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



 
                 A CULTURE OF MISMANAGEMENT AND WASTEFUL 
                  CONFERENCE SPENDING AT THE DEPARTMENT 
                  OF VETERANS AFFAIRS
=======================================================================


                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 30, 2013

                               __________

                           Serial No. 113-68

                               __________

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              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
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        VACANCY
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


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 30, 2013.................................     1

                               WITNESSES

The Hon. Gina Farrisee, Assistant Secretary for Human Resources 
  and Administration, U.S. Department of Veterans Affairs, 
  Accompanied by Edward Murray, Deputy Assistant Secretary for 
  Finance, U.S. Department of Veterans Affairs
    Oral Statement...............................................     8
    Written Statement............................................    11
The Honorable Richard J. Griffin, Deputy Inspector General, U.S. 
  Department of Veterans Affairs, and Gary Abe, Deputy Assistant 
  Inspector General for Audits and Evaluations, U.S. Department 
  of Veterans Affairs
    Oral Statement...............................................    24
    Written Statement............................................    25

                                APPENDIX

Veterans Affairs OIG response to questions.......................    54
Committee on Oversight and Government Reform: Staff Report.......    57
GSA, IRS, and VA estimate IRS Conference Spending................   154
Dept. of Veterans Affairs Conference Oversight...................   156


  A CULTURE OF MISMANAGEMENT AND WASTEFUL CONFERENCE SPENDING AT THE 
                     DEPARTMENT OF VETERANS AFFAIRS

                              ----------                              


                      Wednesday, October 30, 2013

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to call, at 9:30 a.m., in Room 
2154, Rayburn House Office Building, Hon. Darrell E. Issa 
[chairman of the committee] presiding.
    Present: Representatives Issa, Mica, Duncan, Farenthold, 
Walberg, Jordan, Meadows, Bentivolio, Cummings, Maloney, 
Norton, Tierney, Lynch, Connolly, Duckworth, Davis, Horsford, 
Lujan Grisham.
    Staff Present: Alexa Armstrong, Majority Legislative 
Assistant; Molly Boyl, Majority Deputy General Counsel and 
Parliamentarian; Lawrence J. Brady, Majority Staff Director; 
Ashley H. Callen, Majority Deputy Chief Counsel for 
Investigations; Sharon Casey, Majority Senior Assistant Clerk; 
John Cuaderes, Majority Deputy Staff Director; Jessica L. 
Donlon, Majority Senior Counsel; Linda Good, Majority Chief 
Clerk; Caroline Ingram, Majority Professional Staff Member; 
Mark D. Marin, Majority Deputy Staff Director of Oversight; 
Emily Martin, Majority Counsel; Ashok M. Pinto, Majority Chief 
Counsel, Majority Chief Counsel, Investigations; Laura L. Rush, 
Majority Deputy Chief Clerk; Jonathan J. Skladany, Majority 
Deputy General Counsel; Rebecca Watkins, Majority 
Communications Director; Beverly Britton Fraser, Minority 
Counsel; Aryele Bradford, Minority Press Secretary; Kevin 
Corbin, Minority Professional Staff Member; Juan McCullum, 
Minority Clerk; Dave Rapallo, Minority Staff Director; Daniel 
Roberts, Minority Staff Assistant/Legislative Correspondent; 
Valerie Shen, Minority Counsel; Mark Stephenson, Minority 
Director of Legislation.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles. First, Americans have a right to know that the 
money Washington takes from them is well spent. And second, 
Americans deserve an efficient, effective government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights.
    Our solemn responsibility is to hold government and 
government officials responsible to taxpayers. Because 
taxpayers have a right to know what they get from their 
government. It is our obligation to work tirelessly in 
partnership with citizen watchdogs to deliver the facts to the 
American people and bring genuine reform to the Federal 
bureaucracy.
    Today we meet to discuss the Department of Veterans 
Affairs, an organization whose essential duty is second only to 
the men and women who they serve and their obligation and their 
duty and their service to protect our Country. If in fact we 
abandon our veterans, then we abandon our men and women in 
harm's way. We cannot and should not ever forget that service 
begins by raising one's right hand, but continues for a 
lifetime, and the effects of that service often has a lingering 
effect on the men and women who, in a voluntary army, go in 
harm's way because they respect and love their Country.
    Congress in fact exempted the Department of Veterans 
Affairs from sequestration. So important is the obligation to 
get it right that money has not been a problem. Furthermore, 
even as we began opening the government again after the latest 
effects, additional dollars were dedicated to a backlog that is 
by definition inexcusable for those who have served our 
Country.
    The Department, which is second only to the Department of 
Defense, spent an estimated $6.1 million on what was marked or 
considered to be training conferences. Today, we are here at a 
time in which many people would say, didn't you already cover 
the GSA scandal? Didn't you already cover the IRS scandal of 
wasting people's money on conferences? It is true we did. But 
these conferences are in fact historical, not current.
    There are several reasons we are here today, not just that 
these were lavish parties that the Department spent, but that 
the IG's own report finds it impossible, due to the hopeless 
accounting at Veterans Administration, to find out exactly how 
much was spent. A forensic audit only estimates how much was 
spent.
    This is a lot of walking-around money that has been left 
loose at the Veterans Administration that could have and should 
have been made available to our veterans and their needs.
    Additionally, we can find no purpose for these conferences 
that justifies it. I do not often reflect on confidential 
conversations I have, but there is one that I have made public 
in the past, and I will continue to. General Shinseki, in a 
conversation with me at the beginning of the discovery of this 
scandal, told me his greatest obligation and his problem was to 
change the culture at the VA, a culture he inherited, a culture 
that in fact talks about the veterans and then in fact fails to 
perform in a number of areas.
    The taxpayers in this case got a lousy deal. It isn't just 
that there were lavish conferences and once again, videos and 
mocking of people's real obligations and seriousness, but in 
this case, they had an opportunity and an obligation to train 
HR people, to be part of that culture of change that the 
Secretary so much said he wanted to get accomplished on his 
watch. And they failed to do so. The Office of the Inspector 
General, attempting to conduct an audit by recreating the 
budget using the few records that were available, the IG found 
at least $762,000 of unnecessary and unauthorized wasteful 
expense.
    How could this happen? That there could be three-quarters 
of a million dollars of waste? How could it happen? It could 
happen because, in fact, this agency has deep pockets and money 
that is designed to have flexibility because we want that 
flexibility to be used for our veterans.
    The Department's senior leadership effectively gave the 
conference planners a blank check, and those planners took 
advantage of it. I, in fact, am not pleased with outside 
conference planners. But let's understand: $450,000 to market 
and hype the conference was a decision that really didn't need 
to be made, because the fact is, these are employees. You are 
paying for them to come, you can order them to come, you can 
encourage them to come or you can, in fact, make it clear that 
if they don't come, it could reflect on their continued 
training requirement. So why do you need to advertise? These 
aren't buyers, these are, in fact, recipients of a training 
that they need and perhaps a bit of a perk to get away from the 
day-to-day job.
    Fifty thousand dollars was spent on a movie or what we 
might call a YouTube phenomenon on Patton. Ninety-eight 
thousand dollars was spent on promotional products such as 
notebooks, water bottles, hand sanitizers, fitness walking kits 
and the like. Again, I am not sure what part of the HR training 
that reflected.
    When planners asked their managers about the budget, the 
managers replied, ``Don't worry about it.'' Because the 
Veterans Administration, Veterans Affairs is a large agency 
with deep pockets. Yes, it is a large agency with deep pockets. 
But those pockets were not intended to be picked by either 
contractors that were likely unnecessary or, in fact, people 
who we held accountable and paid to be accountable to the 
taxpayers.
    It shouldn't come as a surprise then that the conference 
planners spent considerably more time on planning and 
entertainment activities for themselves than they did for 
planning the training activities. Conference planners visited 
Dallas, Nashville and Orlando to scout possible locations for 
conferences. In emails they raved about what a great time they 
were having on what amounted to be taxpayer-financed vacations.
    While they were on these paid vacations, they accepted 
improper gifts from hotels competing to host the conference, 
including spa packages and room upgrades and show tickets, limo 
rides and helicopter rides. To make matters worse, during these 
conferences, when they were so busy getting the perks of 
representing a large, deep-pocket buyer, they, in fact, asked 
for and received overtime pay. That is right, Mrs. Maloney. 
Only in this kind of environment of not caring enough about the 
taxpayers' money can you have somebody have what I grew up 
calling chutzpah to use taxpayers' money, enjoy the perks and 
then say, but I need overtime.
    The conference planners thought they deserved recognition 
for their hard work and their efforts to save ``Department 
money,'' and amazingly, they did get recognized. Without doing 
any due diligence, the Department awarded over $43,000 in cash 
and one-time awards to conference planners for a job well done.
    This is a pattern that we see, that bonuses are an 
entitlement, they are automatic. But in this case, to see that 
bonuses were basically there for providing perks to the very 
people granting it is the kind of quid pro quo that we need to 
get out of government. And if we can't get it out of government 
using techniques such as training and responsibility and real 
belief in what you do for the government, then in fact 
undoubtedly Congress will again pass additional laws that will 
be complained about as restraining management. But in fact, if 
liberty is given to management to do the job right and they 
abuse it, they can expect nothing else.
    Meanwhile, with the Department having over 300,000 
employees, a $140 billion budget that was immune to 
sequestration, our veterans were abused. And I use that word 
carefully. But I use it deliberatively. The number of pending 
veterans benefits claims currently stands at 700,000. One of 
the great abuses discovered in preparation for this hearing is 
that the stated number is 400,000. Why? Because first we have 
to delay and not do really anything for the first 120 or 125 
days, and then we put them on the list.
    So whether you say it is 700,000 waiting or 400,000 that 
are clearly being abused by a backlog that no matter how much 
money is thrown at it never seems to shrink, the Department 
continues to fall short of its goals and as additional money 
occurs, they simply have excuses. In fact, the Veterans 
Administration missed its own target for processing claims by 
approximately 100,000 last year. The number of appealed claims 
has continued to rapidly grow to over 255,000. Other committees 
have held hearings on the effects of those appeals claims, the 
inaccuracy and the likelihood that appeal claims, if occurred 
often enough, would be meritorious.
    The Department's waste and its problems are primarily the 
Committee on Veterans Affairs responsibility. However, with the 
good work of the IG and the effects that we see of an IG doing 
the right thing and not being able to get to the right answer 
or in this case, 26 out of 49 IG recommendations remain 
unfulfilled, this Committee has very little choice but to bring 
up this issue and make it very clear that we will not take our 
eyes off the Veterans Administration for any of their practices 
until there is a belief there has been meaningful change in the 
culture, as the Secretary has told us, in the culture that he 
inherited.
    With that, I will put the rest of my opening statement into 
the record, and I thank the ranking member for his indulgence 
and I yield.
    [Prepared statement of Mr. Issa follows:]
    Mr. Cummings. Thank you very much, Mr. Chairman.
    I want to begin by thanking Mr. Griffin, Deputy Inspector 
General at the Department of Veterans Affairs, for work he and 
others at his office conducted with respect to conferences 
hosted by the VA several years ago in Orlando, Florida. The 
report you issued, Inspector, was comprehensive in identifying 
problems at the VA. It made concrete recommendations to remedy 
those problems.
    You did great work and I want to make sure that you take 
back our thanks to all those who work in your office and 
contributed to this report.
    Last November, the House Committee on Veterans Affairs held 
a hearing on these issues, and reviewed the Inspector General's 
report in detail. The Committee considered the significant 
problems associated with the VA's conference review process. 
And it examined many reforms that were being implemented to 
ensure adequate internal controls and oversight. For example, 
the VA has made significant changes in its conference planning 
and oversight policies. One change was to clearly define 
specific executives accountable for ensuring that conference 
planning and spending was in compliance with regulations and 
policies. In other words, to integrate the VA budget officers 
into conference planning and to build in fiscal controls.
    The VA also prohibited conferences that cost more than 
$500,000 without a waiver from the Secretary and would require 
approval from the Deputy Secretary for conferences that cost 
between $100,000 and $500,000. The VA also established a 
training support office to provide guidance to VA offices about 
the applicable regulations and other requirements, and the VA 
mandated additional training on travel and purchase cards.
    The VA also held accountable employees who were involved in 
the 2011 Orlando conferences. For example, the VA demoted the 
Deputy Assistant Secretary for the Office of Human Resources 
Management, removing her from the Senior Executive Service and 
admonished then-Chief of Staff John Gingrich for his role in 
authorizing the conferences. The dean of the Veterans Affairs 
Learning University also resigned in response to the IG's 
findings and other career employees have administrative actions 
still pending.
    VA officials also asked John Sepulveda, the Assistant 
Secretary for Human Resources and Administration, to resign 
when the Inspector General's report found that he abdicated his 
responsibilities as the Assistant Secretary when he failed to 
provide proper guidance and oversight to senior executives in 
the operations of his organization.
    The Inspector General's report also found that Mr. 
Sepulveda falsely claimed he had no knowledge about a George 
Patton parody video shown at the conference, although he later 
revised his statement. I would have preferred to hear directly 
from Mr. Sepulveda today about his actions, but I understand 
that he will assert his constitutional right not to testify and 
I will respect his right to do so.
    For today's hearing, I believe it is important to hear from 
our witnesses about steps that still need to be completed, to 
fully implement the Inspector General's recommendations. For 
example, I would like to hear about the status of a web portal 
the VA plans to use to help collect information about 
conference spending, which I understand is running later than 
scheduled. I would also like an update on the status of a 
handbook on conference planning, execution and oversight which 
the Inspector General believes will satisfy many of the 
recommendations that remain open.
    I would also like to hear about VA's progress in meeting 
benchmarks established by the Obama Administration for all 
agencies. In November 2011, President Obama issued Executive 
Order 13589, which required agencies to reduce their total 
expenditures on travel and other items by 20 percent below 
their 2010 spending. The next year, the Office of Management 
and Budget issued a memorandum directing agencies to reduce 
their travel budget even more, this time, by 30 percent, and to 
maintain that spending level until 2016.
    Finally, I want to thank our witnesses from the Department 
for being here today. I know some of you are very new to your 
jobs, Ms. Farrisee, I understand you have been serving in the 
role of Assistant Secretary for Human Resources and 
Administration for only about a month. Although you were not 
here when these mistakes were made, the committee will look to 
you to complete the implementation of the Inspector General's 
recommendations and to prevent the waste that occurred in 2011 
from being repeated.
    With that, Mr. Chairman, I yield back.
    Chairman Issa. I thank the ranking member. I might note 
that Mr. Murray has been, as far as we can tell, in his 
position since 2005. So perhaps the long-serving and the new 
kid on the block will be a good combination for today.
    All members will have seven days to submit opening 
statements and extraneous information for the record.
    I now ask unanimous consent that the Oversight Committee's 
staff report entitled U.S. Department of Veterans Affairs 2011 
Human Resources Conferences, a Culture of Mismanagement and 
Reckless spending, be placed into the record. Without 
objection, so noted, and copies will be distributed to all 
members so they may use the material.
    Mr. Cummings. Mr. Chairman, just one clarification. That is 
the Republican report, is that right?
    Chairman Issa. It is. If you have a minority report, I 
would love to see it.
    Mr. Cummings. We had no input in this report.
    Chairman Issa. Did they have input? I just want to make it 
a staff report for the majority.
    Mr. Cummings. All right, thank you.
    Chairman Issa. I would like to welcome our panel of 
witnesses at this time and introduce the Honorable Gina 
Farrisee, the Assistant Secretary of Human Resources and 
Administration for the United States Department of Veterans 
Affairs. Mr. Ed Murray is the Deputy Assistant Secretary for 
Finance at the U.S. Department of Veterans Affairs, as we said, 
since 2005.
    The Honorable John Sepulveda is the Former Assistant 
Secretary for Human Resources and Administration at the U.S. 
Department of Veterans Affairs. The Honorable Richard Griffin 
is the Deputy Inspector General for the U.S. Department of 
Veterans Affairs. And his chief deputy, Mr. Gary Abe, is the 
Deputy Assistant Inspector General for Audits and Evaluations 
at the U.S. Department of Veterans Affairs, and I understand 
the chief person responsible for this work.
    Pursuant to the committee's rules, would you please all 
rise, raise your right hands to take the oath. Do you solemnly 
swear or affirm the testimony you are about to give will be the 
truth, the whole truth and nothing but the truth.
    [Witnesses respond in the affirmative.]
    Chairman Issa. Please be seated.
    Let the record indicate that all witnesses answered in the 
affirmative.
    When we begin, I understand that we will have Ms. Farrisee 
and Mr. Griffin who will be doing the opening statements. I 
understand, as the ranking member said, Mr. Sepulveda, that you 
may not be willing to testify. Is that correct?
    Mr. Sepulveda. That is correct [remarks off microphone].
    Chairman Issa. Then we will go through the obligatory 
questions with you before opening statements, we have no 
intention on having anyone remain longer than appropriate.
    Mr. Sepulveda, you have not provided us with any written 
testimony today. Do you wish to make any opening statement?
    Mr. Sepulveda. With all due respect sir, Mr. Chairman, on 
the advice of my counsel, I respectfully decline to answer 
based on my Fifth Amendment constitutional right.
    Chairman Issa. Which is the privilege not to incriminate 
yourself by answering, is that correct?
    Mr. Sepulveda. It is the privilege to remain silent, sir.
    Chairman Issa. Okay. It is our understanding from your 
counsel that you may assert that constitutional privilege, and 
you have. Mr. Sepulveda, today's hearing will address the 
planning and execution of two Department of Veterans Affairs 
conferences held in Orlando, Florida in 2011. As the Assistant 
Secretary of Human Resources and Administration during the 
period in question, you played a lead role in the conference 
planning process. You were uniquely qualified to assist the 
committee in the investigation into the waste that may have 
occurred at this event.
    Your name appears more than 80 times in the Inspector 
General's report on the conferences. So I must ask you to 
consider answering the committee's questions, and I am going to 
ask you a few right now, to see if you will answer any 
questions.
    Mr. Sepulveda, you are no longer an employee of the VA. Is 
that correct?
    Mr. Sepulveda. On the advice of my counsel, I respectfully 
decline to answer based on my Fifth Amendment constitutional 
right.
    Chairman Issa. Mr. Sepulveda, when did you resign from the 
VA?
    Mr. Sepulveda. Again, on the advice of my counsel, I 
respectfully decline to answer based on my Fifth Amendment 
constitutional right.
    Chairman Issa. Mr. Sepulveda, are you currently receiving 
full retirement benefits?
    Mr. Sepulveda. On the advice of my counsel, I respectfully 
decline to answer based on my Fifth Amendment constitutional 
right.
    Chairman Issa. Mr. Sepulveda, there was an article in the 
Federal Times on October 1st, 2012, that discussed the 
conferences that we are here to talk about today. The article 
contained a statement attributed to you. The statement 
addressed your resignation from the Veterans Administration. 
The statement was ``I resigned because I did not want to be a 
distraction to the Administration, Secretary Shinseki and the 
VA, especially as they continue to work each day to address the 
urgent needs of our Nation's veterans.''
    Mr. Sepulveda, why did you resign from the Veterans 
Administration?
    Mr. Sepulveda. On the advice of my counsel, I respectfully 
decline to answer based on my Fifth Amendment constitutional 
privilege.
    Chairman Issa. Mr. Sepulveda, is that statement attributed 
to you in fact your statement?
    Mr. Sepulveda. Again, on the advice of my counsel, I 
respectfully decline to answer based on my Fifth Amendment 
constitutional privilege.
    Chairman Issa. Mr. Sepulveda, I am disappointed that you 
are not willing to give a statement, but you were willing to 
give a statement, apparently, to the Federal Times about your 
resignation but you won't do so here today. Additionally, Mr. 
Sepulveda, when the OIG investigators asked you whether you had 
viewed the Patton video parody before it was shown publicly, 
you answered no. Is that correct?
    Mr. Sepulveda. On the advice of my counsel, I respectfully 
decline to answer based on my Fifth Amendment constitutional 
privilege.
    Chairman Issa. Mr. Sepulveda, I have many more questions on 
this list. But it appears as though you will answer no 
additional questions. Is there any question I can ask you today 
that is germane to our discovery that you are willing to 
answer?
    Mr. Sepulveda. On the advice of my counsel, I respectfully 
decline to answer based on my Fifth Amendment constitutional 
privilege.
    Chairman Issa. Okay. In that case, I won't say you are 
excused, you are dismissed.
    Mr. Sepulveda. Thank you, Mr. Chairman.
    Chairman Issa. You are most welcome.
    We will take a very short recess just so they can reset and 
remove his name plate.
    [Recess.]
    Chairman Issa. This really does look like a divide now 
between the IGs and the Administration, but we will leave it 
this way to be expeditious.
    We now continue with our hearing, Ms. Farrisee, such time 
as you may consume, but if you can, stay at approximately five 
minutes.

