[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                  TOP CHALLENGES FOR SCIENCE AGENCIES: 
                  REPORTS FROM THE INSPECTORS GENERAL 
                          (PART I AND PART II) 

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

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                      THURSDAY, FEBRUARY 28, 2013
                                  and
                        THURSDAY, MARCH 14, 2013

                               __________

                            Serial No. 113-9
                                  and
                           Serial No. 113-13

                               __________

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

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

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

79-928 PDF                       WASHINGTON : 2013 



              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                   HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California         EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas                 LYNN C. WOOLSEY, California
F. JAMES SENSENBRENNER, JR.,         ZOE LOFGREN, California
    Wisconsin                        DANIEL LIPINSKI, Illinois
FRANK D. LUCAS, Oklahoma             DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas              FREDERICA S. WILSON, Florida
MICHAEL T. McCAUL, Texas             SUZANNE BONAMICI, Oregon
PAUL C. BROUN, Georgia               ERIC SWALWELL, California
STEVEN M. PALAZZO, Mississippi       DAN MAFFEI, New York
MO BROOKS, Alabama                   ALAN GRAYSON, Florida
ANDY HARRIS, Maryland                JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois             SCOTT PETERS, California
LARRY BUCSHON, Indiana               DEREK KILMER, Washington
STEVE STOCKMAN, Texas                AMI BERA, California
BILL POSEY, Florida                  ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming              MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona            JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky              MARK TAKANO, California
KEVIN CRAMER, North Dakota           VACANCY
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS STEWART, Utah
                                 ------                                

                         Subcommittee on Energy

                   HON. PAUL C. BROUN, Georgia, Chair
F. JAMES SENSENBRENNER, JR.,         DAN MAFFEI, New York
    Wisconsin                        ERIC SWALWELL, California
BILL POSEY, Florida                  SCOTT PETERS, California
DAVID SCHWEIKERT, Arizona            EDDIE BERNICE JOHNSON, Texas
KEVIN CRAMER, North Dakota
LAMAR S. SMITH, Texas



                            C O N T E N T S

                      Thursday, February 28, 2013

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

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

                           Opening Statements

Statement by Representative Paul C. Broun, Chairman, Subcommittee 
  on Oversight, Committee on Science, Space, and Technology, U.S. 
  House of Representatives.......................................     6
    Written Statement............................................     7

Statement by Representative Dan Maffei, Ranking Minority Member, 
  Subcommittee on Oversight, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................     8
    Written Statement............................................    10

                               Witnesses:

Mr. Paul K. Martin, Inspector General, National Aeronautics and 
  Space Administration (NASA), Office of Inspector General
    Oral Statement...............................................    13
    Written Statement............................................    16

Ms. Allison C. Lerner, Inspector General, National Science 
  Foundation (NSF), Office of Inspector General
    Oral Statement...............................................    22
    Written Statement............................................    24

Mr. David Smith, Deputy Inspector General, U.S. Department of 
  Commerce (DOC), Office of Inspector General
    Oral Statement...............................................    32
    Written Statement............................................    34

Discussion.......................................................    39

             Appendix I: Answers to Post-Hearing Questions

Mr. Paul K. Martin, Inspector General, National Aeronautics and 
  Space Administration (NASA), Office of Inspector General.......    54

Ms. Allison C. Lerner, Inspector General, National Science 
  Foundation (NSF), Office of Inspector General..................    60

Mr. David Smith, Deputy Inspector General, U.S. Department of 
  Commerce (DOC), Office of Inspector General....................    68

            Appendix II: Additional Material for the Record

Letter submitted by Representative Dan Maffei, Ranking Minority 
  Member, Subcommittee on Oversight, Committee on Science, Space, 
  and Technology, U.S. House of Representatives..................    86

Washington Post article, submitted by Representative Dan Maffei, 
  Ranking Minority Member, Subcommittee on Oversight, Committee 
  on Science, Space, and Technology, U.S. House of 
  Representatives................................................    92

Office of Personnel Management's 2012 Federal Employee Viewpoint 
  Survey Results, submitted by Representative Dan Maffei, Ranking 
  Minority Member, Subcommittee on Oversight, Committee on 
  Science, Space, and Technology, U.S. House of Representatives..    94

                            C O N T E N T S

                        Thursday, March 14, 2013

                                                                   Page
Witness List.....................................................   128

Hearing Charter..................................................   129

                           Opening Statements

Statement by Representative Paul C. Broun, Chairman, Subcommittee 
  on Oversight, Committee on Science, Space, and Technology, U.S. 
  House of Representatives.......................................   132
    Written Statement............................................   133

Statement by Representative Dan Maffei, Ranking Minority Member, 
  Subcommittee on Oversight, Committee on Science, Space, and 
  Technology, U.S. House of Representatives......................   134
    Written Statement............................................   135

                               Witnesses:

Mr. Gregory H. Friedman, Inspector General, U.S. Department of 
  Energy, Office of Inspector General
    Oral Statement...............................................   137
    Written Statement............................................   139

Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental 
  Protection Agency, Office of Inspector General
    Oral Statement...............................................   150
    Written Statement............................................   152

Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of 
  the Interior, Office of Inspector General
    Oral Statement...............................................   161
    Written Statement............................................   163

Discussion.......................................................   168

             Appendix I: Answers to Post-Hearing Questions

Mr. Gregory H. Friedman, Inspector General, U.S. Department of 
  Energy, Office of Inspector General............................   184

Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental 
  Protection Agency, Office of Inspector General.................   190

Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of 
  the Interior, Office of Inspector General......................   196


                  TOP CHALLENGES FOR SCIENCE AGENCIES:
                  REPORTS FROM THE INSPECTORS GENERAL
                                (PART I)

                              ----------                              


                      THURSDAY, FEBRUARY 28, 2013

                  House of Representatives,
                                  Subcommittee on Oversight
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittee met, pursuant to call, at 10:01 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Paul Broun 
[Chairman of the Subcommittee] presiding.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Broun. The Subcommittee on Oversight will come to 
order.
    Good morning, everyone. I am glad Ms. Lerner finally got 
through security and got here. I was worried about you, but 
welcome.
    In front of you are the packets containing the written 
testimony, the biographies, and Truth in Testimony disclosures 
for today's witness panels. I will recognize myself for an 
opening statement for five minutes.
    Good morning, everyone. The title of today's hearing is: 
``Top Challenges for Science Agencies: Reports from the 
Inspectors General, Part 1,'' Part 2 to follow. This is the 
first of two hearings where we will hear from witnesses from 
the Offices of Inspectors General representing the agencies 
within this Committee's jurisdiction. The object of the hearing 
is to learn about the major performance and management 
challenges facing each agency from the perspective of each of 
the Offices of Inspector General.
    Today we will hear from the IG offices with jurisdiction 
over the National Aeronautics and Space Administration, the 
National Science Foundation and the U.S. Department of 
Commerce. It is my hope that this information will help inform 
our colleagues--on both sides of the aisle--about the issues at 
the agencies over which we have the responsibility to conduct 
thorough and appropriate oversight. With the President's budget 
expected shortly, this hearing will help us as an authorizing 
Committee, to coordinate with the Appropriations Committee, by 
identifying for that Committee programs, projects and 
activities that work as opposed to those that need to be 
modified or perhaps eliminated.
    There is no shortage of issues. This Committee has a 
history of probing NASA, especially in the area of information 
technology security where last year we held a hearing on that 
topic. Unfortunately, some of the issues that I raised back 
then are still outstanding today. In addition to the revelation 
that NASA needs to do more to protect sensitive information 
from going out the back door through cyber intrusions and lax 
protocols, I am increasingly concerned about the possibility of 
sensitive information going out the front door, possibly with 
tacit approval from research centers. The National Aeronautics 
and Space Act has the dual responsibility of providing ``the 
widest practical dissemination of information concerning its 
activities and results'' as well as establishing ``such 
security requirements, restrictions and safeguards as the 
Administrator deems necessary in the interest of national 
security.'' Similarly, the Act also gave NASA broad authority 
to enter into agreements outside of the normal federal 
acquisition process. Originally meant to support smaller-scale 
projects, it is increasingly being used for larger, 
multimillion-dollar procurements.
    NASA is not the only agency that has this authority. The 
NSF has roughly $11 billion tied up in other transaction 
authorities such as Cooperative Agreements which, like NASA's 
Space Act Agreements, do not carry the same oversight and 
transparency requirements as contracts.
    The Department of Commerce, which includes bureaus such as 
NOAA, which in turn houses the National Weather Service, has 
been the focus of this Committee since over a year ago when we 
started hearing claims about financial mismanagement and Anti-
deficiency Act violations. That culminated in a September 12, 
2012, hearing for which we still have not received agency 
responses to questions that we submitted for the record, and I 
hope they will be forthcoming very soon but we still haven't 
heard back from them. And I can't talk about NOAA without 
mentioning its satellite programs, which are of great concern 
to this Committee, particularly in light of potential gaps in 
future coverage. These are symptoms of what I perceive to be 
larger management challenges within NOAA.
    This exercise of deliberating over a program's performance 
and challenges is a particularly timely one because as you all 
know, starting tomorrow, federal agencies will do the exact 
opposite and implement across-the-board, indiscriminate funding 
cuts as a result of the sequester. The House of Representatives 
on more than one occasion has tried to offer a solution to 
prevent these cuts from taking place but we have hit a wall 
with the Senate and with the Administration. And I know I don't 
always see eye to eye with my friends on the other side of the 
aisle, but I respect them and believe that we share the same 
goal regardless of which side of the room we sit in, and that 
is to serve our respective constituencies in the best manner 
possible. To that end, I urge my colleagues, Republicans and 
Democrats alike, to take advantage of the opportunity this 
hearing presents and question the witnesses about the agencies 
within their jurisdiction.
    [The prepared statement of Mr. Broun follows:]

              Prepared Statement of Chairman Paul C. Broun

    Good morning. The title of today's hearing is ``Top Challenges for 
Science Agencies: Reports from the Inspectors General - Part 1.'' This 
is the first of two hearings where we will hear from witnesses from the 
Offices of Inspectors General representing agencies within this 
Committee's jurisdiction. The object of the hearing is to learn about 
the major performance and management challenges facing each agency from 
the perspective of each Office of the Inspector General.
    Today we will hear from the IG offices with jurisdiction over the 
National Aeronautics and Space Administration, the National Science 
Foundation, and the U.S. Department of Commerce. It is my hope is that 
this information will help inform my colleagues--on both sides of the 
aisle--about the issues at the agencies over which we have a 
responsibility to conduct thorough, but appropriate, oversight. With 
the President's budget expected shortly, this hearing will help us, as 
an authorizing Committee, to coordinate with the Appropriations 
Committee, by identifying for that Committee programs, projects and 
activities that work, as opposed to those that need to be modified or 
perhaps eliminated.
    There is no shortage of issues. This Committee has a history of 
probing NASA, especially in the area of information technology 
security, where last year, we held a hearing on the topic. 
Unfortunately, some of the issues I raised back then are still 
outstanding today. In addition to the revelation that NASA needs to do 
more to protect sensitive information from going out the back door 
through cyber intrusions and lax protocols, I am increasingly concerned 
about the possibility of sensitive information going out the front 
door--possibly with tacit approval from research centers. The National 
Aeronautics and Space Act has the dual responsibility of providing 
``the widest practical dissemination of information concerning its 
activities and results'' as well as, establishing ``such security 
requirements, restrictions, and safeguards as the Administrator deems 
necessary in the interest of the national security.'' Similarly, the 
Act also gave NASA broad authority to enter into agreements outside of 
the normal federal acquisitions process. Originally meant to support 
smaller-scale projects, it has increasingly been used for larger, 
multi-million dollar procurements.
    NASA is not the only agency that has this authority. The NSF has 
roughly $11 billion tied up in other transaction authorities such as 
Cooperative Agreements, which, like NASA's Space Act Agreements, also 
do not carry the same oversight and transparency requirements as 
contracts.
    The Department of Commerce, which includes bureaus such as NOAA, 
which in turn houses the National Weather Service, has been the focus 
of this Committee since over a year ago when we started hearing claims 
about financial mismanagement and Anti-deficiency Act violations. That 
culminated in a September 2012 hearing, for which we still have not 
received agency responses to questions we submitted for the record. And 
I can't talk about NOAA without mentioning its satellite programs, 
which are of great concern to this Committee, particularly in light of 
potential gaps in future coverage. These are symptoms of what I 
perceive to be larger management challenges at NOAA.
    This exercise of deliberating over a program's performance and 
challenges is a particularly timely one because as you all know 
starting tomorrow, federal agencies will do the exact opposite, and 
implement across-the-board indiscriminate funding cuts as a result of 
the sequester. The House of Representatives, on more than one occasion, 
has tried to offer a solution to prevent these cuts from taking place, 
but we've hit a wall with the Senate and the Administration.
    Now I know I don't always see eye-to-eye with my friends on the 
other side of the aisle, but I respect them, and believe we share the 
same goal regardless of which side of the room we sit in, and that is 
to serve our respective constituents in the best manner possible. To 
that end, I urge my colleagues - Republicans and Democrats alike--to 
take advantage of the opportunity this hearing presents, and question 
the witnesses about the agencies within their jurisdiction.

    Chairman Broun. Now I recognize the Ranking Member, the 
gentleman from New York, for an opening statement for five 
minutes. You are recognized.
    Mr. Maffei. Mr. Chairman, I thank you very much. I too 
share your concerns about NOAA's response to the Committee, but 
on this, I want to welcome the three witnesses. Inspector 
Generals, sometimes called IGs, carry an unusual mandate and a 
heavy burden, Inspector Generals stand on the front line of 
accountability and work to improve government and protect 
taxpayer interests. As the kind of the cop on the beat in 
agencies, they function not just as another executive office 
but also as Congress's eyes and ears in those agencies. This is 
why IGs have a statutory responsibility to quickly inform 
Congress of any significant wrongdoing at their agencies.
    While some IGs have tried to morph their role into that of 
a management consultant to agency leadership, and that is fine, 
it is still extremely important, though, and Congress expects 
Inspector Generals to view themselves as watchdogs first and 
foremost.
    IGs have enormous discretion to go with their great 
responsibility. Within the limits of the law, they can decide 
what they will and will not pursue, how they will structure 
their offices, who they will hire and fire, and how they will 
spend their budgets. The agencies they overlook are in no 
position to second-guess their actions as that would undermine 
the IG's necessary independence.
    However, this independence combined with large budgets 
outside the control of any other office leaves open the 
possibility that a bad Inspector General may abuse that 
position. Inspector Generals are a classic example of the old 
question, who will watch the watchmen. With no authority over 
them in their agencies, serving at the pleasure of the 
President, but a President who stands in great distance, and 
often keeping information about their activities secret from 
the public and even Congress, the job of ensuring that an IG 
who is not doing their job would be identified and removed can 
fall through the cracks.
    The Chairman's purpose in holding this hearing, it is my 
understanding, is to explore what three IGs from NASA, NSF and 
Commerce have accomplished in the last year and hopes to take 
on next, and I applaud the Chairman for holding this hearing.
    I have no reason to doubt that the two Inspector Generals 
before us have been doing good work and are raising important 
questions, and I welcome your testimony. The Subcommittee 
staff, however, and Members of the news media have reported 
serious and pressing concerns in the Office of Department of 
Commerce Inspector General, and yet, Mr. Chairman, Mr. Zinser, 
the Commerce Inspector General, has decided not to appear 
before us or in staff briefings before the hearing.
    Now, Mr. Smith, I do sincerely appreciate your time and 
attention. I hope you can understand why the Committee Members 
might be disappointed that we don't have direct access to the 
Department of Commerce IG. It is nothing about your work, you 
are a fine public servant, but we want to make sure we have 
direct access to an IG.
    So Mr. Chairman, the Committee was first alerted to one 
serious concern when staff discovered that the Inspector 
General, Mr. Zinser, let NOAA investigate itself regarding 
criminal financial misconduct. The explanations he offered to 
the staff back in August to Members in September and then 
written responses to questions for the record are contradictory 
and his office has refused to provide records Members requested 
to better understand what happened. Then in December, the 
Washington Post reported that Mr. Zinser, along with his 
Principal Assistant for Investigations and his General Counsel, 
compelled senior employees to resign and sign nondisclosure 
agreements that would bar them from disclosing information 
about the operation of his office to either the Office of the 
Special Counsel, which is the whistleblower protection office 
in the Federal Government, or even to Congress itself.
    Now, why would the IG compel senior officials to relinquish 
their statutory and, in fact, constitutional right of redress? 
The conduct reported in the Post should be shocking to conduct 
for any federal official, let alone an Inspector General. And 
if we find an Inspector General who we would hope would listen 
to whistleblowers, not silence them, is engaged in gag orders, 
that is not acceptable conduct.
    The recent Federal Best Places to Work survey brings up 
other concerns that show that the Department of Commerce IG 
Office was ranking 291 out of 292 places polled, making it 
among the worst places to work, according to the survey. In 
this survey, 50 percent of the staff said they were going to 
look for another job in the next year, and almost half were 
unsure or felt unsafe in telling senior leadership if they find 
violations of the law, regulation or policy. So according to 
this survey, the Inspector General staff are afraid to report 
violations of law. I should add that our staff has begun to 
receive information from former employees at Commerce 
Department of Inspector General, and some of the allegations 
are very serious.
    So for all these reasons, Mr. Chairman, Ms. Johnson, Ms. 
Wilson, Ms. Bonamici and I have sent a letter to GAO. We have 
asked that they open an investigation into the management and 
conduct of the IG at the Department of Commerce. At a time when 
we face the possibility of large-scale, arbitrary cuts to both 
domestic and military programs, I believe that any charges of 
wasting taxpayer dollars or using them to run an ineffective 
office must be investigated. Congress has the responsibility 
and authority to hold IGs accountable, and we have to ensure 
money has not been wasted or ineffectively protected, and that 
laws have not been broken in the name of enforcement. If indeed 
Mr. Zinser or any Inspector General has allowed his office to 
be abused or become ineffective, then we in Congress have the 
responsibility to bring that to light.
    And Mr. Chairman, I would like to ask if the article in the 
Post, the letter from Mrs. Johnson, Ms. Wilson, Ms. Bonamici 
and I and the other supporting materials be included after this 
statement in the record.
    [The prepared statement of Mr. Maffei follows:]

