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



 
           OPM'S REVOLVING FUND: A CYCLE OF GOVERNMENT WASTE

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



                                HEARING

                               before the

                   SUBCOMMITTEE ON FEDERAL WORKFORCE,

                    US POSTAL SERVICE AND THE CENSUS

                                 of the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 5, 2013

                               __________

                           Serial No. 113-29

                               __________

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


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan
RON DeSANTIS, Florida

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

 Subcommittee on Federal Workforce, U.S. Postal Service and the Census

                   BLAKE FARENTHOLD, Texas, Chairman
TIM WALBERG, Michigan                STEPHEN F. LYNCH, Massachusetts, 
TREY GOWDY, South Carolina               Ranking Minority Member
DOUG COLLINS, Georgia                ELEANOR HOLMES NORTON, District of 
RON DeSANTIS, Florida                    Columbia
                                     WM. LACY CLAY, Missouri


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 5, 2013.....................................     1

                               WITNESSES

The Honorable Patrick E. McFarland, Inspector General, U.S. 
  Office of Personnel Management
    Oral Statement...............................................     3
    Written Statement............................................     5
Mr. Charles D. Grimes, III, Chief Operating Officer, U.S. Office 
  of Personnel Management
    Oral Statement...............................................    17
    Written Statement............................................    19
Mr. Linda E. Brooks Rix, Co-Chief Executive Officer, Avue 
  Technologies Corporation
    Oral Statement...............................................    28
    Written Statement............................................    30

                                APPENDIX

The Honorable Blake Farenthold, a Member of Congress from the 
  State of Texas, Written Statement..............................    61


           OPM'S REVOLVING FUND: A CYCLE OF GOVERNMENT WASTE?

                              ----------                              


                        Wednesday, June 5, 2013,

                  House of Representatives,
 Subcommittee on Federal Workforce, Postal Service 
                                    and the Census,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 9:30 a.m., in 
Room 2247, Rayburn House Office Building, Hon. Blake Farenthold 
[chairman of the subcommittee], presiding.
    Present: Representatives Farenthold, Norton, Clay and 
Lynch.
    Staff Present: Alexia Ardolina, Majority Assistant Clerk; 
Jennifer Hemingway, Majority Deputy Policy Director; Scott 
Schmidt, Majority Deputy Director of Digital Strategy; Peter 
Warren, Majority Legislative Policy Director; Jaron Bourke, 
Minority Director of Administration; Lena Chang, Minority 
Counsel; Elisa LaNier, Minority Deputy Clerk; Safiya Simmons, 
Minority Press Secretary; Mark Stephenson, Minority Director of 
Legislation.
    Mr. Farenthold. And the subcommittee will come to order.
    I would like to begin this hearing, as we do all within the 
Oversight Committee, by reading the Oversight Committee's 
mission statement. We exist to secure two fundamental 
principles. First, Americans have a right to know that the 
money Washington takes from them is well spent; and second, 
Americans deserve an efficient and effective government that 
works for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights.
    Our solemn responsibility is to hold the government 
accountable to taxpayers, because taxpayers have a right to 
know what they get from their government. We will work 
tirelessly in partnership with citizen watchdogs to deliver the 
facts to the American people and bring genuine reform to the 
Federal bureaucracy.
    This is the mission of the Oversight and Government Reform 
Committee.
    We will start with my opening statement. Today's hearing 
focuses on the Federal Government's human resource bureaucracy 
and whether or not it is serving its agency customers and the 
American taxpayers efficiently and effectively. The Office of 
Personnel Management operates a $2 billion business selling 
products and services in the very same agencies it oversees. As 
OPMs workload has increased, so too has the number of 
investigative cases, referrals and requests for audits. This 
has amplified concerns about OPM's revolving fund business 
model.
    Last year, Inspector General McFarland told the committee 
his office had been flooded with requests from OPM to audit or 
investigate various aspects of the revolving fund. In April, 
the IG found senior OPM officials had used their position to 
give preferential treatment to revolving fund vendors and 
failed to comply with Federal contracting rules. In May, 
Inspector General McFarland informed the committee of an 
ongoing investigation in which a revolving fund contractor used 
deceptive practices to avoid fulfilling certain requirements 
under its contract with OPM in order to maximize profits.
    The IG has requested legislative language to provide access 
to additional resources for revolving fund oversight. The 
authority seems to be an investment that can be accomplished at 
a relatively low cost, using existing funds. At a time when 
agencies are furloughing workers to meet payroll, questionable 
business practices affect the entire Federal Government. Each 
month seems to bring another confirmation of the waste within 
the revolving fund.
    I look forward to hearing from today's witnesses as we 
examine whether OPM should be the regulator and the business 
service provider, and seek to better understand the business 
practices that have led the IG to request additional funds for 
critical audit needs.
    And I will now give Mr. Lynch a chance for his opening 
statement. We will recognize the gentleman from Massachusetts.
    Mr. Lynch. Thank you, Mr. Chairman.
    I want to thank the witnesses for coming before the 
committee, helping us with our work, which is to examine the 
pricing and quality of services provided through the Office of 
Personnel Management's Revolving Fund program and the 
Administration's legislative proposal to increase its 
oversight.
    OPMs revolving fund provides background investigations, 
training and other HR products, answers to Federal agencies on 
a reimbursable basis. These services are essential for 
effective government. OPMs revolving fund budget has gone from 
$191 million in fiscal year 1998 to over $2 billion today.
    The revolving fund activities comprise about 90 percent of 
OPMs total budget, with about two-thirds of the agency's staff 
devoted to this fee for service component of OPMs operations. 
However, private contractors perform most of the work.
    The Government Accountability Office and OPM Inspector 
General have expressed concerns in recent years about the 
pricing and the quality of those background investigations and 
other products and services. OPMs Inspector General also 
identified certain programs as vulnerable to high risk of 
waste, fraud and abuse. GAO also recommended that OPM look to 
increasing efficiencies in its background investigation 
processes. OPMs significant reliance on a vast contractor 
network to conduct background investigations and to provide HR 
solutions appears to present additional challenges to effective 
contract management and oversight.
    This hearing is important to strengthening oversight of 
OPMs revolving fund. OPMs Inspector General has indicated that 
he is currently hamstrung by the limited resources he has to 
conduct audits and investigations of OPMs revolving fund 
programs. Under current law, the Inspector General's budget 
provides only $3 million to finance its oversight of a $2 
billion operation, along with OPMs other non-trust fund 
programs, such as the Combined Federal Campaign and the Dental, 
Vision and Long-Term Care Insurance programs. I am sympathetic 
to the Inspector General's dilemma and I look forward to 
evaluating the Administration's legislative proposal to remedy 
that.
    Thank you, Mr. Chairman, and I thank the witnesses for 
their appearance here today. I yield back.
    Mr. Farenthold. Thank you, Mr. Lynch.
    Members will have seven days to submit opening statements 
for the record. We will now recognize our panel.
    Mr. Chuck Grimes is the Chief Operating Officer of the 
Office of Personnel Management. Ms. Linda Rix is Co-Chief 
Executive Officer for Avue Technologies Corporation. And Mr. 
McFarland, of course, is Inspector General from the OPM. 
Pursuant to committee rules, all witnesses will be sworn in 
before they testify. If you will please rise and raise your 
right hand.
    Do you solemnly swear that the testimony you are about to 
give will be the truth, the whole truth and nothing but the 
truth?
    [Witnesses respond in the affirmative.]
    Mr. Farenthold. Let the record reflect that all witnesses 
have answered in the affirmative, and you may be seated.
    In order to allow time for questioning, we ask that you 
limit your verbal testimony to five minutes. We have received 
and reviewed your written testimony and of course, your entire 
written statement will be made part of the record.
    We will go left to right and start with Mr. McFarland. You 
are recognized for five minutes.

