 to 
20,200 jobs, depending on what methodology was used. Measuring 
job creation is inherently difficult from a methodological 
perspective because it is not possible to observe what would 
have happened in the absence of the Recovery Act. However, 
Environmental Management was initially unable to follow 
Recovery Act requirements and OMB guidance for reporting job 
creation, and it is still unclear if DOE has fixed this 
problem.
    Overall, the science-related programs we have audited have 
responded at least partially to the challenges we identified. 
These programs have implemented some of our recommendations and 
have improved in their ability to monitor the use of Recovery 
Act money.
    GAO continues to conduct oversight of science-related 
programs that received Recovery Act funding. Within the next 
several months, we will issue reports on DOE's Loan Guarantee, 
Weatherization, and ARPA-E programs. We also have ongoing 
evaluations of federal renewable energy initiatives and of R&D 
efforts in areas of solar energy and battery storage 
technologies.
    This concludes my statement. I will be happy to answer any 
questions the Committee may have.
    [The prepared statement of Dr. Rusco follows:]

            Prepared Statement of Dr. Frank Rusco, Director,
                Natural Resources and Environment Team,
                    Government Accountability Office



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Chairman Broun. Thank you, Dr. Rusco.
    Now, Mr. Wood, you are recognized for five minutes.

                 STATEMENT OF MR. MICHAEL WOOD,

                      EXECUTIVE DIRECTOR,

         RECOVERY ACCOUNTABILITY AND TRANSPARENCY BOARD

    Mr. Wood. Mr. Chairman and Members of the Subcommittee, I 
want to thank you for the opportunity to appear before you 
today. As the Executive Director of the Recovery Accountability 
and Transparency Board, I will be speaking to you about our 
role in ensuring the transparency and accountability of the 
Recovery funds and also activities that are underway to extend 
lessons learned by the Recovery Board to all federal spending.
    As you know, the Recovery Board was created in 2009 as a 
part of the Recovery Act. It is composed of Inspectors General, 
two of whom appear beside me today, Gregory Friedman and Todd 
Zinser. The primary mission of the Board is two-fold--first, to 
provide transparency for the funds that were expended; and 
second, to prevent or detect waste, fraud, and abuse for the 
Recovery money.
    The Recovery Board achieves transparency of Recovery Act 
spending through reporting on the use of funds. Specifically, 
the Recovery Act requires recipients of Recovery funds to 
report on how they are using those funds and require agencies 
to report on spending as well. Every quarter, recipients of 
Recovery funds must report centrally into the Board's reporting 
Web site, FederalReporting.gov. In addition, on a weekly basis, 
agencies provide financial and activity reports, which include 
the amounts awarded and paid out.
    Recovery.gov is a Web site that was developed to provide 
transparency for the spending that was occurring. It is an 
attractive, award-winning Web site. It has essentially a 
complex technological infrastructure, but it allows us to very 
quickly display quality-controlled data in unique ways to 
achieve unprecedented levels of transparency.
    FederalReporting.gov and Recovery.gov allow a continuing 
quality-assurance process that involves the agencies, the 
Recovery Board, the Office of Management and Budget, and 
recipients. Innovative mapping on our Web site, Recovery.gov, 
allows us to display data with an unprecedented level of 
transparency, including the ability to search by ZIP codes so 
citizens can see what projects are occurring in their local 
community. You can also search by Congressional District to see 
what is happening in individual Congressional Districts.
    In addition to ensuring the transparency of tax dollars, 
the Recovery Board also conducts and coordinates oversight of 
Recovery funds to prevent and detect fraud, waste, and 
mismanagement of those funds. The Recovery Board's 
accountability staff uses a suite of analytical tools in our 
Recovery Operations Center, or ROC, to find indicators of fraud 
among Recovery recipients and sub-recipients.
    The Recovery Board's work in promoting transparency and 
accountability has garnered much positive attention. On June 13 
of this year, both the Executive and Legislative branches took 
extraordinary measures to extend the work of the Recovery Board 
to the rest of the Federal Government. The President issued an 
Executive Order calling for the creation of a new Government 
Accountability and Transparency Board, or GAT Board, which is 
tasked with ``building on the lessons learned from the 
successful implementation of the Recovery Act'' and working 
with the Recovery Board to apply those approaches developed by 
the Board across government spending.
    And in Congress, Congressman Darrell Issa and Senator Mark 
Warner have both introduced legislation that, among other 
things, would create a new federal agency, the Federal 
Accountability and Spending Transparency Board--or FAST Board--
to provide accountability and transparency for all contracts, 
grants, and loans funded with federal dollars. We look forward 
to working with these officials and other stakeholders to 
ensure that the work of the Recovery Board can serve as a 
template for tracking all government spending.
    Even before the creation of the GAT Board and the pending 
legislation, the Recovery Board devoted time to enumerating our 
lessons learned and our experiences with transparency and 
accountability. One of the key lessons learned over the past 
two years has been ``transparency drives accountability.'' The 
Board's accountability and transparency tools comprise two 
halves of the same fraud-detection operation, reinforcing and 
enhancing each other. Accountability works best when you have 
transparency; transparency works best when you have 
accountability.
    A related lesson is that the interrelated transparency and 
accountability tools are so useful from both a program and an 
oversight perspective that agencies and the IG community should 
have equal access to both these pieces. While both pieces can 
clearly assist the investigatory and auditing functions of the 
IGs, the accountability and transparency data can also help 
agencies improve Agency functions and administration. 
Typically, when the goal of an initiative is fraud detection, 
IGs come to the table with a great deal of enthusiasm while 
agencies appear less motivated.
    One valuable lesson we have learned is that when the common 
goal is fraud prevention, agencies and IGs are equally 
enthusiastic, and a remarkable collaborative effort takes place 
between the two. As a result of this lesson learned, the 
Recovery Board is piloting fraud prevention tools with agency 
personnel as well as with IGs. We believe this program, called 
FederalAccountability.gov, will assist agencies in performing 
their own risk evaluations for those seeking Recovery funds, 
just as it will help enforcement officials conduct reviews of 
Recovery funds in order to prevent and detect waste, fraud, and 
abuse.
    Another lesson has been the tremendous inefficiencies 
caused by the government's lack of a uniform award ID. 
Currently, there is no requirement that awards be standardized 
across government, and we are working towards this goal.
    Finally, rather than dismantle the Board's dual Web sites 
or systems established by the ROC, these three critical 
components can be combined into a ``universal one-stop shop'' 
applied more broadly across the whole spectrum of federal 
spending. Such a model is actually put forth by the DATA Act 
legislation.
    Mr. Chairman, I will submit my full testimony for the 
record, and I would be happy to answer any questions you may 
have.
    [The prepared statement of Mr. Wood follows:]

                Prepared Statement of Mr. Michael Wood,
                          Executive Director,
             Recovery Accountability and Transparency Board



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    Chairman Broun. Thank you, Mr. Wood.
    Mr. Friedman, you are recognized for five minutes.