        Prepared Statement of Ranking Minority Member Dan Maffei

    Mr. Chairman, I thank you very much. I too share your concerns 
about NOAA's response to the Committee. But on this I want to welcome 
the three witnesses.
    Inspector Generals, sometimes called ``IGs,'' carry an unusual 
mandate and heavy burden. Inspector Generals stand on the front line of 
accountability, and work to improve government and protect taxpayer 
interests. As the "kind of cop" on the beat in agencies, they function 
not just as another executive office, but also as Congress's eyes and 
ears in those agencies. This is why IGs have a statutory responsibility 
to quickly inform Congress of any significant wrongdoing at their 
agencies. While some IGs have tried to morph their role into that of a 
management consultant to agency leadership, and that's fine, it is 
still extremely important though, and congress expects, Inspector 
Generals to view themselves as watchdogs first and foremost.
    IGs have enormous discretion to go with their great responsibility. 
Within the limits of the law, they can decide what they will and will 
not pursue, how they will structure their offices, who they will hire 
and fire, and how they will spend their budgets. The agencies they 
overlook are in no position to second guess their actions, as that 
would undermine the IG's necessary independence. However, this 
independence combined with large budgets outside the control of any 
other office leaves open the possibility that a bad Inspector General 
may abuse that position. Inspector Generals are a classic example of 
the old question, "who will watch the watchman?" With no authority over 
them in their agencies, serving at the pleasure of the President, but 
the President who stands at great distance, and often keeping 
information about their activities secret from the public and even 
Congress, the job of insuring that a IG who is not doing their job 
would be identified and removed can fall through the cracks.
    The Chairman's purpose in holding this hearing, it is my 
understanding, is to explore what the three IGs from NASA, NSF and 
Commerce have accomplished in the last year and hope to take on next, 
and I applaud the Chairman for holding this hearing. I have no reason 
to doubt that the two Inspector Generals before us have been doing good 
work, and are raising important questions, and I welcome your 
testimony.
    The subcommittee staff however and members of the news media have 
reported serious and pressing concerns in the office of the Department 
of Commerce Inspector General. And yet, Mr. Chairman, Mr. Zinser, the 
Commerce Inspector General, has decided not to appear before us, or in 
staff briefings before the hearing. Now, Mr. Smith, I do sincerely 
appreciate your time and attention. I hope you can understand why the 
Committee Members might be disappointed that we don't have direct 
access to the Department of Commerce IG. It is nothing about your work, 
you are a fine public servant, but we want to make sure that we have 
direct access to an IG.
    Mr. Chairman, the committee was first alerted to one serious 
concern when staff discovered that the Inspector General Mr. Zinser let 
NOAA investigate itself regarding criminal financial misconduct. The 
explanations he offered to the staff back in August to members in 
September and then written responses to questions for the record are 
contradictory, and his office has refused to provide records members 
requested to better understand what happened. Then, in December, the 
Washington Post reported that Mr. Zinser, along with his principal 
Assistant for Investigations and his General Counsel, compelled senior 
employees to resign and sign non-disclosure agreements that would bar 
them from disclosing information about the operation of his office to 
either the Office of Special Counsel, which is the whistleblower 
protection office in the federal government, or even to Congress 
itself.
    Now, why would the IG compel senior officials to relinquish their 
statutory and in fact, constitutional, right of redress? The conduct 
reported in the Post should be shocking conduct for any federal 
official, let alone an Inspector General. And if we find an Inspector 
General, who we would hope would listen to whistleblowers, not silence 
them, has engaged in gag orders, that is not acceptable conduct.
    The recent Federal Best Places to Work survey brings up other 
concerns, that show that the Department of Commerce IG office is 
ranking 291 out of 292 places polled, making it among the worst places 
to work according to the survey. In this survey, 50% of the staff said 
they were going to look for another job in the next year, and almost 
half were unsure or felt unsafe in telling senior leadership if they 
find violations of the law, regulation or policy. So according to the 
survey, the Inspector General staff are afraid to report violations of 
law. I should add that our staff has begun to receive information from 
former employees at Commerce Department of Inspector General, and some 
of the allegations are very serious.
    So for all these reasons Mr. Chairman, Ms. Johnson, Ms. Wilson, Ms. 
Bonamici and I have sent a letter to GAO, we have asked that they open 
an investigation into the management and conduct of the IG at the 
Department of Commerce.
    At a time when we face the possibility of large scale arbitrary 
cuts, to both domestic and military programs, I believe that any 
charges of wasting taxpayer dollars, or using them to run an 
ineffective office, must be investigated. Congress has the 
responsibility and authority to hold IGs accountable, and we have to 
ensure money has not been wasted or ineffectively protected, and that 
laws have not been broken in the name of enforcement. If indeed Mr. 
Zinser or any Inspector General has allowed his office to be abused, or 
become ineffective, then we in Congress have the responsibility to 
bring that to light. Now Mr. Chairman, I would like to ask if the 
article of the Post, the letter from Ms. Johnson Ms. Wilson Ms. 
Bonamici and I and other supporting materials be included after this 
statement in the record.

    Thank you Mr. Chairman.

    Chairman Broun. Hearing no objection, so ordered.
    [Submitted materials appear in Appendix II:]
    Mr. Maffei. Thank you, Mr. Chairman.
    Chairman Broun. Thank you, Mr. Maffei.
    Part 2 of this hearing, this series that we are doing, will 
feature the IGs from DOE, EPA and DOI. At that hearing, the EPA 
IG also had a conflicting schedule, so this is not unique for a 
Deputy to come and testify, and I appreciate the Deputy from 
the Department of Commerce coming. The Committee is working 
with all the IGs within our jurisdiction. We are trying to get 
everybody here that we possibly can, and I assure you that this 
is not unique. We have made compromises like this previously 
and we will have to in the future as we go forward, Mr. Maffei. 
I know you haven't been on this Committee very long but we 
welcome you and are glad to have you here, and I know that you 
and I are going to continue to work very strongly together 
through this process, but I am as interested as you are in 
getting to the bottom of all this, because nobody wants to see 
fraud, waste and abuse, and we have to count upon the IGs to 
make sure that that doesn't happen, so that is what this is, my 
objective in doing these hearings and trying to find out what 
is going on in these agencies and I want to have a strong IG 
system.
    Mr. Maffei. That is my concern too, Mr. Chairman.
    Chairman Broun. Thank you, and I know we both have that 
same desire so just understand that this is not a unique 
situation today, and I thank you, Mr. Smith for being here.
    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 first panel of 
witnesses. Our first witness is Mr. Paul Martin, who has been 
before us before----
    Mr. Maffei. Mr. Chairman?
    Chairman Broun. Yes, sir.
    Mr. Maffei. I haven't been on this Subcommittee, this 
Committee very long or the Subcommittee very long but my 
understanding is, it is the usual to swear in the witnesses, is 
it not?
    Chairman Broun. We have done so in the past, and we can do 
that.
    Mr. Maffei. I would ask that we do, if it a usual thing, 
given that we are an oversight----
    Chairman Broun. It is my plan to do so, and we--just sit 
tight.
    Mr. Maffei. Absolutely. Sorry.
    Chairman Broun. Just sit tight.
    Mr. Maffei. As you say, I am new.
    Chairman Smith of Texas. Will the chairman yield just for a 
second?
    Chairman Broun. Absolutely. The Committee Full Chair, Mr. 
Smith.
    Chairman Smith of Texas. I just want to kind of explain 
what our overall policy is. It was my feeling that we didn't 
need to do so for two reasons. One, under House rules, all 
witnesses are assumed to be under oath, and two, in the letters 
to the witnesses, I believe they are--I want to get the 
gentleman's attention just to make those points.
    Chairman Broun. If the minority Counsel will listen, please 
as you all talk?
    Chairman Smith of Texas. That is all right. He is not 
listening.
    Chairman Broun. He is listening.
    Chairman Smith of Texas. Let me make my two points. One, 
under House rules, witnesses are assumed to be under oath, so I 
thought it was a little bit redundant to have to swear them in. 
Second of all, I believe that the letters that the witnesses 
get inviting them to testify remind them of that fact as well, 
so we feel like we have got it covered. If the gentleman wants 
to make an exception to that general rule, that is fine with 
me, but I just want to reassure him that the witnesses are 
reminded that they are under oath, one way or the other, 
whether it is verbally or in writing.
    Chairman Broun. Thank you, Mr. Chairman.
    Chairman Smith of Texas. Sure.
    Chairman Broun. We will----
    Mr. Maffei. Mr. Chairman, if you would yield?
    Chairman Broun. Mr. Maffei.
    Mr. Maffei. My understanding, and this could be mistaken, 
but my understanding is that in the past years, the Committee 
did--this Subcommittee did administer an oath, whether to 
remind or whether to reaffirm, for whatever reason, and my 
concern is if we don't do it, and I admit that I didn't know 
these rules when we did our first Subcommittee hearing, but if 
we don't do it now and consistently, we don't want to imply 
that it is necessary at any particular time for the witnesses. 
So whatever we normally do, we should decide that and just 
normally follow the same rules. And I want to thank the 
distinguished Chairman of the Full Committee for his comment.
    Chairman Broun. I am entertaining a unanimous consent 
request from Mr. Maffei that witnesses take an oath. Hearing no 
objection, so ordered.
    Mr. Maffei. Thank you.
    Chairman Broun. Our first witness today is Inspector 
General of the National Aeronautics and Space Administration, 
as I already mentioned, is Mr. Paul Martin, who has been here 
before this Committee before, and I appreciate your coming, Mr. 
Martin. Our second witness is Ms. Allison Lerner, the Inspector 
General of the National Science Foundation. Our third witness 
will be Mr. David Smith, Deputy Inspector General of the U.S. 
Department of Commerce.
    As our witnesses should know, spoken testimony is limited 
to five minutes each, and please, because we have votes shortly 
coming, so if you would, try to maintain within that 5-minute 
window, and then each Member will have five minutes to ask 
questions. Your written testimony will be included in the 
record of this hearing.
    It is the practice of this Subcommittee on Investigations 
and Oversight to receive testimony under oath. If you now would 
all please stand and raise your right hand, unless you have an 
objection to taking an oath. Do you solemnly swear to affirm to 
tell the whole truth and nothing but the truth, so help you 
God? Thank you. You may be seated. Let the record reflect that 
all the witnesses participating have taken the oath, and Mr. 
Maffei, I like that too, and I wanted to do this myself.
    We now recognize our first witness, Mr. Martin, to present 
your testimony. Sir, you have five minutes.

                TESTIMONY OF MR. PAUL K. MARTIN,

                       INSPECTOR GENERAL,

         NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

              (NASA), OFFICE OF INSPECTOR GENERAL

    Mr. Martin. Thank you, Mr. Chairman, Ranking Member Maffei, 
Chairman Smith and Members of the Subcommittee.
    The successful landing of the Curiosity over on the surface 
of Mars in August energized the public about NASA's activities 
in a way not seen since the final Space Shuttle flight. Another 
highlight this past year was the first commercial resupply 
mission to the International Space Station by SpaceX in 
October. However, NASA also faced significant challenges 
including the need to reprogram funds to address cost overruns 
in the James Webb Space Telescope. This shift contributed to 
delays in several ongoing projects and cancellation of several 
others including one with the European Space Agency for planned 
science missions to Mars. At the same time, NASA is busy 
developing a new rocket, capsule, and related launch 
infrastructure to enable crewed missions to an asteroid or 
Mars--expensive and technically complex undertakings in an 
increasingly austere budget environment.
    Along with the rest of the Federal Government, NASA is 
poised to tumble over the ``fiscal cliff'' tomorrow with $894 
million in sequestration cuts. Indeed, from our perspective, 
declining budgets and fiscal uncertainties present the most 
significant external challenge to NASA.
    My written statement discusses our complete list of 
management and performance challenges. This morning, I plan to 
briefly highlight three.
    First, project management. Over its 50-year history, NASA 
has been at the forefront of science and space exploration. 
However, in addition to their achievements, many NASA projects 
share another less positive trait--they cost significantly more 
to complete and take much longer to launch than originally 
planned. Last September, the OIG issued a report that 
identified four primary challenges facing NASA as it seeks to 
achieve project cost, schedule and performance goals: the 
Agency's culture of optimism, underestimating technical 
complexity, funding instability and limited opportunities for 
project managers' development.
    Second, NASA's aging infrastructure. Eighty percent of 
NASA's 4,900 buildings are more than 40 years old and beyond 
their design life. However, NASA has not been able to fully 
fund required upkeep costs and estimates its deferred 
maintenance expenses at $2.3 billion. One way NASA could reduce 
these costs is to reduce the amount of unneeded infrastructure 
in its inventory. To be successful, NASA must move beyond its 
historic ``keep it in case we need it'' mindset. In an audit we 
issued earlier this month, the OIG identified 33 facilities 
including wind tunnels, test stands, airfields, and launch-
related infrastructure that NASA was neither fully utilizing 
nor had a future mission need. These facilities cost the agency 
more than $43 million to maintain in fiscal 2011 alone.
    And finally, information technology security. One year ago, 
I sat behind this same table and testified alongside NASA's 
Chief Information Officer about the state of IT security at 
NASA. Among other things, I mentioned that at the time only one 
percent of NASA's laptop computers were fully encrypted 
compared to a government-wide rate of 54 percent. Eight months 
later, an unencrypted NASA laptop computer containing 
personally identifiable information on more than 40,000 
individuals was stolen from the vehicle of a NASA employee. 
Agency officials estimate that credit monitoring and other 
expenses related to the theft could cost NASA up to $850,000. 
Following that incident, the NASA Administrator accelerated the 
timetable for encrypting the hard drives on all Agency laptops, 
and as of two weeks ago the Agency reported an encryption rate 
for its laptops of 99 percent. Our audits and investigations 
continue to identify recurring weaknesses in NASA's IT security 
program, and we anticipate making additional recommendations as 
we complete an audit examining the Agency's IT governance 
structure. Reexamination of NASA's overall approach to IT is 
particularly timely given that the Agency is currently seeking 
a new CIO.
    In closing, the National Research Council recently 
concluded that there is, and I quote, ``a significant mismatch 
between the programs to which NASA is committed and the budgets 
that have been provided or anticipated.'' In other words, too 
many programs are chasing too few dollars. I hope that the 
NRC's, report together with the ongoing work of the OIG and 
GAO, will contribute to a dialogue about NASA's future 
priorities and lead to enactment of a realistic budget that 
will enable the Agency to accomplish its multifaceted mission. 
Thank you.
    [The prepared statement of Mr. Martin follows:]

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    Chairman Broun. Thank you, Mr. Martin.
    Now, Ms. Lerner, you are recognized for five minutes.

