[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF FCC BUDGET AND MANAGEMENT
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 17, 2014
__________
Serial No. 113-175
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon ANNA G. ESHOO, California
LEE TERRY, Nebraska ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado PETER WELCH, Vermont
MIKE POMPEO, Kansas BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia JOHN A. YARMUTH, Kentucky7
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Communications and Technology
GREG WALDEN, Oregon
Chairman
ROBERT E. LATTA, Ohio ANNA G. ESHOO, California
Vice Chairman Ranking Member
JOHN SHIMKUS, Illinois MICHAEL F. DOYLE, Pennsylvania
LEE TERRY, Nebraska DORIS O. MATSUI, California
MIKE ROGERS, Michigan BRUCE L. BRALEY, Iowa
MARSHA BLACKBURN, Tennessee PETER WELCH, Vermont
STEVE SCALISE, Louisiana BEN RAY LUJAN, New Mexico
LEONARD LANCE, New Jersey JOHN D. DINGELL, Michigan
BRETT GUTHRIE, Kentucky FRANK PALLONE, Jr., New Jersey
CORY GARDNER, Colorado BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois JIM MATHESON, Utah
BILLY LONG, Missouri G.K. BUTTERFIELD, North Carolina
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California, ex
JOE BARTON, Texas officio
FRED UPTON, Michigan, ex officio
C O N T E N T S
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Page
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 1
Prepared statement........................................... 3
Hon. Anna G. Eshoo, a Representative in Congress from the State
of California, opening statement............................... 4
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 5
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 6
Witnesses
Jon Wilkins, Managing Director, Federal Communications Commission 7
Prepared statement........................................... 10
Answers to submitted questions............................... 50
David Hunt, Inspector General, Federal Communications Commission. 16
Prepared statement........................................... 19
Answers to submitted questions............................... 69
OVERSIGHT OF FCC BUDGET AND MANAGEMENT
----------
WEDNESDAY, SEPTEMBER 17, 2014
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:20 a.m., in
room 2123, Rayburn House Office Building, Hon. Greg Walden
(chairman of the subcommittee) presiding.
Present: Representatives Walden, Latta, Shimkus, Terry,
Blackburn, Lance, Guthrie, Kinzinger, Long, Eshoo, Braley, and
Waxman (ex oficio).
Staff Present: Ray Baum, Senior Policy Advisor/Director of
Coalitions; Sean Bonyun, Communications Director; Leighton
Brown, Press Assistant; Andy Duberstein, Deputy Press
Secretary; Graham Dufault, Policy Coordinator, CMT; Gene
Fullano, Detailee, Telecom; Kelsey Guyselman, Counsel, Telecom;
Grace Koh, Counsel Telecom; Tim Pataki, Professional Staff
Member; David Redl, Counsel, Telecom; Charlotte Savercool,
Legislative Clerk; Shawn Chang, Minority Chief Counsel for
Communications and Technology Subcommittee; Margaret McCarthy,
Minority Professional Staff Member; Ryan Skukowski, Minority
Policy Analyst and Patrick Donovan, Minority FCC Detailee.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. We will call to order the subcommittee on
Communications and Technology for our hearing on the oversight
of the FCC budget and management.
Today we continue the committee's efforts to reform the
FCC's process. For the past two Congresses the House has passed
the Federal Communications Commission Process Reform Act. The
FCC Process Reform Act is bipartisan legislation that passed
the House on March 11 of this year and would bring needed
reforms to the commission's processes to guarantee the
transparency and accountability that is the hallmark of
effective and legitimate government.
Unfortunately, like so many really, really good pieces of
bipartisan legislation, H.R. 3675 remains stuck and stalled in
the Senate, without so much as a hearing to consider this much-
needed legislation. While the FCC process reform continues to
wait for the Senate the Energy and Commerce Committee has kept
our foot on the accelerator and continued with our oversight
efforts of the Federal Communications Commission processes.
In this time of transformative technological innovation and
unprecedented private investment in the communication sector of
our economy, we have to ensure that the FCC does remain
vigilant in executing the duties prescribed by the Congress,
operates within the bounds of the law, and does these things
transparently, effectively, and efficiently. The American
people deserve no less.
When we last convened to discuss the oversight and FCC
process reform, we met with Chairman Wheeler amid reports of
fraud processes undermining the Commission's decision-making.
We voiced our concerns regarding reports of the chairman's
office withholding decision documents for other members of the
commission until the eleventh hour and decisions by the
chairman's office used the delegated authority of the bureaus
to circumvent debate and vote by the full Commission.
While I am a firm believer that the buck stops with the
chairman, the FCC is a complex organization with a myriad of
levels of bureaucracy. So today we will take a closer look at
the FCC below the commissioner suites of the eighth floor.
Now, since our last hearing the subcommittee has examined
additional aspects of the FCC's operation, including management
of backlog and current workload, staffing, its budget and
operating expenses, as well as other related issues through
inquiries and information requests to the agency.
The FCC's responses to our questions, reports, submitted by
the Inspector General and reports in the media, raised some
concerns, are pretty serious as to whether the FCC's house is
actually in order. In contrary to Chairman Wheeler's oft touted
remedy, the solution to the Commission's woes is not simply to
throw more money at the problem, but to use the money available
to the Commission more effectively.
Nowhere is this more evident than in the FCC's IT
expenditures. According to the FCC's responses to our data
requests, it spent more than $352 million in the last 5 years
on IT. Now, how much of that money was wasted on the FCC's
disastrous revamp of its Web site? How much is now being spent
to quote unquote ``fix the Web site'' that then FCC's CIO Steve
VanRoekel said would pay for itself in just 9 months? And how
much was spent on the Commission's public efforts to
consolidate aging licensing systems only to have the project
simply disappear; years of work apparently abandoned.
Duplicative spending also seems to be a challenge for the
Commission. While I applaud the FCC's efforts to reduce waste,
fraud, and abuse in Universal Service Fund it appears from Mr.
Hunt's testimony that the Commission now has two teams doing
substantially similar work. I should note that Mr. Hunt's
raising of this issue is itself a profile in courage, as,
unlike many other Inspectors General within the U.S.
Government, the chairman can recommend his removal. So he is in
a unique position, but we appreciate your thoughtful testimony.
The FCC has big challenges to address and hopefully today's
hearing will put some light on those efforts. This morning, we
will hear from Mr. Jon Wilkins, who is the FCC's managing
director, whose office is responsible for the administration
and management of the Commission, including such things as the
Commission's budget and financial programs, human resources,
and communications and computer services.
He is joined by David L. Hunt, the FCC's Inspector
General's office provides investigations, audits, and reviews
of the FCC's programs and operations. It is my hope that their
responses to our questions will provide us with a better
understanding of the FCC's challenges and how the FCC plans to
return to the fundamentals of strong management and fiscal
prudence.
With that I yield the balance of my time to the Vice Chair
of the committee, Mr. Latta.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
Today we continue with the committee's efforts to reform
FCC process. For the past two congresses, the House has passed
the Federal Communications Commission Process Reform Act. The
FCC Process Reform Act is bipartisan legislation that passed
the House on March 11 of this year and would bring needed
reforms to the commission's processes to guarantee the
transparency and accountability that is the hallmark of
effective and legitimate government. Unfortunately, like so
many pieces of bipartisan legislation, H.R. 3675 remains stuck
in the Senate, without so much as a hearing to consider this
needed legislation.
While FCC process reform continues to wait for the Senate,
the Energy and Commerce Committee has kept our foot on the
accelerator and continued with our oversight efforts to improve
FCC processes. In this time of transformative technological
innovation and unprecedented private investment in the
communications sector of our economy, we must ensure that the
FCC remains vigilant in executing the duties prescribed by
Congress, operates within the bounds of the law, and does these
things transparently, effectively, and efficiently. The
American people deserve no less.
When we last convened to discuss oversight and FCC process
reform, we met with Chairman Wheeler amid reports of flawed
processes undermining the commission's decision-making. We
voiced our concerns regarding reports of the chairman's office
withholding decision documents from other members of the
commission until the eleventh hour, and decisions by the
chairman's office to use the delegated authority of the bureaus
to circumvent debate and vote by the full commission. While I
am a firm believer that the ``buck stops'' with the chairman,
the FCC is a complex organization with myriad levels of
bureaucracy. Today, we will take a closer look at the FCC below
the commissioner's suites of the ``8th floor.''
Since our last hearing with Chairman Wheeler, the
subcommittee has examined additional aspects of the FCC's
operation including, management of backlog and current
workload, staffing, its budget and operating expenses, as well
as other related issues through inquires and information
requests to the agency. The FCC's responses to our questions,
reports submitted by the Inspector General and reports in the
media raise serious concerns as to whether the FCC's house is
in order.