              STATEMENT OF HON. GREGORY FRIEDMAN,

                       INSPECTOR GENERAL,

                   U.S. DEPARTMENT OF ENERGY

    Mr. Friedman. Thank you, Mr. Chairman. And to you and 
Members of the Subcommittee, I appreciate the opportunity to 
testify today in response to your request on the work of the 
Office of Inspector General concerning the Department of 
Energy's activities under the American Recovery and 
Reinvestment Act.
    Not to be outdone by at least two of my colleagues, I 
should point out in response to your earlier question that my 
attorney is here with me today, but I do not expect to have him 
testify unless I collapse in place. But I do want to clarify in 
my response to your earlier question.
    Chairman Broun. The record will reflect that. Thank you.
    Mr. Friedman. Thank you.
    As you know, the intent of the Recovery Act was to quickly 
stimulate the economy, create jobs, and transform the 
Department's mission while fostering an unprecedented level of 
accountability and transparency. The Department received over 
$35 billion in Recovery Act funding for various initiatives, 
eclipsing its normal annual budget of approximately $26 
billion.
    The Department's implementation of the Recovery Act has 
been a priority for my office. I have testified on several 
occasions as to the Department's progress, including before 
this Subcommittee in March of 2009. Most recently, on November 
2, 2011, I testified before the House Committee on Oversight 
and Government Reform's Subcommittee on Regulatory Affairs, 
Stimulus Oversight and Government Spending. Since enactment, my 
office has issued 70 reports covering all major program 
activities, initiated a number of Recovery Act-related criminal 
investigations, and conducted 300 fraud awareness briefings for 
nearly 16,000 federal contracts, State, and other officials.
    As I have previously testified, while there has been 
significant progress, the Department's efforts to use Recovery 
Act funds to stimulate the economy has been more challenging 
than many had originally envisioned. We found the Department's 
programs required extensive advanced planning, organizational 
enhancements, and additional staffing and training at federal, 
State, and local levels.
    A fairly consistent pattern of delays existed in the pace 
at which funds have been spent by grantees and other 
recipients. According to the Department's records, as of 
November 18 of 2011, about 43 percent of its Recovery Act funds 
had not been spent, largely by recipients such as State and 
local governments.
    In addition, our reviews have identified performance issues 
that affected the Department's ability to meet its Recovery Act 
goals. Specific examples are provided in my full testimony.
    In contrast, we found that the Department's Office of 
Science and its laboratory system generally complied with 
Recovery Act requirements, expended funds in a timely manner, 
and employed sound project management practices. The Office of 
Science received approximately $1.6 billion in Recovery Act 
funds, most of which were used to accelerate ongoing work by 
purchasing equipment and completing construction projects which 
had already begun.
    The Recovery Act established challenging goals. There was 
what we considered to be an intense effort to implement and 
execute the various aspects of the Department's 
responsibilities. These efforts notwithstanding, we had a 
number of observations about the Department's implementation 
and execution of the Recovery Act. These observations, which I 
have described in prior testimony, are:

     LFirst, the pressure of achieving expeditious 
program implementation and execution placed an enormous strain 
on the Department's personnel and infrastructure.

     LSecond, dealing with a diverse and complex set of 
departmental stakeholders complicated Recovery Act startup and 
administration.

     LThird, in general, the concept of shovel-ready 
projects was not realized.

     LFourth, federal, State, and local government 
infrastructures were, simply put, overwhelmed. In several 
States, the very personnel who were charged with implementing 
the Recovery Act's provisions had been furloughed due to local 
economic conditions.

     LFifth, the pace of actual expenditures was 
significantly slowed because of the time needed to understand 
and address specific requirements of the Recovery Act.

     LSixth, recipients expressed their concern with 
what they perceived to be or they described to us as overly 
complex and burdensome reporting requirements.

    In summary, a combination of massive funding, high 
expectations, and inadequate infrastructure resulted at times 
in less-than-optimal performance. Given the significant amount 
of Recovery Act funds that remain to be spent, we have reviews 
planned in a number of high-risk areas. Additionally, we have 
identified a series of cost-reduction and efficiency-
enhancement actions for consideration by Department management. 
These are provided in our recently issued report on 
``Management Challenges at the Department of Energy.''
    Finally, we are drafting a summary report to highlight 
other lessons learned and best practices related to the 
Recovery Act in the areas of risk management, financial 
management, accounting and reporting, human capital management, 
regulatory compliance, and delivery of public services.
    Mr. Chairman, this concludes my statement and I look 
forward to your questions and those of the Subcommittee.
    [The prepared statement of Mr. Friedman follows:]

              Prepared Statement of Hon. Gregory Friedman,
                           Inspector General,
                       U.S. Department of Energy




    Chairman Broun. Thank you, Mr. Friedman.
    I now recognize Mr. Zinser for five minutes.

                 STATEMENT OF HON. TODD ZINSER,

                       INSPECTOR GENERAL,

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Zinser. Thank you, Chairman Broun, Ranking Member 
Tonko, Members of the Subcommittee. Thank you for the 
opportunity to testify today about our oversight of the 
Department of Commerce's Science, Technology, and other 
programs funded through the Recovery Act.
    I would like to summarize my testimony by updating the 
Subcommittee on the status of Commerce's spending of Recovery 
Act funds and informing the Subcommittee of the most 
significant challenges remaining for Commerce with respect to 
the Recovery Act. The Act appropriated $7.9 billion to five 
Commerce agencies in the OIG. As a result of approximately $1.1 
billion in rescissions and transfers, that amount was reduced 
to $6.8 billion, almost all of which has been obligated. 
Approximately $2.9 billion, or 40 percent of those obligations, 
has been spent. The 2010 decennial census and the coupon 
program that NTIA administered as part of the Nation's 
transition to digital TV accounts for $1.3 billion spent so 
far.
    In all, the Department awarded 467 grants and issued 433 
contracts under the Recovery Act. As of September 30, 2011, 
nearly $4 billion for Recovery Act programs and operations at 
Commerce agencies had not yet been dispersed--including $2.8 
billion for infrastructure grants under NTIA's Broadband 
Technology Opportunities Program, or BTOP; $300 million for 
NIST construction of research facilities and their Science and 
Technical Research Programs; and $125 million for NOAA 
procurement, acquisition, and construction projects.
    By far, BTOP remains the most significant Recovery Act 
challenge for Commerce. Aside from BTOP, however, the greatest 
challenge lies in completing other projects on time. Given the 
constrained budget environment, increased cost or loss of 
Recovery Act funding caused by schedule delays could put 
projects and the operations they support at serious risk. For 
example, our testimony discusses projects that NOAA itself 
identified as experiencing schedule challenges--including the 
construction of the NOAA ship Reuben Lasker, an $87 million 
project which has experienced significant delays and 
difficulties meeting performance requirements; and the 
construction of the La Jolla Southwest Science Center in 
California, an $85 million project which has also experienced 
delays (the responsibility for which is currently a matter of 
dispute between the government and the contractor).
    We are currently auditing the $179 million NIST Recovery 
Act program which awarded 16 construction grants, primarily for 
university research facilities, and believe there are four 
projects that are at some risk of not being completed by the 
new September 2013 deadline recently set by OMB.
    Finally, Mr. Chairman, based on our ongoing oversight and 
close interaction with the Department and its bureaus, we have 
seen improved oversight procedures and processes as well as 
evidence that the Department is being diligent about its 
responsibilities under the Recovery Act. As demonstrated by our 
July 2011 findings concerning recipient reporting, the Recovery 
Act has resulted in more diligent oversight by program offices 
and greater executive-level involvement than we have seen in 
the past. In our view, the emphasis on transparency and 
accountability has been a significant benefit of the Recovery 
Act.
    Going forward, a challenge will be to institutionalize that 
emphasis on transparency and accountability for all spending 
carried out by the Department of Commerce, and we look forward 
to working with the Department in doing so.
    This concludes my statement, Mr. Chairman. I would be happy 
to respond to any questions.
    [The prepared statement of Mr. Zinser follows:]

                Prepared Statement of Hon. Todd Zinser,
                           Inspector General,
                      U.S. Department of Commerce



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    Chairman Broun. Thank you, Mr. Zinser.
    Now, the Subcommittee recognizes Ms. Lerner for five 
minutes.