              TESTIMONY OF MS. ALLISON C. LERNER,

                       INSPECTOR GENERAL,

               NATIONAL SCIENCE FOUNDATION (NSF),

                  OFFICE OF INSPECTOR GENERAL

    Ms. Lerner. Thank you. Mr. Chairman and Members of the 
Subcommittee, I appreciate this opportunity to discuss the work 
of the National Science Foundation Office of Inspector General 
to safeguard federal tax dollars awarded by the Foundation and 
to protect the integrity of NSF programs and operations. My 
statement will focus on accountability of cooperative 
agreements for NSF's large facility construction projects, 
grants management and contract monitoring, three management 
challenges that have a direct impact on NSF's ability to carry 
out its mission of advancing scientific research by funding 
external awardees. I will also address NSF's efforts to 
encourage the ethical conduct of research, another top 
management challenge.
    Over the past two years, my office has issued several 
audits that have raised serious questions about NSF's 
accountability over cooperative agreements for high-risk, high-
dollar projects. NSF currently has 685 open cooperative 
agreements totaling nearly $11 billion. Thirty-eight of these 
are valued at over $50 million each and comprise $5-1/2 billion 
of the total amount of such agreements.
    In September of 2012, we issued an alert memorandum to NSF 
management outlining serious weaknesses in the Foundation's 
cost surveillance measures for awarding and managing high-risk, 
high-dollar cooperative agreements. At the pre-award phase of 
such projects, appropriate controls should include conducting 
audits of awardees' proposed budgets and accounting systems to 
ensure that awardees cost estimates are fair and reasonable and 
that their accounting systems are adequate to bill the 
government properly and to manage funds in accordance with 
federal requirements. While such audits are not required by law 
or regulation for cooperative agreements, obtaining such 
information at the pre-award stage of high-risk, high-dollar 
cooperative agreements is especially important as the proposed 
budget once approved by NSF creates the basis upon which 
awardees can draw down advanced funds over the course of the 
award. NSF does not regularly obtain such audits.
    Post-award controls for high-risk, high-dollar projects 
should include incurred costs of submissions and audits to 
ensure that costs claimed are allowable. As with pre-award 
audits, incurred cost submissions and audits are not required 
for cooperative agreements by law or regulation, and we are not 
recommending that NSF obtain them for every agreement. However, 
such submissions and audits are critical tools for ensuring 
accountability in high-risk, high-dollar cooperative 
agreements. Simply stated, these are reasonable and prudent 
steps to protect taxpayer funds.
    In December 2012, the NSF Director charged the senior 
advisor in his office with conducting a major assessment of 
policies and procedures governing NSF-supported large 
facilities to address these and other matters. We are 
optimistic that this process will yield more robust oversight 
and monitoring for NSF's large cooperative agreements.
    With respect to grants management, oversight and management 
of awards that is sufficient to safeguard federal funds 
invested in scientific research has been an ongoing challenge 
for NSF as grants recipients request payments as an aggregate 
amount and are not required to present supporting documentation 
such as invoices and receipts to receive payments. In the face 
of these oversight challenges, my office is using automated 
techniques to supplement traditional audit tools and help us 
improve our ability to identify high-risk awardees, expand our 
audit coverage to examine more transactions, and better focus 
our limited resources on questionable expenditures.
    In the area of contract monitoring, we continue to 
recommend that NSF obtain incurred cost audits for cost-
reimbursable contracts and that it obtain cost accounting 
disclosure statements from contractors and ensure that they are 
audited and an approved in a timely manner. Incurred cost 
audits enable management to assess a contractor's compliance 
with the financial terms and conditions of a contract and 
approved disclosure statement is essential to establish how the 
contractor classifies and bills costs to the government.
    With respect to the responsible conduct of research, 
pursuing allegations of research misconduct by NSF-funded 
researchers continues to be a focus of our investigative work. 
In recent years, we have seen a significant rise in the number 
of substantive allegations of such misconduct associated with 
NSF proposals and awards. It is imperative to the integrity of 
research funded with taxpayer dollars that we ensure that NSF 
principal investigators carry out their projects with the 
highest ethical standards.
    Finally, we are continuing our efforts with the IG 
community to combat fraud in the Small Business Innovation 
Research and Small Business Technology Transfer programs. We 
will continue to target our work on areas that pose the highest 
risk of misuse of taxpayer dollars and to do our utmost to 
ensure that misused funds are returned to the government.
    This concludes my statement, and I will be happy to answer 
questions.
    [The prepared statement of Ms. Lerner follows:]

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    Chairman Broun. Thank you, Ms. Lerner.
    And now, Mr. Smith, you are recognized for five minutes. 
Thank you.