            STATEMENT OF THE HONORABLE GINA FARRISEE

    Ms. Farrisee. Good morning, Chairman Issa.
    Ranking Member Cummings and distinguished members of the 
Committee on Oversight and Government Reform, thank you for the 
opportunity to be with you today to discuss the Department of 
Veterans Affairs commitment to transparency, oversight and the 
training of its employees to deliver the highest quality 
service to our Nation's veterans, family members and survivors 
while ensuring the accountability of taxpayer funds.
    I am joined today by Edward Murray, Deputy Assistant 
Secretary for Finance in the Office of Management. Sitting 
behind me are Jack Hammer, Senior Advisor and Ford Heard, 
Associate Deputy Assistant Secretary for Procurement Policy, 
Systems and Oversight, Office of Acquisitions and Logistics.
    I know that many of you are interested in talking about the 
2011 human resources training conferences held in Orlando, the 
issues identified by the VA Inspector General and about what 
our Department has done over the last year to ensure that such 
issues do not occur again. Having taken this position last 
month, I was not with VA last year when the VA began 
implementing corrective actions to further strengthen oversight 
of training conferences. But I and my accompanying witnesses 
look forward to discussing the results of the reforms and 
reviews VA has conducted.
    While the findings of the report were troubling, we also 
recognize the critical importance of VA training. The IG report 
states that VA's human resources conferences in Orlando were 
held to fulfill valid training needs and that they offered 
legitimate, substantive training courses. Making clear they 
were focused on legitimately required training is not in 
question. Learning of the event's failures only makes more key 
the fact that VA's mission, to serve our veterans, must be at 
the core of our work all of the time, including when we are 
planning attending and managing training conferences.
    VA began taking actions immediately after learning of the 
IG's report. In September of 2012, VA issued a revised training 
conference planning oversight policy. This policy established 
new standards to ensure senior executives exercise due 
diligence in the planning, execution and management of their 
sponsored training conferences. In summary, this policy demands 
three things. First, every training conference will have a 
point of accountability at the senior executive level. Second, 
each training conference will have four phases: concept, 
development, execution and reporting, each with its own 
objectives, metrics and standards of execution to ensure value 
and accountability. And third, a new training support office to 
assist VA employees in meeting our new reporting requirements.
    This policy ensures greater oversight over each training 
conference. If the training conference is estimated to cost 
over $20,000, the policy requires the appointment of a second 
senior official to ensure that the training conference is 
executed in accordance with policy, and that the costs are 
approved by the administration or staff office.
    These duties carry through the training conference as the 
official must certify that the training conference was executed 
appropriately after its completion. VA's administration and 
staff offices have engaged in a re-examination of the methods 
that we use to train. VA is leveraging current capabilities, 
such as video-teleconferencing, our online training portal, 
known as our talent management system, and the VA national 
telecommunications system, to cut costs. In fiscal year 2012, 
one organization with VA alone realized $33 million in cost 
avoidance as a result of increased usage of those systems, an 
increase of 29 percent usage from 2011.
    The September 2012 policy strengthened the development of 
business cases that must be prepared in advance of a training 
conference. The sponsor must show the training conference is a 
part of a strategy to develop employee skill sets and then 
measure outcomes to help develop more relevant and focused 
training in the future.
    As a result of surveys conducted after the Orlando training 
conference, we learned that 75 percent of supervisors stated 
that their employees' job performance had improved after the 
training conferences. Continuous workforce training and 
development are absolutely critical to delivering the timely 
quality VA care and services our veterans have earned and 
deserved.
    Our Department's mission and sacred obligation are to honor 
and best serve our veterans, their family members and 
survivors. Incumbent in that mission is the non-negotiable 
requirement to manage our resources carefully and ensure that 
there is always appropriate oversight and accountability for 
our taxpayers' dollars.
    Mr. Chairman, the VA panel and I will be glad to answer 
questions from you and other members of the committee this 
morning. Thank you.
    [Prepared statement of Ms. Farrisee follows:]


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    Chairman Issa. Thank you.
    Mr. Griffin?