                       WITNESS STATEMENTS

        STATEMENT OF THE HONORABLE PATRICK E. McFARLAND

    Mr. McFarland. Good morning, Chairman Farenthold, Ranking 
Member Lynch and members of the subcommittee. My name is 
Patrick McFarland, I am the Inspector General of the U.S. 
Office of Personnel Management.
    Thank you for inviting me to testify in today's hearing 
about the Administration and oversight of OPMs revolving fund. 
Once again, I am seeking the committee's help.
    In 1978, the U.S. Congress took a bold step in creating the 
Inspector General Act, bold in that it was an experiment borne 
out of a multitude of government-wide mistakes, serious 
problems and just plain wrongdoing. In the face of much 
opposition from entrenched government bureaucracy, it was, I 
believe, Congress' pledge to the American citizens that their 
expectations of good government would be met, and as a result, 
their tax money would be protected.
    The inspector general concept has transparency at its core 
functionality. It must be transparency without any shades of 
gray. Indeed, it is with this understanding that each inspector 
general's organization honors the independence required of 
them, free of any political influence which Congress mandated. 
We realized as early as 2006 that OPMs revolving fund 
operations lacked adequate transparency and thus required 
additional oversight, oversight that our budget could not 
support. Since that time, the OPM revolving fund has developed 
into a $2 billion behemoth business structure that should 
attract more stakeholders' attention, but instead seems to 
exist and operate in a vacuum. The OPM revolving fund requires 
immediate scrutiny.
    To this end, the President's fiscal year 2014 budget 
includes our legislative proposal, which former director John 
Berry fully supported. This proposal will require Office of 
Inspector General oversight of the revolving fund to be paid 
for by the revolving fund. Please be assured that our Office of 
Inspector General is at the ready to jump deep into all of the 
programs financed by OPMs revolving fund. Based on evidence and 
intuition, we know there extremely serious problems. We already 
have several projects in high risk areas that we are eager to 
begin, such as an initiative to closely examine the Federal 
Investigative Service Program office, and determine whether 
there are deficiencies that may be affecting national security, 
as well as an audit of the pricing methodology used by human 
resources solutions.
    Let me be clear: it is not my intention to grow government, 
but simply to perform the tasks entrusted to me by you and by 
the taxpayer. I cannot stress enough that problems within OPMs 
revolving fund do not affect only OPM. Every major Federal 
agency purchases goods and/or services from OPM through 
revolving fund programs. Consequently, any fraud, waste or 
abuse that occurs in these programs has a government-wide 
ripple effect and thus impacts the use of the appropriations of 
all of its customers.
    They say that sunshine is the best disinfectant. OPMs 
revolving fund programs have been operating in the shadows for 
far too long. You have already taken significant action by 
holding a hearing, the first, to my knowledge, on the revolving 
fund. I ask the subcommittee now, take one more step and assist 
us by amending the revolving fund statute so that together we 
can bring OPMs revolving fund program into the light with full 
transparency where all government operations are meant to 
function.
    The committee's involvement will ensure that this issue 
will not slip back into the shadows. Thank you, and I am happy 
to answer any questions.
    [The prepared statement of Mr. McFarland follows:]

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    Mr. Farenthold. Thank you, Mr. McFarland. We will get to 
questions when we have finished with all of our witnesses.
    Mr. Grimes, you are up for five minutes, sir.