                 TESTIMONY OF MR. DAVID SMITH,

                   DEPUTY INSPECTOR GENERAL,

               U.S. DEPARTMENT OF COMMERCE (DOC),

                  OFFICE OF INSPECTOR GENERAL

    Mr. Smith. Thank you. Chairman Broun, Ranking Member 
Maffei, Committee Chairman Smith, and Members of the 
Subcommittee, I appreciate the opportunity to testify today 
about the Department of Commerce's top management challenges in 
fiscal year 2013.
    The Department plays a pivotal role in implementing the 
President's initiatives for economic recovery and job creation. 
Like other federal agencies, Commerce faces significant 
financial uncertainty this year. I will describe five top 
management challenges which we have identified from our 
oversight perspective to be the most significant management and 
performance challenges facing the Department of Commerce.
    First, stimulate economic growth in key industries, 
increase exports and enhance stewardship of marine fisheries. 
The Department has many government-wide initiatives to 
implement the President's priorities. Successful implementation 
could have a profound impact on the Nation's economy. However, 
it requires focused attention by senior management, close 
coordination with the private sector and other federal 
agencies, and sustained Congressional support.
    Second, increase oversight of resources entrusted by the 
public and invest for long-term benefits. In this era of 
constrained budgets, there is a greater risk that management 
will take shortcuts, loosen internal controls and deemphasize 
oversight to devote resources to other requirements. Therefore, 
attention to internal controls is critical.
    Third, strengthen security and investments in information 
technology. Our recent audits of bureau IT systems confirmed 
the urgency of fixing the Department's security weaknesses. 
While we support senior management's recent actions to 
strengthen the Chief Information Officer's authority, it is too 
early to judge their effectiveness.
    Fourth, implement a framework for acquisition project 
management and improved contract oversight. In fiscal year 
2011, the Department obligated approximately $2.4 billion on 
contracts for goods and services. To maximize these funds, 
Commerce needs to strengthen its acquisition and contract 
management practices. While it has made some progress, we 
continue to find weaknesses in how the Department plans, 
administers, and oversees its contracts. For example, our 
recent audit of contract award fees and award terms found more 
than $100 million in questioned costs and funds that could have 
been put to better use.
    Fifth, reduce the risks of cost overruns, schedule delays, 
and coverage gaps for NOAA's satellite programs. Satellite 
programs remain the Department's largest investment. They 
encompass almost 20 percent of Commerce's budget. Top-level 
management attention will continue to be needed to prevent cost 
overruns and minimize the impact of satellite coverage gaps. We 
recently issued a report on the Joint Polar Satellite System 
program and are completing work on an audit of the 
Geostationary Operational Environmental Satellite-R Series 
program.
    Over the past several years, the Department has experienced 
many challenges in the areas I have discussed here. To its 
credit, top-level management is working diligently to address 
its management challenges. Commerce leadership must continue to 
show the way forward to establish a culture of accountability--
this is perhaps their greatest challenge of all.
    Again, we appreciate the opportunities to appear before the 
Subcommittee today, and I will be pleased to respond to any 
questions you may have. Thank you.
    [The prepared statement of Mr. Smith follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Broun. Thank you, Mr. Smith. Excellent job by all 
our witnesses staying within your time constraints, and I trust 
that all Members on both sides are very pleased with our 
witnesses' testimony, and I appreciate you all's testimony, you 
all being available for questioning today.
    Reminding Members that Committee rules limit questioning to 
five minutes, the Chair at this point will open the round of 
questions. The Chair recognizes himself for five minutes.
    ``Other Transaction Authority,'' may sound like a mundane 
term, but agencies are increasingly relying on this obscure 
acquisition tool. Normally, agencies must comply with federal 
contracting law but oftentimes Congress gives agencies other 
mechanisms in which to enter agreements outside of the law. In 
the instance of NASA, they were provided the Space Act 
Agreement, which is authority given in 1958 when the agency was 
created in order to advance NASA's mission and programs by 
cooperating with outside entities. The NSF authority was 
granted by 31 U.S.C. Section 3605. Initially designed to only 
fund small projects, this is a serious concern for this 
Committee. NASA used Space Act Agreements to fund $750 million 
development of the Commercial Orbital Transportation System, 
and NSF has over 685 Open Cooperative Agreements totaling 
nearly $11 billion to fund the construction of its major 
research facilities. The NASA IG just initiated an audit of the 
NASA Space Act Agreements on Monday. I appreciate you all doing 
that. But it was initiated on Monday and the NSF IG issued an 
alert memo on Cooperative Agreements last September, and thank 
you also.
    Mr. Martin and Ms. Lerner, to the best of your knowledge, 
how has this Other Transactional Authority implemented--how is 
this Other Transactional Authority implemented by the agency 
that you oversee? Ms. Lerner will start first. Ladies first.
    Ms. Lerner. NSF, as we noted, has 685 Cooperative 
Agreements. Thirty-eight of those are over $50 million, so the 
area of greatest concern to my office obviously is the high-
dollar, high-risk Cooperative Agreements, and the concern that 
we have based on the work that we have done is that there 
aren't adequate oversight controls in place to ensure that the 
funds that are directed to those types of awards are properly 
stewarded and subject to the same sort of accountability that 
you would expect in these lean budget times. We have conducted 
several audits and provided a great deal of feedback to the 
agency in that area.
    Chairman Broun. Thank you very much. If you will please let 
this Committee know what we need to do to try to rectify that.
    Mr. Martin?
    Mr. Martin. NASA has three types of Space Act Agreements it 
has entered into. There are over 700 reimbursable Space Act 
Agreements, approximately 500 non-reimbursable Space Act 
Agreements, and three or four what they call funded Space Act 
Agreements. As you indicated in the preface to your question, 
earlier this week we initiated an audit looking at all three of 
these types of Space Act Agreements focusing in particular on 
reimbursable Space Act Agreements to ensure that NASA is 
getting and the taxpayer is getting its appropriate funding.
    Chairman Broun. Okay. I am going to ask a series of 
questions, both of you all, if you would answer this. Is the 
agency required to provide advance notice of solicitation? How 
do the agencies ensure fair competition? Are they required to 
make a public list of all agreements and amounts in a 
transparent manner? And are there sufficient controls to 
prevent waste, fraud and abuse as well as mismanagement? Mr. 
Martin?
    Mr. Martin. You have raised a lot of the questions that are 
the focus of our ongoing audit now. The GAO looked at the issue 
of Space Act Agreements in the last 2 or three years, did some 
high-level work of checking on sort of broad internal controls. 
The IG's office at NASA is going to do a deep dive and get into 
the details of these agreements.
    Chairman Broun. Very good. Ms. Lerner?
    Ms. Lerner. I do believe that NSF requires advance notice 
of solicitation or competition for all of its large cooperative 
agreements, and certainly, as I noted earlier, our office does 
have real concerns about whether there are sufficient controls 
in place to prevent fraud, waste and abuse.
    Chairman Broun. Well, please make sure that this Committee 
is notified because we want to be sure that there is 
transparency as well as to prevent waste, fraud and abuse.
    Mr. Martin, this Committee is reviewing allegations related 
to ITAR violations at the Ames Research Center, and there seem 
to be very grave allegations there as far as mismanagement 
there. It is our understanding that your office has already 
reviewed these allegations. In order to assist our oversight, 
please provide the Committee with all records relating to your 
office's review of these allegations. I appreciate your doing 
so. Thank you. Is that an assurance that we can get those?
    Mr. Martin. Yes, we are actually having a conversation 
tomorrow with a staffer from your Committee as well as Mr. 
Wolf's committee to go over some of these issues related to the 
concerns about export control matters at Ames Research Center.
    Chairman Broun. Well, there are just tremendous allegations 
there of tremendous waste, fraud and abuse in that instance, so 
I hope that you all will look into them very strongly and look 
at those allegations.
    My time is up. Now I recognize Mr. Maffei for five minutes.
    Mr. Maffei. Thank you very much, Mr. Chairman.
    Mr. Smith, are you aware of any investigations of suspected 
Anti-Deficiency Act violations happening in the Commerce 
Inspector General's Office during Mr. Zinser's tenure?
    Mr. Smith. Yes, sir.
    Mr. Maffei. You are aware? Can you enlighten us as to any 
details about that suspected violation and how it was 
investigated?
    Mr. Smith. I want to make sure I understand your question. 
Are you referring to investigations----
    Mr. Maffei. I am referring to an investigation of a 
suspected Anti-Deficiency Act violation within the IG's Office 
itself. In other words, the IG's Office may or may not have but 
there is an allegation that it violated the Act.
    Mr. Smith. No, sir, I am not.
    Mr. Maffei. Okay. You are not. Okay. Given that you have 
been about eight weeks at your job?
    Mr. Smith. I think I am into my third month--my first 
trimester. Yes, sir.
    Mr. Maffei. So am I. So anyway, I respect that, but also I 
want to point out to the Committee that Mr. Smith wouldn't 
necessarily know even if there was. At this point he hasn't 
been there very long.
    The law does require that an Anti-Deficiency Act violation 
can only be declared as having happened officially through a 
decision in the agency's general counsel office. Do you know if 
Mr. Zinser's office has ever had to refer a suspected Anti-
Deficiency Act violation on his own office to the Department of 
Commerce General Counsel?
    Mr. Smith. No, sir.
    Mr. Maffei. Of course. No, you don't know?
    Mr. Smith. I don't know.
    Mr. Maffei. Okay. Just trying to figure out how this would 
all work. I want to ask Mr. Martin and Ms. Lerner, what would 
happen if there was a suspected Anti-Deficiency Act violation 
within an IG office? In other words, if the IG's office spends 
money improperly, who would investigate that? Would the IG 
himself or herself?
    Mr. Martin. If it is an allegation against the Inspector 
General him or herself, there is an overarching organization 
called CIGIE made up of Inspectors General. There is an 
integrity committee as part of CIGIE and the allegation of 
misconduct would go to that committee.
    Mr. Maffei. Ms. Lerner, you agree with that?
    [Nonverbal response]
    Mr. Maffei. Okay. Thank you very much.
    Mr. Smith, I just ask if you could look into it just to see 
if there was any suspected Anti-Deficiency Act violation. These 
things could represent real waste. They could also just be a 
technical issue, so if you wouldn't mind checking and providing 
that information for this Committee?
    Mr. Smith. Yes, sir. I would ask to get together with your 
staff to find out any further details, so I could better do 
that.
    Mr. Maffei. That would be very good for us.
    Mr. Smith. Thank you.
    Mr. Maffei. Now, we have gotten a report the Inspector 
General specifically advertised for investigative staff in the 
State of Arizona and hired an investigator based in Arizona and 
now pays for that employee to spend up to three weeks every 
month in the DC. area. Now, if that is true, it would represent 
real waste of taxpayer money as you have to pay the base pay, 
of course, but as well as temporary duty pay for the time they 
spend in Washington, and this could be several thousand dollars 
each month. Do you know how many employees at the Commerce IG's 
Office, employees who are put on regular TDY status for more 
than a week a month?
    Mr. Smith. I know of one investigator we currently have on 
staff who is working out of our Denver office on investigations 
he is conducting out in that area.
    Mr. Maffei. Do you know how much time he spends in 
Washington every month?
    Mr. Smith. No, sir, I don't have that information 
available.
    Mr. Maffei. Could you find out, and also whether there are 
any other employees that are on this TDY status for more than a 
week a month----
    Mr. Smith. Yes, sir.
    Mr. Maffei. --on a regular or semiregular basis? Do you 
have any idea how much--well, let us leave it at that.
    Obviously, Mr. Chairman, I am worried that these issues 
with this office could extend to waste in management of the 
taxpayer funds by the IG himself. These are things that the 
Committee staff here has had multiple sources on. So I would 
like to at least see if we can't get the Commerce IG's Office 
to sort of address them. Some of them are obvious. If there is 
an employee that lives in Arizona and spends lots of time in 
Washington, D.C., those are facts. We can find that out. So I 
would like to make sure that the IG's office is willing to 
provide us with that information. We do rely on the Inspector 
Generals to be the watchdog on everyone else, so it is one of 
those things that we want to make sure that they are careful 
stewards of taxpayer money themselves for their own operation, 
and then we will also look into the--what is it called? CIGIE? 
We will also look into CIGIE.
    So thank you very much, Mr. Chairman. I yield back the 
remaining three seconds of my time.
    Chairman Broun. Thank you, Mr. Maffei.
    What is CIGIE? What is that an acronym for?
    Mr. Martin. This is one of the worst acronyms in 
government. Council of the Inspectors General on Integrity and 
Efficiency.
    Chairman Broun. Okay. Thank you very much. I just wanted 
that for edification.
    I now recognize the Chairman of the full Committee, Mr. 
Smith from Texas, for five minutes.
    Chairman Smith of Texas. Thank you, Mr. Chairman.
    Mr. Martin, thank you for your testimony. We appreciate the 
good job you have been doing over the years as well. You 
mentioned James Webb in your testimony a few minutes ago having 
been behind schedule and over cost. Has that generally been 
corrected, to your knowledge? I happen to have spoken to the 
Administrator of NASA yesterday, and he seemed to think that 
James Webb was going to be fully funded and on schedule--get 
back on schedule. Do you see it that way too?
    Mr. Martin. I do. And in fact, I was at the Johnson Space 
Center on Tuesday of this week, and they have a thermal vacuum 
chamber they are retrofitting, built in the 1960s, and they are 
going to put James Webb Space Telescope in there and ice it 
down.
    Chairman Smith of Texas. I expect to be there in March, and 
I will double-check, so that is good news.
    Ms. Lerner, you referred to questionable expenditures. We 
have heard about grant problems--you mentioned those as well--
research misconduct and so forth. I don't know that you have 
got much into the way of solutions, if you want to mention a 
couple of solutions, but I would also ask you just for a rough 
estimate as to how many colleges or universities sort of had 
been suspected of--I am not going to find them guilty right 
now--but have been allegedly engaged in some of these 
questionable practices. So two questions. How many 
universities, colleges do you think need a second look at their 
expenditures, and two, do you have some solutions?
    Ms. Lerner. In terms of the first question, the large 
facilities that we are interested in are often run not by 
colleges and universities but by consortiums of nonprofits.
    Chairman Smith of Texas. I know. I was asking about a 
subset because they have been getting some attention.
    Ms. Lerner. Exactly. So I don't have precise numbers on 
that. We can certainly try and get back to you on that.
    Chairman Smith of Texas. Great. And I would actually like 
the names as well.
    Ms. Lerner. Okay.
    Chairman Smith of Texas. Okay.
    Ms. Lerner. We will do what we can there. On the issue of 
research misconduct, and that is defined as fabrication, 
falsification and plagiarism at the federal level, over the 
last ten years, we had approximately 850 allegations of 
plagiarism and 150 approximately allegations of fabrication or 
falsification of data. Those are allegations. We have had 120 
findings of research misconduct.
    Chairman Smith of Texas. Which represents an increase, I 
understand, over the past few years.
    Ms. Lerner. Exactly. We are seeing a particular increase in 
the area of data manipulation. In the last two years, we have 
gotten 24 allegations of data manipulation, and that is the 
same amount as we got in the previous seven years.
    Chairman Smith of Texas. Now, what do you do when you see 
evidence, of this getting to the idea of solutions, do you call 
it to their attention? Do you have oversight? Do you threaten? 
What do you do?
    Ms. Lerner. We absolutely call it to their attention. NSF, 
as with other science funding agencies, has a regulation for 
how you investigate research misconduct, and we play an 
integral part in that process at NSF. All allegations of 
research misconduct are supposed to be brought to the IG's 
attention. We do an initial inquiry to try and see if it looks 
like there is substance to the allegation. If there is, then we 
refer the matter to the university for investigation. When we 
send the matter to the university for investigation, we examine 
the procedures that they have in place for conducting those 
investigations. We look at the people who are going to 
participate in the panel that does the investigation to see 
if----
    Chairman Smith of Texas. Now, are you generally satisfied 
with the subsequent actions taken by university officials?
    Ms. Lerner. For the most part, yes.
    Chairman Smith of Texas. Being corrected and so forth?
    Ms. Lerner. Exactly, and if they don't do it right, then we 
fix it when it comes to us.
    Chairman Smith of Texas. Okay. Thank you.
    Mr. Smith, is it true that Inspector General staff was 
prohibited by NOAA from attending some of the program 
management council meetings?
    Mr. Smith. Yes, sir.
    Chairman Smith of Texas. And why is it important for 
Inspector General staff to attend those meetings?
    Mr. Smith. To give you one example, we received the notes 
and minutes from a meeting, which said a decision had been made 
based on discussions that had occurred during the meeting. We 
were not privy to those discussions so we do not know what 
management's thought process was. Therefore, we cannot opine on 
that nor can we provide any information that may benefit them.
    Chairman Smith of Texas. Would you object if I sent a 
letter today to NOAA insisting that they allow Inspector 
General staff to attend such meetings?
    Mr. Smith. I would thank you very much, sir.
    Chairman Smith of Texas. Okay. Consider it done.
    Thank you, Mr. Chairman. Yield back.
    Mr. Posey. [Presiding] Thank you. Mr. Peters, you are 
recognized for questions.
    Mr. Peters. Thank you, Mr. Chairman.
    I have a question for Mr. Smith. On December 3, 2012, the 
Washington Post published a story about how the Commerce 
Inspector General, Mr. Todd Zinser, forced departing senior 
investigative staff into signing nondisclosure agreements, 
which barred those four members of his staff from approaching 
either the Office of Special Counsel, which exists to protect 
whistleblowers, or Congress to discuss what they had witnessed 
in Mr. Zinser's office, and Mr. Smith, I assume you saw that 
story.
    Mr. Smith. Yes, sir.
    Mr. Peters. Have you asked for an explanation about what 
would be the reason to do that either from Mr. Zinser or Mr. 
Beitel, who is the Principal Assistant Inspector General for 
Investigations and whistleblower protections, or Wade Green, 
the General Counsel?
    Mr. Smith. In answer to your question, sir, I would say 
that I am aware of the circumstances behind that, and we, as 
the Office of Inspector General, disagree with the 
characterization that appeared in the press.
    Mr. Peters. Okay. In what respect?
    Mr. Smith. We do not believe that the interpretation that 
was provided--that those were gag orders--is correct. We 
actually used the definition of disparage within the EEOC 
website, which is the ``telling of falsehoods and lies with 
reckless regard to the truth.'' That is the connotation that 
was used. In addition, we have been working with OSC and 
through the Merit Systems Protection Board, and they have 
requested through the arbitrator that we submit a joint motion 
to dismiss the stay as well the protective order. The last we 
heard from OSC, was that they consider through the additional 
language that we submitted on those nondisclosure agreements as 
well as the Whistleblower Enhancement Act that was passed, that 
the concern about enforcing the separation agreements the stay 
and protective order were meant to prevent is no longer an 
issue.
    Mr. Peters. Has the Committee been provided copies of those 
agreements?
    Mr. Smith. I believe they have, sir.
    Mr. Peters. I am sorry. I haven't seen those. I guess I 
would express to you a concern that there be any kind of 
inhibition placed on what people might say because even if--I 
guess what you are saying is that the limitation was confined 
to what would be considered disparaging remarks?
    Mr. Smith. Yes, sir, lies, falsehoods.
    Mr. Peters. Okay. I guess I would like to see for my own 
purpose, and I will look at those agreements. In the context of 
open government, which is particularly important in California 
and we think works pretty well, that when people make 
statements, whether they are lies or not, are the kinds of 
things that can shake out in the sunshine and that we don't 
want to ever intimidate people from making statements about 
what is going on because they are afraid that they are going to 
be in some sort of litigation or be accused of lying or telling 
a falsehood. That in itself can be intimidating. So I must say 
that I will wait to see the result of what OSC says but it 
raises a great concern that anyone would be asked to sign 
anything that inhibits their ability to talk in the context of 
the whistleblower law that has been provided for our protection 
and for the protection of taxpayers.
    And I realize you are new and that this preceded you. I 
guess you and Mr. Maffei and I are kind of all on the same 
timeline. But I found that--and I understand we are in 
politics. We know that everything you read in the press isn't 
necessarily always 100 percent accurate but I will say that 
this is extremely--was something of great concern when I heard 
about it, and I look forward to following up on it in the 
future.
    Mr. Smith. Yes, sir. If I may, I actually understand that 
kind of intimidation and fear if employees disclose things. I 
myself had to sign a nondisclosure agreement when I left the 
employment of the House and was warned on numerous occasions 
not to discuss any of the work that I had done here.
    Mr. Peters. Well, unless it is classified material, I think 
that that is inappropriate, and so I would say the notion that 
we would do that, I think, is equally inappropriate unless it 
is classified, so I guess I would take that not as 
justification but something we ought to look into ourselves.
    Maybe I will ask Ms. Lerner or Mr. Martin, are you aware of 
any instances in which your agencies, your IGs might have asked 
people to sign these kinds of nondisclosure agreements?
    [Nonverbal response]
    Mr. Peters. Mr. Martin is giving me a no, and Ms. Lerner. I 
can see that even without their microphones on, so I would ask 
the record to reflect that, and again I express my deep concern 
about this kind of behavior. I hope it does not remain the 
norm.
    Thank you, Mr. Chairman. I yield back.
    Mr. Posey. Thank you. The Chair will now recognize the 
Chair for five minutes.
    Mr. Martin, you issued a report a couple weeks ago on 
NASA's management and infrastructure standards, and in that 
report, you use the term ``political intervention'', and I want 
to ask you about three examples of political intervention. 
Number one, the Arc Jet facility at Johnson, the platform for 
the A3 test stand at Stennis, and of course, the Constellation. 
On your report, page 21, you mention a letter signed by 30 
Members of Congress, most of them from Texas, opposed to the 
closing of the Arc Jet facility at Johnson. I am informed that 
the Arc Jet facility was needed to test Orion's Constellation 
crew capsule, still going to be used by the way, their heat 
shield, so I can understand why Members of Congress oppose 
closing down the Arc Jet facility because it could jeopardize 
the upcoming SLS. That is number one.
    Number two, the A3 test stand at Stennis. Your report on 
page 22 also flagged the A3 test stand as political 
intervention. The test stand was intended to test the J-2X 
engines for Constellation. As you know, Congress included 
language in the 2010 NASA Authorization Act instructing NASA to 
complete the test stand, which NASA wanted to mothball. You 
note that the stand was already 65 percent complete and 
taxpayers had spent $292 million but your report fails to 
mention that the test stand was canceled because the 
Administration canceled Constellation. I think that is correct. 
Both Democrat and Republican Congresses had endorsed 
Constellation as a replacement for the space shuttle or the 
successor program. Why do you interpret actions by Members of 
Congress, including a law passed by Congress and signed by the 
President, as political interference, but don't consider the 
cancellation of Constellation as political interference?
    Mr. Martin. I think that what we were attempting to do in 
that report, and I thought we were effective in doing so, was 
pointing out the many obstacles that stand in NASA's way to 
reducing its aged infrastructure, but one of the things we 
pointed out was the interest of Members of Congress to retain 
certain infrastructure and capabilities at centers within their 
States or within their districts. A lot of the other problem 
that NASA has with handling its infrastructure is the fact that 
it is sort of changing programs or changing directions, and as 
you pointed out the cancellation of the Constellation was a 
major shift in the approach for manned space flight.
    Mr. Posey. I don't mean to interrupt you but we are on a 
very tight time schedule here. Did the Administration have a 
right to cancel the program put into law by Congress?
    Mr. Martin. I don't believe that is a question that an 
Inspector General at an agency is appropriate to answer. Did 
they have a legal right to do so?
    Mr. Posey. Yeah. Is that appropriate? I think you are 
supposed to tell us if we are operating according to good 
standards, and I think that is a significant question that 
demands an answer, which nobody has really been willing to step 
up and talk about. You have a Congressional program in place 
and an Administration that unilaterally cancels the program. 
Nine billion dollars flushed down the toilet, and you don't 
think that ought to be on the radar screen?
    Mr. Martin. It certainly is on Congress's radar screen and 
the Administration's. In the NASA Authorization Act of 2010, 
Congress worked with the Administration and came up with a new 
direction for moving forward. You mentioned the SLS and the 
MPCV. It is not an Inspector General's role to say whether that 
is good policy or bad policy. It is the Inspector General's 
role to follow the money.
    Mr. Posey. Well, these instances that you mentioned in your 
report I think were directly linked to and inextricably 
entwined with those decisions, and like I said, I am new on 
this Committee.
    Mr. Martin. Right.
    Mr. Posey. And I don't have all the background, but during 
the review that I have done, I hadn't seen that issue 
addressed, and I think it would be significant and I think 
maybe some other Members of the Committee would have an 
interest in knowing that too.
    Mr. Martin. Again, we were pointing out those significant 
pressures on NASA of multiple kinds including political 
pressures, when it is attempting to address an issue of how to 
handle its aging infrastructure.
    Mr. Posey. I see my time is expired. Mr. Schweikert, you 
are recognized.
    Mr. Schweikert. Thank you, Mr. Chairman.
    Ms. Lerner, you actually had a couple things in your 
testimony that I found interesting. First one. You were saying 
you were starting to do some--forgive me for paraphrasing--data 
mining to find bad acts. Can you share with me first what you 
are doing within that modeling and how effective you are 
finding it?
    Ms. Lerner. What we are doing is augmenting our traditional 
approach to auditing by using data analytics, and data 
analytics enable us to better target. If we do 20 or 30 audits 
in a year, that is all that we can do, so we have to, when NSF 
makes thousands of awards a year, be very careful of where we 
go and do our audit work. Data analytics enables us to better 
target our limited resources to the right places where risk 
looks to be high, and when we get to the institution, then we 
are able to instead of looking at two or three awards that have 
NSF money and 20 to 30 transactions in each, we can look at all 
of the awards and all of the transactions under them and 
identify anomalies that warrant further review. It is a 
starting point, not an endpoint, but it greatly enhances what 
we can see and how we can do our work.
    Mr. Schweikert. And Mr. Chairman and Ms. Lerner, I am 
actually a big fan of that. I am actually married to someone 
who one of her specialties was accounting models and--
accounting data in the statistical models and trying to find 
those anomalies, and it gives you a chance to be able to look 
at huge data sets and find the center, and I hope actually from 
up and down the auditing world out there that we are seeing 
more of this.
    I am going to commit one of my sins here, and you also 
touched on that you have found some fraud and some bad acts. 
Real quickly, would you tell me anecdotal--of something you 
consider outrageous and how it was conducted?
    Ms. Lerner. You mean using the new data----
    Mr. Schweikert. No, no, just anything that was found.
    Ms. Lerner. We certainly see situations with NSF awards, 
where the work is completed but funding remains and then, long 
after the award is done, costs from other projects are 
transferred to it to use up the awards, that don't have 
anything to do with the reason that the award was provided in 
the first place.
    Mr. Schweikert. Mr. Chairman, Ms. Lerner, so what you are 
saying is, where a university or institution may have 
multiple----
    Ms. Lerner. Awards.
    Mr. Schweikert. --awards, they run their fund dry and they 
start to do transfer of costs?
    Ms. Lerner. Yes. We can see that now with these new 
techniques.
    Mr. Schweikert. And the data mining also will--is to get 
enough to look for all those types of silos?
    Ms. Lerner. Absolutely. It is amazing what we can see, and 
it enables us to have a much stronger set of evidence when we 
go to the agency with better support for the costs that we are 
questioning.
    Mr. Schweikert. Mr. Chairman, Ms. Lerner, not that I don't 
love the rest of you but this one interests me. Do you also end 
up finding--using the data auditing mechanics on also how 
awards are given out, not only how they are performing? Because 
over the years we have had, even on a personal basis, lots of 
noise on how National Science Foundation ultimately does their 
awards and sometimes how certain personalities of people with 
great writing skills. Is there a data metric to sort of audit 
why and where those awards are going?
    Ms. Lerner. We haven't established metrics in that area but 
certainly if the data exists, it is something that could be 
done. The question is coming up with the right business rules 
to put into the system to surface the anomalies.
    Mr. Schweikert. I think there was some chart going around 
last year showing how certain institutions seem to dominate in 
collection--obtaining the awards where a lot of--so if you look 
sort of the bell curve, it is sort of going to just sort of a 
handful of institutions. Am I off base on that?
    Ms. Lerner. I sincerely doubt that you are.
    Mr. Schweikert. In my last couple seconds to our other 
gentlemen, data mining being used in your areas of specialty?
    Mr. Smith. Sir, the data mining is not necessarily being 
used at the Department of Commerce but when I did work at the 
Defense Finance and Accounting Service, we used it extensively. 
In fact, the gentleman behind me, Mr. Brett Baker, was in 
charge of that whole project and we found discrepancies within 
the purchase card program within the charges billed by 
transportation companies for military household moves as well 
as many, many other things.
    Mr. Schweikert. And I am over time, but Mr. Martin?
    Mr. Martin. The same thing. We have done audits of credit 
cards, purchase cards, also SBIR audits, Small Business 
Innovation Research grants that NASA awards.
    Mr. Schweikert. I am over time, but Mr. Chairman, thank you 
for your patience, but when we ask multibillion-dollar programs 
to be, you know, if we were private sector, there would be 
hundreds and hundreds of auditors for things that big. Maybe 
data is actually part of the future of how we find bad acts.
    Chairman Broun. Thank you. All of us, Mr. Schweikert, are 
very interested in doing this, and people have to be held 
responsible and accountable.
    We are going to have votes in about somewhere between 10 
and 15 minutes from now, so we are going to go to a second 
round of questions for two minutes each, so if you could, just 
make sure that your answers are real tight and short if you 
could so that we can get as much done here before we have to go 
for votes.
    Conducting oversight on NOAA took up a disproportionate 
amount of this Subcommittee's time last year, or in the last 
Congress, actually. One of the recurring weaknesses that we 
encountered was the poor financial management of the agency. We 
have seen numerous Anti-deficiency Act violations: the 
solicitation of a magician for training purposes, an 
independent review team's description of CFO's oversight of the 
JPSS program as ``dysfunctional'', a fisheries enforcement 
accounting system that incentivized corruption and a budget 
development process that is no longer tied to requirements. Mr. 
Smith, given the gross negligence that we uncovered in Congress 
last year, what work are you planning for the coming year tied 
to NOAA financial oversight? And before you answer, let me just 
tell you, Mr. Martin, Ms. Lerner, I hope you all are looking in 
these same sorts of things, but I am focused on Mr. Smith and 
NOAA at this point. Mr. Smith?
    Mr. Smith. We currently continue to receive hotline 
complaints concerning the NOAA reprogramming. We are very glad 
that NOAA has brought on Grant Thornton to review their budget 
books. We are continuing to talk to NOAA officials. We are very 
glad to see that they brought on a permanent CFO to review this 
matter. In addition, we just finished an audit of the JPSS 
program and are currently doing an audit of the GOES-R program, 
so we are still actively involved in the high-risk areas and 
the known problems within NOAA.
    Chairman Broun. Is it appropriate for Grant Thornton to be 
overlooking this since it reports to the person who is involved 
in all this?
    Mr. Smith. Yes, sir, I believe it is because they are an 
independent entity that may not be tainted by the culture that 
we found there said, the reason reprogrammings were done was to 
succeed with the mission.
    Chairman Broun. To use a trite phrase, the fox watching the 
henhouse is not appropriate and I hope you all look into that.
    My two minutes is up. Now Mr. Maffei for two minutes.
    Mr. Maffei. Thank you very much, Mr. Chairman.
    I was interested in this Office of Personnel Management-
sponsored employee viewpoint survey. In 2012, it showed, Deputy 
Inspector General Smith, the office that you work in was next 
to last as the worst place to work in federal offices, 291 out 
of 292 offices, and over half of the staff in the Commerce IG's 
Office said they would try to leave the office in the next 
year. Did you know about this before you took your position?
    Mr. Smith. No, sir. The results did not come out until late 
December.
    Mr. Maffei. Well, I thank you for your service. The bottom 
line is, the survey suggests that the staff is almost evenly 
split between those who feel safe reporting violations of laws, 
rules, regulations to the Inspector General and those who are 
uncertain or expect retaliation for such reporting. That sounds 
like a highly dysfunctional environment, at least according to 
this survey. I am going to assume you don't find that 
acceptable. Are there any programs that are going to put in 
place to kind of improve that workplace atmosphere?
    Mr. Smith. Yes, sir, there is. In fact, I have been 
designated to be in charge of that. I have already initiated 
several employee working groups and they have met. We are 
trying to get to the reasons behind the survey results. I also 
would like to point out the fact that even though the 
difference between the positive and the neutral and negative 
may not be where we want it to be, it is encouraging to see 
that the number of negative responses from last year's survey 
has actually decreased for almost every question, and I do 
consider that progress.
    Mr. Maffei. Okay. Well, I am going to remain very, very 
interested in that, and also just to echo what Congressman 
Peters said earlier, obviously there might be reasons for 
nondisclosure in the case of a lawyer-client privilege, privacy 
of a particular person or national security or other kind of 
sensitive information, but otherwise the appearance of some 
sort of a problem is certainly there whenever these sort of 
nondisclosure agreements are signed, so I would hope that in 
the future the Commerce IG's Office would recognize that.
    Thank you. My time is up.
    Mr. Smith. Sir, if I may just respond to that one, we have 
discontinued the use of those nondisclosure agreements.
    Mr. Maffei. I am glad to hear it, Mr. Smith. Thank you.
    Chairman Broun. The gentleman's time is expired. Now Mr. 
Posey, you are recognized for two minutes.
    Mr. Posey. Thank you, Mr. Chairman.
    Back to Mr. Martin. I want to be sure we show him some love 
too. Hopefully this will just be yes or no. The NASA IG report 
from August 9, 2012, highlights that NASA acknowledges the need 
to clarify the criteria centers should use to determine if 
underutilized property has a current or future mission-related 
use. That is under roman numeral page six of the report. Would 
it be fair to say that in regards to undeveloped land, not 
structures in the ground or infrastructure in the ground, but 
undeveloped land at a center that has never been designated for 
future use in any plan is a potential candidate for excess 
property, i.e., leasing, conveying, enhanced use agreements? Is 
that fair to say?
    Mr. Martin. Based on your question, I would think so, yes.
    Mr. Posey. Thank you very much, Mr. Chairman.
    Chairman Broun. Thank you, Mr. Posey.
    I don't think we have time to go into another round of 
questioning. I want to thank the witnesses for you all's 
valuable testimony today. The Members of the Committee may have 
additional questions for you, and we will ask you to respond to 
those in writing. Please do that very expeditiously. As I 
mentioned in my opening statement, we have asked for some 
reports or answers to questions that have not been produced 
thus far, and I am very disappointed in the Administration for 
not providing those answers to the questions from this whole 
Committee from both sides, but I hope, and I trust, that you 
all will answer those very expeditiously. The record will 
remain open for two weeks for additional comments and written 
questions from Members.
    The witnesses are excused. Thank you all so much. We are 
now adjourned.
    [Whereupon, at 11:12 a.m., the Subcommittee was adjourned.]
                               Appendix I