And contrary to Chairman Wheeler's oft-touted remedy, the
solution to the commission's woes is not simply to throw more
money at the problem, but to use the money available to the
commission more effectively. Nowhere is this more evident than
in the FCC's IT expenditures. According to the FCC's responses
to our data requests, it has spent more than $352 million in
the last five years on IT. How much of that was wasted on the
FCC's disastrous revamp of its Web site? How much is now being
spent to ``fix'' the Web site that then-FCC CIO Steve Van
Roekel said would pay for itself in just nine months? And, how
much was spent on the commission's public efforts to
consolidate aging licensing systems, only to have the project
simply disappear, years of work apparently abandoned?
Duplicative spending also seems to be a challenge for the
commission. While I applaud FCC efforts to reduce waste, fraud,
and abuse in the Universal Service Fund, it appears from Mr.
Hunt's testimony that the commission now has two teams doing
substantially similar work. I should note that Mr. Hunt's
raising of this issue is itself a profile in courage, as unlike
many other inspectors general within the U.S. government, the
chairman can recommend his removal.
The FCC has big challenges to address and hopefully today's
hearing will shed some light on those efforts. This morning, we
will hear from Mr. Jon Wilkins the FCC's Managing Director
whose office is responsible for the administration and
management of the commission including such things as the
commission's budget and financial programs, human resources,
and communications and computer services. He is joined by David
L. Hunt the FCC's Inspector General whose office provides
investigations, audits, and reviews of the FCC's programs and
operations. It is my hope that their responses to our questions
will provide us a better understanding of the FCC's challenges
and how the FCC plans to return to the fundamentals of strong
management and fiscal prudence.
Mr. Latta. I thank the chairman for yielding and I
appreciate you holding this hearing today and I thank our
witnesses for being with us today.
Oversight of the FCC serves a critical function in
maintaining efficiency, transparency, and accountability at the
agency. Given the FCC's integral role in the information and
communications technology marketplace, and the growing online
ecosystem, we have a responsibility to ensure that the
processes and procedures at the FCC are not wasteful and
reflect the capability that handles such significant parts of
our Nation's economy.
To that end, today's hearing represents a valuable
opportunity to gather additional information about the FCC's
budget management, and spending practices and better understand
challenges confronting the agency, its work, and other
potential issues limiting the efficiency of its operations.
I look forward to the testimony of our witnesses, Mr.
Chairman.
With that I yield back.
Mr. Walden. The gentleman yields back.
I now turn to my friend and colleague from California, Ms.
Eshoo for an opening statement.
OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Eshoo. Thank you, Mr. Chairman, for holding this
hearing, and good morning to our witnesses and welcome.
Connecting America, protecting and empowering consumers,
and promoting competition, these are among the strategic goals
outlined by the FCC in its fiscal year 2015 budget request.
Now, to achieve these goals, the FCC has to be equipped
with the necessary resources to effectively carry out its
mission, including sufficient staffing, a modern IT system,
which we will talk about, and improved collection of consumer
complaint information so that the agency and its people really
better understand the communication challenges facing the
American people; not just the interests that come in the door,
but what the American people are saying.
And very recently, what the American people were saying,
there were so many of them saying it that the system crashed.
So I don't think in my view that we were very well prepared for
that.
Now, the office of the Inspector General, I have a great
deal of regard, a deep regard for IGs across our government
because they play really a critical role in upholding the
integrity of an agency. And so that the American public knows,
you are the ones that are there for them to guard against any
kind of abuse, any kind of fraud, any kind of waste and I think
that we are all cognizant of that, and that we have a regard
for it, and the independence of IGs is very important.
I have never understood why the system is the way it is
because it establishes huge tensions immediately. I learned
this when I was almost a 10-year member of the House
Intelligence Committee. You know, the intelligence community
didn't want IGs to do a damn thing, but the head of the agency
was the one that was calling the shots. I mean, go figure.
So but that is the way it is set up. I don't think it is
the best way. But for decades, the audits and the
investigations conducted by the IG's office have, I think,
complemented the FCC's work.
Now, in recent years, it has included the implementation of
important programmatic reforms to strengthen and modernize the
agency, but despite the dramatic increase in scope and breadth
of issues being considered by the FCC over the past 30 years,
today's FCC has 200 fewer employees than it did in 1984.
So we are charging the agency with executing the world's
most complex spectrum auction, evaluating two major, major
mergers, and preparing for the IP transition. This all requires
significant staff time and resources. And the agency funds the
IG. And the IG has a considerable team of people in the agency
sourced through their HR department; I think 39 or 40
employees, I have like 12 in two offices. So you have a lot of
people.
And so I think today what I would like to know, and I hope
that there are not personality conflicts in this. That is the
mark of humanity. I really want to examine what you think you
are not able to do that you should be doing. I don't believe
that we need criminal investigators relative to the E-Rate
going into classrooms and libraries. I think that is the
equivalent of having all of these Army tanks going into local
PDs, they all don't need that.
I hope today that when the IG leaves, that he and his team
will have a clear understanding from Members of Congress of
what we want, we think is important that you keep your eye on
in terms of investigation and all of that.
So with that, Mr. Chairman, thank you for holding this
hearing.
It is always important for us to review the efficiency and
the effectiveness of an agency and I think that is what today's
hearing is about.
Thank you, and I yield back.
Mr. Walden. I thank the gentlelady.
I now turn to the vice chair of the full committee, Ms.
Blackburn from Tennessee, for 5 minutes.
OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Mrs. Blackburn. Thank you, Mr. Chairman.
And I thank you for your focus that you have put on FCC
reform and the importance of that, especially as we look at
being a knowledge economy, as we look at interactive
technologies and the impacts that they have on every single
sector of our economy.
As we do the oversight and look at process and look at
reforms with you all, we are interested to hear what you have
to say and the chairman said that well in his opening
statement, and looking at what is happening throughout the
bureaucracy of the FCC.
One of the things that we will be looking for is how close
are you to your core competencies and your core mission in
delivering service to the American people? Where are you into
areas where you should not be and what type of resources are
you expending on those areas? The bureaucracy, and how that has
grown, has changed, what has happened with that process? And we
do this in the light as we seek to rid the agency of
duplication. And by the way, the Inspector General's office and
the FCC strike force, that might be one of those areas of
duplication where resources would be better used.
We do this realizing that we have a responsibility to the
taxpayer. Hard-working taxpayers send their money to
Washington, D.C. Many taxpayers struggle to live within their
means and pay taxes to the Federal Government for a government
that refuses to live within its means. We are still borrowing
$0.36 of every dollar we spend.
So due diligence and making certain that the bureaucracy,
via the use of technology continue to right size themselves and
not duplicate programs, and not waste funds, and not have the
attitude of, well, it is Federal money, if we need more, we can
print more. Those are things that are important to our
constituents, and we appreciate that you are willing to be here
and help us answer those questions.
I will be willing to yield time to any Member who would
seek it.
Mr. Walden. Anyone on our side want the rest of the time?
Mrs. Blackburn. I yield back to the chairman.
Mr. Walden. I thank the gentlelady for her work on these
and other issues.
And now we will turn to the gentleman from California with
the bright purple tie, Mr. Waxman, for 5 minutes.
Mr. Waxman. Thank you, Mr. Chairman, you have Californians
to the left of you.
Mr. Walden. Usually always that is the case.
Mr. Waxman. And we are pleased to be with you.
Mrs. Blackburn. And Tennesseeans to the right.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Far right.
This subcommittee has spent a substantial amount of time
focused on the operations and processes of the Federal
Communications Commission, and I support oversight of the FCC,
which is a small but critical agency charged with overseeing
industries that make up nearly \1/5\ of our National economy.
What we are learning is that the FCC is making significant
progress in improving its operations and eliminating backlogs.
Under former Chairman Genachowski and current Chairman Wheeler,
the FCC has taken strides to improve transparency and
efficiency in decisionmaking. Within the past 6 months alone,
the agency has closed over 640 dormant proceedings and doubled
the total number of media license applications resolved in all
of 2013.
The Commission is also working hard to reduce the number of
backlog across all of its bureaus and offices. And although
contentious issues often grab headlines, the vast majority of
decisions made by the chairman and commissioners are bipartisan
and unanimous.
Chairman Wheeler came into office at the end of last year
and immediately took action to build on the momentum for
process reform. On his first day in office, Chairman Wheeler
appointed a senior advisor to examine FCC process reform and
issue recommendations for agency action.
One of our witnesses today, Mr. Wilkins, will be able to
tell us about the progress that is being made to implement
those recommendations as well as the barriers preventing the
agency from making process improvements. Process reform is
moving forward at the same time the FCC is implementing a
significant new law and overhauling numerous programs for the
broadband era.