              STATEMENT OF CHARLES D. GRIMES, III

    Mr. Grimes. Thank you, Chairman Farenthold, Ranking Member 
Lynch, members of the subcommittee.
    Thank you for this opportunity to discuss the OPMs 
revolving fund and the government-wide services it supports. 
The fund was established by Congress in 1952 to allow OPMs 
predecessor, the U.S. Civil Service Commission, to recover the 
costs of conducting background investigations for other Federal 
agencies. It has subsequently been expanded to authorize OPM to 
provide assistance and personnel management functions at the 
request of agencies on a reimbursable basis.
    OPM provides a wide range of human resources management 
services to other Federal agencies, and the payments for those 
services are consolidated under OPMs revolving fund. The 
revolving fund is similar to many other such funds across the 
Federal Government. The aim of the revolving fund is not to 
generate a profit, but instead to break even over a reasonable 
amount of time, generally defined as three years.
    Providing human capital services and training for Federal 
employees, conducting background checks and other revolving 
fund services are integral to OPMs core mission of recruiting 
and retaining a high performing workforce to protect and 
advance the interests of American citizens. The revolving fund 
includes a diverse range of programs, including human resources 
tools and technology, enterprise human resources integration, 
the Presidential Management Fellows program, and the human 
resources line of business. I would like to briefly discuss the 
three most public faces of the revolving fund: Federal 
Investigative Services, human resources solutions and USAJOBS.
    OPMs background investigation programs performance is 
strong. We have no backlogs, are meeting congressional 
timeliness mandates for OPM under the Intelligence Reform and 
Terrorism Prevention Act and have increased automation. Since 
driving down average investigative time on this from 145 days 
in 2005 to 40 days today, customer agencies have realized over 
$26 billion in cost avoidance and efficiency.
    Additionally, the Government Accountability Office had long 
listed the government personnel security clearance program in 
the Department of Defense on their high-risk list. OPM assumed 
responsibility for the background investigation function in 
February of 2005, and the program was removed from the high-
risk list in January 2011, as a result of the major efforts of 
OPM, the Office of Management and Budget, DOD, and the Office 
of the Director of National Intelligence.
    Despite a shift towards more costly field work-intensive 
investigations, OPM remains resourced to meet the investigative 
timeliness and quality standards based on the projected needs 
of the executive branch community that we service. HRS provides 
human resources products and services through a variety of 
methods to meet the needs of the Federal Government. HRS offers 
a by government, for government solution to a variety of human 
resources needs and is uniquely well-positioned to help Federal 
agencies meet their recruitment, testing and training needs.
    The HRS team has expert knowledge and experience with 
Federal policy and operating environments, and designs and 
delivers solutions well-suited for government. In recent years, 
HRS has worked with OPMs Office of the Inspector General to 
become even more transparent and efficient. HRS offers agencies 
the opportunity to access world class consulting experience 
from pre-competed private sector companies through our training 
and management assistance contracting vehicle. Pre-competition 
allows agencies to save valuable time and resources in gaining 
access to consulting experts and conformance with OPMs 
contracting requirements.
    Finally, USAJOBS is another critical program that operates 
through the revolving fund. Pursuant to law and OMB guidance, 
USAJOBS operates on a fully reimbursable basis, charging fees 
to agencies that use USAJOBS to pay the cost of providing 
Federal employment information to the public, along with 
various services. USAJOBS offers a wide array of products and 
services to job seekers, agencies and vendors. These products 
include the job board with job opportunity announcements, the 
resume builder, the agency recruitment portal, mobile apps and 
the USAJOBS help desk.
    To increase quality, we have worked to increase agency 
participation in USAJOBS by encouraging cross-government 
involvement and integrated project teams. These teams have led 
to direct system improvements to the USAJOBS resume and user 
profile sections, greatly benefitting the user experience for 
the thousands of job seekers using the service. We've also 
successfully cleared the audit and security reviews by OMB and 
the White House cross-agency SWAT team, OPMs Office of the 
Inspector General and the Department of Homeland Security.
    OPM agrees that it is important to have a strong oversight 
in order to ensure the integrity of their revolving fund, and 
we look forward to continuing to work with the OIG in this 
area. I am proud of the government-wide services that OPM 
provides, and I look forward to addressing any questions that 
you may have. Thank you.
    [The prepared statement of Mr. Grimes follows:]


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    Mr. Farenthold. Thank you, Mr. Grimes.
    We will now go to Ms. Brooks Rix. You are recognized for 
five minutes, ma'am.