                              ----------                              


                   Answers to Post-Hearing Questions

Responses by Mr. Paul K. Martin

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                              Appendix II

                              ----------                              


                   Additional Material for the Record

           Letter submitted by Ranking Minority Member Maffei

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

  Washington Post article submitted by Ranking Minority Member Maffei

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Office of Personnel Management's 2012 Federal Employee Viewpoint
       Survey Results submitted by Ranking Minority Member Maffei

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  TOP CHALLENGES FOR SCIENCE AGENCIES:
                  REPORTS FROM THE INSPECTORS GENERAL
                               (PART II)

                              ----------                              


                        THURSDAY, MARCH 14, 2013

                  House of Representatives,
                                  Subcommittee on Oversight
               Committee on Science, Space, and Technology,
                                                   Washington, D.C.

    The Subcommittee met, pursuant to call, at 12:37 p.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Paul Broun 
[Chairman of the Subcommittee] presiding.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chairman Broun. The Subcommittee on Oversight will come to 
order.
    Good afternoon. In front of you are packets containing the 
written testimony, the biographies, and truth-in-testimony and 
the disclosures for today's witness panel. I recognize myself 
for five minutes for an opening statement.
    Let me begin first by thanking our witnesses for you all's 
patience and flexibility, and you all have been very patient 
and very flexible and I greatly appreciate that. We have had 
several exchanges over the last couple weeks as we have had to 
change the hearing start time not once but twice. I appreciate 
you all's willingness to work with us on this.
    The title of today's hearing is ``Top Challenges for 
Science Agencies: Reports from the Inspectors General--Part 
2.'' Part 1 was a couple of weeks ago. This is the second of 
two hearings we scheduled to hear from the Offices of 
Inspectors General representing the agencies within this 
committee's jurisdiction. The object of these hearings is to 
learn about the major performance and management challenges 
facing each agency from the perspective of each Inspector 
General.
    The DOE IG's office is a regular guest at the hearings 
before this Committee. We follow your work very closely and pay 
attention to your thorough analysis. For example, during 
testimony provided at the Subcommittee hearing last year, your 
colleague explained that the Department ``awarded grants of 
nearly $300 million for Clean Cities projects and about $400 
million for Transportation and Electrification efforts.'' And 
while both programs required fund recipients to comply with 
Federal regulations governing financial assistance awards, as 
noted in testimony provided by your office back then, you 
identified ``needed improvements in financial management for 
both programs.''
    Since then, the Department does not seem to have improved 
its management abilities, as further highlighted in the report 
by your office issued last month about LG Chem. This Michigan 
company received nearly $150 million in Recovery Act funds. 
Yet, not only did the company fail to meet basic project goals, 
its employees actually got paid for watching movies and playing 
board games. These are serious concerns about serious amounts 
of taxpayer money that require this Committee's attention.
    As for the EPA, we always have questions about their 
actions and decisions. The Integrated Risk Information System, 
or IRIS, is a perennial topic of discussion even when we were 
in the Minority. IRIS is on the GAO's high-risk series and 
continues to be on the IG's management challenges list for the 
Agency.
    Another issue that this committee has been involved with 
for several months is EPA's draft Bristol Bay Watershed 
Assessment. EPA has not provided clear answers about the 
purpose, cost, or relevance of an assessment that is based on a 
hypothetical mining plan. Hypothetical mining plan, mind you. 
Concerns have been raised about this assessment, prompting one 
peer reviewer to describe it as ``hogwash.'' We have also heard 
concerns about the integrity and usefulness of EPA's second 
peer review of the assessment. These concerns, along with other 
potential problems regarding conflict of interest and proper 
process at other advisory and peer-reviewed bodies at the 
Agency, will require the IG's diligent attention as they 
ultimately impact important regulatory decisions at EPA.
    The Department of Interior also faces many challenges in 
the future, not the least of which is how it conducts science 
and incorporates that science into Department decisions. The 
Department is embroiled in scientific integrity cases 
involving: polar bear research; the Klamath River dam removal 
decision; the Delta Smelt issue regarding California's Central 
Valley Water; the evacuation of peer reviewers' comments to 
justify an offshore drilling moratorium; and the treatment of 
science in deciding to extend the operating agreement for an 
oyster company on a national seashore, just to name a few.
    Because of the Department's track record, an uncertain 
process for handling allegations between the IG and the Agency, 
and questions about the IG's independence, I see scientific 
integrity as a fundamental challenge facing the Agency moving 
forward. This challenge affects the use of Federal lands, 
Endangered Species Act listings that influence property owners, 
and countless other important national interests tied to 
resources and wildlife.
    As Inspectors General, you all have the important 
responsibility of conducting and supervising audits and 
investigations; providing leadership; recommending policies; 
and preventing and detecting waste, fraud, and abuse and 
mismanagement at the agencies. We rely on your diligence and 
independence to assist in our oversight responsibilities. That 
is why I look forward to receiving your testimonies and hearing 
your answers to my questions later this hour. I thank you.
    Now, I recognize the Ranking Member, my friend from New 
York, the gentleman, Mr. Maffei, for an opening statement.
    [The prepared statement of Mr. Broun follows:]

              Prepared Statement of Chairman Paul C. Broun

    Good afternoon. Let me begin first by thanking our witnesses for 
their patience and flexibility. We've had several exchanges over the 
last couple of weeks as we had to change the hearing start time not 
once, but twice. I appreciate our witnesses' willingness to work with 
us.
    The title of today's hearing is ``Top Challenges for Science 
Agencies: Reports from the Inspectors General - Part 2.'' This is the 
second of two hearings we scheduled to hear from the Offices of 
Inspectors General representing agencies within this Committee's 
jurisdiction. The object of these hearings is to learn about the major 
performance and management challenges facing each agency from the 
perspective of each Inspector General.
    The DOE IG's office is a regular guest at hearings before this 
Committee. We follow your work closely, and pay attention to your 
thorough analysis. For example, during testimony provided at a 
Subcommittee hearing last year, your colleague explained that the 
Department ``awarded grants of nearly $300 million for Clean Cities 
projects and about $400 million for Transportation Electrification 
efforts.'' And while both programs required fund recipients to comply 
with federal regulations governing financial assistance awards, as 
noted in testimony provided by your office back then, you identified 
``needed improvements in financial management for both programs.'' 
Since then, the Department does not seem to have improved its 
management abilities, as further highlighted in a report your office 
issued last month about LG Chem. This Michigan company received nearly 
$150 million dollars in Recovery Act funds. Yet, not only did the 
company fail to meet basic project goals, its employees actually got 
paid for watching movies and playing board games. These are serious 
concerns about serious amounts of taxpayer money that require this 
Committee's attention.
    As for the EPA, we always have questions about their actions and 
decisions. The Integrated Risk Information System, or IRIS, is a 
perennial topic of discussion, even when we were in the Minority. IRIS 
is on the GAO's high-risk series, and continues to be on the IG's 
management challenges list for the agency.
    Another issue that this Committee has been involved with for 
several months is EPA's draft Bristol Bay Watershed Assessment. EPA has 
not provided clear answers about the purpose, cost, or relevance of an 
assessment that is based on a hypothetical mining plan. Concerns have 
been raised about this assessment, prompting one peer reviewer to 
describe it as ``hogwash.''
    We've also heard concerns about the integrity and usefulness of 
EPA's second peer review of the assessment. These concerns, along with 
other potential problems regarding conflict of interest and proper 
process at other advisory and peer review bodies at the Agency, will 
require the IG's diligent attention as they ultimately impact important 
regulatory decisions at EPA.
    The Department of Interior also faces many challenges in the 
future, not least of which is how it conducts science and incorporates 
that science into Department decisions. The Department is embroiled in 
scientific integrity cases involving: polar bear research; the Klamath 
River dam removal decision; the Delta Smelt issue regarding 
California's central valley water; the manipulation of peer reviewers' 
comments to justify an offshore drilling moratorium; and the treatment 
of science in deciding to extend the operating agreement for an oyster 
company on a National Seashore, just to name a few.
    Because of the Department's track record, an uncertain process for 
handling allegations between the IG and the Agency, and questions about 
the IG's independence, I see scientific integrity as a fundamental 
challenge facing the Agency moving forward. This challenge affects the 
use of federal lands, Endangered Species Act listings that influence 
property owners, and countless other important national interests tied 
to resources and wildlife.
    As Inspectors General, you all have the important responsibility of 
conducting and supervising audits and investigations; providing 
leadership, recommending policies, and preventing and detecting waste, 
fraud, abuse and mismanagement at agencies. We rely on your diligence 
and independence to assist our oversight responsibilities. That's why I 
look forward to receiving your testimonies, and hearing your answers to 
my questions later this hour. Thank you.

    Mr. Maffei. Thank you, Mr. Chairman, my friend from 
Georgia. And I want to join you in welcoming our witnesses 
today. We have a tight schedule this afternoon and I promise 
that I won't take too much time, but I really do want--because 
I really do want to hear from these witnesses.
    As was said by the former Chairman of the Recovery 
Accountability and Transparency Board, Earl Devaney, who 
pointed out that history shows approximately seven percent of 
any large expenditure is likely to be subject to fraud. Now, 
while I am sure there is a lot of people that believe it is 
far, far more than that in today's Federal Government, even 
seven percent is too much. And I think we can do better. And 
that is precisely why we have Inspectors General, to help us 
locate waste, fraud, abuse and provide accountability to the 
American people that we are good stewards of their tax dollars. 
They are expected to be the watchdogs first and foremost.
    And in that, Inspectors General have a tough job. They have 
to watch what the Agency follows--does in terms of making sure 
they follow the law. They have to guard the taxpayers' precious 
dollars. They have to offer advice and direction to management 
without getting so close to their agency heads that they lose 
their independence. On the one hand, they answer to the 
President, and on the other hand, they have to answer to 
Congress. I think in both cases you always answer to the 
American people.
    All three of our witnesses have had experience standing up 
to those pressures and all demonstrate somewhat different 
choices on how to navigate through them. But even if we do not 
always agree with their conclusions or like the implications of 
what they find, I want to recognize that all three of the 
offices work hard to produce meaningful audits, carry forward 
criminal investigations when necessary, and produce thoughtful 
reports that provide perspective on management challenges.
    I particularly want to point out that the Department of 
Energy's IG is an office that provides a good model for others 
on how to balance the work.
    Mr. Chairman, I am particularly looking forward to--looking 
to these witnesses to tell us about the impact of the current 
sequestration on the work of their offices and to offer 
insights into how their agencies might adapt to sequestration 
in the most cost-effective fashion. And in view of the 
conversation in the full Committee earlier, I just want to make 
it clear, Mr. Chairman, that I do not solely hold the 
Congressional leadership or the President responsible for this. 
I certainly don't hold the Chairman responsible, who, as noted, 
had voted against it. I was not in Congress then, and--but I do 
think that whoever is to blame--and there are many--we need to 
look at how to move forward. And so these across-the-board cuts 
done mid-year, they may be producing potential waste and 
unanticipated costs, and at the very least, I think it would be 
useful for this Committee to gather whatever information we can 
on this matter to inform our actions and that of the full 
Committee and the Congress moving forward.
    And with that, I yield back the balance of my time and I 
thank the Chairman.
    [The prepared statement of Mr. Maffei follows:]

        Prepared Statement of Ranking Minority Member Dan Maffei

    Thank you, Chairman Bucshon, and thank you to all of the witnesses 
for being here today.