Congress has tasked the FCC with conducting the world's
first ever incentive spectrum auction. This is a complex task
with many competing priorities that will impact competition and
innovation for years to come. The FCC has also adopted reforms
to all four of the Universal Service Fund programs, most
recently in the E-Rate program. These reforms will enhance
support for connectivity and capacity to schools and libraries
across the Nation.
And an unprecedented number of Americans have filed
comments with the agency about the proposed open Internet
rules. Despite the difficult budget climate, the dedicated and
talented public servants at the FCC are ensuring the agency's
mission is being fulfilled.
Today we will also hear from the FCC's Office of Inspector
General. Inspectors General were created by Congress to protect
the integrity of agencies and programs funded with public
resources.
And I look forward to learning about the significant
accomplishments of the Inspector General in combatting waste,
fraud, and abuse. I take seriously the concerns that the IG has
raised and I want to learn more about them.
Thank you, Mr. Chairman.
And then I yield back the balance of my time.
Mr. Walden. The gentleman yields back the balance of his
time.
That concludes our opening statements from the committee
members. We thank you all for your participation.
We will go now to our first witness Mr. Jon Wilkins who is
the managing director of the Federal Communications Commission.
Mr. Wilkins, thank you for being here. Thanks for the work you
do. Pull that microphone a little closer, and please go ahead.
STATEMENTS OF JON WILKINS, MANAGING DIRECTOR, FEDERAL
COMMUNICATIONS COMMISSION; AND DAVID HUNT, INSPECTOR GENERAL,
FEDERAL COMMUNICATIONS COMMISSION
STATEMENT OF JON WILKINS
Mr. Wilkins. Thank you. Good morning Chairman Walden,
Ranking Member Eshoo, members of the subcommittee. My name is
Jon Wilkins, and since November----
Mr. Walden. Yes, you actually have to be pretty close to
these. That is better.
Mr. Wilkins. OK. And since November last year I served as
the FCC's managing director.
My testimony today will focus on our management activities,
how they relate to our budget and especially to our process
reform efforts. And I have already submitted my written
testimony so I will just focus on a few points and then answer
all of your questions.
As managing director, my primary function is to support the
efficient and effective management at the FCC. My staff of 208
employees includes areas including budget, IT, HR
administration. As several members of the subcommittee have
noted, immediately upon coming into office Chairman Wheeler
identified process reform as a priority management objective.
My staff was heavily involved in developing the recommendations
that flowed into the February 14th staff report.
From a management standpoint, process reform fundamentally
is about measuring and tracking. When we can measure and track,
we actually can simultaneously become more transparent and more
efficient and that is the mission that my office has in process
reform.
Today we have delivered some early wins of available
resources. Just a few examples by the end of this year, we will
have a new consumer complaint process online that will be much
better; online FOIA, and electronic filing; we are working on
improving the Web site; we have also directly supported
Commission bureau efforts to close both 1,500 stale dockets,
and by our broadest measure of backlog we have reduced that
about 29 percent since May.
In addition to the process reform focus, we do do budget IT
and human capital work commission wide, so just a few points of
emphasis. First, the budget is the starting point for all of
our management efforts. As I came in and began to develop
forward-looking plans for the new chairman's priorities, I
pretty quickly did grapple with the reality that the flat
funding the Commission has had since 2009, despite the growth
in some operational costs, and quite a few new mandates, it
really has challenged our ability to maintain current service
levels.
Another factor, the impact of sequestration did introduce
some real budget uncertainties that made it quite hard recently
to be investing in any kind of long-term efficiency. So given
that, our 2015 budget request asks for an increase in three
areas.
First, we do have some uncontrollable cost increases, rent,
utilities, pay increase, retirement plan, and support.
Second, IT modernization, fundamentally, is about trying to
improve our IT cost profile as well as better deliver mission
objectives, including process reform. We have asked for a total
of $18 million in funds for several IT areas, but primarily for
the enterprise modernization. That really will tackle head on
the main problem we face in IT, which is our 207 legacy
systems, over 40 percent of which are over 10 years old that
really are just increasingly expensive for us to maintain and
operate.
And third, Chairman Wheeler made very clear to FCC
management that he views USF oversight and enforcement as a top
priority. Our 2015 budget request supports that by asking for
45 new FTEs at a cost of $10.8 million, to be part of an
interagency USF oversight task force that actually included
several FTEs for the IG's office; and the overall focus is to
make sure that we are fully discharging our obligations to
oversee universal service as it is going through a number of
major changes.
At this point I do just want to address a couple of quick
points in the Inspector General's written testimony.
First, Commission management unequivocally respects,
values, the independence of the Office of Inspector General. We
do not interfere in the Inspector General's mission.
Second, specifically with regard to hiring activities, the
Section 1811 criminal investigators. We fully agree the IG has
independence to hire whoever their office needs to fulfill
their mission, my HR staff does have an obligation to ensure
that we are complying with applicable civil service rules, and
that is the only constraint that we have.
And third, the Commission really does take seriously our
management's oversight obligation of universal service. We have
always coordinated with the Inspector General's office. We will
do more of that in the future and we view it as a really top
priority for management to make sure we are fully discharging
our obligations over universal service.
So just to conclude, I do have very clear marching orders
in my office. Chairman Wheeler has directed me to improve our
management practices to take all steps possible to implement
process reform. We are fully funded by regulatory fees and so
we are very mindful of making every dollar count.
And I look forward to taking your questions, so thank you.
Mr. Walden. Mr. Wilkins, thank you very much.
[The prepared statement of Mr. Wilkins follows:]
[GRAPHICS AVAILABLE IN TIFF FORMAT]
Mr. Walden. We will now go to Mr. David L. Hunt, who is the
Inspector General for the Federal Communications Commission.
Thanks for the good independent work you do.
Mr. Hunt, we look forward to your testimony.
STATEMENT OF DAVID HUNT
Mr. Hunt. OK, thank you, Mr. Chairman.
Thank you again Chairman Walden, and Ranking Member Eshoo,
and members of the subcommittee.
Good morning. I appreciate the opportunity to come before
you today to discuss issues pertaining to the management,
operations, and budget of the Federal Communications
Commission. I would like to take this opportunity to thank the
committee for its continued support of our efforts, which has
consistently been demonstrated by the approval of our budget.
My testimony today will discuss our oversight and
investigative activities related to the FCC's major program
areas. I will then discuss several areas of management and
budget, and our oversight of these areas that merit attention
and will conclude with a discussion of the challenges we face
in providing efficient and effective oversight of the
Commission.
Our annual audits of the FCC's financial statements have
resulted in clean audit opinions for the past several years,
and management has made improvements to the financial
management of the FCC. However, our audits of the FCC's
financial statements and information security have disclosed
findings and resulted in recommendations for improvement to
management, many of which are duplicated every year.
Lately we have conducted more audits of FCC's internal
processes and procedures. These audits have disclosed generally
acceptable results, but several bring to light serious
deficiencies in FCC's practices. For example, we will soon
issue a report on an audit of the FCC's management of civil
monetary penalties that disclosed that the FCC has not
collected all of the penalties and the fines it could have, and
uncollected penalties have been carried on the agency's books
for years, a few even for decades.
However, this internal focus has not caused any detriment
to the oversight of FCC's programs, such as the Universal
Service Fund and the Telecommunications Relay Service Fund
because of increased efficiencies within OIG and support from
other Federal agencies.
OIG annually submits a statement summarizing our assessment
of the most serious management challenges facing the FCC. OIG
is currently developing the fiscal year 2014 statement and we
anticipate the areas of challenge to be similar to fiscal year
2013. In fiscal 2013 we noted the challenges continue to exist
in the USF program, the TRS fund, and overall innovation at the
FCC.
In the past 2 years, our investigatory staff has achieved
impressive results securing numerous settlements and criminal
convictions, thus protecting the integrity and quality of the
programs the FCC oversees and generating hundreds of millions
of dollars in savings and recoveries for the past several
years.
The results of the investigative team's work are even more
impressive in light of the fact that my efforts to expand the
capabilities of this team by hiring criminal investigators has
not been allowed. I will return to that topic momentarily, but
I would first like to discuss some of my investigative team's
accomplishments.
Since I last appeared before you we have secured our very
first indictments and guilty pleas in the low-income program of
the Universal Service Fund. This was an issue mentioned to me
last time when I appeared before the committee. We have also
obtained additional convictions related to fraud in provision
of Video Relay Service, a program we have focused on for years,
frankly, with remarkable results.