                STATEMENT OF LINDA E. BROOKS RIX

    Ms. Rix. Chairman Farenthold, Ranking Member Lynch and 
members of the Subcommittee, good morning. My name is Linda 
Rix, and I am the Chairman and Co-CEO of Avue Technologies 
Corporation. I want to thank you today for the opportunity to 
testify on this important topic.
    Avue provides a comprehensive human resources management 
platform to Federal agencies using a cloud-centered model. If 
you combine the content of Westlaw, the rules and engines 
capability of TurboTax and the use of self-service ATM 
machines, you would have the equivalent technology Avue offers 
to its Federal Government clients. Avue has competed with the 
Office of Personnel Management's human resource products and 
services for more than 10 years.
    Before founding Avue, I began my career and spent five 
years as an employee of OPM.
    The subject of this hearing is whether OPMs revolving fund 
is a cycle of government waste and the resounding answer to 
that is yes. There are three compelling factors that lead to 
this conclusion. First, despite dramatically reduced hiring 
government-wide, the cost of Federal HR has escalated 
dramatically at a time when the private sector has reduced its 
HR staff by 21 percent and its cost per hire by 28 percent, the 
Federal sector has increased its HR staff by 41 percent and its 
cost per hire is more than 12 times that of industry.
    The real breadth of OPMs impact can be seen at the VA, 
which uses the OPMs USA Staffing product by mandate for all of 
its hiring. In the last five years, the VA has increase its HR 
specialist workforce by over 51 percent and has created a 
corresponding increase in HR payroll of $100 million per year. 
During the same period, the VA awarded contracts for HR 
services at a rate of $16 million per year and paid OPM an 
average of $216 million per year for the last three years.
    After increasing its payroll by $100 million, its 
contractor support by $16 million and its fees to OPM by $216 
million, the VA hired a net 13,475 fewer people in 2012 than it 
did in 2008. If you look across government for the last five 
years, agencies using USA Staffing product have increased their 
HR payroll, added contracted services and paid OPM extremely 
high fees while concurrently reducing the number of new hires.
    The second factor that gives rise to this level of 
duplication of waste is that OPM is an innovation inhibitor. 
OPM has a clear self-interest in promoting inefficiencies that 
are better aligned with its own products and services. For 
example, OPM mandates that all agencies post positions on 
USAJOBS. OPM spent $20 million recoding the existing Monster 
USA job system plus another $1 million in emergency fixes to 
in-source USAJOBS board from Monster. To date, features and 
functionalities would be typical of what we would find in a job 
board in the 1990s.
    At the same time, private employers have dropped their use 
of job boards. Today, private sector only hires one of every 
six people from job boards. Progressive employers leverage 
innovations, like LinkedIn, search engine marketing social 
media sites and employee referrals.
    While the VA is one example, Inspector General McFarland 
correctly observes that OPMs problems affect the entire 
government. OPM offers that its customers choose products 
because they are better than private offers and they are by 
government for government. But Federal HR is not any more 
complicated than you would find in a unionized company and the 
theory that OPMs technologies and services are cheaper or even 
cost-competitive are not validated.
    This brings us to the third factor, OPMs extraordinary 
conflict of interest and the lengths to which OPM will go to 
expand its revenues. OPM violates the Competition in 
Contracting Act, illegally asserting OPM products may be 
purchased through the Economy Act and therefore non-
competitively. OPM duplicates GSA's 738X Federal supply 
schedule, and adds layers of waste in the form of excessive 
fees. Where GSA is capped at a service fee of not to exceed .75 
percent, OPM openly states that its fees range from 8 percent 
to 12 percent. OPM also abuses its role as portfolio manager 
for the HR lines of business. It exerts its role as advisor to 
agencies to steer contracts exclusively to Federal shared 
service centers.
    This illustrates the dual identities of OPM, one as 
regulator and the other as a for-profit business. As a for-
profit company, OPM is the systemic reason the Federal 
Government HR costs are skyrocketing.
    OPM has succumbed to its own monetary interest at the 
expense of what is best for the government as a whole, and 
every day furthers this extraordinary conflict of interest 
while insulating itself from competition with the private 
sector. OPMs legitimate role must focus exclusively on its 
statutory mission, which desperately needs to be restored. Its 
revolving fund business, which draws all resources and 
intellectual attention, should be returned to the private 
sector, so that the government can enjoy billions in savings 
through the elimination of wasteful spending, as illustrated 
here.
    Thank you for this opportunity to contribute to this 
hearing. This concludes my remarks and I look forward to your 
questions.
    [Prepared statement of Ms. Rix follows:]
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    Mr. Farenthold. Thank you very much. I will now recognize 
myself for five minutes of questioning.
    Mr. Grimes, Ms. Rix really does point out what is a great 
concern with me, in that you guys are both the regulator and 
the vendor. You set the rules and you say all right, you can go 
out to the private sector and do this and comply with all those 
rules, oh come on, bring it in here, deal with us. Do you see a 
conflict there and how do you answer Ms. Rix's concern about 
that?
    Mr. Grimes. Thank you, Mr. Chairman. We don't see a 
conflict at all. In fact, we provide a vehicle for training and 
management and so forth, through our training and management 
assistance program that utilizes private sector contractors. In 
fact, 80 percent of the work that we do in HRS is through 
private sector contractors. So they are certainly not being cut 
out of the deal.
    The bright line that we have is that our merit systems and 
accountability division that evaluates whether agencies are 
examining and hiring people in the right way has nothing 
whatsoever to do with our human resources and products 
division. They don't tell agencies that they need to use them. 
The HRS merely provides an opportunity for agencies to get 
lower cost contracting help in a quick way for their training, 
hiring, assessment needs.
    Mr. Farenthold. Thank you.
    Mr. McFarland, have you done any, has the IGs office done 
any investigative work as to the competitive practices there? I 
realize this is something we didn't prepare you for.
    Mr. McFarland. No, Mr. Chairman, we have not done any work 
in that area.
    Mr. Farenthold. Mr. Grimes, do you use appropriated funds 
to operate any of the revolving fund or is it fully self-
funding?
    Mr. Grimes. The revolving fund is fully self-funding. We 
work on a cost recovery principle of whatever we spent we 
recover from our customers.
    Mr. Farenthold. And you don't use appropriated funds to 
promote it or anything like that?
    Mr. Grimes. Absolutely not.
    Mr. Farenthold. That is certainly good to hear.
    Mr. Grimes, the Inspector General recently informed the 
committee of an investigation involving an OPM contractor 
utilized by the revolving funds investigative service division. 
Given the particularly serious nature of the investigation, is 