         STATEMENT OF THE HONORABLE RICHARD J. GRIFFIN

    Mr. Griffin. Mr. Chairman, Ranking Member Cummings and 
distinguished members of the committee, thank you for the 
opportunity to provide testimony today and for your continued 
support of the work of the men and women of the VA Office of 
Inspector General.
    Today marks the 61st time over the past six years that IG 
managers have provided Congressional testimony. During these 
hearings, we have covered a wide variety of challenging topics, 
including mental health program management, military sexual 
trauma, IT security and protecting veterans' private 
information, physician staffing standards, VBA claims 
processing issues and internal controls for VA fee-basis 
payments.
    In addition to these hearings, featuring the work of our 
Audit and Health Care staff, our investigative team in fiscal 
year 2013 made 498 arrests, including a former VAMC director, 
for wire fraud, bribery and conflict of interest, a fiduciary 
who stole $2.35 million from 54 veterans, and a service 
disabled veteran-owned small business fraud of $6 million, to 
include a kickback of $1.2 million to a VAMC engineer.
    In addition, our Office of Investigations achieved $718 
million in fines, penalties, restitution and civil judgments. 
During fiscal year 2013, our Office of Contract Review reported 
monetary benefits of $678 million in potential cost savings and 
recoveries. Overall, monetary benefits for fiscal year 2013 
were $3.6 billion, representing a return on investment of $36 
for every $1 in the IG budget.
    Our hot line handled 27,000 contacts generating more than 
1,225 open cases. It was actually a contact with our hot line 
in April of 2012 that triggered our review of the Orlando 
training conferences.
    As you know, our report identified eight issue areas as 
follows. Number one, VA leadership failed to provide proper 
oversight. Number two, VA employees improperly accepted gifts. 
Number three, HR&A exceeded chief of staff authorization for 
the conferences. Number four, VA inappropriately conducted pre-
planning site visits. Number five, lack of accountability and 
control over conference costs. Number six, inadequate 
management of inter-agency agreement terms and costs. Number 
seven, contract violations and lack of oversight led to 
excessive costs and illegal and wasteful expenditures. And 
finally, number eight is the inappropriate use of government 
purchase cards.
    To address these shortcomings, we made 49 recommendations 
to the VA secretary, who agreed to take corrective actions. Mr. 
Chairman, this concludes my statement. Mr. Abe and I will be 
pleased to answer any questions the members may have.
    [Prepared statement of Mr. Griffin follows:]
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    Chairman Issa. Thank you, and I think we will have a great 
many questions.
    My opening question, Ms. Farrisee, as I said in my opening 
statement, the Secretary told me many years ago that he 
inherited a culture that he had to change, a culture that he 
had not encountered in the U.S. military and was shocked that 
it existed in the premier agency to take care of U.S. military 
after they leave active duty.
    In your short time, have you observed problems inherent in 
the attitudes at Veterans Affairs that are part of activities 
such as waste, such as the seemingly impossible task of ever 
catching up to the backlog and the backlog's backlog?
    Ms. Farrisee. Mr. Chairman, in my short time, I have not 
noticed this. What I have noticed is that people seem to 
understand very clearly that there have been more processes put 
in place, that there is a requirement for accountability in 
this Department. And they also understand why that has 
happened, recognize it.
    Chairman Issa. Let me follow up, then, because you have 
only been on board since your confirmation in September. Mr. 
Murray has been on board a long time. If I told you you had to 
produce a handbook and you agreed to do so, and you spent 
millions of dollars every month without that handbook and you 
came before Congress and you told us about all these things 
that sound like they are right out of a handbook, would you be 
surprised that my question to you is, why did your organization 
miss an agreed-on deadline to produce a handbook? And how hard 
can it be to produce at least a draft handbook so guidance can 
be available while millions of dollars are being spent every 
month?
    Ms. Farrisee. Mr. Chairman, the guidance that came out in 
September 2012, the policy that the Secretary rushed to ensure 
was put out as soon as he was advised of the IG's 
recommendations in August of 2012, is the current policy that 
has been----
    Chairman Issa. But where is the handbook?
    Ms. Farrisee. The handbook is still in development, and it 
will----
    Chairman Issa. Where is the handbook? Can you make a copy 
of the draft of the handbook to us so we can see how much work 
product has gone on? We are talking about millions of dollars 
being spent every month. We are talking about a kind of a, 
maybe almost inappropriate way to reduce travel by saying we 
are going to cut it 20 percent, when in fact, the right number 
might be 80 percent, and is unlikely to be 20 percent.
    The question is, will you make available to this committee 
all draft materials related to this handbook that are in place 
as of today, so we can understand why it is so hard? You 
understand most companies produce a handbook almost immediately 
so as to limit litigation. In the HR business, handbooks of 
conduct are routine. And yet this seems to be so vexing that 
Mr. Griffin ha to say he doesn't, I suspect he will say, he 
doesn't understand why it is so hard to get it out.
    Do you have a note there?
    Ms. Farrisee. I do, Mr. Chairman. It says the handbook was 
made a part of our response.
    Chairman Issa. Handbook draft?
    Ms. Farrisee. Draft.
    Chairman Issa. And that is current as of today?
    Ms. Farrisee. As of today. And it will not be complete 
until, our goal is December.
    Chairman Issa. December. That is a lofty goal.
    Mr. Griffin, you made, the IG overall, you made 49 or so 
requests. Some of the most important ones, 20 some, 26 or so, 
are unkept to date. Can you find a valid reason that this could 
not have, there could not be greater implementation or at least 
partial implementation as of today?
    Mr. Griffin. I can't speak to the level of effort that has 
been brought to bear against the 49 items. I can say that in 
the area of the personnel actions that we thought were in 
order, all but two of the people that we felt should have some 
personnel action taken have in fact been completed.
    Chairman Issa. But personnel action in this case represents 
no loss of pay, people either retired or are still being paid, 
they simply don't have the jobs they had, is that correct?
    Mr. Griffin. That is a decision that is made at the 
Department, Mr. Chairman.
    Chairman Issa. And I appreciate it, and you are very 
important to it. But I just wanted to make sure I explained it 
simply. In this case, like in every other case, practically, 
nobody gets fired in the sense that the private sector 
understands it. Everyone still gets a pay unless they choose to 
retire, then they get their retirement pay. So no one lost a 
day's pay as a result of their failures to protect millions of 
dollars of the taxpayers' money as far as you know, is that 
correct?
    Mr. Griffin. That is correct.
    Chairman Issa. Okay. My time is expiring, but I would like 
to have the second video, not the Patton, but the other video 
quickly shown, to get it into the record. And then we will 
immediately go to the ranking member. I want to note that this 
has been edited to make it shorter, but it is all original 
material. And I want to thank the IG for their efforts to get 
us as much material as they have.
    [Video shown.]
    Chairman Issa. I repeat again General Shinseki's statement 
that there is a problem with the culture. I yield to the 
ranking member.
    Mr. Cummings. The Inspector General's report stated that 
more than a year after the Orlando conferences, VA was unable, 
Inspector General, to account for all conference costs. The 
VA's original estimate was that the two conferences cost $5.8 
million. But when the Inspector General's office reconstructed 
the expenses, they found about $300,000 in additional costs. Is 
that right?
    Mr. Griffin. That is a partially accurate description. 
There were actually eight or nine different attempts to come up 
with a number by the Department. We came up with the $6.1 
million figure as the best we could determine based on the 
available records that VA had.
    Mr. Cummings. So did the VA know how much the conferences 
cost?
    Mr. Griffin. No.
    Mr. Cummings. And why do you think that was? It seems as if 
you are doing conferences, you logically keep some type of 
accounting. You look at your bills, you look at your invoices 
and whatever. Can you try to explain as best you can, first of 
all, the difference between what you found and what they were 
saying, and then why it is and what recommendation did you make 
to go to that problem?
    Mr. Griffin. There were a number of different issues that 
led to the eventual lack of oversight and the lack of having an 
ability to come up with a precise figure. The original budget 
numbers that were presented to the chief of staff that he 
approved changed radically. The number of people to be trained 
was moved down by 1,200. It was supposed to be 3,000 for $8 
million; it became 1,800 were going to be trained. And based on 
a service level agreement that was executed a month before the 
hearing, the total cost was projected to move up to $9.3 
million.
    The problem is, no one was in charge. It was an HR 
conference. Accountability started with the Assistant 
Secretary. There are two SES employees, and between the three 
of them, they never had a single meeting to discuss the 
conference planning, conference costs, et cetera.
    So the budget that the chief of staff signed off on, after 
that day, it vanished. There was no spend plan, there was no 
cost tracking. There were credit card purchases made above the 
authorized contract level of the purchaser. One individual made 
10 purchases that had a value of over $100,000 when his 
contract didn't allow him to make purchases above $3,000.
    Mr. Cummings. Well, did they have a budget?
    Mr. Griffin. They had a dollar figure that they put in 
front of the chief of staff. But after that, no one paid too 
much attention to it.
    Mr. Cummings. Well, Mr. Murray, according to the VA's 
September 2012 memorandum, VA offices involved in planning a 
conference were mandated to fully integrate their budget 
officers into conference planning decisions in order to ensure 
fiscal discipline. Can you tell us whether this has been 
implemented and discuss what difference it makes to the 
conference budgeting process? And do they have budgets now?
    Mr. Murray. Thank you, Representative, for that question.
    Indeed, they do. A conference certifying executive now has 
to review the business case, the rationale, the outcomes for 
any proposed conference. If it is above $20,000, a second 
executive has to serve as the responsible conference executive 
and certify and affirm those costs in writing in an after-
action report.
    So I feel that the discipline is very strong in the process 
now. I might add that my expectation, and I do this every day 
with the auditors, because we get an external audit, and we 
have 14 clean audit opinions, which may surprise some. But 
fiscal officers, accounting professionals, budget officers are 
required to keep documentation to support transactions, whether 
they are a travel obligation, a travel transaction, a contract 
transaction, you name it, purchasing, payroll. But it is in 
place now, Representative.
    Mr. Cummings. And finally, let me ask you this. The 2012 
memo also directed the creation of a web-based portal in order 
to ``accomplish the data collection and reporting activities 
associated with conference activity by October 1st, 2012.'' Has 
that been taken care of?
    Mr. Murray. That automated portal is not complete. We are 
collecting the data. But the portal that actually collects the 
data is not complete.
    Mr. Cummings. It is already a year after the deadline. What 
is the problem?
    Mr. Murray. We are working with the Office of Information 
Technology on the portal.
    Mr. Cummings. When do you expect it to be done?
    Mr. Murray. We will have to get back to you.
    Mr. Cummings. Can you give us something in writing with a 
date that you expect it to be done? We are already over a year 
late. And it just is a bit much. I think we can do better.
    Thank you very much, Mr. Chairman.
    Mr. Mica. [Presiding] I thank the gentleman and recognize 
myself for five minutes.
    Ms. Farrisee, you weren't there while this took place, 
right?
    Ms. Farrisee. No, I was not.
    Mr. Mica. Mr. Murray, you were there when this took place?
    Mr. Murray. I was, sir.
    Mr. Mica. And what is your title? It looks like it is 
Deputy Assistant Secretary for Finance?
    Mr. Murray. Yes, sir.
    Mr. Mica. So you were overseeing Finance for VA during this 
period when this took place?