We are working alongside the FBI, DOJ, Department of
Interior, Department of Education, in numerous criminal cases
involving all of USF programs, but as these matters are
ongoing, I cannot discuss too many in public at this time.
On the civil side, the OIG investigation's team is
continuing its oversight of the E-Rate and other USF programs
as well as Commission spectrum auctions to identify individuals
and companies who may be engaged in activities to defraud these
programs. In this regard we have initiated cases based on
information developed in the first instance within the OIG as
well as being assisted by the Department of Justice in numerous
qui tam cases under the Federal False Claims Act.
Lastly, in addition to our programmatic work, OIG has a
team of investigators that deals with allegations involving
Commission internal operations. Our efforts have led to
discipline including the dismissal or retirement of a number of
Commission employees.
Over the years that I have been the IG, I have had
generally a very good working relationship with agency
management. However, there are several areas that still give me
great concern. I have been trying for over 2 years to hire
criminal investigators to continue to expand my ability to
conduct criminal investigations and raised the issue with
Chairman Wheeler. Management has so far refused to support
these hires and precluded my ability to staff my office in the
way that I see fit. I have already been informed that there is
no support for OIG to hire criminal investigators. I continue a
dialogue with OIG management, but to no avail.
In addition, FCC human resources have for several years
retained the right to approve every OIG hire. My deputy IG, or
my assistant IG for management must e-mail the chief of HR and
ask permission for each hire, be it an auditor or attorney or
even for administrative support. We have asked many times why
this is necessary, and for this practice to end, but have
received neither an explanation for, nor relief from this
restriction.
The IG Act states that each Inspector General is authorized
to select, appoint, and employ such officer employees as may be
necessary for carrying out the functions, powers, and duties of
the office. This statement is clear and unambiguous and
authorizes IGs to make personnel determinations necessary for
carrying out IG offices' responsibilities.
While in truth, with the exception of my request for
criminal investigators, I have never been denied a hire,
nonetheless management's involvement in OIG personnel matters
appears to be a direct contravention of the IG Act.
Further, every time one of my managers has to request
permission from an FCC manager to hire someone, I believe our
independence is impugned. This ongoing practice gives my office
at the very least the appearance of a lack of independence from
FCC management.
I would like to address one final area of concern. In July,
FCC Chairman Wheeler announced the creation of a strike force
to combat fraud, waste, and abuse in the Universal Service
program. Many in Congress, Chairman Walden included, I believe,
approved the creation of the task force and I, too, am pleased
to see the FCC become active in reducing fraud within USF.
However, this action was taken with no coordination from OIG
and complications abound.
As my testimony this morning has demonstrated, FCC's OIG in
recent years has had unprecedented success. We have been
instrumental in effecting significant savings on consumers'
telephone bills and significantly helped ferret out fraud from
entire FCC programs such as the VRS. It might be best to expend
FCC's valuable yet limited resources to bolster the IG's
office, an entity with a proven track record that has
established a track record with DOJ and the FBI, rather than
one that is potentially encumbered by policymaking constraints
and whose mission, as I understand it, is not limited to
ascertaining rule violations.
Our concern is that the strike force, which does not
independently report to Congress as I do, has a potential for
unnecessary overlap in the agency's enforcement and
investigatory efforts. That being said, we can all agree that
expending additional resources to uncover fraud, waste and
abuse may be a positive measure provided that the level of
coordination between OIG and the strike force is extensive and
delineated by each entity's responsibilities.
Because OIG is primarily engaged in law enforcement, all
information gathered by the strike force should be provided to
the OIG at the earliest possible opportunity. Failure to do so
could negatively impact OIG's law enforcement efforts and
potentially waste resources.
Thank you for the opportunity to address these important
matters with this subcommittee.
I will be happy to answer all of your questions.
Mr. Walden. Mr. Hunt, thank you very much for your
enlightening testimony. It sounds like there are some issues
there that need to be prosecuted.
[The prepared statement of Mr. Hunt follows:]
[GRAPHICS AVAILABLE IN TIFF FORMAT]
Mr. Walden. I am going to start with a question for Mr.
Wilkins regarding the Web site because we have talked a lot
about it. And frankly, as an old broadcaster, I found the FCC
Web site to be worse than useless. You could never get the
information out of it you were seeking. You had to hire
somebody who could figure it out at a very high rate. I don't
know how all of that works, but it is a mess. I am not sure it
has gotten any better. But we sure spent a lot of money. I saw
that there was like a $400,000 contract issued for initial
work. Is that right? I mean, how----
Mr. Wilkins. Yes.
Mr. Walden. How much do you intend to spend in total on
this overhaul? And when do you think it will be up and running?
I mean, we have dealt with some other Web sites on this
committee unrelated to the FCC. It doesn't seem like the
government has got a good track record on this. What can you
tell me?
Mr. Wilkins. OK. So the current plan for the Web site, as I
actually mentioned in my oral statement, we do have work
underway. We have got it divided into two phases.
First phase has already started under that $400,000
contract. That work is to fundamentally improve the search
function, which I think, if we have to fix one thing soon, it
is that. The search function is how you find information.
Mr. Walden. Yes, which doesn't work worth a----
Mr. Wilkins. So we are going to improve the search
function.
Mr. Walden. Sorry.
Mr. Wilkins. And redesign the user experience to work
better. And we have heard loud and clear that despite some of
the previous improvements that were made to the back end
systems, to the users that was not working----
Mr. Walden. Worthless.
Mr. Wilkins. So, phase one is to redesign that interface to
improve the actual search capability that is live.
And then phase two will be the first half of the next year
that will make that a live new version of the Web site.
Mr. Walden. All right. According to the OPM Web site the
revising of Intergovernmental Personnel Act, IPA's intended
facilitate cooperation between the Federal Government and
certain non-Federal entities. For example, State and local
governments and institutions of higher education. Basically,
this allows the Federal Government to borrow employees as long
as the government reimburses the current employer for their
costs. Isn't that correct?
Mr. Wilkins. Yes.
Mr. Walden. So now, the FCC has utilized this mechanism as
I understand it. In response to one of our inquiries it appears
that there were two IPAs leading up to 2009. In 2009 that
number jumped to 12, and the cost for IPAs starting in 2009,
has been approximately $3 million for 12 people.
The cost to the agency for some of these folks well exceeds
the salary permitted for either traditional GS employees or
those Federal employees in Senior Executive Service. For
example, we found that the cost for one individual was
$208,345.89 per year. But perhaps the most egregious was an
economist we understand the FCC paid $396,878.68 for 8 months
of work. Now, that appears to be an annual salary of nearly
$600,000 for an economist out of the academic world.
Where do these funds come from to pay for the cost? Were
any of these individuals from State or local government? And
are these counted as FTEs, so that the agency actually has more
FTEs than the number that it is reporting?
Mr. Wilkins. Well, today we have three IPAs in place.
Mr. Walden. That is it?
Mr. Wilkins. Three.
Mr. Walden. All right.
Mr. Wilkins. One is for our chief technologist who just
came on board very recently. One is for our chief economist,
and one is a senior advisor to our rural healthcare task force
that we have just launched.
Mr. Walden. Right.
Mr. Wilkins. I don't have the exact figures, but the cost
for those three is closer to, I think, $500,000 total for----
Mr. Walden. For all three?
Mr. Wilkins. For three of them in total.
Mr. Walden. All right.
Mr. Wilkins. I think that our approach to those IPAs, we
only want to do it where it really is external expertise,
cutting edge----
Mr. Walden. Right.
Mr. Wilkins [continuing]. That frankly is hard to bring
into the government, especially--so our chief technologist is a
good example. Federal Government can be a great career path,
but if you are interested in being on the very cutting end of
technology and academic research----
Mr. Walden. Right.
Mr. Wilkins [continuing]. There may be better places in the
academic sector, or the private sector. So the idea of the
annual or maybe 2-year IPA to bring in that kind of talent we
think works and we are trying to make only in the most focused
way.
Mr. Walden. Is the IPA process a sole-source contracting?
Does somebody in the agency--does Mr. Wheeler or some other
commissioner say I want Mr. Hunt to work for me, as opposed to
the contracting process where it is more open and transparent?
Mr. Wilkins. Yes, I mean, there is not a competitive
bidding process in the same way. It is more akin to a senior
talent recruitment and the IPA is the way that you can----
Mr. Walden. So you go pick somebody, pay them whatever----
Mr. Wilkins. Of course, we want to do that based on very
legitimate----
Mr. Walden. One other question. What is the agency's
retention policy per e-mails? Has this come up in other
agencies over time. I believe it is 90 days?
Mr. Wilkins. We, right, so for a user, the user's live e-
mail account, and if you are just a user at your desktop, you
can go back 90 days. We certainly do have backup that is done
by our IT organization and can go back longer as needed.