the contractor still conducting background and security 
investigations as an OPM contractor and what steps has OPM 
taken to address the concern raised by the IG?
    Mr. Grimes. Mr. Chairman, the Department of Justice is 
looking into that and I just can't comment right now.
    Mr. Farenthold. All right. I appreciate that. I would, as 
the investigation progresses, I do think it is important that 
this committee be kept abreast of what is going on, 
particularly with those investigations. It is especially 
troubling that this investigation involves background checks 
that are critical to not only the trust of the government but 
the safety of American people.
    Let's talk a little bit about technology. Of the 26 record 
checks that OPM currently performs, Mr. Grimes, only 7 return 
records in machine readable format. And nine only provide hard 
copy records. And there are no common standards for data 
structure or formats for FIS providers.
    What is hindering the progress and how can we get this 
automation going to save money and to speed the process?
    Mr. Grimes. Mr. Chairman, I regret that I can't tell you 
that, because I am not in the FIS operation. But we can 
certainly take it for the record and get you an answer.
    Mr. Farenthold. I would appreciate that.
    Let me ask Ms. Rix a question. You indicate that the online 
system for finding jobs is more antiquated than, I think you 
said, a 1990s system. Can you expand a little bit on what 
effect you think that is having on the quality of applicants in 
the process overall?
    Ms. Rix. Sure. As many of you know, the USAJOBS board is a 
mandated jobs board. It actually is generated from an older 
requirement by statute that OPM ensure that Federal agencies 
provide a public notice of job postings, which is completely 
different than a centralized controlled job board.
    The purpose of the job board is essentially to be able to 
let people know that have been RIFed from the Federal 
Government to base realignment closure and other principles 
what job opportunities might be available to them so they can 
be restored to public service. Right now, the OPM jobs board is 
very confusing. It leads to a lot of people who are expending 
resources, the VA is a very good example here. The VA is part 
of the $16 million a year expenses in media buys for 
recruitment. And doing those media buys, they've spent about 
$100 million in media buys in the last five years.
    When you see a local advertisement for jobs at the VA for 
critical health care professional positions, you then go to 
USAJOBS where the VA has approximately 30 to 40 percent of the 
job postings on any given day, which means you are going 
through 3,000 to 4,000 individually-posted jobs to find a 
position for which you would like to apply.
    Mr. Farenthold. This is an ongoing problem. I am down at my 
VA office regularly talking to them and talking to veterans who 
are saying, we don't have the doctors. So how do we get the 
doctors in better? What do we need to do to fix that?
    Ms. Rix. What needs to happen is, the VA needs to be able 
to do single job postings, for example, for physicians, allow 
users to select locations in which the user would like to work, 
not have 4,000 job postings where a user has to individually 
has to search every job posting, not just to determine where it 
is, but also to determine whether they are even eligible to 
apply for the posting.
    So centralizing that process and running open, continuous 
recruitment is the best way to go about that objective. But you 
have to have the technology.
    Mr. Farenthold. Are there now solutions to do that, cloud-
based solutions to do that, where we don't have to spend a 
whole lot of money reinventing the wheel?
    Ms. Rix. Absolutely.
    Mr. Farenthold. I see my time is greatly expired. I will of 
course extend the same courtesy to Mr. Lynch in his 
questioning. So we will recognize Mr. Lynch for five minutes 
plus a minute 33.
    Mr. Lynch. No problem, Mr. Chairman. I appreciate that. Mr. 
McFarland, good to see you again. I do want to say that I do 
share some of the concerns that you have raised, and that Ms. 
Rix has raised, with the lack of pricing transparency. This has 
been raised before by GAO.
    Mr. Grimes, what have you done to address the concerns that 
they have and that I share with the lack of pricing 
transparency?
    Mr. Grimes. This year, our FIS organization released an 
annual report that has extensive price transparency included in 
the annual report. For our HRS operation, the prices are 
clearly marked, as they say. Agencies know what they are 
getting when they buy services from HRS, and the prices are 
either set in advance or negotiated with the agency, and they 
do know exactly what they are getting and how those prices were 
arrived at.
    Mr. Lynch. That is part of the problem. Now, Ms. Rix has 
pointed out, and it seems that Mr. McFarland agrees, that in 
some cases, for the same investigation, that OPM is charging 
about $1,500 more per investigation than some of the folks in 
the private sector. We are doing an awful lot of these. And 
also the amount of money we are spending is staggering here.
    The cost to conduct background investigations increased by 
almost 79 percent from $602 million in fiscal year 2005 to $1.1 
billion in fiscal year 2011. So what are we doing to increase 
competition? We have some difficult challenges here fiscally, 
across the budget. What are we doing in this regard to bring 
these prices down and introduce some real competition?
    Mr. Grimes. First of all, with respect to comparisons 
between other agencies that conduct background investigations 
and our FIS operation, it is important to note that, I think 
the example maybe was NSA, they have appropriated funds. So 
when they charge for an investigation, they don't recover the 
cost of those appropriated funds. Our FIS operation has to 
include, has to recover all funds. We get no appropriated 
funds.
    If we were to get appropriated funds, say, for our 
personnel, our cost would go down by 27 percent. So it is not 
exactly a fair comparison.
    Mr. Lynch. Mr. McFarland, what do you think I should do 
here? If we wanted to fix this, give me a couple of bold 
strokes that would help us get to a better place with this 
whole process?
    Mr. McFarland. Show me the money.
    Mr. Lynch. Could you elaborate on that?
    Mr. McFarland. Yes, I can.
    Mr. Lynch. Okay, I bet you can. Why don't you take a minute 
and do that?
    Mr. McFarland. The question goes right to the heart of our 
concern and our frustration. We just have not been able to do 
in the revolving fund the work that we need to do, by any 
stretch of the imagination. We have devoted as much time and 
money as we can from our salary and expense fund to do work in 
that revolving fund area, especially on the Federal 
Investigative Service cases. Because to us, they demonstrate a 
real problem that could occur at any given time and that is 
picking the wrong person for a government job, picking the 
wrong person that is going to get a particular classification 
that shouldn't have it. There are many instances of that taking 
place, not just with OPM employees per se, but with the 
contractors.
    So what we want to do, it is a broad scope, but the only 
way I can describe it is we really want to delve into 
everything in the revolving fund, because it is $2 billion, it 
is out of control from our perspective inasmuch as we can't 
tell you hardly anything about it. That is a real shame. We 
were talking a minute before, when Mr. Grimes was talking about 
transparency, that things are published, when my point is, that 