                STATEMENT OF MS. ALLISON LERNER,

                       INSPECTOR GENERAL,

                  NATIONAL SCIENCE FOUNDATION

    Ms. Lerner. Thank you.
    Chairman Broun, Ranking Member Tonko, and Members of the 
Subcommittee, I appreciate this opportunity to provide an 
update of my office's continuing efforts to monitor the $3 
billion in Recovery Act funds provided to the National Science 
Foundation.
    Our approach to ARRA oversight has consisted of two phases: 
a proactive phase for risk mitigation activities that was 
accomplished primarily during the funding stage to help prevent 
problems and prepare for more substantive work; and an 
operational phase, during which we plan to undertake more 
traditional audits, investigations, and other types of reviews.
    During the proactive phase, we conducted real-time reviews 
of NSF's ARRA-related activities that resulted in several 
recommendations to NSF management. Our work during this phase 
included identifying potential high-risk ARRA awardees and 
recommending ways to make NSF's award process more accountable 
and transparent. We also conducted a series of reviews of 
universities and nonprofit organizations that received ARRA 
funds to determine at an early stage whether those institutions 
had the financial capability to manage Recovery Act funding and 
how well those organizations were complying with the Act's 
quarterly reporting requirements.
    With respect to financial capability, we concluded that, in 
general, the entities we examined had established adequate 
internal controls to ensure that ARRA funds were properly 
segregated as required.
    With regard to data quality, we found that while the 
institutions we reviewed had generally established appropriate 
processes, there were several areas in which NSF recipients 
were not consistently, accurately, or completely reporting 
data. We made recommendations to NSF to promote consistent and 
accurate reporting, and the Agency generally agreed with those 
recommendations. The ARRA recipients we reviewed also indicated 
that they were taking action to improve their reporting.
    In the operational phase, among other things, we are 
planning to audit specific ARRA awards at recipient 
institutions. In determining which awards to audit, we will 
conduct a risk assessment, which takes into consideration 
variables such as award type, the results of prior audits, and 
ARRA-specific issues such as the total number and dollar value 
of Recovery Act awards.
    Mr. Chairman, because of the large amounts of ARRA funding 
they received, the complexity of the projects, and the 
management challenges inherent in construction projects, we 
have directed significant oversight to NSF's construction of 
three major projects: the Alaska Region Research Vessel, the 
Ocean Observatory's Initiative (or OOI), and the Advanced 
Technology Solar Telescope (or ATST). I will conclude my 
testimony by focusing on problems uncovered in audits of OOI 
and ATST and the impact of those problems on Recovery Act 
funds.
    We began this oversight activity with audits of the cost 
proposals for OOI, which had total projected costs of $386 
million with $106 million in ARRA funds, and for ATST, which 
had total projected costs of $298 million with $146 million in 
ARRA funds. We reviewed these proposals because they are the 
basis on which recipients can draw down funds over the course 
of their awards. The resulting audits performed on our behalf 
by the Defense Contract Audit Agency disclosed significant 
problems with the use and management of contingency funds.
    NSF requires awardees to include contingency estimates in 
the budgets of construction projects to ensure that actual 
costs do not exceed planned costs. The auditors found that the 
$150 million in contingencies in the two cost proposals are not 
allowable under federal cost principles which state that 
``contingencies for events the occurrence of which cannot be 
foretold with certainty as to time, intensity, or with an 
assurance that they are happening are unallowable.'' The 
questioned amount includes $55 million in ARRA funding.
    The auditors were also troubled by the lack of controls 
over the contingency funds. NSF allows contingency funds to be 
held by the awardee's project officer during the construction 
phase. The auditors found that the awardees can draw down 
contingency funds without prior NSF approval at any point in 
the project and that there are no technical barriers to prevent 
these funds from being used for purposes other than 
contingencies. As a result, there is an increased risk of fraud 
or misuse of these funds.
    We have recommended that NSF require awardees to remove the 
unallowable contingencies from their proposed budgets and that 
NSF, not awardees, control the release of contingency funds. We 
are working with NSF management to resolve these and other 
contingency findings, and because of the large dollar amounts 
and the risk posed by NSF's current process of funding 
contingencies, we will begin work this year to examine the use 
of ARRA funds for contingencies in the construction of the 
Alaska Region Research Vessel.
    This concludes my statement, and I will be happy to answer 
any questions.
    [The prepared statement of Ms. Lerner follows:]

               Prepared Statement of Ms. Allison Lerner,
                           Inspector General,
                      National Science Foundation



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    Chairman Broun. Thank you, Ms. Lerner.
    I now recognize Ms. Robinson for five minutes.

                STATEMENT OF MS. GAIL ROBINSON,

                   DEPUTY INSPECTOR GENERAL,

         NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

    Ms. Robinson. Thank you, Mr. Chairman. And thank you to you 
and the Members of the Subcommittee for inviting us here today.
    NASA received $1 billion in direct Recovery Act funding, 
the bulk of which it dedicated to ongoing projects in Earth 
Science, Astrophysics, Exploration, and Aeronautics Research. 
For example, the James Webb Space Telescope received an 
infusion of $75 million; the Multipurpose Crew Vehicle, $166 
million; and the Mobile Launcher, $25 million; while $24.4 
million was used to fund contracts in the Small Business 
Innovative Research and Small Business Technology Transfer 
Programs. In addition, NASA used $50 million to repair 
facilities at the Johnson Space Center that had been damaged by 
Hurricane Ike in 2008. As was already pointed out in contrast 
to some of the other agencies, NASA has obligated and, in fact, 
dispersed virtually all of these funds.
    Since passage of the Act, the OIG has actively monitored 
NASA's Recovery Act efforts through both our audit and 
investigative work. On the audit side, we have issued seven 
products, including reports examining the Agency's use of funds 
for the James Webb Space Telescope, for three Earth science 
missions, and for the Johnson hurricane repair work. We also 
have five audits currently in progress.
    Overall, we have found that NASA generally used Recovery 
Act funds in accordance with the requirements and goals of the 
Act and OMB's implementing guidance. However, we also made more 
than $2 million in monetary findings and identified several 
internal control weaknesses in NASA's processes, including 
unauthorized persons recommending payment of invoices, poor 
negotiation of project oversight costs, and incomplete contract 
files. We made eight recommendations to improve NASA's internal 
controls. The Agency agreed with all of our recommendations, 
and five of them have been closed. The Agency continues to work 
to address the remaining three.
    In addition to our audit work, we currently have seven open 
investigations relating to the Recovery Act. One is a proactive 
effort involving SBIR and STTR contracts, three involve 
allegations of companies submitting false information, and one 
involves a possible conflict of interest and misappropriation 
of funds by a former NASA employee. We also have an active 
investigation involving procurement irregularities and a case 
in which an individual has been indicted for stealing copper 
from a project funded with Recovery Act money. In addition to 
these ongoing matters, we recently closed two cases as 
unsubstantiated, and we referred two other issues to NASA 
managers for their disposition.
    As NASA's Recovery Act efforts wind down, the OIG will 
continue to conduct audits, reviews, and investigations to 
ensure compliance with the Act's mandates.
    This concludes my oral statement and I would be happy to 
answer any questions.
    [The prepared statement of Ms. Robinson follows:]