Mr. Walden. So those are retrievable beyond 90 days back?
Because some of the agencies, processes stretch over years.
Mr. Wilkins. Yes.
Mr. Walden. And so we just want to make sure that those e-
mails----
Mr. Wilkins. We have a backup capability that is
essentially just limited by the funding that we have for our
storage contract. It definitely goes back at least a year.
Mr. Walden. A year.
Mr. Wilkins. At least a year. Yes.
Mr. Walden. Do you think it should go back as far as the
proceedings are open?
Mr. Wilkins. Well, I think we want to be sure that we are
appropriately preserving government records.
Mr. Walden. As required by law.
Mr. Wilkins. Yes, and we, obviously, want to make good
efficient use of, the cost to store them and just keep that
balance right.
Mr. Walden. And what is the policy for employees that use
personal e-mails for official business, because this has come
up elsewhere in the government?
Mr. Wilkins. Oh, obviously your government FCC e-mail
account should only be used for work.
Mr. Walden. No, but the problem is personal accounts are
being used by some in the agency to conduct official business,
so it is not showing up in the----
Mr. Wilkins. I mean, obviously, if you are using----
Mr. Walden. Do you have a policy on that?
Mr. Wilkins. Yes, if exigencies require you to use your
personal e-mail for some reason, you need to make sure that you
then retain it and bring it into the appropriate----
Mr. Walden. Mr. Hunt, is that something that you keep an
eye on?
Mr. Hunt. Yes, Congressman. Yes, Mr. Chairman, we do.
And we actually did take a look--I don't know if you have a
question for me about, these sole source contracts, we did do
an inspection, and the FCC has made some changes because we did
find issues with the way they were retaining people; that they
were not following FAR requirements to awarding sole-source
contracts. The FCC concurred with our inspection report and our
recommendations and now they have initiated corrective actions
so we have looked at that in the past.
Mr. Walden. All right. That was on sole source. With
deference to the committee, can you answer the part about e-
mails to personal? Because we are seeing this in other agencies
where government officials, to keep it out of the public
record, are using their personal e-mails.
Mr. Hunt. We do look at, for instance, individuals who are
doing business within the FCC, an individual business, and
using it for personal e-mails. The issue is we don't have as
much access.
Mr. Walden. I am flipping it around the other way. It is
not that some individuals do an occasional e-mail using their
official account for personal business.
Mr. Hunt. I am sorry.
Mr. Walden. On the other way around. Are they offline, in
effect, using a personal e-mail account to conduct official
business so that it gets around the rules of the----
Mr. Hunt. Oh, I am sorry. I am sorry. No, we don't--we
haven't looked--we have looked at that thing in the past. We
haven't looked at that lately.
The problem is technology. Do we have the technology to
look into that? The FCC--I am sorry, the FCC runs the network.
We don't have an independent network of our own to look into
issues like that.
Mr. Walden. Yes. I would just be interested in your formal
policy if you could provide it. I know I am way over my time.
Thank you, gentlemen, for the work that you do.
I will turn now to my colleague from California Ms. Eshoo.
Ms. Eshoo. Thank you, Mr. Chairman.
So that means I have 8 minutes, right? No, I am teasing. I
know that won't be the case and it doesn't need to be.
Thank you to both of you for your testimony.
What I am interested in is what, actually, you are doing
and how you are using your money, both of you.
Mr. Wilkins, relative to being managing director and making
sure that you are pushing things through that need to be done
in an efficient, effective way.
Mr. Hunt is saying that there needs to be more and I think
that you are extraordinarily focused on criminal
investigations.
Now, I have stated before what I have, the critical role
that IGs play across the government. Now, I understand that the
OIG received $21 million, and $25 million directly from the
Universal Service Fund in 2008, 2009 respectively, to fund
investigations. That is a lot of money. That is a lot of money
for--this is a relatively small agency. I mean, this is not a
gigantic agency and those amounts were also exempt from
sequestration cuts. So you come out very well in terms of, at
least in my view, in terms of dollars.
And unlike the Commission, you are permitted to carry
forward these dollars year after year. That is my
understanding.
So my first question is, how much money do you have on
hand?
Mr. Hunt. Well----
Ms. Eshoo. And how many employees do you have?
Mr. Hunt. We have 39 permanent employees.
Ms. Eshoo. You have 39. And how much cash on hand do you
have right now?
Mr. Hunt. Well, first of all I have to correct something.
Ms. Eshoo. Yes, do it fast, because I----
Mr. Hunt. OK, we have the $21 million. When I became the
acting IG, I turned down the additional $25 million. I said, we
don't need it. We can't spend it fast enough and that was--that
money was----
Ms. Eshoo. So from 2008 through 2009 you operated on $21
million?
Mr. Hunt. No, no, this is in addition to our regular
budget.
Ms. Eshoo. I understand. I understand. That is why I am
raising it because I think the committee members need to
understand this.
But at any rate, so you turned back the 25, you operated on
the 21, plus the other dollars that you had to operate on. So--
and you can roll money forward.
That is why I was asking: How much do you have on hand?
Mr. Hunt. I think what we have left is maybe $5 million.
Ms. Eshoo. OK.
Mr. Hunt. Most of that way money was spent by the prior----
Ms. Eshoo. Given the recent increases in your funding, even
though you turned some back--I don't know why you did.
You are saying you have a lot of work to do but you turned
money back, I don't get that, but that is what you did--what
have you--can you describe what additional work you have
conducted, for example, there has been a spike in criminal
prosecutions during that time frame, or immediately following,
and what I am really stuck on is where the agency has not done
well at all.
You have your eye on criminal investigations. You keep
talking about it. It is like a broken record and you feel
strongly about it. But I want to dissect that because we have
huge agencies that do criminal investigations. The DOJ is very
well funded. The FBI is well funded. What is it that you can't
partner with them to do that is leaving huge gaps and
unaddressed investigations on your part? And as succinct as
possible. Why does there have to be duplication in these
agencies?
Mr. Hunt. Right, I mean, let me say one thing really
briefly so everybody understands.
Ms. Eshoo. I just want you to answer my question because I
have other questions.
Mr. Hunt. OK. OK. To get FBI agents, DOJ agents, I mean,
and Interior agents to help us out is very rare. They have a
threshold. They have more people helping us out than before,
but we have much more fraud and waste than we can tackle with
the 39 people we have.
You are talking about $20 billion that you are asking 39
people to try to monitor. And oftentimes, we can't get support
from the FBI because they simply don't have enough agents out
there to help us. So we end up dropping cases worth $1 million
or less because we don't have----
Ms. Eshoo. What are the cases worth, though?
Mr. Hunt. Pardon?
Ms. Eshoo. What are you cases worth? Are you talking about
$20-, $40-, $50 million cases? Are you talking about $1
million? Are you talking about $35,000? What kind of dollar
value do these cases have?
Mr. Hunt. Of, the cases go--I mean, we have cases under $1
million, in which case, DOJ and FBI won't touch them.
Ms. Eshoo. Yes, and I don't blame them. It is not worth it.
Mr. Hunt. And then we have cases over $100 million and
everything in between.
Ms. Eshoo. Unfortunately my time is up. I have a lot of
questions and maybe we can have another round.
My point in pressing this with you is not to diminish what
needs to be done in terms of investigations, but I think that
there are other areas that are really essential for you to be
putting the pedal to the metal on. And I mean, for a whole
system to crash, an IT system at an agency that is in charge of
communications, where are you on that?
So both of you, but that is why I am pressing on this, and
I don't know if this is a well-sought avenue for you. I really
think that you should be working with the other agencies and
not duplicating it and you have got the money too.
So at any rate, thank you, Mr. Chairman.
Mr. Walden. Mr. Hunt, did you have anything that you wanted
to respond to that?
Mr. Hunt. I appreciate everything that the chair--the
Congresswoman is saying, but----
Ms. Eshoo. Be sincere. No.
Mr. Hunt. No, I don't think--I really have to disagree. I
don't think we are duplicating efforts.
We are trying to get as much help as we possibly can. We go
all the time. Sometimes we have to call local law enforcement
to go with our agents so our agents don't get hurt in the
field. And if we can't get local law enforcement to help us--we
have had guns pulled on us before.
Ms. Eshoo. If there are criminal threats to people in the
OIG, we need to know that. We need to know that. I don't know
where you are going with this. It is either, what some
attorneys would consider, in terms of money, kind of two-bit
cases, or are people's lives being threatened? That is a huge
range, spectrum, so----
Mr. Walden. I think he was just saying they have had guns
pulled on them.
Ms. Eshoo [continuing]. Maybe you could answer that to the
chairman.