is not really transparency from our perspective. Transparency 
is only going to be there if we give an independent review of 
it.
    Mr. Lynch. Right. Well, I just want to say, maybe this is 
editorializing, but I think the Chairman and I are of a like 
mind on this, we should be able to come up with something that 
would allow you to have that transparency. I think that serves 
our economic interests as well as our national security 
interests, to make sure that that happens. I would like to work 
with you on this and figure out a way that we can make that 
happen.
    Ms. Rix, do you have some thoughts of your own in terms of 
how we can straighten this mess out?
    Ms. Rix. I think one thing to really focus on is the 
availability of private sector alternatives for highly scalable 
technologies that can be instituted quickly. I think you had a 
hearing previously related to retirement examinations and 
processing. There are plenty of options out there in the 
private sector that OPM could adopt that would in effect reduce 
both cycle time and cost dramatically.
    In addition to that, and I will throw this out there even 
though it might be fairly controversial, I do think that OPM 
should delegate more of its authorities directly to agencies 
where agencies can manage those funds. Despite Mr. Grimes 
saying that the fact that there is appropriated funds make the 
process cheaper, it is all still taxpayer funds.
    Mr. Lynch. That is right.
    Ms. Rix. It is just a redistribution of that.
    Mr. Lynch. Right, exactly right. There are no appropriated 
funds, but you are charging these Federal agencies who are 
being funded by taxpayer money. So there is a pass-through 
here, so there is a real cost to the taxpayer, even though it 
is not through the appropriations process. I get that. Thank 
you.
    I am just about of time. Thank you, Mr. Chairman, I yield 
back.
    Mr. Farenthold. Thank you very much, Mr. Lynch.
    We will now go to the gentlelady from the District of 
Columbia, Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman. I thank you for 
holding this hearing.
    I generally support revolving funds, normally because they 
are cost savings. We see the opposite here.
    I really am confused, by the way, Mr. Chairman, I see that 
the President has a proposal in his budget to give the 
Inspector General precisely the jurisdiction he would allow. I 
hope our subcommittee or committee quickly authorizes this, 
carries it to the Floor so that we can see this done this year. 
It seems to me that hands-down, the case has been made for that 
oversight.
    I am confused here, though, because as I read your 
testimony, Mr. McFarland, he notes that the revolving fund 
relies heavily on contract employees. So it does seem to me 
that the OPM has partly privatized this anyway. And I don't 
understand, if the reliance on contract employees saves you 
money then it seems to me you should explain why this is such a 
government operation. You are not using Federal employees, and 
indeed, I would wonder if you use Federal employees, would 
these extraordinary increases be any less? That is directed to 
the witness from OPM, Mr. Grimes.
    Mr. Grimes. Thank you, Ms. Norton. A couple of things. One, 
expenses have gone up because the ratio of more expensive 
investigations to less expensive investigations has gone up.
    Ms. Norton. So you are doing more expensive investigations 
than the private sector is doing. And their costs do not 
reflect that.
    Mr. Grimes. The investigations that we do with our Federal 
Investigative staff, which consists of both Federal employees 
and contract----
    Ms. Norton. What percentage is Federal employees and what 
percentage are outsourced employees?
    Mr. Grimes. About half of the FIS budget is spent on 
contractors.
    Ms. Norton. Why the difference?
    Mr. Grimes. We use a balance of contractors and Federal 
employees, so that when we get a lot more business, we can 
expand quickly through the contracting side of the house.
    Ms. Norton. Does it cost any more or less for the Federal 
employees and the contract employees?
    Mr. Grimes. I cannot give you a number there. I would be 
happy to take that for the record. I don't know what those cost 
figures are. But it gives us the ability to expand as our need 
increases.
    Ms. Norton. So as far as a Federal agency is concerned, the 
Federal agency is really without recourse when the Federal 
agency comes to you, Mr. Grimes, isn't that the case? It needs 
the background investigation, it wants the employee. Is there 
anyplace else for the Federal agency to go?
    Mr. Grimes. Congress told us to do background 
investigations. So we do them. We do over 2 million 
investigative products a year, deliver more than 2 million 
investigative products a year. And we do them under 40 days on 
average, in accordance with the recent legislation that was 
directed us to do so.
    Ms. Norton. How do you control costs? There is no 
competition. How do you control costs, Mr. Grimes?
    Mr. Grimes. Well, we control costs through our----
    Ms. Norton. Because it looks like you don't, frankly. When 
we look at these increases, I ask that almost pejoratively, how 
do you control costs, does anybody ever sit down and say, wow, 
these costs are really going up? Is there any group in the 
agency that maybe sits down every once in a while and gives 
some attention to these costs?
    Mr. Grimes. They work very hard to control costs. In fact, 
the law requires us to recover the costs that we do have and in 
fairness to our customers, our FIS operation works very hard to 
control costs.
    Ms. Norton. So one of the things you can do as you get more 
business, and can charge whatever you desire, is you can just 
go out and get more employees instead of, for example, 
considering, can we do this work with fewer employees, as for 
example, Federal agencies have to do all the time?
    Mr. Grimes. In fact, that is what we do. We do not staff up 
our Federal workforce to respond to increased demand.
    Ms. Norton. Where are the increases, then? Where have the 
increases come, then? They have not come from Federal 
employees, have they? Or have they? If the increases haven't 
come from Federal employees, I have to assume that this 
outsourcing gives you the ability to just go get whoever you 
need. You said as much when you said that, when we have extra 
work or if we need more employees we need these outsourced 
employees.
    Mr. Grimes. The number of investigations that require more 
extensive field work has gone up. So that raises our costs, 
because it is more expensive to gather information in the 
field.
    Ms. Norton. Have Federal agencies given you more people who 
need background checks or are you testifying that deeper 
background checks are needed? The Federal workforce I don't 
think has been exponentially rising.
    Mr. Grimes. The number of products probably is about the 
same from year to year. But the ratio of more expensive 
products to less expensive products has increased.
    Ms. Norton. Mr. Grimes, don't you see the problem? If you 
are sitting on a product that keeps going up, didn't you 
believe that at some point somebody was going to call the 
question on you? I am amazed that you don't have a remedy to 
offer the committee for these extraordinary increases. I am 
speaking now for the rest of the government, which has to come 
to you and has no place else to go. Do you have a remedy that 
you would offer for these extraordinary increases?
    Mr. Grimes. I guess I would have to disagree that there 
have been extraordinary increases. The last time we had a price 
increase was in 2010. I think it was about 3 percent, and they 