                Prepared Statement of Ms. Gail Robinson,
                       Deputy Inspector General,
             National Aeronautics and Space Administration



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    Chairman Broun. Thank you, Ms. Robinson.
    I want to thank all of you all. By the way, that is 
southern for--it is plural for you all. But I want to thank all 
of you all for your testimony.
    Reminding Members that Committee rules limit Members' 
questions to five minutes per round of questions, the Chair at 
this point will open the round of questions. And I will 
recognize myself for five minutes.
    To Mr. Friedman, a lot of attention has been paid to the 
loan guarantees to Solyndra and Beacon Power because of their 
bankruptcies. Beacon Power also received funding from DOE's 
Energy Delivery and Energy Reliability Program, the Office of 
Science, and ARPA-E. What happens to the grant money when 
companies go bankrupt? And does the company keep it? Does the 
Agency keep it or does it go back to the Treasury?
    Mr. Friedman. Well, Mr. Chairman, I frankly am not 
personally familiar with the specific terms in the non-loan 
guarantee expenditures the Department made with regard to 
Beacon, so I can't give you a definitive answer. However, in 
general, depending upon the nature of the agreement, there are 
either time payments based on completion of various aspects of 
goals of the project or there is a payment up front. If, in 
fact, the entity is bankrupt and they are cashless, if that is 
the case, then obviously, the--if the money has been expended 
it can no longer be recovered. If, on the other hand, it has 
not been dispersed, my assumption would be there would be a 
hold placed on those funds until the bankruptcy is resolved.
    Chairman Broun. Well----
    Mr. Friedman. But that is an assumption on my part, Mr. 
Chairman.
    Chairman Broun. Sure.
    Mr. Friedman. I am not positive.
    Chairman Broun. Well, assets should have value, though, so 
where does the taxpayers' interest fit within the bankruptcy 
proceedings?
    Mr. Friedman. Well, I----
    Chairman Broun. Who would recover those funds?
    Mr. Friedman. I am not intimately familiar with the way the 
Department is proceeding. I have seen the published reports on 
sale of assets and the Department's interest in those assets. I 
don't know how that intersects with the funds, other than the 
loan guarantee funds that have been expended with Beacon.
    Chairman Broun. Okay. To all you all, if a recipient is 
unable to spend its ARRA funding prior to the OMB deadline of 
September 30, 2013, what happens to that money? Does the Agency 
keep it or does it go back to the Treasury?
    Mr. Zinser. Mr. Chairman, it is unclear from the OMB 
guidance what exactly is going to happen, but one factor of the 
Dodd-Frank legislation is that it included some provisions 
about unobligated and unspent Recovery Act money. I think our 
sense would be that the unspent money would go back to the 
Treasury.
    Chairman Broun. Anybody else want to weigh in on that? Dr. 
Rusco.
    Dr. Rusco. I think in general we agree our reading of it is 
that it will go back to the Treasury. There may be some 
conditions where the OMB guidance is unclear, in which case it 
would have to be resolved.
    Chairman Broun. All right. Ms. Robinson, in your testimony 
you stated that the $75 million in ARRA funding that NASA 
received for the beleaguered James Webb Space Telescope enabled 
454 jobs to be retained on the JWST project in the fourth 
quarter of fiscal year 2009 and 149 jobs in the first quarter 
of fiscal year 2010. I am familiar with jobs created and the 
attempt to quantify jobs saved. Is jobs enabled mentioned as a 
criterion in the Act or in OMB guidelines?
    Ms. Robinson. I don't know, Sir, of exactly what they use 
in the OMB guidelines. I do know that the James Webb Space 
telescope project was going to run out of money in that year, 
in fiscal year 2009, and that they used that money to continue 
work which enabled the--primarily the contract personnel to 
continue that work in that period.
    Chairman Broun. All right. JWST was initially expected to 
cost $1 billion and to launch in 2008. It has now ballooned to 
almost $9 billion and is expected to launch in 2018. Should 
cost overruns be considered an economic stimulus?
    Ms. Robinson. Again, I don't think cost overruns are an 
economic stimulus. As we are all aware, the program has 
repeatedly been over schedule and over budget, and Congress and 
NASA and the Administration have worked hard to give them the 
additional money they need to finally bring it to fruition.
    Chairman Broun. Okay. And are these jobs enabled 
contractors that flow from project to project? Or are they 
federal employees that are part of a standing workforce that 
are there at NASA Center?
    Ms. Robinson. I believe with regard to the telescope, they 
were primarily contractor employees.
    Chairman Broun. Okay. My time has expired.
    I now recognize my Ranking Member, Mr. Tonko, for five 
minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    While the Solyndra story has preoccupied many, the real 
story on DOE's Loan Guarantee Program is not about one company 
going under but about the Department holding tens of billions 
of dollars in loans, all of which carry risk.
    From my experience in New York State, I can attest that 
nuclear projects are among the most expensive and sometimes 
most risky. I am not alone in that opinion. In a 2003 study, 
CBO put the risk of default for nuclear loans at ``well above 
50 percent.'' The key factor they wrote is ``accounting for 
this risk is that we expect that the plant would be uneconomic 
to operate because of its high construction costs relative to 
other electricity generation sources.'' Nothing has changed on 
this, of course. In 2003, a new report by CBO cites a study 
that found ``of the 117 privately owned plants in the United 
States that were started in the '60s and '70s and for which 
data are available, 48 were cancelled and almost all of them 
experienced significant cost overruns.''
    The Solyndra loan is dwarfed by just one of the nuclear 
project loans that DOE has approved. The first approved loan is 
for over $8 billion to the Southern Company. That single loan 
is roughly 16 times the size of the Solyndra loan.
    So, Dr. Rusco, I would ask according to the July 2010 
report from the Department of Energy which treats--or on the 
Department of Energy by GAO treats nuclear loans differently 
than other types of applicants. Can you describe the treatment 
that these loans--that the loan applicants receive and shed 
light for us on why there was that difference?
    Dr. Rusco. Well, first of all, there is a difference 
between the Recovery Act loans and the 1703 loans and the 
nuclear loans were conditionally committed to under the 1703 
program. So in that program, the companies themselves will be 
paying their credit subsidy cost. But that is just to clarify 
that that is not a Recovery Act--those aren't Recovery Act 
loans. And that money has not yet gone out the door and is 
awaiting licenses.
    What we found is that in the application process that the 
nuclear loans and some of the larger fossil fuel loans were 
able to essentially skip some steps in the application process 
and were--reached conditional commitment prior to having 
completed all those steps, and we felt that that was 
inconsistent with the guidance and the rules as set out by the 
program. The explanation by the program for that was that more 
is known about these types of projects and therefore they were 
able to skip those steps, but we didn't feel the documentation 
for that justification was sufficient.
    Mr. Tonko. Right. But as I understand it, these loans were 
brought under the ARRA in terms of employment-reporting 
requirements, were they not? And there is absolutely no 
difference in how the Department of Energy handles those loans?
    Dr. Rusco. Well, the basic loan process differs in the 
sense that for the 1703 programs, the government won't be 
picking up the credit subsidy cost, which will be very 
significant for the nuclear loans.
    Mr. Tonko. Um-hum. Given the favorable way that nuclear 
applicants were treated, is there any assurance you can provide 
this panel that DOE is being as tough on reexamining the 
nuclear loan exposure as they are in looking at everything 
else? Perhaps Dr. Rusco or Mr. Friedman, can you give us those 
assurances in this case?
    Dr. Rusco. GAO has broad concerns about the slow speed at 
which the loan program has codified and made consistent its 
application review process and its due diligence process. And 
so we are concerned about all loans that may or may not have 