    One of the reasons I joined this Committee is because of my strong 
interest in working to improve STEM education. I have also served as 
co-chair of the House STEM Education Caucus for the past four years, so 
I'm glad we're having this hearing and that we are doing it early in 
the new Congress. As a former engineer, I can personally vouch for the 
importance of educating our students at all levels in STEM fields.
    We're all familiar with the statistics by now. According to the 
2011 TIMSS study, U.S. students in 4th grade rank behind students in 10 
other countries in science aptitude and 15 other countries in math, and 
students fall further behind as they proceed to high school. This has 
serious consequences for individuals and for our nation's economy. For 
example, while we still face unacceptably high unemployment, many 
employers are unable to find qualified workers. I have heard from many 
manufacturers that they are having a difficult time finding workers who 
have basic STEM knowledge. And students who aren't learning the 
necessary skills by the time they graduate high school are much less 
likely to pursue STEM fields if they go to college, constraining our 
workforce even further. And with fewer Americans in STEM fields, 
especially fewer PhDs, American innovation is suffering, further 
hurting economic development.
    We know that improving STEM education is a complex problem with no 
easy or one-size-fits-all solution. Therefore, we all must work 
together--the private sector, nonprofits, colleges and universities, 
school districts, and local, state, and federal governments--to find 
solutions that fit specific needs. If the U.S. wants to remain the 
global leader in innovation and technology, we have to tackle these 
challenges with an ``all hands on deck'' approach.
    Today's hearing focuses on corporate and nonprofit organization 
STEM initiatives. U.S. companies are realizing more and more how 
critical it is to their long-term success that we have a robust high-
tech workforce. Meanwhile, foundations and other nonprofits are 
increasingly leveraging their resources and expertise in this area as 
the problems grow. I'm very excited to see how much the private sector 
has stepped up on these issues in the last few years, and I look 
forward to hearing about the efforts of the companies and organizations 
represented here today. But I also want to talk about the federal role 
in this partnership and in particular, the role of the National Science 
Foundation.
    NSF is one of the most important sources of funding for education 
research. Industry rightly wants to put their money into proven 
programs. For that to happen, somebody has to provide the funding to 
develop and prove out those programs. NSF grants allow education 
researchers and organizations to test out and evaluate new ideas, and 
to improve our understanding of how people learn and what effective 
pedagogy really means. Much of what we know and use in STEM education 
today started out with NSF funding.
    Unfortunately, our Federal investments in STEM education, including 
at NSF, have stagnated and are even being questioned. This is not a 
good strategy for educating and training our next generation of STEM 
workers and strengthening American competitiveness. We must continue to 
address this challenge, so I hope this first hearing on STEM education 
is one of many during this Congress, and that future hearings will look 
at the role of other stakeholders, including the Federal Government.
    U.S. researchers and universities--which attract top-notch students 
from many nations--remain the best in the world. However, we can't take 
this leadership for granted. As other countries take bold steps to 
match and surpass our progress, we must all work together so that the 
U.S. remains the most innovative country in the world. I look forward 
to working with all my colleagues to ensure that we are doing our part.
    I want to thank Chairman Bucshon again for calling this hearing, 
and the witnesses as well for taking the time to offer their insights 
today. And with that, I yield back.

    Chairman Broun. Thank you, Mr. Maffei. I know you weren't 
here when we had that bill before us. It was proposed by the 
President and Members of Congress voted on it on both sides, so 
it was something that I thought was terrible policy and that is 
the reason I voted against it. And I don't believe generally in 
across-the-board cuts. I think we need to make some targeted 
cuts. And I appreciate the cooperation that I have from you and 
I love working with you.
    Mr. Maffei. And if----
    Chairman Broun. We have got a good partnership in this 
Committee. And so we will go forward.
    Mr. Maffei. Wonderful. Thank you, Mr. Chairman.
    Chairman Broun. If there are Members who wish to submit 
additional opening statements, your statements will be added to 
the record at this point.
    Chairman Broun. Now, at this time, I would like to 
introduce our panel of witnesses. Our first witness is Mr. 
Gregory Friedman, Inspector General of the U.S. Department of 
Energy, a position he has held since 1998. I know he has been 
before this Committee and the full Committee before, so we 
appreciate your being here, Mr. Friedman, as many a time 
participant in these hearings.
    Our second witness is Mr. Arthur Elkins, Jr., Inspector 
General, U.S. Environmental Protection Agency, a position he 
has held since 2010.
    And our third witness is Ms. Mary Kendall, Deputy Inspector 
General, U.S. Department of Interior, a position she has held 
since 1999, and includes a brief stint as acting Inspector 
General when the former IG left.
    As our witnesses should know, spoken testimony is limited 
to five minutes each, and we are kind of pressed for time 
today, so if you would try to keep your spoken testimony within 
a five minute window, after which the Committee Members will 
have five minutes each to ask questions. Your written testimony 
will be included in the record of the hearing.
    It is the practice of this Subcommittee on Oversight to 
receive testimony under oath. If you would please rise and 
raise your right hand unless you have an objection to taking an 
oath. Do either of you have an objection--any of you have an 
objection to taking an oath? Okay.
    Let the record reflect all indicated they have no objection 
doing so.
    Do you solemnly swear or affirm to tell the whole truth and 
nothing but the truth, so help you God?
    You may be seated. Let the record reflect that all 
witnesses participating have taken the oath and said that they 
did swear to that oath.
    I now recognize our first witness, Mr. Friedman, to present 
your testimony. And sir, you have five minutes.

             STATEMENT OF MR. GREGORY H. FRIEDMAN,

         INSPECTOR GENERAL, U.S. DEPARTMENT OF ENERGY,

                  OFFICE OF INSPECTOR GENERAL

    Mr. Friedman. Thank you, Mr. Chairman.
    Mr. Chairman, Ranking Member Maffei, and Members of the 
Subcommittee, I appreciate the opportunity to testify today on 
the major challenges facing the Department of Energy and the 
associated work of the Office of Inspector General.
    The Department of Energy is a multifaceted agency 
responsible for some of the Nation's most complex and 
technologically advanced missions. These include vital work in 
basic and applied research, clean energy innovation, 
environmental cleanup, medical applications, nuclear weapons 
stewardship, and efforts to enhance national security. To 
advance these efforts, the Department receives an annual 
appropriation of nearly $30 billion, employs 115,000 or so 
Federal and contractor personnel, and manages assets valued in 
excess of $180 billion.
    We provide in the Office of Inspector General independent 
oversight of the Department's programs, and of course our 
objective is to promote economy and efficiency and to prevent 
and detect fraud, waste, and abuse.
    Based on this body of work, on an annual basis, my office 
identifies what we consider to be the most significant 
management challenges facing the Department. For Fiscal Year 
2013, our list of challenges includes the following: 
operational efficiency and cost savings, which I will discuss a 
little bit more in depth later on; contract and financial 
assistance award management; cybersecurity; energy supply; 
environmental cleanup; human capital management; nuclear waste 
disposal; safeguards and security; and stockpile stewardship. 
We also developed a watch list of emerging issues and other 
items that warrant special attention by department officials. 
These include infrastructure modernization, the Department's 
Loan Guarantee Program, and worker and community safety.
    These challenges are integral to the Department's mission. 
They are not amenable to immediate resolution, and they can 
only be addressed through a concerted effort over time.
    I would like to focus, as I indicated earlier, on what may 
be the most current challenge. That is sustaining departmental 
operations in a period of constrained resources. In our Fiscal 
Year 2012 and 2013 Management Challenge Reports, we provided 
the Department with a series of suggested actions for major 
operational improvements and cost-reduction initiatives. They 
include the following:
    First, applying the Quadrennial Technology Review's 
strategic planning concept to the Department's entire 
multibillion dollar science portfolio. This would put the 
Department in a better position from our perspective to develop 
metrics to evaluate its science efforts and to determine 
whether the science initiatives are aligned with current 
national priorities.
    Second, we proposed eliminating costly duplicative 
functions associated with the National Nuclear Security 
Administration. The NNSA contains a set of distinctly separate 
overhead operations that are often redundant to existing 
departmental functions.
    Third, we suggested the Department use a BRAC-style 
commission--Department of Defense BRAC-style commission to 
evaluate the current alignment of its laboratory and technology 
complexes and proposed revisions, including laboratory 
rightsizing and laboratory consolidation wherever possible. We 
noted that of the $10 billion spent annually on operating, the 
Department's 16 federally funded Research and Development 
Centers, administrative overhead, and indirect costs account 
for about $3.5 billion of this amount. This burden may not be 
sustainable in the current budget environment.
    Fourth, reprioritizing the Department's $268 billion 
environmental remediation liability with the objective of 
ensuring that high-risk initiatives and activities are funded 
first. This would require an analytically-based remediation 
strategy which addresses environmental concerns on a national 
complex-wide basis, essentially a form of remediation triage.
    Lastly, we propose evaluating the current structure of the 
Department's $1 billion per year physical security apparatus, 
nearly 700 million of which is spent on acquiring nearly 4,000 
protective force guards from contractors around the country. We 
think other options need to be examined, including the 
possibility of federalizing those individuals.
    The Department of Energy has an extraordinary mission and 
it truly is extraordinary. Yet, like most Federal agencies, it 
faces significant management challenges. Current budget trends 
and realities complicate the job of resolving the challenges 
that we have identified and the other issues facing the 
Department. The operative question going forward from our 
perspective may well be what can the Department afford in this 
environment?
    We look forward to working with program officials, agency 
management, and the Congress in our common effort to advance 
the interest of U.S. taxpayers.
    Mr. Chairman, this concludes my statement and I am pleased 
to answer any questions that you might have.
    [The prepared statement of Mr. Friedman follows:]

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    Chairman Broun. Thank you, Mr. Friedman. Thank you for 
staying within the five minutes.
    Now, Mr. Elkins, you are recognized for five minutes for 
your testimony.

            STATEMENT OF MR. ARTHUR A. ELKINS, JR.,

                       INSPECTOR GENERAL,

             U.S. ENVIRONMENTAL PROTECTION AGENCY,

                  OFFICE OF INSPECTOR GENERAL

    Mr. Elkins. Thank you very much. Good afternoon, Chairman 
Broun, Ranking Member Maffei, and Members of the Subcommittee. 
I am Arthur Elkins, Inspector General of the U.S. Environmental 
Protection Agency, and I am pleased to appear before you today 
to discuss the significant management challenges facing the EPA 
that the OIG has identified in Fiscal Year 2012. Thank you for 
allowing me the opportunity to share with you our work and 
recommendations on how to improve EPA's programs and 
operations.
    Before I begin, I would like to commend the expertise, 
dedication, and professionalism of the OIG staff whose 
exceptional work serves as the foundation of my testimony this 
afternoon. I also would like to mention that last year the OIG 
was a recipient of the Alexander Hamilton Award for its work 
related to the Deepwater Horizon oil spill. This is the highest 
award bestowed by the IG community.
    Although we are part of the EPA, senior EPA leaders can 
neither prevent nor prohibit us from conducting our work. In 
accordance with the IG Act of 1978, as amended, the OIG's 
mission is to: conduct independent and objective audits, 
investigations, and inspections; prevent and detect fraud, 
waste, and abuse; promote economy, effectiveness, and 
efficiency; review pending legislation and regulation; and keep 
the agency head and Congress fully and currently informed.
    We identified five challenges which are detailed in my 
statement for the record. I will focus on two of these 
challenges: Oversight of Delegation to States and Limited 
Capability to Respond to Cybersecurity Attacks.
    To accomplish its mission to protect human health and the 
environment, EPA develops regulations and establishes programs 
to implement environmental laws. The Agency relies heavily on 
authorized state and tribal agencies to implement environmental 
programs, and the performance of state and tribal governments 
is critical to assuring protection of human health and the 
environment.
    Since 2008, we have designated oversight of delegations to 
states as a management challenge. For example, we reported that 
despite EPA efforts to improve state enforcement performance, 
state enforcement programs frequently do not meet national 
goals and States do not always take necessary enforcement 
actions. If these issues are not addressed, state performance 
will remain inconsistent across the country providing unequal 
environmental benefits to the public and an unlevel playing 
field for regulated industries.
    We reported that Georgia's Concentrated Animal Feeding 
Operations program was operating without proper permits, 
inspection reports were missing required components, and the 
State was not assessing compliance with permits. As a result of 
inadequate oversight and reporting, Georgia's waters were 
vulnerable to discharges of animal waste from these facilities, 
which are associated with a range of human health and 
ecological impacts and contribute to the degradation of the 
Nation's surface waters.
    As technology continues to advance and the Agency increases 
its use of automated systems, having a strong IT infrastructure 
that addresses security at the enterprise architecture level is 
critical to protecting the Agency against cyber attacks. It is 
imperative that EPA continue efforts to strengthen practices to 
guard against advanced persistent threats.
    While EPA has committed to making significant progress, 
this challenge persists. For example, we found limited 
assurance that data in the Automated System Security Evaluation 
and Remediation Tracking tool are reliable for decision-making. 
This tool is used to track the remediation of weaknesses in 
EPA's information security program, as well as informs 
management about the adequacy of controls implemented to 
protect Agency systems. We reported that EPA neither developed 
a comprehensive deployment strategy for its Security 
Information and Event Management tool to incorporate all of the 
Agency's offices, nor developed a formal training program to 
train employees on how to use the tool. This computerized tool 
is used to centralize the storage and review of computer logs 
or events to monitor or investigate unusual network activity.
    While the EPA's senior leadership is taking the management 
challenges seriously and is making progress on resolving them, 
the Agency must remain focused on these challenges, especially 
in light of the difficult budgetary climate facing all Federal 
agencies today. The OIG will continue to provide oversight and 
track the EPA's actions on these challenges while looking to 
identify any emerging issues warranting attention.
    In conclusion, I would like to reaffirm the OIG's 
commitment to vigorously work with the Administrator and 
Congress to ensure that the Agency's programs and operations 
work efficiently and effectively for the benefit of the 
American taxpayer.
    Mr. Chairman, this concludes my prepared statement and I 
will be pleased to answer any questions you or the Members may 
have. Thank you.
    [The prepared statement of Mr. Elkins follows:]

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    Chairman Broun. Thank you, Mr. Elkins.
    Now, I recognize Ms. Kendall for five minutes.

               STATEMENT OF MS. MARY L. KENDALL,

                   DEPUTY INSPECTOR GENERAL,

                U.S. DEPARTMENT OF THE INTERIOR,

                  OFFICE OF INSPECTOR GENERAL

    Ms. Kendall. Thank you, Mr. Chairman, Ranking Member 
Maffei, and Members of the Subcommittee. Thank you for the 
opportunity to testify about the major management and 
performance challenges facing the Department of the Interior 
and the approach the Office of Inspector General takes for 
providing oversight in these program areas.
    As you know, the OIG makes an annual determination as to 
what the most significant management and performance challenges 
are facing Interior. Historically, the OIG made this 
determination by looking at our recent past audit and 
investigative work to identify the major challenges. In the 
past two years, however, we chose to take a more prospective 
outlook. Utilizing a number of resources, the OIG identified 
the top challenges we see facing the Department. We then met 
with the department officials to gain their perspective on the 
challenges we identified and the areas we would report upon. In 
those areas that the OIG had not done significant--or in some 
cases any--audit or investigative work, we asked the Department 
to help us identify one or two program areas that present the 
most challenge or concern.
    Prior to issuing our report, we have done some limited 
analysis to better identify the scope of these issues involved 
in the greater challenges. We then used the major management 
and performance challenges to inform and guide our audit--and 
to the extent possible, investigative--work in the coming year.
    Last year, the OIG identified the top management 
performance challenges as: energy management, climate change, 
water programs, responsibility to Indians and insular areas, 
Cobell and Indian land consolidation, and operation 
efficiencies. Therefore, in planning our audit and evaluation 
work for Fiscal Year 2013 and determining the scope for this 
work, we were guided by these top challenge categories into 
developing our targeted categories.
    In energy, some of the program areas subject to review are 
mineral material sales, underground injection controls, 
offshore renewable energy, onshore oil and gas permitting, and 
pipeline management.
    In climate change, we were reviewing the various climate 
change requirements placed on the Department.
    In water, we are conducting a series of evaluations of the 
Coastal Impact Assistance Program and we will be looking at the 
Bureau of Reclamation Wastewater and Groundwater Programs.
    In Indians and insular areas, we have looked at the 
election system and Public Finance Authority of the Virgin 
Islands and are reviewing the Guam Memorial Hospital Authority.
    In addition to these top challenge categories, we have 
maintained additional targeted categories for audits and 
evaluations, as they are so integral to the mission of DOI and 
have been areas of concern historically. They are: asset 
protection and preservation; and health, safety, security, and 
maintenance.
    For investigations, we are necessarily more reactive. We 
cannot plan our investigative activities like we do our audits 
and evaluations. We are, however, guided by five investigative 
priorities: contract and grant fraud, energy, scientific 
misconduct, ethical violations, and public safety and security. 
Clearly, our investigative priorities overlap to a certain 
degree with our audit and evaluation priorities. This is a 
natural overlap, not necessarily intentional. But as an OIG of 
less than 300 employees that oversees a department with over 
75,000 employees, we must focus our oversight activities on 
those areas of greatest concern and challenge. Although there 
may be many other ways in which to fine-tune this focus, using 
targeted categories and investigative priorities help us deploy 
our resources to the areas in greatest need of oversight in the 
Department of the Interior.
    Mr. Chairman and Members of the Subcommittee, this 
concludes my formal testimony. I appreciate the opportunity to 
be here today and would be happy to answer any questions.
    [The prepared statement of Ms. Kendall follows:]