Mr. Hunt. So much money, like, it is $20 billion involved
here, and we don't have a single criminal investigator to help
us look at them.
So we have to--we do go to other agencies. We go to
Interior. We go to FBI. We go to local law enforcement. We go
to the Department of Education. We borrow their agents all the
time because we don't have any. But they don't have enough to
do all of the work that we have to do. We have got much more
money, many more cases, than we possibly have the staff to
handle right now.
Mr. Walden. All right, Mr. Hunt, thank you.
We are going to go now to the gentlelady from Tennessee,
the vice chair of the full committee Ms. Blackburn for 5
minutes.
Mrs. Blackburn. Thank you, Mr. Chairman.
And I want to thank each of you for being here.
Again, Mr. Wilkins, you are basically the chief operating
officer, right?
Mr. Wilkins. Yes, ma'am.
Mrs. Blackburn. OK, well, let me ask you this: We will stay
with the same of how you use the resources and the money, the
taxpayer's money that you are given to work on.
And Mr. Hunt, I have to tell you, I like the fact that you
sent money back and said we don't need all of this. I
appreciate that and I can guarantee you, my constituents like
it when they hear that a Federal agency would send some money
back; that they are just not out there willy-nilly spending
money because they can. They get tired of that.
Mr. Wilkins, let's talk about this strike force because
this is something that caught my attention and to me, it sounds
like it is duplicative. So tell me why it would not be
duplicative, and why you need a strike force when you have got
the IG's office?
Mr. Wilkins. We don't see the strike force as an either/or
with the IG. Oversight of Universal Service Funds involve the
whole spectrum of issues from direct criminality, to egregious
rule violations, to more pedestrian rule violations.
I think that it has always been clear that there is an
overlapping mission between the IG's office and the enforcement
bureau staff and I think Chairman Wheeler's direction is, he
wants the enforcement bureau doing more of its part.
Absolutely, we need to coordinate duplication, I completely
agree is not what we want. And I actually, what I have heard so
far is that since the strike force is just really set up over
the last couple of months, it only has three employees, there
really has been quite good coordination so far.
Mrs. Blackburn. OK, would you recommend eliminating the
strike force?
Mr. Wilkins. No, absolutely not.
Mrs. Blackburn. Say you have a tight budget, would you say
we can eliminate this?
Mr. Wilkins. Well, most of the funding for the strike force
is actually is dependent on our going-forward request.
Mrs. Blackburn. OK, does Chairman Wheeler have a lack of
confidence in the IG's office?
Mr. Wilkins. No. To the contrary, I think that the work the
IG has done shows that there is--I think the Inspector General
actually agreed, there is plenty of work to do.
The most important thing is the Universal Service is going
through so many changes, we think the challenges are going to
grow.
Mrs. Blackburn. Maybe we need to do away with it.
Mr. Hunt, you want to weigh in on the strike force?
Mr. Hunt. I think what I was just saying earlier kind of
proves my point. There would not be a strike force except for
there is so much fraud, waste, and abuse out there.
But the strike force is not limited just to enforcement
bureau actions. It is not limited to changing rules which is
what we can't do. What we are seeing in our office is that the
FCC should focus on changing the rules and closing loopholes
and then we will do the criminal enforcement part.
But they have now created this new group which they will
not say will not do criminal work, and----
Mrs. Blackburn. So they are using it.
Mr. Hunt. I am sorry, but the Department of Justice has
called our office up and they are concerned. They have gotten
calls from the strike force.
Mrs. Blackburn. OK, so, let me be sure we are clear on
this. So the strike force is, in essence, usurping your
authority and some DOJ authority, and there is a blurring of
who is responsible for what? Is that a fair assessment?
Mr. Hunt. That is the way the IG's office feels----
Mrs. Blackburn. OK.
Mr. Hunt [continuing]. Feels the way it is, because in
DOJ's concern----
Mrs. Blackburn. OK.
Mr. Hunt [continuing].Because they are being contacted by
the strike force and then calling us and saying, who is in
charge here?
Mrs. Blackburn. OK, that helps.
All right, Mr. Hunt, let's talk about some of the waste,
fraud, and abuse that is apparent that we all know exists. And
that is this Lifeline program, or as it has become commonly
known in the last few years, the ObamaPhone program.
Consumers, telecommunication consumers pay for this. And we
hear complaints about this all the time, and the growth of this
program from $800 million in 2005 up to $2.2 billion now. And
we have seen this program really become a symbol of
mismanagement of USF and the FCC as a whole, kind of this
picking and choosing what kind of mismanagement you are going
to allow.
Now, last year it was discovered that there were over 2
million fraudulent subscribers in this program. So will USF
strike force focus on eliminating waste, fraud, and abuse from
this failed welfare program?
So Mr. Hunt I want to hear from you first, and then Mr.
Wilkins.
Mr. Hunt. Well, I have I--thank you for the question,
Congresswoman. I have no control over the strike force so what
they do or don't do, I have no idea.
I know we are working on low income. We not only do
criminal law, but we do USF. We do every single program within
the USF fund. And one of those is low income. And like I said
in my opening statement, we have gotten our first criminal
convictions. When you get criminal convictions, it helps quell,
once people know they can go to jail for things, it helps stem
the tide of more crime.
But we have two people, two people in the entire office
that are focused solely on low income, and for the numbers you
are talking about, we don't have that many people. We are doing
what we can with the people that we have.
Mrs. Blackburn. All right.
Mr. Hunt. And part of the $21 million we had was spent to
help that.
Mrs. Blackburn. Mr. Wilkins, what are you going to do about
it?
Mr. Wilkins. The Lifeline example, I think, really
demonstrates what the role of the strike force ideally would
be.
So the lifeline cases involve exactly that combination of
direct criminality on fraudulent operators, but also a lot of
rule violations that need to be aggressively enforced. I think
that what I have been told for the coordination so far has been
good.
My understanding is that there are actually two cases that
the strike force, the IG, and the Department of Justice are
working on jointly as we speak; that there actually has been
good coordination. If that is not true, I will definitely
follow up on that.
But Lifeline is the perfect example. It is a transition of
that program to mobile communications, new rules, lots of
opportunity for fraud, and a joint effort really is important
to crack down on it.
Mrs. Blackburn. All right, yield back.
Mr. Walden. Thank the gentle lady.
We turn now to the gentleman from Ohio, the vice chair of
the subcommittee, Mr. Latta, for 5 minutes.
Mr. Latta. Thank you, Mr. Chairman.
And, gentlemen, again, thanks very much for being with us
this morning.
Mr. Hunt, if I could start my questions with you. In your
most recent report to Congress, you identified two significant
deficiencies related to the FCC's new financial system, which
was implemented in October of 2010. According to the report,
functionality and integration issues continue to exist, and as
a result, certain activity continues to be processed manually
in order to maintain the accuracy of the system data.
You also noted that there are security deficiencies in
these IT systems. The report notes that these deficiencies have
been identified by audits over the course of the last several
years.
Would you say it is fair to say that the new system didn't
fix the problems that it was intended to correct?
Mr. Hunt. Congressman, we did have those findings. We
believe they are trying to upgrade and fix, but to have, in
this day and age, manual entries when so much money has been
spent on computer technology and information technology, to
have people have to look and hand write items in just does not
seem like a fair use of time.
Mr. Latta. If I could follow up with that, then, how much
money has been spent if it doesn't sound like it has been
corrected?
Mr. Hunt. I would have to look that up for you. I can get
that information.
Mr. Latta. If you could get that back to the subcommittee,
that would be good.
And in your audits that you have also continually flagged
these problems. Is that correct?
Mr. Hunt. Pardon, sir?
Mr. Latta. And with your audits that you have been
conducting, you have continually flagged these problems that
have been occurring?
Mr. Hunt. There are several audit findings that the FCC
agrees with that occur year after year.
Mr. Latta. Could you say when the first year was?
Mr. Hunt. Oh, my goodness.
Mr. Latta. You say year after year.
Mr. Hunt. We are asked every year by Congress to give a
list of recommendations that haven't been completed or fixed. I
could find that list and give you----
Mr. Latta. Yes. If you could get that to us, we would
appreciate it.
And also in one of your more recent reports you indicated
the commission was not in compliance with the Federal Manager's
Financial Integrity Act because of these deficiencies. Is that
correct?
Mr. Hunt. Yes, sir. That is correct.
Mr. Latta. OK. And your office has also described these
significant deficiencies as functionality and integration
issues.
How much has this new system cost so far?
Mr. Hunt. Again, Congressman, I would have to look that up
for you.
Mr. Latta. OK.
Mr. Hunt. I don't have the number off the top of my head.