gone through all the steps of the process, and we think that if 
the program will more clearly document what they are doing and 
their reasons for deviating from their process, there will be 
greater transparency and we will be more comfortable.
    Mr. Tonko. Mr. Friedman, would you have anything to add to 
that or would you agree with that?
    Mr. Friedman. I agree. I don't have any information on it. 
I can't give you any assurance because obviously that is not 
within my purview. But we issued a report in March of this year 
concerning the very issues that you have just heard about, 
which is basically the level of documentation with regard to 
identification of risks and the mitigation of those risks and 
how they have been addressed and the lack of documentation and 
inadequate documentation. So obviously we agree. And it covers 
the entire portfolio of loan guarantees in terms of the ability 
of the Department in the event of a crisis to identify why they 
took the actions that they took. So we do agree.
    Mr. Tonko. Um-hum. And finally, if we can get some info on 
the funds that are obligated but uncommitted--spent--what 
leverage do the agencies have to push recipients of awards to 
spend these funds? Is there anyone on the panel or all of you 
that might want to address how we could get those monies spent?
    Mr. Zinser. Sir, I think whether guarantees remain on 
schedule is a function of the program offices overseeing those 
projects. Beyond that, I think you have to strike a balance 
between pushing the grantees or contractors to spend the money 
quickly and making sure that the money is spent effectively.
    Chairman Broun. The gentleman's time has expired.
    I would like to remind my friend from New York there is a 
huge difference between Southern Company and Solyndra, between 
the technology of nuclear energy as well as what Solyndra was 
trying to do. So the risk of the loan to Southern Company or 
any other nuclear power company is vastly different than 
loaning--lending money to a company like Solyndra, particularly 
with all the warnings that came from the previous 
Administration, as well as this Administration.
    Now, I recognize Dr. Bucshon for five minutes.
    Mr. Bucshon. Thank you, Mr. Chairman. I thank all the 
panelists here today.
    When we passed the stimulus bill, I wasn't here, but it was 
promised that the unemployment rate would be below eight 
percent and drop down, so my questions are going to be related 
to--similar to that process. Because as everyone knows, we now 
have a persistent over nine percent unemployment rate, and the 
economy is still sluggish.
    It appears to me not being in Congress at the time that 
everyone that received money had to scramble to find uses for 
the money and then retrospectively assess whether or not it was 
used properly, or more importantly, has resulted in long-term 
improvement and changes that are necessary to decrease our over 
nine percent unemployment. It seems to me that that is backward 
from the way we should be thinking about this process.
    So I will make the assumption that all the departments 
represented here would take extra money if it is offered to 
them, but the question I have--and I guess I would direct it to 
Mr. Friedman first as it relates to the Department of Energy--
did the Department of Energy request the money? Did they need 
the money? Or, in your view, did the Department of Energy have 
to find ways to spend the money once it was out there?
    Mr. Friedman. Well, I am not sure I have good answer to 
your question, but I--in March of 2009, we issued a report 
concerning lessons learned on our prior work in this regard, 
Congressman. And at that point, it was clear that the Recovery 
Act, with regard to the Department of Energy, had three 
purposes. One is economic stimulus, two is job creation, and 
three was transformation of the Department. So I think there 
was a clear understanding on the part of both the Congress at 
the time and those who voted for the legislation and the 
Administration that the funds would be used for that purpose as 
well, transforming the Department of Energy, focusing on 
green--going green, renewables, and what have you, and the 
technology area.
    Mr. Bucshon. Okay. Thank you. Mr. Zinser.
    Mr. Zinser. We are not part of the inner circle of the 
Department, so we do not have a lot of insight on how the 
requests were formulated. However, there were two factors 
related to agencies that have experienced issues with timely 
spending. I think some were older budget requests that had not 
been funded in previous years, and then, in the case of the 
Department of Commerce, for example, there is an entire $5 
billion program thrust upon a small agency not properly staffed 
to administer a program of that size and scope. So I think it 
is likely a combination of factors.
    Mr. Bucshon. Ms. Lerner.
    Ms. Lerner. Thank you. And I would echo what Mr. Zinser 
said and further it by the fact that I was not at NSF in 
February of 2009 when the stimulus act was passed. So I am not 
aware of what role the Agency had in determining the $3 billion 
that the Agency got, but I do know that NSF has wanted to boost 
the acceptance rate for people that they fund over time, and 
they were excited that the $3 billion would enable them to fund 
more scientific research. Two-thirds of the funding that they 
received was used to fund proposals that they had in hand that 
had been rated well, so I think they were prepared to move 
pretty quickly and execute the funding that they received, and 
they were able to build the acceptance rate. And that helps 
them, as I said, ensure that more basic scientific research is 
done, and that the science and technology workforce of the 
future is trained.
    Mr. Bucshon. Ms. Robinson.
    Ms. Robinson. I also was not at NASA in 2009 when the Act 
was passed, so I do not know what role the Agency played in how 
much money they were going to get. Again, they did--they got 
the smallest amount of the people here. They did do a lot up 
front to make sure that they were going to use it appropriately 
and that they were going to meet the transparency and other 
requirements of the Act.
    Mr. Bucshon. I guess my line of questioning is just meant 
to establish the fact that it seems to me that a bunch of 
federal funding was thrust upon these different agencies and 
then they had to scramble to find out how to use it and in many 
cases did not even have the infrastructure in place to 
appropriately implement whatever programs it was supposed to 
benefit. And being a new Member of Congress, that just seems 
backwards to me and the way we allocate money at the Federal 
Government. And again, I think that the proof is in the 
results. We still have an over nine percent unemployment rate, 
and now we have almost $800 billion more on the federal deficit 
and the entire intent of the stimulus was to get people back to 
work.
    And I yield back. Thank you.
    Chairman Broun. Thank you, Dr. Bucshon.
    I now recognize Mr. McNerney for five minutes.
    Mr. McNerney. Thank you, Mr. Chairman.
    One of the things that I really have found useful in this 
set of testimonies is that the increase in transparency and 
accountability has been caused by the American--by the ARRA. 
And that is a good thing.
    But moving forward, Dr. Rusco in particular, do you believe 
that those checks and balances have made a difference in 
reducing waste and abuse and fraud?
    Dr. Rusco. Yes, I am certain that the oversight--the extra 
oversight that we and the IGs and the other bodies were giving 
this have reduced that. There has been fraud, waste, and abuse 
found but the added oversight has also made the agencies more 
careful and also created better processes for performing their 
own oversight.
    Mr. McNerney. Well, good. Do you think those processes will 
be in place moving forward into non-ARRA expenditures?
    Mr. Rusco. I hope so.
    Mr. McNerney. I do, too. Well, that is going to be 
something we are going to be watching, I guess.
    Mr. Wood, I found your testimony very informative, and I 
want to congratulate you and the RAT Board for the excellent 
work you have done in--toward creating transparency. I am sure 
there is room for improvement as we go forward, but there are 
costs associated with this improvement in transparency 
reporting and so on. Do you have any insights as to whether the 
enhanced transparency is worth the cost that went into 
developing those processes?
    Mr. Wood. My position would be that it was worth the costs. 
We established a system where recipients needed to report 
information and they did. We tried to establish systems that 
were very easy to use. When I built the reporting system, I 