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    Chairman Broun. Thank you, Ms. Kendall.
    I congratulate all three witnesses for staying within five 
minutes. I greatly appreciate it. And I thank you all for being 
available for questioning today.
    Reminding Members that Committee rules limit questioning to 
five minutes, the Chair at this point will open the first round 
of questions. And the Chair recognizes himself for five 
minutes.
    Ms. Kendall, you have refused to comply with a 
Congressional subpoena and obstructed at least two 
Congressional committees' inquiries into the Deepwater Horizon 
Offshore Drilling Moratorium Report. You have also adopted a 
policy to work more collaboratively with the Department. One of 
the most important qualities of an IG is their independence. 
How can this Committee trust your work, particularly when even 
your testimony today states that you collaborated with the 
Department and to quote you, ``together, agreed upon the 
challenge areas we would report on?'' Ms. Kendall?
    Ms. Kendall. Yes, sir. We did take a collaborative approach 
with the Department primarily because the--I am going to say 
the Association of Government Auditors made a recommendation to 
the Department of the Interior that the way that the top 
management challenges had been reported in the past did not 
give a good sense of sort of where the Department was and the 
position the IG took. It was more a sort of debate between 
the----
    Chairman Broun. Ms. Kendall, I am sorry to interrupt you 
because I--my time is very limited. The point is when you 
collaborate with the Department, that is not your job. Your job 
is to be a watchdog, to oversee them, to report things that 
they are doing that are wasteful or abuse, fraud, other types 
of oversight that you are supposed to be doing. That is what we 
have in this Committee's responsibility is being an oversight 
Committee. And if you are working in collaboration with the 
Agency, I don't know that we can trust your independence. I 
don't know that we can trust what you tell us. The IGs have to 
be independent. It is absolutely a critical part of what you 
guys do.
    Mr. Friedman, the Administration's attempt, which I think 
was very misdirected--the attempt to permanently shutter the 
Yucca Mountain project is still in the process of being 
litigated. In spite of the possibility that the courts might 
require DOE to continue pursuing the license, which hopefully 
that will happen, DOE has eliminated all semblance of a Nuclear 
Waste Management Program, and that affects every single nuclear 
facility in this country, including the Georgia Power Company 
in my own State, including the legislatively created Office of 
Civilian Radioactive Waste Management. Has the DOE IG examined 
DOE's ability to reconstitute the Yucca Mountain project? 
Should the court--should the--well, let me ask that question. 
Have you all looked at reinstituting the Yucca Mountain 
project?
    Mr. Friedman. We have not. First of all, Mr. Chairman, 
nuclear waste disposal and the termination of the Yucca 
Mountain project is one of our management challenges, which I 
referred to earlier.
    Chairman Broun. Yes.
    Mr. Friedman. This is a $15 billion tunnel to nowhere in 
the middle of Nevada. So it is one of the worst cases of how 
not--or the best cases actually of how not to make public 
policy from my perspective. And we have been outspoken on that.
    In terms of reconstituting the office, the expertise--this 
is by observation; we have not done a report--by observation, 
the expertise--large parts of the expertise have left the 
office and I am not sure--could it be reconstituted? I am sure 
it could. Would it be extremely difficult? The answer is yes.
    Chairman Broun. Well, obviously, you think the courts 
should not require them to reconstitute that, is that correct?
    Mr. Friedman. No, I have no position on the courts' 
position with regard to reconstitution at all.
    Chairman Broun. Okay. Has the DOE IG examined the CRWM's 
data retention plans to preserve the relevant records and 
documentation?
    Mr. Friedman. Well, it is interesting you asked that 
question because when the Administration made the decision that 
it made not to fund the Yucca Mountain project and the office, 
we did do a review and we indicated that we were concerned that 
after the expenditures of nearly $15 billion, that there would 
be no appropriate means to maintain that information so that it 
could be used as a planning tool if nothing else for nuclear 
waste disposal decisions in the future.
    Chairman Broun. So were you maintaining those records?
    Mr. Friedman. There is a system. We determined that there 
was a system to maintain those records. We have not looked at 
it in the last two, two and a half years.
    Chairman Broun. Well, my time is just about up, but this is 
a huge issue for us in Georgia and South Carolina and the 
Southeast and all over the country. And it is something I have 
been very interested in. This Yucca Mountain project has been 
studied at great length. We had hearings here and the general--
and the full Committee about the safety of it, and it has been 
shown that this is the best repository--it is not a disposal; 
it is a repository, in my opinion, of this nuclear waste.
    My time is expired. I now recognize Mr. Maffei for five 
minutes.
    Mr. Maffei. Thank you, Mr. Chairman.
    I am just wondering if each of the Inspectors General could 
very briefly tell us if--how the sequester is affecting their 
own offices, so not the Department but your own office. We will 
start with Mr. Friedman.
    Mr. Friedman. Well, Mr. Maffei, we have canceled a very 
important training meeting that we had. It is not really a 
conference; it is a meeting. We were required to meet certain 
professional standards and training our auditors specifically. 
We had to cancel that and we are looking at alternatives. We 
are limiting travel, we are limiting training, and we are going 
to institute a hiring freeze in the not-too-distant future. So 
at this point, we have the resources to continue. We have--we 
are anticipating a reduction, but we have planned carefully and 
we think we will be okay in terms of furloughs and other job 
actions.
    Mr. Maffei. Mr. Elkins? Thank you, Mr. Friedman.
    Mr. Elkins?
    Mr. Elkins. Yeah, thank you. I will echo Mr. Friedman's 
comments. Generally speaking, we are pretty much in the same 
boat. We have to take a look at training and travel. Over 80 
percent of our appropriations are in FTEs. In order to do the 
IG's work, you have to have people, and the people need to get 
out and travel to do their investigations and audits.
    I would like to say that there is also an opportunity cost 
that is missing here as well. The IG community is probably one 
of the few organizations that actually produce a return on 
investment. We pay for ourselves. And at the end of the day 
when we have to cut our resources to do the work that we need 
to do, that has an impact on the bottom line, because we are 
not out looking at fraud, waste, and abuse. So yeah, it is 
going to have a big impact on our ability to do our mission.
    Mr. Maffei. So if I understand you correctly, you are 
saying that cutting the resources at the oversight level may 
lead to more waste and therefore, overall, may end up costing 
the taxpayer more money than if we had the appropriate 
resources at the IG?
    Mr. Elkins. Absolutely. If we don't do it, who will do it?
    Mr. Maffei. I agree. Ms. Kendall?
    Ms. Kendall. Yes, sir. I would echo what Mr. Friedman and 
Mr. Elkins have both said. We are also operating right now at 
about 90 percent of our full FTE and we have slashed training, 
we have slashed travel. We are trying to limit travel to as 
close to our office locations as possible for the work that we 
are doing. Like Mr. Elkins said, about 80 percent is in 
salaries and benefits and the rest is really in support of our 
mission. So it is quite a significant effect.
    Mr. Maffei. Thank you.
    And then very briefly, Mr. Friedman--and the Chairman may 
be surprised that I am going to ask a question on this, but I 
am very interested in the LG Chem case in Michigan and what you 
were able to find there. I do believe that these are important 
programs, and when they are abused, it is an extremely 
detrimental effort to our attempts to green the economy and 
make sure that we can sustain the planet. So I would like an 
update on where you are with that.
    And I would note that these need to be competitive 
programs. I have a battery company in my district that applied 
and was not granted these grants, and we are actually making 
batteries at my plant. So could you just give me an update as 
to where that investigation is and what you have found?
    Mr. Friedman. Do you want me to synopsize what our report 
said, Mr. Maffei?
    Mr. Maffei. Sure. Nothing----
    Mr. Friedman. Oh----
    Mr. Maffei. --since the report?
    Mr. Friedman. I am sorry. Essentially, it was a grant to 
build a plant in Holland, Michigan, designed to produce lithium 
ion batteries primarily for the Volt. It went to LG--it went to 
a predecessor of LG. LG purchased the predecessor. We found 
that the--there were allegations that employees, because there 
was no demand for the product, that employees were in fact 
playing board games and volunteering for Habitat for Humanity, 
as important as that may be, certainly on the government 
payroll. We found that--we confirmed that's the case. We 
identified at least 1.6 million in inappropriate payments of 
which the Department recovered from LG Chem $840,000.
    But more importantly, actually, is the fact that the--that 
this 650,000 square-foot plant is idled because there is no 
demand for the product at this point. One of the important--one 
of the conditions precedent to granting the grant was that the 
LG production of lithium ion batteries in South Korea would be 
transferred to this plant.
    Mr. Maffei. Yes.
    Mr. Friedman. That component was never--although it was 
conceived--it was part of the conception of the grant, it never 
made its way into the written product. As a consequence, the 
Department had no leverage, so they told us to force LG to meet 
that term, which is--was extremely unfortunate.
    Mr. Maffei. Realizing I am out of time, Mr. Chairman, but 
Mr. Friedman, is there any update--have you concluded the 
investigation? Are you continuing to look at how this so-called 
competitive decision was made?
    Mr. Friedman. We have completed the audit component of the 
investigation. There are other aspects of it that are currently 
under review.
    Mr. Maffei. Okay. We will be very interested in those.
    Thank you, Mr. Chairman. I apologize for going over.
    Chairman Broun. Mr. Maffei, I will always give you some 
leeway here on that.
    Okay. Thank you, Mr. Maffei.
    Let us go to Mr. Schweikert, my friend from Arizona. You 
are recognized for five minutes.
    Mr. Schweikert. Thank you, Mr. Chairman.
    And to--is it--and forgive me for asking. It is properly 
pronounced Mr. Maffei?
    Mr. Maffei. It rhymes with buffet so----
    Mr. Schweikert. Buffet?
    Mr. Maffei. --yeah. Think of everything you want----
    Mr. Schweikert. Now, you will have just made me hungry.
    Mr. Maffei. --to eat for 12.95 except with an M, of course.
    Mr. Schweikert. Yeah, and that is in New York?
    Mr. Maffei. Yes.
    Mr. Schweikert. All right.
    Mr. Maffei. Yes.
    Mr. Schweikert. Hey, but Mr. Friedman, actually, my friend 
from New York here, who is my brand-new friend obviously, was 
basically going down a path that I know it is not your job is 
ultimately to audit, analyze policies that we make here in 
Congress and where we are going to have maybe some differences 
is was this actually a place that we should have been putting 
capital or instead of designing, you know, sort of tax and 
mechanical codes and those things that--with--maybe the 
benefits should have gone to the battery factory in his 
district because they were producing and working.
    But when you are looking at this LG example in Michigan, 
your department or the department that you oversee has dozens 
and dozens of these grants, assistance, loan guarantees. What 
methodology do you reach out to? How do you grab data sets? How 
do you stay on top of it to know that you don't have bad actors 
out there?
    Mr. Friedman. Well, understand, Mr. Schweikert, that I 
give--I am giving you an answer from the IG prism. The 
Department has a fairly extensive mechanism for managing the 
grants process and the contract process and other financial 
awards process, for making priority decisions, for evaluating 
what proposals make sense and what proposals don't make sense. 
Our role, as I see it, is to probe those processes to make sure 
that in fact they are using the structure that exists in the 
Federal acquisition regulations and good logic and good common 
sense.
    Mr. Schweikert. But my concern is how do you catch them 
quickly? I mean have you embraced enough technology or the 
agencies you oversee so they are getting monthlies? You are 
actually seeing purchase orders that are attached to the 
grants, that you actually can see production? I mean this 
drives me insane because it is close to planned economy and 
that, we know, doesn't work. But if we are handing out the 
money, how are you--how does it ultimately get overseen and 
mechanically, how do you do quickly?
    Mr. Friedman. Okay. Are you asking from--again----
    Mr. Schweikert. You are the IG. Purely from the guy that is 
auditing----
    Mr. Friedman. From an IG perspective----
    Mr. Schweikert. In many ways you are auditing the auditors.
    Mr. Friedman. Well, we are auditing those who are 
responsible for managing these contracts----
    Mr. Schweikert. Yes.
    Mr. Friedman. --and instruments. And the answer is we try 
our best, Mr. Schweikert, to be proactive and preventative in 
nature rather than reactive and come in after the fact. And we 
have done that in a number of cases where we are getting 
essentially--looking at the--looking--invoicing on a real-time 
basis to try and--to try to prevent unallowable costs before 
they occur----
    Mr. Schweikert. Okay.
    Mr. Friedman. --rather than after the fact. I don't know 
how--I hope I am answering your question, but I am more than 
happy to go beyond----
    Mr. Schweikert. This is classic design controls setup, you 
know, we had in our Accounting 101 and 301 classes.
    Ms. Kendall--and this one may be tainted because of some 
personal experiences when I was Maricopa County Treasurer. Is 
there a mechanism--does it hit your audit standards, your 
review standards, litigation settlements where Department of 
Interior is being sued because of a certain quarter, certain 
flood, certain this, certain that, and the mechanics within the 
decisions to either settle--do those hit your desk?
    Ms. Kendall. We have not had any issues really with the 
litigation in the Department that I can think of right now. It 
just hasn't been something that has come to us.
    Mr. Schweikert. Okay. It is one of our folklores out West 
is sue the Department of Interior, sue the Forest Service, sue 
them, because that is how you get what you want. Because you 
basically sue them and they will agree and that way you 
actually get the court order that sort of circumvents much of 
the rule-writing mechanics.
    Ms. Kendall. Interesting. It is not something that I was 
familiar with. I am glad you brought it to my attention. Thank 
you.
    Mr. Schweikert. Okay. Mr. Chairman, with that, I yield 
back.
    Chairman Broun. Thank you, Mr. Schweikert.
    Now, Mr. Peters, you are recognized for five minutes.
    Mr. Peters. Thank you. It is much easier to pronounce, too, 
I suppose. Thank you, Mr. Chairman.
    Mr. Elkins, I had some questions for you. Last month, your 
office released a report calling for EPA to improve its air 
emissions data for oil and gas production, and it said that the 
sector had various pollution processes emit large amounts of 
harmful pollutants that affect air quality at local, regional, 
and global levels. States and the EPA rely on this air 
emissions data to guide this decision. And putting aside for 
the fact how we even know what the amounts are, how would we--
how could EPA improve its directly measured air emissions data, 
and is there anything that Congress can do to help that 
process?
    Mr. Elkins. Well, as I recall, the import of that report 
really addressed the fact that EPA didn't have the--enough data 
to be able to make decisions as to whether or not it was 
problematic or not. I am not quite sure just exactly what the 
recommendation in terms of what Congress could do to assist. 
This is more of a data quality issue that EPA has, an 
investment that the Agency needs to make in order to 
strengthen, bolster its ability to make decisions with the data 
that it has. But that was the issue related to that report.
    Mr. Peters. But does EPA have the sufficient authority to 
be able to get that data if it wanted to get it?
    Mr. Elkins. I would have to say that they do. It is a 
matter of just being--you know, they need to accumulate the 
data. They clearly have the expertise to be able to do that so, 
yes, the data is available; they just need to collect it.
    Mr. Peters. So there is no need for Congressional 
authorization to EPA to get them to collect the data that we 
would all need to evaluate whether this is a problem as far as 
you know?
    Mr. Elkins. As far as I know. I don't see that that would 
be necessary, but of course, the Agency may have some 
constraints that I am not aware of.
    Mr. Peters. Do you know whether the drilling companies keep 
this data themselves or whether they are required to?
    Mr. Elkins. I do not know. I don't recall that that was 
brought out in our report.
    Mr. Peters. So is it possible that drillers--I have to 
concede we don't know whether it is worse than we think or 
better than we think because we don't have the data, but it is 
possible, I suppose, that a driller at a particular site would 
be emitting exceptionally high levels of methane but not know 
it? Or what they--would you expect that they would know that?
    Mr. Elkins. Well, you don't know what you don't know. So 
that is kind of hard to say. I really wouldn't have an opinion 
on that. I mean if you are not looking for it, if you don't 
have any mechanisms or tools to identify it, I am not quite 
sure you would know it. I would think the science would suggest 
that based on the type of reduction and the type of work that 
you are doing that it is going to produce certain byproducts. 
And if methane is based on the science, it is one of those 
byproducts; I would suspect that you would know that.
    Mr. Peters. So I would just observe from the answer a lot 
of the use of the words ``I don't know'' and the use of the 
word ``guess.'' It strikes me that we would be better off in 
terms of evaluating the need for environmental regulation, and 
I start from there because I don't necessarily assume it if we 
knew what was going on. And if they have the power under 
existing law to collect that data, it would seem to me that 
that would be kind of something that you would want to 
encourage them to do. Otherwise, they can't very effectively be 
regulating air emissions, could they? We don't know?
    Mr. Elkins. I wouldn't want to go there. I mean in terms of 
what their statutory authority to do, in terms of regulation, I 
mean that is again totally up to the Agency to make that 
interpretation. That is an Agency call.
    Mr. Peters. Okay. So we should talk to the Agency about 
that, I guess.
    Mr. Elkins. That would be a good idea, I think.
    Mr. Peters. All right. Well, I appreciate your time, Mr. 
Chairman. Thank you. I yield back.
    Chairman Broun. Thank you, Mr. Peters. I hope I did 
pronounce that correctly.
    Now, Mr. Posey, you are recognized for five minutes.
    Mr. Posey. Thank you very much, Mr. Chairman.
    Mr. Friedman, in your written testimony you indicate that 
the Department of Energy ``contract management remains a 
significant management challenge.'' You also highlighted the 
fact in your testimony that the Department of Energy is the 
``most contractor-dependent agency on the civilian side of the 
Federal Government.'' Ironically, you know that numerous 
Department of Energy Inspector General reports have documented 
missteps I think they call them associated with successfully 
managing the Department's contracting process.
    Just a couple of examples: a February 2013 report from your 
office confirmed that LG Chem employees at the Michigan 
facility had little work to do and were spending time 
volunteering at local nonprofit organizations, playing games, 
and watching movies at the expense of the Federal Government 