    Mr. Murray. Yes, sir, I was Deputy Assistant Secretary for 
Finance.
    Mr. Mica. This is a list, Ms. Farrisee, of 25 pages, 399 
conferences, $86.5 million that was spent. Mr. Murray, are you 
aware of this, in 2011, for conferences? Were you aware that 
this was taking place?
    Mr. Murray. We were aware there were a lot of conferences.
    Mr. Mica. Ms. Farrisee, did they need 399 conferences and 
spend almost $87 million, VA?
    Ms. Farrisee. Congressman, I can't answer if they needed 
them. I wasn't there.
    Mr. Mica. Well, again, right now, for the first nine months 
of 2012, I have the information you spent $7.5 million for nine 
months. Would that be a little bit more in line with what you 
would recommend?
    Ms. Farrisee. Congressman, I think you have to look at the 
type of training that was being done at the time.
    Mr. Mica. Again, you, so far nine months this year, you 
spent $7.5 million and they spent $87 million for this entire 
year. Again, outrageous.
    I think the American people are sort of fed up with this. 
These are the $20,000 drumsticks from GSA that they spent. We 
had the guy in the hot tub with the conference in Las Vegas 
thumbing his nose. Then we conducted the IRS, we had the 
squirting fish that cost thousands of dollars and gifts to 
employees. Now we have VA.
    I have no problem with a conference in Orlando. I don't 
represent the tourist area, but north of there. No problem with 
the conference in Las Vegas, where GSA got in trouble. It is 
the spending and the amount of spending that goes on.
    Now, you testified, Inspector General, that people accepted 
gifts, right? And three resigned. I am told also that there 
were $43,000 in bonuses to conference planners. Is that 
correct? I can't hear you. For the record?
    Mr. Griffin. That is correct.
    Mr. Mica. And there are still people here, Mr. Murray was 
there, and he was somewhat in charge of finances, paying the 
bills for this while it went on. Many continue, who were 
involved, many continue to receive salary and benefits. Would 
you say that is correct, Mr. Griffin?
    Mr. Griffin. That is correct.
    Mr. Mica. Now, they spent almost $100,000 in gifts. This is 
$20,000 outrageous--bring the teddy bear in. Am I correct, was 
it over $97,000 in gifts for employees and trinkets and stuff?
    Mr. Griffin. That is correct.
    Mr. Mica. And were some rewarded with, now I am told that 
this is the teddy bear, told that some were rewarded with big 
stuffed teddy bears, maybe not this one, but is that correct?
    Mr. Griffin. I can't speak to that, sir.
    Mr. Mica. The information that we have is this is one of 
the prizes that was given. So taxpayers not only paying for 
drumsticks, squirting fish and now with VA teddy bears. It is 
absolutely outrageous that again, people are sending their 
money to Washington asking us to be good stewards. And 
particularly offensive for the Veterans Administration, where 
we should be spending every penny for our veterans. So I am 
offended by this.
    And then the Cleanup Act is almost just as offensive. When 
you were made aware of this, what did they do, Mr. Murray? They 
hired some contractors to look at the spending, is that 
correct?
    Mr. Murray. There were contractors hired.
    Mr. Mica. Two contractors. One got about $188,000 and the 
other over $200,000, right?
    Mr. Murray. Correct.
    Mr. Mica. Four hundred thousand dollars to look at the 
spending. Outrageous spending to look at the outrageous 
spending. Do you think this is in line? We had the Inspector 
General look at this. You offered what, 49 recommendations for 
improvement, right?
    Mr. Griffin. That is correct.
    Mr. Mica. And how many have been implemented? I understand 
about half. Is that right, Ms. Farrisee?
    Ms. Farrisee. Congressman, yes, the personnel actions were 
complete.
    Mr. Mica. About half.
    Ms. Farrisee. And the directive and the handbook will 
complete it.
    Mr. Mica. What did you do with the $400,000 worth of 
reports that were paid for, contractor reports, to look at the 
spending of the spending?
    Ms. Farrisee. Those reports were actionable to how we 
complete our policy. It was an objective review that was 
completed by an outside organization to look at all of VA, and 
not just look at HR&A.
    Mr. Mica. Now, some people are going to have, isn't there 
at least one criminal referral, Mr. Griffin?
    Mr. Griffin. There was a criminal referral and it was 
declined for prosecution by the Department of Justice.
    Mr. Mica. So that person is not going to be prosecuted.
    Mr. Griffin. That is correct.
    Mr. Mica. And we had one witness here who refused to 
testify, of three who were implicated in wrongdoing. I believe 
that was accepting gifts also, is that right?
    Mr. Griffin. That is correct, on the one that we had the 
declination. He accepted a number of gifts.
    Mr. Mica. All right. Again, it is sad, I know my members 
feel the same way, when you see the waste at GSA, IRS, and now 
VA. It is pretty offensive to us, to taxpayers and particularly 
today our veterans.
    Let me recognize now Ms. Norton. Mr. Lynch, I am sorry. We 
will go to Mr. Lynch if you are ready.
    Mr. Lynch. Sure, thank you, Mr. Chairman. And I want to 
thank the witnesses for coming forward and helping the 
committee with its work.
    I do realize that this is a 2011 conference and that there 
was an extensive investigation previously done by the Committee 
on Veterans Affairs. So this is not exactly a timely hearing. 
But it does point out some examples of waste, fraud and abuse 
that this committee is certainly charged with responsibility to 
eradicate.
    I have to say, though, that I have three VA facilities in 
my district. I have the Brockton VA Hospital, I have the West 
Roxbury VA Hospital, and I have the Jamaica Plains VA Hospital. 
And I am a frequent flyer to my VA hospitals. I visit them on a 
regular basis as well as Walter Reed and Bethesda. The people 
that I see there that care for our veterans on a daily basis 
are not at all reflected in the investigation that is ongoing 
here.
    It is sad, I agree with the chairman's statement, it is sad 
to see the allegations on the VA in a broad stroke. I would 
hate to think that the American people think that my doctors, 
my nurses, my staff, my therapists who are working at the VA 
hospitals, their services are indicative of what we are hearing 
today. It is not.
    The doctors, the nurses, the staff, the therapists at the 
VA, in the city of Boston, they are staying and working at the 
VA, number one, a lot of them are veterans. As I go through the 
corridors of those hospitals, a lot of the folks that are 
serving our veterans, and especially those coming back from 
Iraq and Afghanistan, as well as a lot of World War II veterans 
who have never in their life had to rely on the VA, but do now, 
Korean War veterans, Vietnam veterans, those docs, those 
nurses, those staff, therapists, they are working for less than 
what they could earn if they walked across the street and 
worked at a private hospital in the Boston area. There are some 
hospitals there that are very generous in their benefits and 
their pay.
    But our VA employees, they do the right thing because they 
believe in their service. They are intentionally staying at the 
VA so that they can, we all want to spend our lives in a 
meaningful cause. I think that a lot of our VA employees do so 
because they believe deeply in serving our veterans, and they 
do so for all the right reasons.
    It pains me greatly to see the administration of the VA 
caught up in this crap and diminishing the excellent service of 
those employees at the VA. That is what pains me more than 
anything.
    Now, I know that the VA adopted a lot of the 
recommendations of the Office of Inspector General, and I am 
happy to see that. And there is a problem here. I am not trying 
to sugarcoat this at all, there is a problem here. And we have 
to make sure that the way the VA is administered at the top is 
reflective of the way those docs and nurses and therapists 
serve every single day in the VA hospitals and the VA 
facilities around this Country and indeed reflect the honor and 
the dignity that is due to our veterans. That is the bottom 
line here. That is the bottom line. The job that is being done 
at the VA should be reflective of the dignity and the sacrifice 
and the noble intent of those who have served.
    And this is such a departure. It is disgraceful. It is 
disgraceful. So we have to get at this thing. I know some heads 
have rolled, and that is good. They deserve to go. There is a 
real disconnect between the wonderful, gracious, noble service 
of our veterans and what is going on that we are uncovering in 
this hearing. I think it is a disgrace.
    So I think the administration of VA should take a look at 
their VA hospitals, look at the people who are working there, 
look at the dignity and the sacrifice and the dedication that 
they exert in caring for our veterans. And look at the veterans 
who are lying in those hospital beds.
    The VA administration ought to go visit, they ought to make 
it mandatory, if you walk through maybe once a week, a couple 
of times a month, walk through that VA hospital so you know who 
you are working for. I think that would change your attitude 
100 percent, if you know who you work for. Because those are 
America's best, those are America's best who did what they did 
for all the right reasons. And the service of the VA should be, 
as I say, reflective of that wonderful service.
    Mr. Chairman, I yield back.
    Mr. Mica. I thank the gentleman. I am going to ask 
unanimous consent of myself and the committee here to put these 
figures in, which I did. I just want the members to know what 
you are doing today and what you have done to date, the 
results, the GSA spending went from $37 million in 2010 to $4.9 
million on conferences. GSA from $10.9 million to $1.3 million 
last year. And then we heard today from nearly $87 million to 
$7.5 million so far. So these hearings are having an impact. 
Without objection, this will be made part of the record.
    Mr. Mica. Let me recognize Mr. Walberg.
    Mr. Walberg. I thank the chairman. And it is important work 
that we are doing, and I think it is good that you mention 
those figures and the changes that are taking place. It is kind 
of ugly work, as well that we do, but it is necessary. 
Especially in context, and I certainly would identify my 
thoughts and emotions with the previous member, Mr. Lynch, 
about the concern of what is taking place here.
    Ms. Farrisee, I certainly wish you all the best in 
attempting to lead to get to the bottom of this and deal with 
the recommendations, all 49 of them, plus any more that would 
be helpful, that will go on.
    The number two concern that is brought to my district 
office and my office here in Washington from my citizens back 
in my district are VA issues, and the frustration that we 
continue to have with the backlog that makes it difficult to 
get the information necessary or the records necessary for our 
veterans that are expanding with the present war situations 
that we are in. And I too have the privilege to visit veterans, 
wounded warriors at Walter Reed then back in my district at the 
Ann Arbor VA Hospital, and see the care that they are receiving 
that is second to none, and the quality upgrades of facilities 
that are taking place.
    So to think that we are wasting resources, not on necessary 
planning and upgrading of skills, but on things like we have 
had come across our desks in recent history with departments 
that are spending for videos of Dr. Spock, and now we see a 
parody of Patton, and an attempt to get the Washington Redskins 
cheerleaders for the event. It is just--it shouldn't happen.
    I would like to queue up an email that specifically refers 
to one of the lead planners of this conference and her 
concerns. And especially stated, if that email could be queued 
up, if you will notice that she expresses concern, where she 
says, obviously the money is not an issue. That is a stark 
statement when we talk about $6.1 million spent on this 
conference, while the VA is exempted from sequestration because 
of our concern that veterans' issue be addressed. When we add a 
$1.6 billion increase to deal with the backlog, that right now 
is at over 700,000 benefit claims, backlogs, some in my 
district, Ms. Farrisee, why were conference planners 
unconcerned with budgetary constraints, from what you have 
found out in your short period of time already?
    Ms. Farrisee. Congressman, I believe there was a lack of 
leadership and oversight in any kind of good direction and 
purpose given to the planners.
    Mr. Walberg. Is this from what you have seen so far, an 
overarching attitude toward spending throughout the Department?
    Ms. Farrisee. Congressman, no, it is not. I have seen the 
policies put into place and the accountability that now exists 
at the Department.
    Mr. Walberg. A second slide I would like to point out was a 
concerned employee who stated, ``Please know that I am willing 
to help where I can, but the scope of the kickoff has grown 
immensely and the work necessary to ensure that kickoff is a 
success is beyond what I can balance with my regular work.''