Mr. Latta. And do you remember who the contractor was?
Mr. Hunt. No, sir, I don't. Not off the top of my head.
Mr. Latta. If you could get back to the----
Mr. Hunt. I will get you all that.
Mr. Latta [continuing]. Committee on that.
Let me go back to some questions the gentlelady from
Tennessee had asked, especially with the Strike Force, you
know, because in your testimony, on page 11 when you were
talking--you were talking about the Strike Force, you say,
``This action was taken with no coordination with either the
OIG or the DOJ, and complications abound.''
And I know the gentlelady brought up, should we even have
the Strike Force? Should it even exist? But in your mind, since
thereis no coordination and that you don't have any, really,
ability to, it sounds like, work within the system, how are you
going to fix this?
Mr. Hunt. Yes, sir, the Congresswoman from Tennessee, when
she asked the question, Mr. Wilkins said there is coordination
between the Strike Force, OIG, and DOJ. That in itself is a
problem. There should be the DOJ and the IG office.
The fact that there is coordination between the three
supports the very problem that we are running into. DOJ is
wondering who is really in charge here. Who is the criminal
investigative team. Is it the IG shop or is it the Strike
Force?
If the Strike Force wants to focus on enforcement, if they
want to focus on changing rules and regulations, we don't
object to that. It is when they step over into criminal law
there will be--there have been coordination issues already. And
we don't see how that is ever going to end.
Mr. Latta. OK. And just before you had that in your
testimony, you also said this. You said, ``Further, every time
one of my managers has to request permission from the FCC
manager to hire someone, our independence is impugned. This
ongoing practice gives my office the appearance of a lack of
independence from FCC management.''
When you say it looks like there is an appearance of a
lack, is there a lack of appearance that there is something
happening, or don't you have that independence at all?
Mr. Hunt. Let me just give you an example. The Strike Force
now contains three people. Those people were hired in a matter
of months. Sometimes it takes me 6 months to a year to hire
people.
I think it is an appearance of lack of independence if I
have to go--well, let us just say this. I think it is a lack of
independence if I have to go and contravene the IG Act by
asking HR for permission to hire every single time.
Now, 1811s, they will argue about that, but even for a
paralegal, I have to ask permission to hire a paralegal. Now,
eventually I will get that permission, and I know that they
have rules and regulations, but they play with the PD, the
position description, which is something that we have the
capability of doing, and by modifying what the position will do
is something else we don't necessarily agree with.
Now, we are working with the managing director's office. We
are trying to resolve these issues, but when they can hire
people in the Strike Force almost instantaneously and it takes
us months and even a year to do the same, I think that answers
itself.
Mr. Latta. Thank you very much, Mr. Chairman.
I see my time has expired, and I yield back.
Mr. Walden. The gentleman yields back.
I turn now to the gentleman from Nebraska, Mr. Terry, for
questions.
Mr. Terry. I guess I am next since I'm the last.
Mr. Wilkins, somewhat related to the Web site issue, but in
2010 the FCC launched an effort to develop a consolidated
licensing system, and it seemed like, frankly, a common sense
reform, given that the FCC has six different online databases
for licenses.
So if the issuance of low power FM licenses and several of
my constituents have been provided licenses. I would imagine
they have had a lot of difficulty if they are trying to find
their own license application.
So can you explain what happened to this initiative? Is it
still on course? How much money have they spent? What is the
timing of completion?
Mr. Wilkins. Yep. So the consolidated licensing system is a
great example of the overall IT modernization we are trying to
accomplish, and so the fundamental need is how do we create a
much more cohesive enterprise environment to manage efficiently
and then allow all the users--they do have slightly different
needs--to have those needs filled.
You know, I was not the managing director when the specific
project decisions about the CLS project were made, but we see
absolutely the same need. Our modernization effort, a much more
consolidated and consistent approach to licensing it would be
one of our best reasons we think it needs to get done.
Mr. Terry. What is the time expectations that this could--
the CLS would be completed and how much money has been spent on
it so far?
Mr. Wilkins. Yes, sir. So the timeline truly depends on our
funding. The challenge is if we have the funding to commit to
the systematic approach we want to take, our timeline will be
about a 2-year timeline is what we put in place. If we are
doing things piecemeal, the timeline could be quite a bit
longer. That is a question we have to make as we assess.
Mr. Terry. Probably the right answer is--I am picking up
reading between the lines--is I don't know, but I will get back
to you.
Mr. Wilkins. Well, we could certainly follow up with
specific information on the history----
Mr. Terry. I would appreciate that.
Mr. Wilkins [continuing]. On the CLS project.
It is on hold now pending----
Mr. Terry. OK. Well, that is new information. So it is on
hold now.
Now, Mr. Hunt, kind of dovetailing to the Intergovernmental
Personnel Act and borrowed employees, of which Mr. Wilkins and
the chairman had a discussion, reading some salacious newspaper
articles regarding FCC and some of their employees, which is
disturbing on so many different levels, first of all, that an
employee is watching pornography, but viewing it at work with
government taxpayer-owned equipment, but also giving the excuse
that they are bored.
If FCC employees have time to engage in that ugly activity,
A, why do they exist there anyway? Doesn't that tell us that
they have more employees than they need?
Then I want to know is that a criminal act by watching that
stuff on government-owned or taxpayer-owned equipment? And
what's your inspector general's role in getting rid of that
person?
Mr. Hunt. OK. Thank you, Congressman.
The IT department of the FCC, they screen for images. It is
usually through, I think, a hash number. It is a crime to view
child pornography. There are hash numbers for those. Normally
we go to the department of mail--mail department because they
are the repository of that information, but that is a crime. We
have a hot line number to the FBI. Whenever child pornography
is found, we call the FBI immediately. We screen and if--it
just depends on the severity. If it is child pornography, yes,
it is a crime. If it is not, no.
I heard the report also. I think the report was wrong a bit
because he said he was watching it 8 hours a day. It was
actually 8 hours a week. I know that doesn't help.
Mr. Terry. Yes, that----
Mr. Hunt. But that person was----
Mr. Terry [continuing]. Means really sick versus just sick.
Mr. Hunt. Right. But it was referred to the IG office
from----
Mr. Terry. Should it have been?
Mr. Hunt. It should have been referred to the IG office,
and we got the person to resign before he was terminated. So
that person is gone, but it is an ongoing thing to look for any
type of pornography on the system.
Mr. Terry. All right. So I will submit a written question
since my time is up to you, Mr. Wilkins, regarding if the
employees are that bored why do you have that many employees.
Mr. Walden. Thank the gentleman for his questions.
We will turn now to Mr. Long for 5 minutes.
Mr. Long. Thank you, Mr. Chairman.
And, Mr. Hunt, I want to follow up on that just for a
minute. Speaking of this pornography situation, you said that
the gentleman resigned before he was terminated.
Mr. Hunt. Yes, sir. Yes, sir.
Mr. Long. What is the difference?
Mr. Hunt. I would have to go to the----
Mr. Long. Well, does he get his benefits? I mean, you are a
lawyer. Does he get his benefits and things that--is that why
he was able to resign instead of be terminated?
Mr. Hunt. I assume he retained his benefits when he
resigned, yes, sir. I assume that. I don't know that for a
fact, but I can find that out for you.
Mr. Long. Do. I would appreciate if you would find that out
and let us know.
Mr. Hunt. Yes, sir.
Mr. Long. Because I don't get that.
Mr. Hunt. Yes, sir.
Mr. Long. I apologize for my voice and my cold today.
For both the witnesses, over the summer we heard a little
bit about the FCC's Web site crashing during the net neutrality
comment period, and was the agency able to ensure that all the
comments submitted were collected and accounted for or were
some of them lost? Mr. Wilkins first.
Mr. Wilkins. Oh, yes. They were--yes, they were all
collected, all accounted for. The actual current number as of
today is about 3.7 million total comments filed over that whole
proceeding now.
Mr. Long. And you are confident none were lost during the
crash----
Mr. Hunt. Yes.
Mr. Long. OK. And then what is the plan for the agency to
ensure that this type of thing doesn't happen again?
Mr. Wilkins. Well, so that is our electronic comment filing
system that is part of our external profile. It is different
from the Web site. It is actually an 18-year-old system. It was
developed in the late 1990s.
The technology that underlies it is sort of long gone from
the commercial world. That is a major focus of our IT
modernization is that whole system needs to be basically
brought into the 21st century, and that is what our IT
modernization proposal actually focuses on.
Mr. Long. OK. Mr. Hunt, do you have any comment on the
loss? Well, it was not lost, I guess, but the crash and whether
anything was lost and what can be done about it in the future?