basically told people if you can order a book online, you can 
use the reporting system, which is fairly true. It is a Web-
based system.
    There can be improvements made. We can incorporate things 
such as pre-population sums of data so that the recipient 
wouldn't have to add that information. I know the DATA Act 
includes a provision for providing some administrative 
overhead. I think it is .5 percent for recipients to use for 
things like reporting and so forth. So there are some things 
that could be improved.
    We looked at--one of the concerns was reporting burden when 
we were getting going in looking at the Recovery Act. We think 
the Recovery Act and the Transparency Act--FFATA, its 
predecessor--both established that it was sort of floor of 
$25,000. So if you received $25,000 or more, you had to report. 
That scenario you could look at for--if you were concerned 
about reporting burden on small entities and so forth.
    Mr. McNerney. Dr. Rusco, again, one of the things that I 
was disappointed to hear was that you were unable to assess the 
employment impact of the ARRA. Is that--did I understand that 
correctly? Was that your position?
    Dr. Rusco. Well, not exactly. GAO has not set out to 
evaluate ourselves what the job creation effects have been. We 
have looked at what has been reported, and we have also looked 
at some of the efforts in particular in the Environmental 
Management Office of DOE, and we found that the methodologies 
used by that office were not conforming to OMB guidance and 
they were in some cases clearly overcounting, in some cases 
perhaps even undercounting.
    Mr. McNerney. Is there anyone on the panel here this 
morning that could answer that question about the impact of the 
ARRA funding on employment in your particular department?
    Mr. Zinser. Sir, I think the goal of calculating and 
tracking job creation was very ambitious, but, in the end, it 
didn't turn out to be very feasible. Jobs might be temporary or 
term positions; as a result, from one reporting period to 
another, the jobs are created in a particular quarter but 
aren't cumulative. So when the Recovery.gov Web site reports 
jobs created, it is just for that most current quarter.
    Mr. McNerney. Well, you know, the improvement in 
accountability and transparency is terrific. It would be good 
to have an improvement in terms of being able to assess the 
impact of this funding on employment.
    And with that I yield back.
    Chairman Broun. Thank you, Mr. McNerney.
    I now recognize Mrs. Adams for five minutes.
    Mrs. Adams. Thank you, Mr. Chair.
    Dr. Rusco, your testimony notes that DOE has only 
implemented two of your eight recommendations concerning 
weatherization programs that received $5 billion in stimulus 
funds. Have any independently verified studies been conducted 
to see what energy savings have occurred as a result of this 
program?
    Dr. Rusco. There is a study being done by Oakridge National 
Lab, and they have some preliminary results, but they are also, 
I think, in two years going to have more definitive results of 
that study.
    Mrs. Adams. So there is one independent to your knowledge?
    Dr. Rusco. Yes.
    Mrs. Adams. And the five billion dollars in stimulus funds 
given to weatherization programs is more than 20 times as much 
as programs was previously appropriated. Such huge increases 
can lead to a number of challenges for any agency that sees 
such an increase. Can you discuss some of the challenges faced 
by DOE due to the increase? And what lessons can be learned 
from this experience, and how can they be applied to other 
programs?
    Dr. Rusco. Well, I think some of the main challenges were 
related to ramping up both at the Department but also at the 
recipient level. So the recipients were not used to receiving 
as much funds as were available under the Recovery Act. And 
some recipients received hardly any funds in the past, and so 
for them to set up the accountability structure and to set up 
the training systems and the reporting systems and to get 
guidance from DOE took time. And those are sort of just the 
basic challenges of setting up something that was--that ran at 
a much smaller scale.
    Mrs. Adams. Thank you.
    Mr. Zinser, your testimony notes a referral from the 
Recovery Board that led to an investigation about a company 
that had previously pled guilty to a criminal charge concerning 
export regulations. This company then falsely certified that it 
had not been convicted of a crime in order to receive the 
stimulus funding. Which company is this, and why did it even--
why did they even receive the stimulus funds in the first place 
with the Recovery Board's DATA system in place?
    Mr. Zinser. Congresswoman, I believe the name of the 
company is MTS, and it does do a lot of work with the 
government. I think what happened is that when it was convicted 
in 2008, nobody made the effort to get it onto the government's 
excluded list. And so, when the company started competing for 
contracts, there is some ambiguity whether that particular 
conviction met the government's criteria for exclusion. So it 
said no based on advice of their counsel.
    Mrs. Adams. So that ambiguity from their side--what about 
your side?
    Mr. Zinser. We referred the company for suspension and 
debarment from government contracting. And it has entered into 
an agreement with the government to have its operations 
monitored by an independent third party. Further, we are 
investigating its conduct for any potential judicial action.
    Mrs. Adams. So instead of being disbarred, they have 
entered into a corporate compliance agreement and therefore 
continuing to operate. Would you support disbarring them?
    Mr. Zinser. We did support disbarring them, yes.
    Mrs. Adams. Ms. Robinson, your testimony mentions inflated 
overhead costs for hurricane damage repair at the Johnson Space 
Center. Is NASA making any effort to recoup this money from the 
contractor?
    Ms. Robinson. NASA could not recoup the money from the 
contractor. It was a fixed-price contract and amounts that they 
had agreed to pay.
    Mrs. Adams. Your testimony, you know, is generally positive 
concerning NASA's stimulus expenditures. Is that because these 
funds were primarily directed towards existing programs? Or was 
NASA better able to manage the funding increase over other 
agencies?
    Ms. Robinson. I think it was probably a combination of the 
fact that it was existing programs and that the Agency took 
steps proactively to make sure that they had set up systems to 
ensure the proper use of the money.
    Mrs. Adams. Mr. Zinser, you said in an answer earlier that 
it was an ambitious goal to track the employment or lack of 
employment based on these funds. Do you think it is possible at 
all to truly know if it did or did not help unemployment? 
Because the numbers show that we are well over eight percent, 
so if I am going by what I see every day in my communities, I 
would say no, it did not help.
    Mr. Zinser. In the beginning of the Recovery Act, there 
were two different tracks that were set up. One was set up by 
the Council of Economic Advisors where they were going to 
determine what the impact of the Act had been on employment. 
The other track was for award recipients reporting the jobs 
created. My previous answer dealt with that second track. 
Trying to count the number of jobs created and the problems you 
run into.
    Mrs. Adams. Well, let me ask you this. Would you agree that 
unemployment is higher today than it was when this was passed?
    Mr. Zinser. Based on my reading of the economic statistics, 
I would say that the unemployment rate is higher today than it 
was then.
    Mrs. Adams. Thank you. I yield back.
    Chairman Broun. Thank you, Mrs. Adams.
    I now recognize Mr. Hultgren for five minutes.
    Mr. Hultgren. Thank you, Mr. Chairman. And thank you all 
very much.
    This is important for us to be discussing, and the American 
people want accountability. They want results that really make 
a difference and get things rolling again, so I think this is 
an important discussion to be having today. So thank you for 
the work that you are doing and for your role being here today.
    It appears to me that money spent on and channeled through 
the national labs was money that was much better spent than 
these apparently rushed loan guarantees and economic 
interventions that we saw. Mr. Friedman, I wanted to address a 
question to you and wondered if you could speak to what efforts 
and formal studies DOE has conducted to assess and properly 
weigh the relative merits of funding to the labs versus other 
recipients. Fermilab is located in my district, and they do 
cutting-edge work that really is important. Given how hard it 