    Why were planners allowed to forego their normal work tasks 
for the Department in favor of planning conferences?
    Ms. Farrisee. Congressman, I can't answer that question, 
because I was not there. But I will go back to, I do not think 
there was good leadership, oversight on what was happening. I 
do not think that the leadership even knew at these levels 
everything that was happening.
    Mr. Walberg. Were they ever told? Were employees ever told 
that they were to forego work? Have you found that to be the 
case?
    Ms. Farrisee. I have not found that to be the case. But I 
do not know what happened during this time, Congressman.
    Mr. Walberg. Again, 717,000 backlogged, benefit claims 
backlogged. There is work to be done, and that does not send a 
positive message.
    Mr. Griffin, I would ask you a question relative to the 49 
directives. I would assume the majority of those are considered 
high directives. There are 26 as far as the first of this month 
that we know of that have not been addressed.
    Could you describe the potential cost savings that could 
come about by addressing these 26 unmet directives that have 
been given for priority improvement?
    Mr. Griffin. I think what our work was able to demonstrate 
for these two conferences was that there was at least $762,000 
that could have been used for better purposes than trinkets and 
some of the other excesses that occurred. The application to 
other VA conferences, clearly, there is money to be saved. I 
think some of the numbers that were mentioned by the chairman 
reflect that there has been a huge reduction in conference 
spending this year.
    Mr. Walberg. Significant, significant reductions.
    Mr. Griffin. Frankly, the September 2012 memo from the 
chief of staff was very thorough. I thought it was aggressive. 
We just need to get to the finish line, get the book published 
so everybody has it. There is a certain protocol and process 
that it has to go through to put a handbook on the street in 
VA. We need to finish that to make sure that all the good plans 
get enacted.
    I did think that the memo of the end of September, which 
was issued a couple of days before the release of our report, 
was an aggressive attempt to reign in costs. I think it 
addressed one of the principal shortcomings in the HR 
conferences, in that nobody was in charge.
    Mr. Mica. I thank the gentleman. The gentleman's time is 
expired.
    Mr. Davis?
    Mr. Davis. Thank you very much, Mr. Chairman. Let me first 
of all associate myself with the remarks made by Mr. Lynch and 
Mr. Walberg relative to the services of VA medical facilities. 
I have two in my district, Hines VA in Hines, Illinois, closely 
affiliated with Loyola University Medical Center, where they 
provide, both combined, some of the best medical care in the 
world for any person, certainly the veterans that they serve. I 
also have the pleasure of having the Jesse Brown VA Medical 
Center, which is named for the former Secretary, who had a very 
distinguished career in both the military and as Secretary of 
Veterans Affairs in his service to the Country.
    So we certainly want to extol the virtues of those 
facilities and what they do. I think it is most unfortunate 
that this kind of hearing is necessary.
    Mr. Griffin, let me ask you, the IG report highlights 
inappropriate and unauthorized use of government purchase cards 
to spend more than $200,000 on the two 2011 conferences. 
Basically, when conference planners wanted to spend money on 
the conferences, they just charged it to their government 
credit cards, even when they went over their authorized limits 
and didn't have approvals. Is that correct?
    Mr. Griffin. Yes, sir.
    Mr. Davis. And at least seven employees did this?
    Mr. Griffin. I am sorry, how many?
    Mr. Davis. Seven?
    Mr. Griffin. Yes.
    Mr. Davis. The report also indicated that the primary event 
planner was able to circumvent his $3,000 purchasing limit by 
making ten separate purchases totaling more than $100,000. Is 
that correct?
    Mr. Griffin. That is correct.
    Mr. Davis. Can you explain how this employee was able to 
circumvent Federal and VA acquisition regulations?
    Mr. Griffin. There is supposed to be a review process in 
place where someone looks at purchase card activity and makes 
sure that, first of all, the purchase is for the purpose of 
serving our Nation's veterans and not for something else. That 
review process is supposed to happen to every cardholder. But 
if you have a card and you have a contract that says you are 
not authorized to make a purchase over $3,000, and you do 
anyway, the vendor doesn't know that VA put a $3,000 limit on 
you, they will just take your card and hit it for $10,000.
    The problem is that in actuality, the person you are 
talking about, his contract was not even valid because he had 
moved from Veterans Health Care over to this new assignment, 
and his authority didn't transfer with him. It is one of the 
areas that the Department is addressing to tighten down. 
Frankly, we are doing some additional work in the area of 
purchase cards, to make sure that things are in order.
    Mr. Davis. Ms. Farrisee, let me ask you, what has the 
Department done, what is the Department doing to correct this?
    Ms. Farrisee. Congressman, I am going to turn that over to 
Mr. Murray from the Finance Office.
    Mr. Murray. Thank you for that question, Representative. 
What we did, upon immediately learning that this had occurred, 
and let me be clear that there was an approving official that 
should have reviewed each of those purchases and signed off of 
them, as well as a more senior agency program coordinator that 
should have looked at those purchases. So it was quite 
dismaying, disappointing. I think we were as shocked as anybody 
that it occurred, that that many folks could do the wrong 
thing.
    But what we did immediately was not just look at the HR 
purchase card transactions, we looked at the entire Department 
of Veterans Affairs purchase cards transactions. We immediately 
got with the Office of Acquisitions, and we said, we need to 
know definitively who has the elevated purchasing authorities 
and who does not. And for those who do not have those elevated 
purchasing authorities, we check every Monday, and if they 
don't have it, we reduce those cards to the $3,000 micro-
purchase limit.
    So the oversight controls went strong, went quick, went in 
fast.
    Mr. Davis. Thank you very much.
    Let me just ask Mr. Griffin, did you find these steps to be 
adequate?
    Mr. Griffin. I haven't reviewed the entire response in that 
area. I am not sure if our follow-up team has felt like it 
meets the requirement of the recommendation or not. But I would 
be pleased to give you an answer for the record.
    Mr. Davis. Thank you very much. And thank you very much, 
Mr. Chairman.
    Mr. Mica. I thank the gentleman, and we will be keeping the 
record open. We will have an announcement on that later.
    Mr. Farenthold?
    Mr. Farenthold. Thank you very much, Mr. Chairman.
    I have been actively involved in conference over-spending 
and have actually sponsored bills with respect to this. But the 
VA spending on conferences to me seems more egregious than any 
of the others, especially when you look at the backlog of 
claims some of our veterans are facing. We are looking at 
717,000 backlogged claims, in excess of 125 days in some cases.
    So I am going to digress for a second on those backlogged 
claims to set the stage for some conference questions. 
Secretary Shinseki sought to blame the claims backlog on the 
government shutdown when he testified before Congress on 
October 9th. And I would like to ask you, Ms. Farrisee, is it 
true that the Department only furloughed 4 percent of its 
employees during the government shutdown?
    Ms. Farrisee. At the time of the shutdown, yes, there would 
have been more employees furloughed had the government not come 
back.
    Mr. Farenthold. Let me ask Mr. Murray, since you are the 
finance guy. The VA has been pretty much exempted from cuts and 
sequestration, is that correct?
    Mr. Murray. It depends on the program. For instance, we did 
furlough OIT, information technology employees.
    Mr. Farenthold. Isn't it true that Congress has pretty much 
met every request from the Department to increase its funding 
to process the backlogged claims? I believe the Department 
actually received around $300 million in the continuing 
resolution that would have ended the shutdown. So it seems the 
VA has the money to reduce the backlog of claims. Why haven't 
we seen a significant decrease? Where do we see this problem 
getting solved? Ms. Farrisee, I will let you take a stab at 
that.
    Ms. Farrisee. Congressman, the Secretary's goal is 2015 for 
the backlog on those records. They have made significant 
progress. They have used the use of overtime, they have trained 
the employees, training is critical to the mission. Training is 
critical to us being able to continue to move forward.
    Mr. Farenthold. Let us talk for a second about overtime. 
During this process, and during these investigations into the 
conference spending, the committee found that Department 
employees received overtime pay for days in which they 
participated in activities entirely unrelated to the 
conferences. I have a problem with overtime to plan the 
conferences to begin with, but we are looking at helicopter 
rides and spa treatments. Wouldn't that overtime have been 
better spent on employees who are actually processing veterans' 
claims?
    Ms. Farrisee. Congressman, you are absolutely right, that 
is extremely disturbing. I would expect my leaders in the 
future to have and execute good fiduciary responsibilities.
    Mr. Farenthold. Earlier this year the House passed H.R. 
313, the Government Spending and Accountability Act of 2013, 
which caps non-military spending on conferences and requires a 
detailed itemized report on Federal conference spending. That 
bill is designed to ensure that conferences are for training 
and work purposes, rather than taxpayer-funded vacations. It 
also adds transparencies and measures to remove loopholes from 
the President's Executive Order 13589 entitled Promoting 
Effective Spending.
    Earlier this year, I sponsored that bill, and it was 
passed. Unfortunately, it appears at least in this case, and 
this s before the VA people lost sight of what the purposes of 
these conferences were, for training. And we have no itemized 
expense report. Mr. Griffin, you have testified you don't think 
there is a way to actually find out how much was spent, is that 
correct?
    Mr. Griffin. We did the best we could to review available 
receipts, and that is where we came up with the number. But we 
are not confident that that is 100 percent of the expenses.
    Mr. Farenthold. Ms. Farrisee and Mr. Murray, don't you 
think it is important that we keep detailed information on what 
we are spending the taxpayers' money on?
    Ms. Farrisee. It is extremely important, and the new 
policies that were put into place in 2012 will allow us to keep 
this information. When the handbook and directive are out, that 
will complete that. But we have been doing that kind of 
accountability.
    Mr. Farenthold. And I understand you all are working on a 
web portal for some of this information. Do we have any idea 
what that is costing? We are not going into the healthcare.gov 
$600 million range, are we?
    Mr. Murray. I do not, but we can take a look at that.
    Mr. Farenthold. It seems the government has a bad habit of 
spending a little bit too much money on websites. That being 
said, is there a process in place to try to move some of this 
training that is done at these high dollar conferences to 
online? You look at what the general trend is in the training 
community now, you look at sites like Lynda.com, 
totaltraining.com, you have gotomeeting and Google hangouts, 
all sorts of opportunities to do this online. Can you give me a 
quick overview of what you all are trying to do to move more of 
this stuff online?
    Ms. Farrisee. Congressman, yes, you are absolutely right. 
We have a talent management system which has numerous courses 
online. We do webcasts, we do other virtual blended training. 
And we are looking into the future to continue to do more of 
that training, because we absolutely agree, training can be 
accomplished in other forms.
    Mr. Farenthold. I see that my time is expired.
    Mr. Mica. I thank the gentleman and recognize the gentleman 
from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman. By the way, you 
looked really good with that teddy bear up there. Very nice.
    Mr. Mica. Anything is an improvement. Thank you.
    [Laughter.]
    Mr. Connolly. Ms. Farrisee, Tammy Duckworth, Congresswoman 
Duckworth, wanted me to point out that you are here after a 30-
year career in the United States Army, retiring as a major 
general, is that correct?
    Ms. Farrisee. Yes it is, Congressman.
    Mr. Connolly. On behalf of certainly Congresswoman 
Duckworth and myself and I know my colleagues, thank you for 
your 30 years of service in the U.S. Army to your Country.
    Ms. Farrisee. Thank you. It has been my privilege.
    Mr. Connolly. Let me ask a question of, well, first of all, 