have remained static since.
    Ms. Norton. Mr. Chairman, I know I am over my time. I was 
looking at a graph.
    Mr. Farenthold. Without objection, we will give you another 
minute or two.
    Ms. Norton. It is this graph, multi-year budget comparison 
of revolving fund, OPM and OIG is what it really increases 
there. I am trying to account for the 4,000, if I look at 4,012 
and 98. I am asking, if the depth of the work that you have to 
do is what accounts for the increases, the 79 percent increase, 
for example, in pricing that I think has already been indicated 
to the agencies.
    Mr. Grimes. Our pricing has only gone up once in the last, 
I think, five years. That was in 2012.
    Ms. Norton. OPMs reported cost to conduct background 
investigations increased by almost 79 percent in fiscal year 
2005 to $1.1 billion in fiscal year 2011. That is the GAO 
report.
    Mr. Grimes. Right, and I think that reflects, again, the 
depth of the investigations that are required and the types of 
investigations that have been asked for.
    Ms. Norton. Yes, Mr. Chairman, you can see why we need an 
in-depth look at this agency.
    Mr. Farenthold. Thank you very much, Ms. Norton. We will 
now go to the gentleman from Missouri, Mr. Clay. You are 
recognized for five minutes or thereabouts.
    Mr. Clay. Thank you, Mr. Chairman. Thank you for conducting 
this hearing.
    As the stewards of the taxpayer funds, the Federal 
Government needs to prevent waste, fraud and abuse. The 
concerns raised by GAO and the OPM IG regarding OPMs revolving 
fund provide strong support for improving the IG's oversight of 
the fund's activities. And I appreciate that OPM has been able 
to eliminate the investigations backlog and improve its 
timeliness.
    When GAO was looking at OPMs background investigation 
service, it had recommended that OPM look at process 
efficiencies to eliminate costs. Panel members, are there 
particular revolving fund processes that you believe can be 
streamlined? We will start with you, Ms. Rix.
    Ms. Rix. Thank you. I believe that both the investigative 
process, retirement claims processing processes, the hiring and 
staffing process of the Federal Government, and the general 
process by which agencies are able to operationally execute 
their HR service should in fact all benefit from innovations in 
technology. There is no reason to have conflicting 
requirements, to have non-digital methods of getting work done 
or not having case files and records that are 100 percent 
digital going forward.
    These are products and innovations that are readily 
available from the private sector. OPM has had a not invented 
here, build don't buy process that has effectively ignored the 
innovations of the last five to ten years in terms of where 
technology is today, supporting very large scale private 
companies, for example.
    Mr. Clay. Mr. Grimes, how can we streamline? Thank you for 
your response, Ms. Rix. Mr. Grimes, any comments on how we can 
streamline the processes?
    Mr. Grimes. There are steps that could be taken to 
streamlining the revolving fund process by, for example, 
looking at maybe a five-year rate of return rather than the 
three years that we do now. Possibly by annual budgets instead 
of annual year budgets. That would help.
    With regard to investigations, we are undergoing a 
transformation in our FIS operation to bring more automation 
into the process. We are looking to increase our timeliness 
through changing from batch processing to real-time processing. 
We are looking at increasing our quality by providing enhanced 
data validations and real-time information and with the field 
agents as they conduct their work.
    We are improving our data security and so forth. So we are 
taking steps to improve and streamline that process.
    Mr. Clay. Thank you for your response. Mr. McFarland, any 
suggestions on streamlining?
    Mr. McFarland. Mr. Clay, this is very difficult, because I 
sit here giving you the same answer all the time, based on this 
particular subject. I don't know, because we haven't been able 
to look into the processes. It is very frustrating for an 
inspector general office to have to say that, and I apologize 
for having to say that.
    But once we are able to, we will delve into everything.
    Mr. Clay. Mr. McFarland, given the fact that OPMs revolving 
fund operations are operated on a cost recovery basis, does 
that in a way serve as a disincentive to streamline business 
processes and reduce costs?
    Mr. McFarland. One might think so, simply because it is 
controlled, and there is really not competition per se. But 
once we could evaluate pricing methodology, technology 
innovation and everything else, we will have some very 
definitive answers.
    Mr. Clay. Mr. Grimes, does that serve as a disincentive to 
streamline business processes?
    Mr. Grimes. I think again, on the surface, yes, I can see 
where someone might make that assumption. But that is not the 
way we operate. We constantly look for ways to streamline our 
operations.
    Mr. Clay. What about you, Ms. Rix? What is your opinion?
    Ms. Rix. I think the VA example that I read to you is 
probably the clearest example of the impact government-wide of 
having products and services that are mandated for agency use, 
that are inadequate and antiquated technologies producing 
considerable cost inefficiencies. The revolving fund does in 
fact distort the incentive for OPM, because it is incented to 
maintain that revenue level in order to maintain its employment 
level.
    Mr. Clay. Thank you so much for your responses. I yield 
back.
    Mr. Farenthold. Thank you very much, Mr. Clay.
    We are still under an hour here, and I have a couple more 
questions, so we will do a second round of questioning. So if 
you have some more, Mr. Clay, or Mr. Lynch, we will get back to 
you as well. We will get going here with a second round of 
questioning.
    Ms. Rix, you are in a company that basically does work 
similar to what OPM does in their revolving fund. What 
percentage or, can you give me an idea of what you spend on, I 
would call it quality control, security investigations, what 
have you all been doing in-house? What Mr. McFarland wants to 
do is an IG with respect to the revolving fund. Obviously you 
have a higher level of transparency in government than the 
private sector. But management would dictate that you have some 
sort of quality control similar to what an IG would do.
    How do you all do it? What do you all spend there? 
Percentages are good.
    Ms. Rix. We probably spend about 50 percent of our total 
revenues on maintaining the security level of protocols of our 
data centers and access to our systems, which is a requirement 
by the Federal Information Security Management Act. In addition 
to that, the quality control function, as well as ensuring that 
our expense rate is maintained at a low level.
    I will give you a couple of examples of recent innovations 
that have allowed for dramatic cost savings for our company.
    Mr. Farenthold. Let me limit that to about 45 seconds, 
because I have some more questions.
    Ms. Rix. One thing that we have been able to do is reduce 
our cost from about $1.4 million in a year in data center 
operations to approximately $14,000 a year by adopting cloud-
based solutions from Amazon that are government-approved. 
Another is we have been able to reduce our fees to our 
customers by the Avue budget protection plan in concert with 
the reductions to their budget, so that we can be in line with 
reductions that our clients are experiencing.
    So those are things we pay attention to and monitor 
constantly as well as price.