has been for DOE to find even modest additional funding for the 
lab, this question is very important to me, so I wonder if you 
could shed some light on that for me.
    Mr. Friedman. Well, if you are asking whether the 
Department has done such a study, I am not aware of one. And 
they may well have. But what we have found, both in terms of 
the science funds and in terms of the environmental remediation 
funds that the Department received which were significant, the 
work done in preexisting programs and advancing preexisting 
programs at the national laboratories actually worked quite 
well. The requirements of the Recovery Act appear to have been 
followed. There was a fairly expeditious expenditure of the 
funds. They did hire people in fact and they have completed 
the--they have applied reasonably good project management 
skills to those funds.
    Mr. Hultgren. Okay. Well, again, thank you all for being 
here. I appreciate the work that you are doing in this 
important discussion.
    I yield back.
    Chairman Broun. Thank you, Mr. Hultgren.
    We will endeavor to do a second round of questioning. I now 
recognize myself for five minutes.
    Ms. Lerner and Ms. Robinson, are there lessons learned from 
the Recovery Act SBIR funding that can be translated to overall 
SBIR programs and agencies that are so troubled by waste, 
fraud, and abuse? Whichever one wants to start.
    Ms. Robinson. We believe there are. We are actually doing 
an ongoing audit at the moment that is looking at the Agency's 
Recovery Act SBIR/STTR work and we haven't quite completed it 
yet. But we do believe that there will be some actions that the 
Agency took during--before the Recovery Act that would be 
applicable and recommended to apply to their other programs as 
well, non-Recovery Act.
    Chairman Broun. Ms. Lerner.
    Ms. Lerner. I would note that the greater access to data 
about SBIR and STTR programs that is provided through the 
reported data and the stimulus act was useful in trying to work 
those types of cases. One of the challenges agencies have had 
has been the quality of data about SBIR and STTR, projects that 
have been funded. There have been improvements made to 
databases that the SBIR program is intended to maintain, but 
the additional data that is available from the Recovery Act is 
useful as well and it makes it easier for our agencies, 
particularly in cases where there is duplicate funding, to find 
opportunities to work together and to combat fraud in those 
programs.
    Chairman Broun. Very good.
    Dr. Rusco, in GAO's 2009 testimony, they mentioned that the 
Recovery Act made a $2.32 billion available to energy to 
jointly fund private sector projects demonstrating clean coal 
and carbon capture and sequestration technologies. FutureGen 
was the subject of considerable attention by this committee 
after the Bush Administration decided to cancel the program 
citing cost overruns. Various reports and testimony, GAO found 
that DOE did not base its decision to restructure FutureGen on 
a comprehensive analysis of factors such as associated cost 
benefits and risks. Did DOE ever conduct the recommended 
analysis prior to awarding over $1 billion in stimulus funding 
to the project?
    Dr. Rusco. Beyond the point at which we last testified and 
reported, we have not looked at that program, but I am unaware 
of such a study at this point.
    Chairman Broun. So the answer is no.
    Recently, Ameren, the owner of the power plant, announced 
their intent to close down the site to comply with EPA 
regulations leaving the restructured FutureGen project once 
more in limbo. What implications did this announcement have on 
the future of the project?
    Dr. Rusco. Again, we haven't looked at it recently but, you 
know, obviously they--that program has been troubled by a 
number of things, including the fact that in our view they 
haven't really reconciled the purpose of the program with what 
industry is willing and able to do, and I think that that needs 
to be looked into further.
    Chairman Broun. Okay. What is the current status of the 
billion dollars in stimulus funding? What impact do you 
anticipate the future announcement will have on the overall 
cost to FutureGen? And if FutureGen does not move forward, what 
will happen to that obligated funding?
    Dr. Rusco. Yeah, I am sorry I can't answer that at this 
point, but I could look into that and see if I can answer it 
for the record.
    Chairman Broun. Okay. Mr. Friedman, do you have any 
comment? Can you answer that?
    Mr. Friedman. No, I can't elaborate on what has been said 
already, Mr. Chairman.
    Chairman Broun. Okay. To all you all, start with RATB, Mr. 
Wood, what oversight body is responsible for ensuring that the 
goals of the stimulus bill were met, and who is looking whether 
outcome-based metrics are being evaluated?
    Mr. Wood. The Recovery Board does coordination of the 
accountability mainly for waste, fraud, and abuse and passes 
out if we find information such as was discussed earlier, we 
will refer it to the Inspectors General for investigation. I 
think on the performance metrics, that is an area that was not 
stressed in the Recovery Act. We did publish program plans for 
each agency that OMB required, but if you look at performance 
metrics per se, it is probably one of the weaker areas of the 
Act. We can track the dollars. We do collect information on the 
jobs, but the performance metrics is probably not an area where 
we specifically collect information.
    Chairman Broun. Anybody else want to weigh in?
    Mr. Zinser. Yeah, Mr. Chairman, in the case of NOAA, for 
example, they received about $150 million for habitat 
restoration. They have actually established a Web site, 
Restoration.NOAA.gov, that identifies where those projects are 
located, and you go to that Web site and you can click on the 
map and it will actually give you the performance of grant 
recipients associated with those projects.
    Chairman Broun. You cited one instance but we are spending 
billions of dollars here. Is this just one instance out of all 
of the stimulus funding, or is it pretty pervasive across the 
whole gamut of stimulus expenditures?
    Mr. Zinser. Recovery.gov does provide for analysis a lot of 
information about individual projects. Whether they are all 
outcome measures or not, I am not sure. Many are output 
measures, but for many, the key outcome is economic stimulus. 
And I think I have testified about the difficulties in 
calculating job creation.
    Chairman Broun. Thank you. My time has expired.
    Mr. Tonko, you are recognized for five minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    Let me congratulate all of you for the work that you have 
done to enhance the public's ability to see where its money 
goes. It also is important I think to thank you for all the 
work done to raise your own effort to bring accountability to 
the ARRA program. The transparency of ARRA is wonderful, but it 
does come at a cost, as was earlier stated by Representative 
McNerney. I would like to delve into that a little deeper.
    Agencies have obviously more burdens associated with 
working with fund recipients and collecting data. And the IGs 
and the RAT Board have burdens for spot-checking reporting 
compliance and in aggregating data before making them available 
to the public. Perhaps most importantly, recipients of funds 
have costs in complying with reporting requirements and 
tracking where those funds specifically go. Now, members and 
staff have heard complaints over the last two years from 
colleges, from universities, from small businesses that that 
reporting is indeed onerous and confusing. Now, I am very 
supportive of making government funding as transparent as 
possible for our public. However, it should be stated that we 
don't want it to see--to have it serve as an unnecessary burden 
onto agencies or small businesses and universities.
    So to our witnesses, I would like you to share your 
thoughts about how we can apply the lessons learned with ARRA 
to make government funding more transparent while not 
overburdening funding agencies and recipients. Just like--could 
you address what you believe is the right balance and should we 
perhaps establish a dollar value which would then kick in for 
further scrutiny or reporting requirements? Perhaps, Mr. Wood, 
we can start with you and then have the entire panel address 
that.
    Mr. Wood. Yeah, I think I mentioned earlier this is an 
excellent question. We tried to build our reporting systems to 
be as least burdensome as possible. There are some things I 
think we could do. You have mentioned some of them. One thing 
you could look at is raising the floor from $25,000 to a higher 
level. You would lose some granularity in the information you 