Mr. Murray, you answered something to Mr. Farenthold on 
furloughs. He asked whether only 4 percent of the veterans 
workforce was furloughed and which parts were furloughed. And 
you answered, OIT people.
    Mr. Murray. Right. Actual furlough notices did go out to 
our information technology people, not all of them, not the 
ones that were actually at the medical centers, but some that 
did not meet the necessary implication, the high bar, were 
furloughed.
    Mr. Connolly. To this committee, particularly, that has a 
resonant tone to it, because we are very struck with the fact 
that IT, properly deployed and invested in, can really make a 
difference in terms of adding capability and capacity, 
especially in a resource-thin era.
    One of the things that IT capacity for the Veterans 
Administration was being deployed for was to eat into the 
notorious backlog of applications and claims, is that not 
correct?
    Mr. Murray. That is one of the programs they support.
    Mr. Connolly. So those people were furloughed for 16 days?
    Mr. Murray. I do not specifically know the status of those 
individuals.
    Mr. Connolly. Ms. Farrisee, do you know the status of those 
individuals?
    Ms. Farrisee. I know that all of the OI&T were not 
furloughed. Some were in what we considered an accepted status 
to be able to continue to support.
    Mr. Connolly. Did it disrupt our eating into the backlog? 
Because you have actually made progress in the last year, about 
30 percent, eating into that backlog, is that correct?
    Ms. Farrisee. We have, and it did make a difference, 
because the employees were furloughed also from the VBA.
    Mr. Connolly. So we in Congress can't have it both ways, we 
can't beat up on you on the fact that you have a backlog and 
then we shut down the government, forcing you to make some 
tough decisions about who gets furloughed and who doesn't, 
hampering an effort that otherwise had actually been showing 
significant progress.
    Mr. Griffin, do conferences have any management value at 
all, from your point of view?
    Mr. Griffin. Absolutely. In our report, we indicated that 
we determined that the training was valid training, and that 
the previous training that had been conducted, which was in 
2009, hit a small percentage of the HR staff. So we felt that 
the actual training was justified.
    Mr. Connolly. And there was a lot of training going on, 
even at the conferences where the ``we are family'' video was 
just shown.
    Mr. Griffin. Yes. We included the training agenda as an 
appendix to our report, so people could see what the courses 
were, how long they lasted and so on.
    Mr. Connolly. And I didn't understand your answer to Mr. 
Davis. This happened two years ago, the particular incident we 
are talking about. Have you reviewed new procedures, given we 
have a lot of new people, including Ms. Farrisee in place, to 
clean up what happened? Are you satisfied that there are new 
protocols, policies and procedures in place to prevent excess 
spending, frivolous spending from occurring from legitimate 
training conferences and other parts of conferencing that can 
really help in terms of networking and the like?
    Mr. Griffin. I think that it is a work in progress. I know 
that previously, the memorandum that came out four days before 
the issuance of our report laid down a lot of very important 
markers that people would have to meet at future conferences. 
But we need to finish up about half of the recommendations, 
which are still in various stages of completion.
    Mr. Connolly. Briefly, Ms. Farrisee, could you address 
that? How confident are you that we have developed protocols, 
procedures and policies that would satisfy the IG's office and 
more importantly, satisfy the American people that the 
investments we do make in legitimate training and conferences 
is wisely invested?
    Ms. Farrisee. I am confident that the policy that was put 
out in 2012 was the first large step in doing that. Included in 
this policy is a form called the Conference Certification Form, 
which prohibits many things that had happened at that 
conference, prohibits things like purchasing of entertainment 
and many of the waste, fraud and abuse that you all have 
discussed here today. So we have already put those into place. 
It will be in a directive, it will be in a handbook by 
December. But it has evolved over this last year, and we look 
forward to our handbook.
    Mr. Connolly. And if the chairman would just allow one 
final technical question? In answer to Chairman Issa's question 
about, would you be willing to provide a draft of that 
handbook, you said you have already provided it.
    Ms. Farrisee. It was one of the responses we have provided.
    Mr. Connolly. When was that provided?
    Ms. Farrisee. In the OIG report, October 23rd. It was one 
of the responses.
    Mr. Connolly. So just about a week ago. Thank you so much, 
thank you, Mr. Chairman.
    Mr. Mica. I thank the gentleman. And we have had trouble, 
we haven't gotten a lot of information, late in July, 
unfortunately and then just before the hearing.
    Mr. Bentivolio, you are recognized.
    Mr. Bentivolio. Thank you very much, Mr. Chairman.
    Ms. Farrisee, thank you for your service. I too spent some 
time at Fort Knox. I was medivacked out of Iraq in 2007. And I 
was at the Warrior Transition Unit in October of 2007. Were you 
there at that time?
    Ms. Farrisee. I was not, but you would not recognize the 
new Warrior Transition Center. They have opened a wonderful new 
facility at Fort Knox.
    Mr. Bentivolio. Since when, 2007 or before that?
    Ms. Farrisee. They didn't open the facility until 2013.
    Mr. Bentivolio. Okay. That is good to hear, because when I 
got there, everybody was in a hullaballoo, because a soldier 
had died in the barracks. So the Warrior Transition Unit for 
wounded and injured soldiers from Afghanistan and Iraq, they 
said, you don't understand. I said, what don't I understand? 
They didn't find his body for four days. The Army said 12 
hours, the newspaper said two days, the boots on the ground 
said he opened his pizza on a Friday and they found him Monday 
night.
    My own experience there, I waited six hours for the 
pharmacist to tell me they didn't carry the prescription, come 
back on Thursday. And when I went back on Thursday, they had 
forgotten to requisition that medication, for my neck injury. 
When I got out, I went back, you get discharged from active 
duty, you go back to your National Guard unit and I was ordered 
to go and apply for VA benefits. Ordered. Because being a 
Vietnam veteran 30 years ago, with my experience with VA, I 
didn't want anything to do with it. Do you understand? You're 
familiar with those feelings, Vietnam veterans?
    Ms. Farrisee. Yes, I am.
    Mr. Bentivolio. And Congressman Connolly mentioned, I am 
sorry he is not here, but he said there has been a 30 percent 
improvement--thank you, Mr. Connolly--a 30 percent improvement 
in that since 1973. That is a 1 percent improvement for the 
last 30 years, as far as I am concerned, because I am a veteran 
and I have direct experience with the VA. The orders I was 
given, I filled out my paperwork and waited 11 months for the 
VA to tell me they had lost my medical records. Luckily, being 
an old soldier, I had made hard copies. So I took them down to 
the Detroit VA and stood behind the gentleman as he photocopied 
a stack about 8 inches tall of my medical records. Within 60 
days, I had my disability, 50 percent.
    As a Congressman, I toured the facilities and got the dog 
and pony show. They were very gracious, very professional. I 
saw a lot of new improvements to the VA. But when I talked to 
some of my constituents that come in, handling their casework, 
I see the same story that I saw in 1973.
    And the question. You have been a general in the military, 
you are familiar with FM101-5?
    Ms. Farrisee. Not off the top of my head.
    Mr. Bentivolio. Well, it is the officer's bible, it is 
called Staff Organizations and Operations.
    Ms. Farrisee. Okay, yes, I am familiar with it.
    Mr. Bentivolio. Could somebody hand her this, please, 
chapter four, page 1 of FM101-5 states, could you read that for 
me, please, where I have circled it?
    Ms. Farrisee. Yes, I will, Congressman. ``The commander is 
responsible for all that his staff does or fails to do. He 
cannot delegate this responsibility. The final decision as well 
as the final responsibility remains with the commander.''
    Mr. Bentivolio. And you carried that Army training with you 
to the VA, correct?
    Ms. Farrisee. Correct.
    Mr. Bentivolio. Can you tell me why commanders are 
responsible for the actions and attitudes of those under them?
    Ms. Farrisee. Because we are placed in that position of 
responsibility and we must incur that responsibility for every 
action.
    Mr. Bentivolio. So in the military, the actions of service 
members under the commander's authority are often directly 
attributed to the leadership and culture of the group, correct?
    Ms. Farrisee. Correct.
    Mr. Bentivolio. The VA is no exception. The disgraceful 
attitudes and lack of concern over wasting taxpayers' funds 
could only be explained by the fact that the leadership of the 
VA is flawed. Until the stagnant attitudes at the very top of 
the VA are eliminated, we cannot truly hope to eliminate the 
many problems plaguing the VA that in the end are hurting our 
veterans the most, correct?
    Ms. Farrisee. Correct.
    Mr. Bentivolio. So let me ask you this. I am new to 
Congress. I was a taxpayer, worked in the service. Served my 
Country in two wars. And I see the IRS, EPA, the Energy 
Department, and now the VA wasting taxpayers' money. What do 
you think I should do? What can I do to stop that from 
happening? Because what I think is I would like to fire you all 
and start over. That is my feeling. But what is reality? 
Reality is I have to work with you. How am I going to get 
improvements, 100 percent improvements, more than 100 percent 
improvements? Because all I saw is 30 percent improvement over 
the last 30 years. That is 1 percent a year. Do I have to wait 
until 2083 to get 100 percent from the VA?
    Ms. Farrisee. Congressman, I believe that the Department is 
working, and we plan to work faster than that.
    Mr. Bentivolio. I have heard that for 30 years. Actions 
speak louder than words. What are you going to do tomorrow to 
eliminate that backlog, to get it done? Because that backlog is 
the same backlog we had in 1973, 1974, 1975. If you want 
something screwed up, let the government do it. That is the way 
I look at it. That is not what my taxpayers are expecting. I 
want quality service to our veterans, not tomorrow, well, 
tomorrow, next week, not in 2083.
    Mr. Mica. I thank the gentleman, and he yields back the 
balance of his time. Ms. Norton?
    Ms. Norton. Thank you very much, Mr. Chairman.
    Just let me say, as I begin this series of questions, the 
backlog is not the same backlog. That is one of my concerns 
here. Because this agency has been given responsibilities it 
did not have in previous administrations. So when I heard 
initially that it was a VA hearing, I said, oh, it must be on 
the backlog of claims.
    Of course, the reason we look so closely now at VA is that 
the President, hearing all the complaints from veterans about 
post-traumatic syndrome, changed the standard, making it more 
possible for veterans to show PTSD. So that is not the same 
backlog, there probably always has been a backlog. But that is 
the reason this agency, I think, is under very, very real 
scrutiny.
    Now, we have had hearings here. In fact, in two of my 
committees on conferences. The first, and I note that this 
conference was held in 2011. So perhaps the VA was not on 
``fair notice.'' But in April of 2012, there were hearings 
about the GSA conferences. And those hearings resulted in 
literally the beheading of the top of the agency, the very top 
of the agency, the GSA administrator and the person who headed 
the main division of the GSA, the Public Buildings Service.
    These occurred in 2011, and there was some evidence that 
this kind of conference goings-on has been systematic in 
Federal agencies for many years now. What made us take very 
special note was, of course, the outlandish GSA conference, but 
also the fact that we were in very hard times and we still are.
    Now, Mr. Griffin, you have testified that there was, in 
most of these instances, failure of the senior officials to 
give the proper oversight. Now, one begins to wonder about 
conferences in hard times and about conferences with agencies 
that have an additional backlog. Not the Vietnam backlog, but 
an additional backlog. Now, as far as I asked staff, as far as 
I could figure our, Mr. Griffin, they said training did occur, 
and we think about 12 percent might be chalked off to 
entertainment, even waste, with most of it going to training, 
is that correct, of these conferences?
    Mr. Griffin. I can't put a percentage on it for you, Ms. 
Norton. They did have plenary sessions in the beginning, in the 
morning.
    Ms. Norton. Were these conferences largely devoted to 
training which we understand the VA staff may have needed, we 
just spoke about PTSD, or was a disproportionate amount of time 
spent on these other activities?