and taxpayers; also, number two, a review of the July 2012 
security breach at NS--NNSA's 2002--or Y-12 National Security 
Complex, a site which processes and stores uranium identified 
``troubling displays of ineptitude'' that were chalked up to a 
lack of contractor governance and Federal oversight which 
failed to identify and correct early indicators of multiple 
system breakdowns.
    And number three that grabbed me, your October 2012 report 
on foreign travel highlighted the fact that Department of 
Energy contractors, for some reason, are not bound by travel 
restrictions that DOE government employees have to adhere to. 
And so this suggests, of course, that the Department of Energy 
does not just have an isolated issue with some of its contracts 
but rather suffers from a systemic problem in the Agency's 
procurement system and what actions you would take I think we 
would all like to hear or would you recommend that DOE take to 
ensure effective contractor oversight to address those issues 
and similar issues, which could conceivably be wasting billions 
of billions of taxpayer dollars every year?
    Mr. Friedman. Well, Mr. Posey, we had almost a whole 
inventory of recommendations to address the contracting, 
granting, cooperative agreement, financial assistant awards, 
management in the Department of Energy. It is a--the weak 
underbelly, from my point of view, of the Department. We do a 
huge amount of contracting. Virtually everything we do 
actually, with obviously some exceptions, is done by contract, 
including work with regard to the nuclear weapons, the 
management of our national laboratories system, and I could go 
on and on and on. What needs to be done, it seems to me, we 
need to seriously revisit the question of finding the right 
balance between oversight of the contractors and, at the same 
time, encouraging the contractors, incentivizing the 
contractors to do the right thing. And it is a balance. It is 
an issue which has not been resolved in the many years that I 
have spent looking at the Department of Energy's system. That 
is, to me, the prime recommendation.
    Mr. Posey. Well, this is my first year on this Committee, 
and so this is kind of shocking to me. And I get the feeling 
from what else I have read and from hearing you that this is 
not a new problem at DOE. And apparently, there have been 
proposed solutions before. Can you give me a little bit of 
insight as to how they were received or taken?
    Mr. Friedman. Well, this is not a new problem. It has been 
going on for years. The fundamental structure of the way the 
Department of Energy manages really goes back to the Manhattan 
Project. It has many of the same elements that existed in the 
late 1940s, early 1950s and 1960s. So it is a long-standing 
issue. And finding--as I say, finding that right balance is 
extremely difficult. A number of Administrations have tried and 
made valiant efforts. The contractors frequently pushed back. 
Sometimes their interests and the Department's interests--of 
course, when it comes to national security, I am not quarreling 
with that, but their interests--it is not always exactly 
parallel to that of the Department.
    So, as I say, finding the right balance is tricky but it 
seems to me that is the avenue we need to pursue.
    Mr. Posey. Well, but besides the obvious waste of billions 
of dollars of taxpayers' money, my next point was the threat to 
our national security to have such ineptitude, such 
incompetence, such belligerence, obviously that they seem to be 
refusing to comply with the Inspector General's recommendations 
to remedy this situation.
    Mr. Friedman. Well, in fairness, Mr. Posey, the senior 
leadership of the Department and the senior leadership with 
regards to the Y-12 matter, which is extremely--which is fresh 
and raw and very troubling. And you are absolutely correct. The 
Department's leadership--and I am not here to support them; I 
am not here speaking for them--they have gone to great lengths 
to make sure that the issues that we identified at Y-12 have 
been addressed. And at some point in the future, in the not-
too-distant future, we will be going back in there to see if in 
fact the remedies are as effective as they have been portrayed. 
So you have my commitment with regard to that, but you have 
struck a chord on the issue that is extremely important. And 
national security is of the highest priority, of course, and Y-
12, presumably, prior to the intrusion last summer was thought 
to be the Fort Knox of the weapons complex.
    Mr. Posey. Yes. Thank you.
    Chairman Broun. The gentleman's time is expired.
    And now, we will start our second round of questions.
    Mr. Elkins, one challenge facing the EPA is its 
transparency. In fact, to me, it seems like that is a huge 
issue for this whole Administration. We were promised by the 
President that he would have the most transparent 
Administration in history, and it seems that he has redefined 
transparency to be obscurity. EPA's use of alias emails appears 
to corrupt the Agency's records by not tying an individual's 
name to an email account. This Committee sought your help in 
reviewing whether EPA followed relevant Federal records laws, 
regulations, and policies, and for that I thank you.
    Understanding that EPA could hypothetically follow all 
relevant requirements and still frustrate records transparency, 
will your review address whether the current policies are 
sufficient to maintain the integrity of agency records and 
allow public transparency?
    Mr. Elkins. Yes, Chairman Broun. The focus of our review--
and as you know, we are still in the process of doing that 
review--is going to take a look at whether or not the Agency's 
policies, regulations, and guidance was followed. Based on that 
review and based on the findings, we will be making 
recommendations if we find that the Agency has not followed its 
policy regulations and reviews and make recommendations how 
they can do so.
    But yes, we will be definitely addressing any issues that 
arise and we will keep you informed.
    Chairman Broun. Well, I would appreciate that. The public 
deserves to know and use of alias email accounts is obviously a 
way of trying to get away from Freedom of Information Act and 
other ways of holding people accountable and responsible, and I 
think it is absolutely critical that--and I understand that 
this is not the only Administration that has utilized that type 
of activity, and I think it is deplorable that Administrator 
Jackson did do so and I hope that you will follow very closely 
and give this Committee some input.
    But before you were confirmed as EPA IG, you worked for the 
EPA's Counsel's office under Administrator Jackson. Were you 
aware of Administrator Jackson's use of email aliases?
    Mr. Elkins. No, you are absolutely right. I did work in the 
Office of General Counsel, and no, I was not aware. This issue 
only surfaced as far as my awareness level is when it was 
raised as a result of the issues that we have had discussion on 
here at this hearing.
    Chairman Broun. Well, I think there is a potential 
appearance of a conflict of interest here, and what are you 
going to do to protect against a potential conflict of interest 
related to this review in view of the fact that you were in the 
counsel's office?
    Mr. Elkins. Yes. I mean that is a good question and it is 
something that when we embarked on doing this review, I raised 
the issue quite frankly, as to whether or not there was any 
conflicts. And I had a detailed discussion with my staff to 
determine whether or not I should recuse myself. But after 
going through that discussion, you know, a) it was determined 
that I had absolutely no knowledge about any of the issues that 
we were going to take a look at; 2) the focus of our review is 
again going to take a look at whether or not the Agency 
followed the law, and if that is the case, that it either did 
or did not, and so, you know, it didn't seem based on that sort 
of review, it didn't seem that I should recuse myself from that 
because----
    Chairman Broun. When can we expect the report of that 
review?
    Mr. Elkins. I am sorry, sir?
    Chairman Broun. When can we expect a report of that review?
    Mr. Elkins. I would say probably within the next couple of 
months at least----
    Chairman Broun. Well, please get it to----
    Mr. Elkins. --we are in the early phases of it----
    Chairman Broun. --us as quickly as you can. My time is 
just----
    Mr. Elkins. Absolutely.
    Chairman Broun. --about up.
    Mr. Friedman, after receiving anonymous complaints alleging 
improprieties in the Department's Loan Programs Office, you 
initiated a special inquiry and issued a report that identified 
weaknesses in the administration of loan programs at DOE. These 
findings parallel similar conclusions to a March 2011 report 
from your office on DOE's Loan Guarantee Program for clean 
energy technologies, as well as findings in a GAO report on DOE 
Loan Guarantees.
    Your testimony states that the Loan Guarantee Program is on 
your watch list as you termed it. I recently received a letter 
from DOE's Loan Programs Office that seems to indicate that 
everything was just fine. Can you explain why you listed the 
Loan Guarantee Program?
    Mr. Friedman. Mr. Chairman, there are aspects of our work 
in loan guarantee that I can talk about. There are aspects that 
I cannot talk about in public session that there are law-
enforcement-sensitive. The cumulative body of work that we have 
done and that we have seen indicates to us in the obvious 
number of problems within the program that are in the public 
domain in and of themselves are sufficient to cause us to raise 
concerns about the program, its management, the selection 
process, the documentation that is maintained, and those sorts 
of issues. So that is our basis. I hope that is a satisfactory 
answer.
    Chairman Broun. Well, the American hard-working taxpayers 
need all you guys to be very diligent. The Loan Programs Office 
has certainly come into a lot of criticisms, and I hope you 
will continue that process.
    I now recognize Mr. Peters for five minutes.
    Mr. Peters. Thank you again, Mr. Chairman.
    I just had one more question for Mr. Friedman. I think you 
had indicated that the Department might establish a process to 
look at whether they could save money by consolidating their 
labs. This may even lead to closing some facilities. So I just 
wanted to see if you can explain for us maybe kind of what you 
thought the magnitude of the savings we might realize might be 
without undermining the missions of the Department's labs. And 
I also understand it is something like a $3.5 billion ticket. 
And then adopting any process, do you have principles that you 
believe should guide the Department's review for sort of a lab 
BRAC kind of process? Thank you.
    Mr. Friedman. Yes. Thank you for the question. Excuse me. 
Just to make sure we are clear, this is our recommendation as 
part of the management challenge process. The Department has 
not adopted it.
    Mr. Peters. No, I understand.
    Mr. Friedman. It is--in fact, if--we are realists, Mr. 
Peters, and we are talking about jobs here and people and 
states that--in which these laboratories play a very important 
economic development role and they are extremely important. The 
basic framework of the laboratory system as it is currently 
established--and there has been some tinkering at the margins--
is a remnant of the 1950/1960s model. It has not changed.
    There are 16 FFRDCs spending about $11 billion a year, and 
of that amount, 35 to 40 percent is for administrative costs. 
Our view is that, given the current economic times, there ought 
to be a thoughtful approach--taking politics out of the mix if 
that is at all humanly possible--to determine whether all of 
those labs makes sense, whether there are ways of consolidating 
so that more of the--what is currently devoted to 
administrative costs could be devoted to direct science would 
be possible. That--our recommendation has not been adopted, and 
I might say, there are a number of Members of Congress who said 
it was dead on arrival.
    Mr. Peters. Um-hum.
    Mr. Friedman. So we we made the recommendation because we 
thought it was the right thing to do, and the time has come for 
a reevaluation, but it was not received with a great deal of 
acceptance.
    Mr. Peters. Just to follow up----
    Mr. Friedman. No white smoke, you might say.
    Mr. Peters. No, just to follow up, did you suggest a 
process by which that might be--might take place?
    Mr. Friedman. Well, we believe that the BRAC--something 
patterned after the Department of Defense BRAC style is 
exactly--BRAC Commission is exactly what we would recommend.
    Mr. Peters. Okay. Thank you, Mr. Friedman.
    And Mr. Chairman, I yield back. Thank you.
    Chairman Broun. Thank you, Mr. Peters.
    And now, Mr. Posey, you are recognized for five minutes.
    Mr. Posey. Thank you, Mr. Chairman. And thank you for 
asking about Yucca Mountain earlier. I was really concerned 
about that. And you kind of got some of that air cleared for 
me.
    Mr. Friedman, I appreciate your comments that it is not the 
top leadership at DOE, but clearly, some of the contractor 
oversight personnel need to have better accountability or need 
to be more accountable. What tools do you, the IG, need, do you 
believe, to help that be more effective?
    Mr. Friedman. Well, I hope this doesn't disappoint you, Mr. 
Posey, but I actually think we have a bag of tools available to 
us currently that allow us to do what needs to be done.
    Mr. Posey. Okay.
    Mr. Friedman. So I am comfortable with the status quo.
    Mr. Posey. What would you think Congress needs to do to 
make them a little bit more accountable?
    Mr. Friedman. Well, I am--having been in this position for 
a long time and participated in a number of hearings, the 
sunlight that a--hearings and Congressional oversight forces 
is, to me, the most--single most important thing that Congress 
can do. So having hearings, having those involved in actual 
oversight and administration of these contracts appear before 
you it seems to me is the way of clearing the air, making it 
transparent, and holding people--maximum--achieving maximum 
accountability.
    Mr. Posey. Okay. That didn't work in Financial Services 
with the Securities and Exchange Commission after they let 
Madoff steal $70 billion. Nobody lost their job, and the answer 
to that was supposed to make us feel good is that, well, at 
least half the investigators and half the examiners who dropped 
the ball don't work here anymore. So maybe they are at DOE. I 
don't know.
    But Mr. Elkins, one of the challenges facing EPA is that of 
public trust. I am sure you know that. The American people 
deserve to know that the regulations created by the EPA are 
informed by science and not special interest or activism. Your 
office received a request to conduct a review of the Clean Air 
Act Advisory Committees in August 2011. Can you tell me where 
that stands now?
    Mr. Elkins. I don't have that information right off the top 
of my head. I can get back to you on that, though. One second. 
Okay. My subject matter expert tells me that you can expect it 
in late summer.
    Mr. Posey. Okay. Please keep the Committee appraised.
    Mr. Elkins. I will do so.
    Mr. Posey. Thank you.
    That is all, Mr. Chairman. I yield back.
    Chairman Broun. Thank you, Mr. Posey.
    I have got a few more questions that I would like to ask. 
And I want to go back to the Loan Guarantee Program. Mr. 
Friedman, you all oversee over--the--that program oversees over 
$38 billion for 40 loan projects. Does your office plan on 
conducting any reviews on the loan selection process?
    Mr. Friedman. Well, we have looked at the documentation. We 
have already published a report on the documentation that was 
maintained on the decision-making associated with the loan-
granting process, Mr. Chairman. I admit to you that I am not as 
up to speed on the current status of the program as perhaps I 
should be, but my impression is that the vast majority of the 
loans have already been effectuated, if not all of the loans 
have been effectuated. But if there are loans to be granted in 
the future, we will be looking at that process.
    Chairman Broun. I hope you will be a very strong watchdog 
on that.
    Mr. Elkins, I will come back to a question that Mr. Posey 
was asking you. The President has stated that if he cannot get 
his radical environmental agenda pushed through Congress that 
he is going to go around Congress. What is the IG office doing 
to try to maintain that we follow the Constitution and follow 
what should be done where the President is saying he is going 
to take Congress out of the decision-making process? He is 
going to do whatever he wants to do. He is going to push his 
agenda and he doesn't care whatsoever what Congress does or 
doesn't do. What is the IG's office going to be doing to keep 
us in Congress and the American public aware of what is going 
on and make sure that the EPA does not promulgate regulations 
that are not authorized through Congressional action?
    Mr. Elkins. Well, Mr. Broun, our responsibility and 
mission, as you know, for the Office of Inspector General is to 
provide oversight and to make sure that the Agency follows its 
laws, the regulations, and guidance. We will continue to do 
that. We will continue to provide that oversight, and in areas 
where we determined that the Agency is not following the law, 
we will shed light on it and we will make it aware through our 
work products. So you can be assured of that.
    Chairman Broun. Well, we are counting on you. And the 
American people--the hard-working taxpayers of America are 
counting on you to do so. And I just trust that you will do so 
and look forward to your report in this Committee.
    Ms. Kendall, as I said in my opening statement, I am 
concerned with how the DOI and the DOI IG handle allegations of 
scientific integrity and scientific misconduct. And I believe 
that this is a serious challenge facing the Agency as it moves 
forward, as we move forward. Given the allegations facing not 
only the Department but also the IG, I am not sure we can trust 
the Department's decisions. While some scientific integrity and 
misconduct cases seem to have been handled appropriately by the 
IG, it appears as though allegations from a scientific 
integrity officer have gone ignored. How do you decide when to 
pursue an allegation of scientific integrity or misconduct?
    Ms. Kendall. Well, we will look at any allegation of 
scientific misconduct. We are not, however, in a position to 
make a determination really on scientific integrity. The Office 
of Inspector General does not have any kind of scientific 
expertise in it. So we have to draw a fairly clean line between 
integrity of science and misconduct. When there are allegations 
of misconduct, we can investigate those factually. We cannot 
make a determination about the science, however.
    Chairman Broun. Well, I am real concerned. As I mentioned 
already, when you are working in collaboration with the folks 
that you are supposed to be overseeing, I am not sure that that 
is going to occur.
    Mr. Elkins, in response to my earlier question, you said 
you would review whether EPA followed current policies 
regarding the integrity of maintaining agency records. I want 
to clarify my question. Will your review also address whether 
EPA's policies are sufficient?
    Mr. Elkins. We will make--if we find that the EPA's 
policies are not sufficient and that additional internal 
controls need to be implemented in order to make them 
sufficient, we will make that recommendation. Yes, we will be 
looking at that and--yes, we will be looking at that.
    Chairman Broun. Okay, Mr. Elkins. My time is expired. Mr. 
Posey--I think he is gone. And I appreciate Members being here 
and I appreciate you all's testimony. And I appreciate all 
the--your forbearance with us and flexibility also. Again, I 
want to thank you.
    Members of the Committee may have additional questions, and 
I ask you to respond to those in writing. Please do so very 
expeditiously. The record will remain open for two weeks for 
additional comments and written questions from Members.
    The witnesses are excused and the hearing is now adjourned.
    [Whereupon, at 1:45 p.m., the Subcommittee was adjourned.]
                               Appendix I

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                   Answers to Post-Hearing Questions


Responses by Mr. Gregory H. Friedman

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Responses by Mr. Arthur A. Elkins, Jr.

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Responses by Ms. Mary L. Kendall

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