collect, but you would probably alleviate some of the small 
business concerns and so forth.
    There are some things we could do technologically and we 
have done. For instance, we installed data checks and so forth 
to prevent people from making common mistakes, putting in the 
wrong ZIP code where putting a New Hampshire ZIP code with 
Nevada and so forth. So there are things we can do along those 
lines.
    I think the other thing we did in the Recovery Act that was 
effective is we actually limited it to 99 data elements. That 
sounds like a lot, but that is a limited data set for some of 
the things the Federal Government does. I think you could even 
look at reducing the number of data elements some, making sure 
that you really were collecting exactly what you wanted. And 
you could do some pre-population of those data elements. You 
could use existing government systems that might have 
information in them to pre-populate it. So, even though there 
were data elements that needed to be reported, it wasn't 
burdensome for the person filing the report.
    Mr. Tonko. Um-hum. Dr. Rusco.
    Dr. Rusco. I think improved guidance from programming 
agencies would help and that was one of the big challenges. 
Getting that guidance to be clear and timely was a challenge, 
and hopefully that is also a lesson learned going forward.
    Mr. Tonko. Um-hum. Mr. Friedman.
    Mr. Friedman. Well, of course you have hit, Mr. Tonko, on 
one of the really important questions that have come out of 
this, and I appreciate that.
    Look, I think we need a risk-based strategy, we need 
thresholds that make sense, and that is one of the lessons that 
I think we have learned. We heard the same thing from 
recipients that you are alluding to, which is that they felt 
the reporting requirements were overly burdensome and not 
necessarily productive, and we agree with that.
    I would just--one note of caution, though, that if the body 
politic is prepared to accept the thresholds and understand the 
risks associated with accepting those thresholds and no 
reporting below the threshold or limited reporting, that would 
be okay. But if, on the other hand, at the end of the day we 
are going to adopt such a mechanism and then have people 
criticize the fact that there wasn't reporting and there wasn't 
adequate oversight below those thresholds, we will have 
actually ended up, I think, moving a ball backwards rather than 
moving the ball forward. I don't know if that makes any sense. 
I hope that addresses your question.
    I think the--several Members of the Subcommittee have hit 
on some extremely important points with regard to lessons 
learned and best practices, and if we spent 3/4 of a billion 
dollars or $800 million on the Stimulus Act and if we haven't 
learned both in the IG community, in the program part of our 
agencies, and frankly the Congress if I may say so, if we 
haven't learned a lot, then shame on all of us.
    Mr. Tonko. Thank you. Mr. Zinser.
    Mr. Zinser. Well, Mr. Wood knows better than anybody about 
the development of FederalReporting.gov. Early on I think the 
RAT Board thought that it would just use existing financial 
systems to access grantee and contractor information. To 
navigate those labyrinthine systems, however, would take years. 
So the RAT Board came up with this FederalReporting.gov system, 
and I think the legislation that Mike referred to is intended 
to institutionalize that for all government spending, and we 
think that would be a good idea.
    One of the problems the system encountered was that it was 
layered over existing reporting systems. There were a lot of 
complaints early on. We have been through nine quarters of 
reporting now, and the complaints have subsided. The recipient 
data now have a high quality. All the OIGs have done audits of 
the data quality, so the data is better, and I think if we were 
able to get rid of some of the legacy systems in place of this 
FederalReporting.gov that would be an improvement.
    Mr. Tonko. Thank you. Ms. Lerner.
    Ms. Lerner. I would concur with what Mr. Zinser said. I 
certainly have heard a lot of complaints about the burden, 
especially in the early days from NSF recipients. And I have 
some sympathy with that. But, I think part of the reason people 
feel overburdened is because they have to report data not just 
to the Recovery Board but to multiple other sources for the 
Federal Government. And I think, moving forward, if we could 
get to a point where we could combine many of those sources 
which often require overlapping data, we would achieve some 
cost-savings because we wouldn't be separately maintaining 
dozens of different reporting systems, just the single one. We 
would have improved accountability because it would be one-stop 
shopping for data, and hopefully in a situation like that we 
could expand on the data collected in a way that would provide 
more useful information to people like me and people like you 
for oversight purposes at a lesser burden on the recipients.
    Mr. Tonko. Thank you. And finally, Ms. Robinson.
    Ms. Robinson. I don't really have anything to add to that. 
I think it is pretty much all done by the panel.
    Mr. Tonko. Thank you very much to all of you.
    Thank you, Mr. Chairman.
    Chairman Broun. The gentleman's time has expired.
    Well, I have a lot of leeway here, and I am not going to 
run things real tight, particularly when we are looking into an 
issue such as oversight, transparency, and accountability.
    To me, the good thing that has come out of the stimulus act 
is that I do think we have more transparency and accountability 
for federal spending. We have certainly identified some 
problems in regard to trying to pour a massive amount of money, 
almost a trillion dollars, and I respectfully disagree with my 
friend from New York about the success of the Stimulus Act.
    I think it has been--you can't pour almost a trillion 
dollars into the economy without having some positive effects, 
but I think overall it has been an abject failure and the 
metrics I use for determining that is we were promised by the 
President that if we passed this stimulus bill--and you and I 
both were here during that period of time, Mr. Tonko, that our 
unemployment rate would not go above eight percent and it has 
steadily risen to over 10 percent. In my district it is over 10 
percent; in my State it is over 10 percent today. So there are 
other ways, I think, that are better of stimulating the economy 
and that is getting the tax burden and regulatory burden off 
the private sector so that we can start creating jobs and start 
creating a strong economy.
    Having said that, I want to thank the witnesses for all 
being here and for you all's valuable testimony. It has been 
very enlightening and I appreciate you all's hard work. In that 
regard, I thank members for their very insightful questions, 
too.
    Members of the Subcommittee may have additional questions 
for you all, and we ask that you respond in writing to those 
questions that will be submitted. The record will remain open 
for two additional weeks for additional comments or questions 
from the Members.
    The witnesses are excused. Again, thank you all so much for 
being here and for you all's hard work on this issue.
    The hearing is now adjourned.
    [Whereupon, at 11:36 a.m., the Subcommittee was adjourned.]


                                Appendix

                              ----------                              


                   Answers to Post-Hearing Questions




                   Answers to Post-Hearing Questions
Responses by Dr. Frank Rusco, Director,
Natural Resources and Environment Team,
Government Accountability Office

Questions Submitted by Chairman Paul C. Broun



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



Responses by Mr. Michael Wood,
Executive Director,
Recovery Accountability and Transparency Board

Questions Submitted by Chairman Paul C. Broun



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



Responses by Hon. Gregory Friedman,
Inspector General,
U.S. Department of Energy

Questions Submitted by Chairman Paul C. Broun



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Responses by Hon. Todd Zinser,
Inspector General,
U.S. Department of Commerce

Questions Submitted by Chairman Paul C. Broun



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Responses by Ms. Allison Lerner,
Inspector General,
National Science Foundation

Questions Submitted by Chairman Paul C. Broun



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Responses by Ms. Gail Robinson,
Deputy Inspector General,
National Aeronautics and Space Administration

Questions Submitted by Chairman Paul C. Broun



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