    Mr. Griffin. I wouldn't say it was disproportionate. There 
were four hours of classroom training, if you will, each day.
    Ms. Norton. Four hour each day.
    Mr. Griffin. Right. And there was a plenary session in the 
morning and there was a plenary session at the end of the day.
    Ms. Norton. Was the plenary, do you count that in the four 
hours, or is that additional?
    Mr. Griffin. No.
    Ms. Norton. So it is important to note, this is an agency 
that needed training, they are working on a wholly new form of 
disability that the VA had not fully recognized before. Now, I 
ran a Federal agency, and I am with those who say that of 
course, you don't want to wipe out all opportunities to have 
some fun, particularly people who are under the kinds of 
pressure the VA is under. It is important to note that these 
people may have had some steam to let off, and that is the kind 
of stuff out of context that never tells me anything. Because 
if that happened, for example, in one of this 12 percent of the 
time, I am not so sure that would have been so bad.
    So it doesn't tell me anything. What tells me much more is 
what we did not learn from the GSA conference, and that is that 
most of the time there was being spent, as apparently it was 
here, on training. And I must say, given PTSD, that needed 
training.
    Now, of course, if you head a government agency and you are 
overburdening your senior official, you designate somebody else 
or you hire somebody else. They have designated a conference 
certifying official and he has all kinds of duties. Mr. 
Griffin, this, we now must have a conference certifying 
official, and he is responsible for seeing the after-action 
review, for seeing this special training, that is not a new 
hire, is it? Ms. Farrisee, that is not a new hire, is it?
    Ms. Farrisee. No, Congresswoman, it is not a new hire.
    Ms. Norton. So those are duties in addition to duties 
that--let me just suggest that as important as the training is, 
and I am almost through, Mr. Chairman, I appreciate your 
indulgence, it is difficult to understand how somebody who has 
your, the agency's mandate now, with this extra backlog, in 
addition to whatever backlog you may have had, it is going to 
be very difficult to do what is the central function of the 
agency and pay a lot of attention, as you now require, given 
what has been discovered, to conferences. And I think the 
agency is going to have to look very carefully at what I would 
normally regard as a very important activity, and see if the 
training can be done as training, perhaps in the locations. 
Because I just don't see how this conference certifying 
official, as important and responsible as that designation is, 
is going to be able to do that and do it what Congress is 
really looking at you to do, and that is to get rid of this 
backlog and deal with our veterans.
    Thank you very much.
    Mr. Mica. I thank the gentlelady. Mr. Duncan?
    Mr. Duncan. Thank you very much, Mr. Chairman. I first want 
to commend Mr. Bentivolio for his courage in speaking out in 
the way in which he did. Apparently there are some or many, 
employees of the VA that think that they are immune from 
criticism, because they know that all members of Congress want 
to support the veterans. I can tell you that my father was the 
State Legion commander in 1954, my Uncle Joe was State Legion 
commander in 1963, and those were times, in the 1950s and 
1960s, when the American Legions around the Country were huge. 
And I am the product of Bowie State and now one of the, I think 
it's only about 19 percent of the Congress who are veterans.
    I am proud of my service and appreciated the education and 
opportunities that I got from the military. On the other hand, 
I know that most veterans don't want to see the taxpayers 
abused or money wasted, even in the VA. And we have this, I 
want to commend Mr. Griffin and Mr. Abe for the work that they 
have done.
    We have this report that says there was an email in which 
one Department employees said, we are a large agency with deep 
pockets. And it says this email response was indicative of a 
larger problem throughout the conference planning process. 
Planners disregarded any budgetary concerns and engaged in out 
of control spending. They exercised extremely poor stewardship 
of taxpayer dollars. That is a very disturbing report.
    General Farrisee, in the time of a massive $17 trillion 
debt that is headed up much higher and much faster than ever 
before, how does a statement like this, we are a large agency 
with deep pockets, how do you think that reflects on the 
Department?
    Ms. Farrisee. It is a very troubling statement, 
Congressman. I do not believe it reflect well. I do not believe 
that is the thought process today. I do believe that fiduciary 
responsibilities are taken very seriously and the policies that 
have been put in place will eliminate those types of thoughts.
    Mr. Duncan. Well, another email obtained by the committee, 
a Department employee stated, in this place you have to get it 
all when you can. We have heard and read that this $6.1 million 
on these conferences, that planners, it says planners spent, I 
think Mr. Griffin said $762,000 or some figure like that. Was 
that the figure, Mr. Griffin, on trinkets?
    Mr. Griffin. The total overspend was $762,000 as far as we 
could determine.
    Mr. Duncan. But it could have been more. And then we hand 
in this report that the planners were using these trips, these 
various resort locations, as just paid vacations by the 
taxpayers. It seems to me that this type of activity needs to 
be stopped and it needs to be restricted. If the employees of 
the VA are patriotic, dedicated employees, this will stop.
    General Farrisee, why do you think conference planners were 
able to maximize spending on these promotional products? Did 
any supervisor step in to say that these amounts were too high? 
Or did they just not control this much at all?
    Ms. Farrisee. Congressman, I believe there was a lack of 
oversight through this whole conference planning. There was not 
enough leadership attention to all the details.
    Mr. Duncan. Well, I certainly hope that this stops. All 
this money, instead of it being paid vacations for VA 
employees, as others have said, could have been spent in many, 
many better ways.
    Thank you very much, Mr. Chairman.
    Mr. Mica. Thank you. I recognize the gentleman from Nevada, 
Mr. Horsford.
    Mr. Horsford. Thank you, Mr. Chairman.
    On October 1st, 2012, the Inspector General's office 
publicly released a report issuing 49 recommendations on 
conference oversight, internal controls and spending. Mr. 
Griffin, how many recommendations did Secretary Shinseki concur 
with?
    Mr. Griffin. The Secretary concurred with all of the 
recommendations.
    Mr. Horsford. And in fact, the VA had already issued a 
conference oversight memorandum that began implementing many of 
those recommendations when the report was released, is that 
correct?
    Mr. Griffin. We shared our draft report with the Department 
in August. They had an opportunity to see what the issues were. 
And as I previously testified, they did generate an aggressive 
memorandum laying out new guidance to try and address a lot of 
the issues.
    Mr. Horsford. How many of the 49 recommendations has the 
Department finished implementing?
    Mr. Griffin. We got a flurry of activity in the past few 
days, which is a byproduct of the hearing, so we are grateful 
for the hearing. Roughly half is my belief. But we will get you 
an answer with the precise number for the record. We track 
these recommendations on a quarterly basis. We send a reminder 
to the Department that this is still an open recommendation and 
how are you progressing and getting to closure on it. So it is 
a process that we have had in place. I am told now by my 
colleague that 26 of the 49 are open.
    Mr. Horsford. So 26?
    Mr. Griffin. Twenty-six out of 49 remain open. There has 
been some exchange of information back and forth between our 
follow-up staff and the Department where indications are that 
progress is being made but we have not gotten enough 
information to say that they have met the requirements of the 
recommendation.
    Mr. Horsford. So there are 23 that are still in process?
    Mr. Griffin. No, there are 26. Twenty-three are closed, 26 
are open.
    Mr. Horsford. And of the 26 that are open, where is the 
Department in the process and the progress and what is the 
follow-up on the implementation until they are completed?
    Mr. Griffin. I can't speak to all 26 of them. I have seen 
some of the responses and as I have indicated, there is 
progress being made. But we are not going to close those 
recommendations until we are satisfied that they have nailed 
it. And so far, that is not the case in all of them. Three of 
them involved personnel actions which I understand the 
Department intends to conclude tomorrow.
    Mr. Horsford. Is there a date certain when they all have to 
be completed by?
    Mr. Griffin. We will follow up until they are done.
    Mr. Horsford. But there is not a deadline?
    Mr. Griffin. There is not a deadline. But as things tend to 
get older, we do send a past due list to the Congress every 
quarter to bring it to their attention that some of these 
things have been out there for a long time. We seek to get any 
assistance we can in making sure that the Department 
understands the importance and takes care of the problem.
    Mr. Horsford. Okay. Ms. Farrisee, as Mr. Griffin just 
indicated, the Department now has additional reporting 
requirements to Congress regarding these conferences. How often 
is the VA required to report on conference spending?
    Ms. Farrisee. I will have to pass that question to Mr. 
Murray on conference spending.
    Mr. Murray. We have to report conference spending quarterly 
and annually to the Congress as well as OMB.
    Mr. Horsford. And what kind of information is now included 
in these reports? And who do they go to?
    Mr. Murray. Committees on veterans affairs. Our reports go 
to the OIG, reports go to OMB. It is detailed breakdowns on 
conference spending costs by categories elaborated in the 
statute.
    Mr. Horsford. So the oversight is there for the conference 
spending on a quarterly and annual basis?
    Mr. Murray. I believe it is. And I actually believe there 
is a lot of oversight before a conference is ever approved, 
which is where I think the key oversight belongs is, are there 
alternative methods to do this? Is there another way to 
accomplish this training, short of traveling and enlisting a 
facility and incurring all those incumbent costs. We make a 
very strong, we require the activity to make a strong case 
there first. And then we make them, if they make the case and 
there are good learning outcomes and they can demonstrate there 
are good learning, important outcomes that can be measured, 
then we look at their analysis of different venues.
    I think that is where the control exists.
    Mr. Horsford. Thank you. Thank you, Mr. Chairman.
    Mr. Mica. I thank the gentleman. Mr. Meadows, the gentleman 
from North Carolina, is recognized.
    Mr. Meadows. Thank you, Mr. Chairman. I thank each of you 
for coming
    I want to start off by saying that there are a tremendous 
amount of dedicated workers. I know in Veterans Affairs, 
there's a number of very dedicated employees. Our committee 
staff here is unbelievably dedicated, they do a great job, 
truly, for the American people. So I don't want anything to be 
misconstrued or out there that there is not an appreciation for 
those who serve our Country and work in government. Because 
these hearings can come out that way.
    At the same time, we must address a few of these issues. 
Because I have other governmental agencies saying, why in the 
world do they get to travel and I have people in the Blue Ridge 
Parkway who can't go from one end of the Blue Ridge Parkway to 
others in their service area without having to come back 
because of the unbelievable spending that goes on in other 
areas.
    With that being said, we have some $762,000 that was spent 
according to the IG's report. And Ms. Farrisee, you have said, 
and Mr. Murray, you have said as well, that top officials 
didn't know about it, there wasn't the proper oversight. Could 
you put up an email slide here, queue up the slide for me, this 
is an email, a senior official email to conference planners 
that says, ``Bottom line, you don't have to worry about a 
thing.''
    Now, when a top official asserts to conference planners 
that they don't have to worry about the funding, does that not 
send the wrong message? Mr. Murray?
    Mr. Murray. Absolutely. It is totally the wrong message.
    Mr. Meadows. When do I get to tell the veterans in North 
Carolina, of which you do not have a good track record of 
processing claims in North Carolina, many of the veterans that 
I talk to have to wait, some as many as 600 days to get their 
claims handled. When do I get to tell them, bottom line, you 
don't have to worry about a thing? When are we going to get to 
that point?
    Does this type of spending Ms. Farrisee, when we sent out a 
word like this, what does it tell the American people, when we 
say, bottom line, does it show that we have an unlimited budget 