    Mr. Farenthold. Let's go back to Mr. McFarland now. I think 
we are going to get some bipartisan agreement that we need to 
get you guys looking into the revolving fund. What do you want 
in the legislation? How much money, how many people? Give us an 
idea how you want us to craft the legislation and how you would 
suggest that we pay for it in this tight budgetary environment.
    Mr. McFarland. What we have asked for in our planning was 
.33 percent of the total budget. In this particular case, that 
would bring us to $6.6 million. Our anticipation is the first 
year probably, but not for sure at all, that we would spend 
possibly $1.5 million to get things moving.
    There has to be a plan in place which we have already 
started working on. And we have to move aggressively to get 
people trained.
    Mr. Farenthold. I have to get to funding. I do have a 
limited amount of time. The FIS and the revolving fund is cost 
specific. We could pull some money out of that without 
appropriating some more money and give you some money there to 
investigate it and do some of the management structures without 
really directly costing the taxpayers some money. Is that 
accurate?
    Mr. McFarland. Are you saying such as a memorandum of 
understanding, that type of thing?
    Mr. Farenthold. We just say, all right, for the for-profit 
or non-traditional activities, X percent goes to the IG to 
investigate that.
    Mr. McFarland. That is what we are seeking in the 
legislation.
    Mr. Farenthold. That is what you are after?
    Mr. McFarland. Yes.
    Mr. Farenthold. No direct appropriations.
    Mr. McFarland. That is right.
    Mr. Farenthold. Obviously Mr. Grimes might argue, well, we 
are going to raise the price to our customers to pay for that. 
Or do you have some sort of flexibility in profit, where a 
small percentage wouldn't hurt you?
    Mr. McFarland. Let's say tomorrow we get it and the next 
day we use all $6.6 million. That is very easy to explain away 
as far as what the cost would be. OPM would have to raise the 
cost to the customer, per $1,000, $3.35. We are not anywhere 
close to taking that kind of money, $6.6 million. We want to 
probably start about $1.5 million.
    Mr. Farenthold. Mr. Grimes, do you think you would have to 
significantly raise the prices to your customers to fund the IG 
looking at what you were doing?
    Mr. Grimes. No. We would not have to raise them 
significantly.
    Mr. Farenthold. Would you have any objection to that sort 
of legislation?
    Mr. Grimes. In fact, we support that legislation.
    Mr. Farenthold. All right, great. I appreciate that. Just 
one quick last question. One of the things you said in your 
testimony that kind of tweaked my interest was, you stated that 
the OPM has created specific training offerings for Federal 
employees that align with the Administration's management 
priorities. What are the Administration's management priorities 
and what are you doing with respect to that? Are there any 
specific courses or directives there?
    Mr. Grimes. I can't list off any specific courses, but they 
are leadership and training courses and management and so forth 
that we offer, that agencies can avail themselves of.
    Mr. Farenthold. All right, thank you very much.
    Mr. Lynch, do you have some more questions? You have five 
minutes.
    Mr. Lynch. Thank you, Mr. Chairman.
    I just want to go back, Mr. McFarland, the Administration 
has proposed a way to increase the IG's budget, you are 
familiar with that?
    Mr. McFarland. Yes, sir.
    Mr. Lynch. And I know in your testimony you indicated that 
you might be able to achieve a return of $7 for every $1 you 
spend.
    Mr. McFarland. That was reflective of what we do now with 
the retirement and the heath care. That is what we bring back 
now. And that changes year to year, of course.
    Mr. Lynch. Right. The President does have a proposal, as 
the chairman pointed out, that would give you about $6.6 
million, something like that. Any problems or any refinements 
that you might have to the President's proposal?
    Mr. McFarland. No. That would be just fine the way it is.
    Mr. Lynch. Mr. Grimes, you seem to be okay with that as 
well?
    Mr. Grimes. Yes, we are.
    Mr. Lynch. Okay, I don't have any more questions. Thank 
you. I yield back.
    Mr. Farenthold. It is good when we have consensus.
    Mr. Clay?
    Mr. Clay. Thank you, Mr. Chairman. I understand that 
Congress created OPMs revolving fund back in 1952, and that it 
was originally used to allow OPMs predecessor to recover the 
cost of conducting background checks for other Federal 
agencies.
    Over the years, the revolving fund was expanded to permit 
OPM to recover the cost of providing training and other HR 
related services to Federal agencies. I firmly believe that 
these activities are necessary for an effective government.
    Mr. Grimes, both Mr. McFarland and Ms. Rix have testified 
about the tremendous growth in the revolving fund. Can you 
explain to us what you believe are the reasons for the 
substantial growth?
    Mr. Grimes. Thank you, Mr. Clay. I can. In 2005, we 
inherited the workload from the Department of Defense 
investigation program. It came with an enormous backlog. And as 
I mentioned in my testimony, that did increase the cost of the 
revolving fund. But in six years, we were able to get that 
backlog eliminated and get our timeliness to processing down to 
40 days.
    Mr. Clay. And then with that, do you do background checks 
for the DOD?
    Mr. Grimes. Yes, we do.
    Mr. Clay. Okay. Mr. Grimes, I understand that at the end of 
fiscal year 2012 the amount of surplus in the revolving fund 
was $379 million. Now, Mr. Grimes, does the statute authorizing 
OPMs revolving fund allow for the carryover of surplus funds 
from one year to another?
    Mr. Grimes. The statute allows us to maintain a corpus that 
would allow us to, for example, shut down a program without 
having to rely on appropriated funds. So for example, if the 
HRS program were shut down, there needs to be enough money 
there to shut the program down. And that is kind of the 
standard that we use.
    The amount of the revolving fund, I believe FIS had an 
independent contract calculate what they ought to have. And 
that number was between $180 million and $270 million. So they 
are probably around $210 million right now, I believe, and the 
balance is probably in our HRS. I can get you more specific 
figures if you are interested.
    Mr. Clay. Yes, would you do that? And do you ever turn any 
money back in to the Treasury?
    Mr. Grimes. We would if we had excessive returns. But so 
far, we have not.
    Mr. Clay. Well, okay. Do you have plans for the use of the 
current revolving fund surplus?
    Mr. Grimes. That fund exists for capital investment and 
also the ability to shut the program down, should we have to do 
that. So to the extent that we get, we make more money in a 
year than we calculate what that fund ought to be, then we 
would have to do something like that, yes.
    Mr. Clay. Is there any of the money used for conferences?
    Mr. Grimes. We don't spend much on conferences any more.
    Mr. Clay. Very good. Mr. Chairman, I yield back.
    Mr. Farenthold. On that note, we would like to thank our 
witnesses and of course, my fellow members for participating. 
This was a great hearing, one that shows more bipartisan 
consensus than I think I have seen in my two years in Congress. 
I think you can count on some positive results as a result of 
this hearing. And again, thank you for being here, and we are 
adjourned.
    [Whereupon, at 10:38 a.m., the subcommittee was adjourned.]
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