in the VA?
    Ms. Farrisee. Congressman, we absolutely don't have an 
unlimited budget. And I think it shows a past history of bad 
decisions, bad leadership that controls have been put on.
    Mr. Meadows. I agree. So how many people got fired because 
of the bad leadership and bad decisions? How many? I think I 
know the answer. How many got fired for bad leadership and bad 
decisions?
    Ms. Farrisee. None fired that I am aware of.
    Mr. Meadows. Mr. Murray, how many in your organization got 
fired?
    Mr. Murray. None in my organization.
    Mr. Meadows. Okay. How many of them got disciplined greatly 
in your organization, Mr. Murray?
    Mr. Murray. There was no discipline in mine.
    Mr. Meadows. So no discipline no firings, but yet we have 
bad leadership and bad decisions. Let's go on a little bit 
further, because I am even more troubled by the next slide. 
Here is an email that the Department approved a $450,000 
marketing budget for a conference. Now, why do we need such a 
large marketing budget to make employees go to a conference 
that they're required to go to? Why would we do that? Who makes 
that decision? Who would have made the decision to approve 
that?
    Ms. Farrisee. The leadership of HR&A at the time would have 
made that decision.
    Mr. Meadows. Okay, and they are still employed, right? This 
was a good decision on their part, to market it?
    Ms. Farrisee. They are no longer with the VA.
    Mr. Meadows. Okay. And you were very kind, Ms. Farrisee, in 
the way you responded. I want to thank you for your service and 
thank you for the way that you responded.
    Mr. Murray, I am a little bit troubled, because as we see 
these emails coming out, don't ever play poker. Because they 
are rolling your eyes and huffing and having disdain for the IG 
as these emails come out. Do you think that your organization 
does a great job, Mr. Murray?
    Mr. Murray. My organization, whenever we become aware of 
these issues, we find weaknesses in internal controls, whether 
the IG finds it, General Accountability Office finds it, our 
internal or external auditors find them, we immediately take 
actions to correct, mitigate, fix these kinds of deficiencies. 
We have a good, collaborative relationship with the IG and we 
work in a transparent and accountable fashion.
    Mr. Meadows. But your demeanor today at this hearing 
doesn't show that. I have been watching you. I watch people all 
the time. So your demeanor would indicate that you are a little 
frustrated by these emails as they roll out, as they are 
telling a story. Do you agree with the story that this is 
indicative of those who are making decisions, that they didn't 
have an accountability for cost?
    Mr. Murray. The employees that work for me, the employees I 
work with, the leaders I work with have a strong accountability 
for the costs, for their actions, exercise good judgment. So I 
find this very dismaying, very disappointing, sir. And that is 
the expression I would like to convey.
    Mr. Meadows. So when does this translate into my veterans 
in North Carolina being able to count, the moms and dads, the 
children counting on those, being taken care of? When are we 
going to get our act together? Not just on conferences.
    I yield back.
    Mr. Mica. I thank the gentleman. Waiting patiently and last 
but not least, and I think a day older after celebrating her 
birthday, the gentlelady from New Mexico, Ms. Lujan Grisham, 
you are recognized.
    Ms. Lujan Grisham. Thank you, Mr. Chairman, and thank you 
for recognizing that yes, indeed, I am another year older, 
which, given the alternative, I am willing to take. I had a 
nice time last night.
    I know that being one of, maybe the last person to talk, 
that you are clear that I think both sides, my colleagues on 
this committee, are clear that in the best of circumstances, 
our job and yours, no matter how much resources you have or 
don't have, is to use that funding in the most effective and 
streamlined way that you can. And that further, I would agree 
that where you have the flexibility to move as much of your 
administrative funds, including training and conferences, into 
the direct services and benefits where you are actually making 
a difference for veterans and families directly. Given that I 
have 20 plus years in local and State government and worked as 
a cabinet secretary, I was clear that my dollars that were 
appropriated for me needed to go to seniors and their families. 
That was an effective use of my time.
    However, I also recognize that when we react strictly and 
narrowly, we can also do damage. Because if I want you to 
provide those direct services and benefits in a meaningful way, 
your staff must be trained and have access to innovative new 
resources and tools. And if we do get a new software program 
implemented that really helps with the backlog and is more 
effective, you are going to need training just at that level. 
And that is not really what we are talking about here, but I am 
a big fan of having appropriately trained and a productive 
public and private workforce that are doing the best possible 
job.
    So I am certainly not going to be your advocate, I don't 
think anybody here is, for spending nearly a million dollars on 
a conference that had marketing. We know that that is never 
going to happen again, or your jobs now is make that happen. We 
also recognize in a public system there are limitations about 
how you deal with accountability. I think that is an area that 
we ought to do a better job too, in terms of holding folks 
accountable.
    So thank you for being here. Thank you for owning this 
problem and thank you for implementing as many of those 
recommendations. But I am going to take a different twist, 
which is, I think that the OMB's reaction might cause harm and 
not get to the real issue, which is, we expect you to be 
effective and smart and professional about how you spend all of 
your money, regardless of what it is and what it is intended 
for.
    So I am going to remind folks that last year, OMB ordered 
Federal agencies to reduce travel and conference expenses by 30 
percent by 2016, and then my district is home to Sandia 
National Laboratories, which is one of the critical players in 
the Nation's complex energy, national defense, cybersecurity 
and employs some of the Country's best and brightest minds. I 
am going to read you an excerpt from a letter that Dr. Paul 
Hommert, the Director of Sandia Laboratories, wrote to me about 
these restrictions.
    He shares my concern that these will harm the ability of 
the national labs in their research, their scientists and 
engineers to share knowledge and collaborate with their peers 
in academia and industry. These interactions are critical to 
keeping our researchers at the cutting edge in their field.
    He shares my desire to ensure that we are spending our 
taxpayer dollars wisely while effectively helping the 
government accomplish its missions. Dr. Hommert offers 
suggestions for developing standards for evaluating and 
managing the risk and cost of conference travel spending. And 
then I ask, Mr. Chairman, unanimous consent to place the whole 
letter in the record.
    Chairman Issa. [Presiding] Without objection, so ordered.
    Ms. Lujan Grisham. Thank you, sir. And I have another 
letter that is from the Center for Association Leadership, a 
watchdog organization, who is also looking at these balances. 
Clearly we don't want these mistakes made. But we want to be 
careful that we don't minimize opportunities that make us a 
more efficient and effective government. And I would ask 
unanimous consent to put this letter into the record, Mr. 
Chairman.
    Chairman Issa. Without objection, so ordered.
    Ms. Lujan Grisham. And that is really my statement. I only 
have 30 seconds, and I am not sure if there is anything to 
respond to except, I hope that what we leave this hearing with 
is the kind of issues that we have identified should never come 
before this Committee or anyone else again. We are expecting 
wise, smart, efficient, effective leadership in all of our 
public entities. We want to be sure that the recommendations 
that you put in place do effectively prohibit this kind of 
waste but don't limit the opportunities to have a well-trained, 
well-recognized, productive workforce. My fear is we will go 
too far and we won't do health research, scientific research 
and we won't find the best way to serve our veterans and their 
families.
    Thank you very much, and with that, Mr. Chairman, I yield 
back.
    Chairman Issa. I thank the gentlelady. Does the ranking 
member want to close?
    Seeing none, Ms. Farrisee, I am informed by staff that 
having reviewed what was sent to us as ``the manual,'' entitled 
memorandum, without objection be placed in the record.
    Chairman Issa. With all due respect, I have had to have 
manuals under ISO-9000 that complied. This ain't it. This isn't 
even close to it. Is there some other document that we are 
unaware of that would reflect a manual? You can confer with 
your staff.
    Ms. Farrisee. Mr. Chairman, the handbook was included in 
the OIG response on October 23rd.
    Chairman Issa. We did not receive that response. October 
23rd was pretty recent.
    Mr. Griffin, do you know something about this?
    Mr. Griffin. As I mentioned in your absence, Mr. Chairman, 
there has been a flurry of documents being sent to us as a 
result of the hearing, for which we are grateful.
    Chairman Issa. So in other words, if we keep hauling them 
in, we will get what we ask for?
    Mr. Griffin. I can't say that I have personal knowledge of 
receipt of the manual. I don't question the integrity of the 
answer given, but I haven't seen it myself.
    Chairman Issa. Well, then, I hope you will pledge to 
forward us a copy if you find it in that last minute dump in 
anticipation of this hearing.
    Mr. Griffin. We will do that, Mr. Chairman.
    Chairman Issa. Thank you.
    Before I go the ranking member, I do want to thank you for 
being here. Ms. Farrisee, I expect that we will see you in the 
future. Because it is the intention, I just talked to the 
chairman of Veterans Affairs Committee, it is the intention of 
both our committees to both continue looking at what is driving 
backlog down, if it starts really going down, and a continued 
look about the question of the VA's drive to change the 
culture.
    And Mr. Griffin, I would suggest that you might keep us 
informed on whether the culture of timely delivery of your 
requests are being met. Because the idea that something arrives 
just before but not in time for you to review it for a full 
committee hearing again begs the question of whether you and 
Mr. Abe are being treated with the respect within your own 
department that we expect all IGs to be treated with.
    And with that, I recognize the ranking member.
    Mr. Cummings. Thank you very much.
    I think it would be Ms. Farrisee, you can check with your 
staff, will you let us know how long is the handbook? How many 
pages is it? Just give me an approximation.
    Ms. Farrisee. It is about 40 pages.
    Mr. Cummings. Forty pages, I see. First of all, Mr. 
Griffin, I want to thank you, Inspector Griffin, I want to 
thank you and your staff. I have to tell you, Ms. Farrisee and 
Mr. Murray, we can do better. And I think you would agree with 
that, don't you, Inspector General? Do you agree?
    Mr. Griffin. I do agree.
    Mr. Cummings. We can do better. I think that it would be 
legislative malpractice if we stood on this side of the dais 
and said, okay, everything is okay. It is not okay. We are 
hoping that you will take that word back to your agency. We 
realize you probably have a lot of balls up in the air. But I 
have to tell you, well, first of all, as far as conferences are 
concerned, I can see you are not spending as much money. You 
seem like you have gotten pretty good control, it seems that 
way. But we will see when you submit the documents that you 
will be submitting.
    But we also are concerned about the backlog. And the 
chairman talks about this whole culture, what kind of culture 
we have there at Veterans. We want to make sure that culture is 
one that believes in efficiency and effectiveness, that 
believes in making sure that the taxpayers' dollars are spent 
in a prudent way, and makes sure that money is spent to enhance 
the lives of our veterans. They have already given their blood, 
sweat and tears. We have so many families who have lost a loved 
one.
    So again, we see this as the urgency of now, I have to tell 
you, when we were talking about the handbook, I didn't feel a 
sense of urgency, although I know we have gotten a draft. Then 
I asked a question about a document that was due October 1st, 
2012, and it seemed as if, you know, we will get to it when we 
can. Well, that is not good enough.
    So again, I am hoping that you will go back, that you will 
address these issues with some sense of urgency. With that, Mr. 
Chairman, I yield back.
    Chairman Issa. I thank the gentleman and I thank all 
participants today, particularly out witnesses. With that, we 
stand adjourned.
    [Whereupon, at 11:40 a.m., the committee was adjourned.]


                                APPENDIX

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