Mr. Hunt. Actually, we haven't had any complaints or
comments on that yet. We have heard about it crashing and have
the new technology----
Mr. Long. You haven't had any comments about what? I am
sorry. I didn't----
Mr. Hunt. No. About the Web site crashing. We get our work
from complaints, and the Web site crashing is not anything we
have ever been asked to look at yet.
Mr. Long. OK.
Mr. Hunt. But it is one of many things we are considering
looking into.
Mr. Long. And again for both of you, I will start with you,
Mr. Wilkins, outside of anything special in your testimony, can
you each tell me what Congress can do to help you carry out
your duties more effectively other than just providing more
money? If you had a wish list, if you had your druthers, what
would you rather us do?
Mr. Wilkins. Right. Well, I will say one thing that does
come to mind, some of our employees are highly specialized
professional staff, but we will lose very talented employees
sometimes--especially to competing federal agencies that can
pay slightly higher salaries.
And, of course, that would not be relevant for most of our
employees, but we do have a handful of very important employees
who have been hired away from competing agencies, and it is
still in the Federal Government. They can just pay a lot more,
and it is sort of hard for us to retain that kind of talent.
Mr. Long. So that sounds like more money to me. Anything
besides more money?
Mr. Wilkins. You know, it almost--on that issue, I would be
fine on a net neutral money basis with the ability to take a
given employee who is really important and be able to make sure
we are paying a market rate at least in the government to
retain that talent. Would actually add a lot separate from
whatever the total budget was.
Mr. Long. OK. Mr. Hunt?
Mr. Hunt. Thank you, Congressman. I just want to apologize.
Sometimes I raise my voice too much because I am just very
passionate about what we are doing and what my staff is doing.
We work very----
Mr. Long. I am hard of hearing. So I appreciate when you
raise your voice.
Mr. Hunt. OK. OK. Well, good. You are going to hear more of
it because the things I mentioned before, letting us hire who
we want to hire. If they want a Strike Force, tell us exactly
what that Strike Force is going to do.
Are they going to do criminal law? If they are going to do
criminal law, how do we work that and how does that jibe with
the IG Act? The IG Act was created to do exactly what the
Strike Force apparently is intended to do.
We report to Congress in the same way. We report twice a
year and they don't. And I am not saying this would ever, ever
happen, but there is potential they could find things that we
didn't know about and cover them up. I am not saying it would
ever happen, but there is potential there.
So we would like to, A, hire who we want to hire when we
want to hire them. Hire 1811s and get more definitive
information on the Strike Force or have the Strike Force
incorporated within the IG office.
Mr. Long. OK. Excuse me. OK. I appreciate that, and thank
you both for your testimony.
And I yield back with no time remaining.
Mr. Walden. Well done.
I now turn to the gentleman from California, Mr. Waxman,
for 5, minutes.
Mr. Waxman. Thank you very much, Mr. Chairman.
Many questions have been raised concerning Mr. Hunt's
allegations about the Universal Service Fund Strike Force, and
I would like Mr. Wilkins to respond.
Could you describe the level of coordination between the IG
and the Strike Force?
Mr. Wilkins. So my understanding is that there has been an
A, just a regular level of coordination since the Strike Force
stood up its first employee, which was just a couple months
ago. One of the main areas of activity for the Universal
Service Fund, of course, is USAC, the administrative company
that runs it.
One of the ways that enforcement issues come from USAC is
through whistleblower logs that come in to USAC. My
understanding is there has been now an agreement that those
logs will be shared between the enforcement bureau and the IG,
and that compared to past practice, that is a much higher level
of coordination than existed in the past.
Now, it is very important to the chairman that is in fact
what is happening, and so if there are issues where our
enforcement bureau and staff are not doing that, I actually
will go and follow up and make sure that it is happening, but
that is my understanding.
Mr. Waxman. Well, how would they delineate the respective
responsibilities of the IG and the Strike Force?
Mr. Wilkins. So the IG clearly is the lead on criminal
activity that relates to Universal Service. I think what we are
seeing, though, especially as the programs change so much is
that it is rarely one or the other. Any significant enforcement
action very often will involve both egregious rule violations
and some criminal activity. It is actually one very common
thing, for example, that an enforcement bureau may get a
matter, find criminal activity, and then refer it to the IG or
vice versa. I mean, these are fairly common practices.
We completely agree with the overall idea that as we add
this additional enforcement oversight, it has to be closely
coordinated to not be duplicative. We want nothing but a good
coordinated relationship with the IG where needed, and
sometimes it should be independent. Totally agree that there
are areas where the IG should--we should not be involved in
anything they are doing.
As the Strike Force hopefully adds some more staff, we will
just have to make sure all that coordination happens exactly as
the chairman wants it to.
Mr. Waxman. Mr. Hunt's testimony asserts that, quote ``FCC
management retains a right to approve all OIG hires, a
requirement which appears to contravene the IG Act and impugn
the independence of the OIG,'' end quote.
Mr. Wilkins, can you explain the process the FCC uses to
pass through all OIG hires to be posted by your human resources
office?
Mr. Wilkins. Yes. Thank you for that question.
It is a passthrough. Whoever the IG wants to hire our HR
team will put into the system.
By the way, it is very different than hiring for other
places in the commission. I personally actually involved in
human capital planning for other parts of the commission for
the IG. Whoever they want to put in there they can.
And, actually, I would almost say that the issue is more
about the performance of our HR function. So I agree, a 6-month
delay to get the hire done is not acceptable, and that is
actually an overall management issue that we want to work on.
So I think that all we want to do is make sure that when
something is posted, we have done our job on the HR side to
make sure that whatever the civil service requirements are are
complied with. They always are. No question. And, frankly, we
could just do a better job processing those requests.
I will say--I did just do a quick check. So just last week
we had one where approval came in about I think 6 minutes was
the e-mail chain, and that probably is because we have really
been focussing on it lately.
So we absolutely can do better in the performance, but full
stop. Whatever the IG--whoever he wants to hire, we will
support it and want to do the best job we can.
Mr. Waxman. In other words, the OIG could decline to use
the FCC HR office for hiring and go to another agency as OIG
did with procurement?
Mr. Wilkins. We would love to try to keep their business,
but they absolutely can, and, in fact, we have another
situation where our contracting organization earlier this year
was really underperforming. We had a huge backlog. The IG's
management staff came and said: We are actually thinking about
moving to the--the Interior Department has a shared service
center, and I said: You know, based on the performance you are
getting, I can't argue with you.
So they actually took that business to the Interior
Department. We actually now have a new head of contracting that
has made a lot of improvements, and I have told them--I said,
``Keith, try to win back the IG's business.'' So they certainly
could do that, although we, frankly, think we can do an
efficient job supporting them, and want to do as good of a job
as we can.
Mr. Waxman. Yes, Mr. Hunt. What do you think?
Mr. Hunt. No, I thank you for letting me respond.
First of all, when there is evidence of crime, it is not
that you should go to the IG, you have to go to the IG. There
is no option there. To say that--I don't mean to beat up on Mr.
Wilkins too much. He hasn't been there that long, but we have
had instances where we have tried to hire people, like a
paralegal, and HR has come back and say: You can't hire a
paralegal because the FCC doesn't have any paralegals, which is
exactly what we need.
And this, yes, we did take part of our business----
Mr. Waxman. Can't you work this out?
Mr. Hunt. We took part of our business to the Department of
Interior for contracting because we would get our contracts--
our work to the managing director's office first. We were first
year after year after year, and every single year we would be
up until midnight on the last second of the last day to get the
work done.
I have had people--last time I testified here I had people
who pulled IVs out of their arm in a hospital to get back to
work to get these contracts done. It is----
Mr. Waxman. Mr. Wilkins, what do you say about that?
Mr. Wilkins. Well, obviously I can't speak for past
management. I absolutely agree our contracting performance was
not up to snuff. We brought in a new head of contracting on--
since he has come in in May, we have reduced our backlog from
300 acquisitions to 50. So we actually think we could do a much
better job supporting the IG going forward.
And on the hiring front--so, again, I can't speak to
anything before I was there. Absolutely, if the IG thinks a
paralegal serves their mission, there is no reason in the world
that we should not be able to support that, or, you know,
anything else other than, as the IG said, the 1811 criminal
investigator is a different civil service law question, but,
you know, we are fundamentally there to make sure that the IG
can hire who they want to hire to deliver their mission.
Mr. Waxman. OK.
Thank you, Mr. Chairman.
Mr. Walden. Thank you, Mr. Waxman.
I am sitting here trying to figure out how an agency that
can't quite get a Web site to work and has all these issues is
going to effectively manage the entire Internet.
We are going to go now to Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman.
Happy Liberty Day. I just wanted to let you know I was--
left the room. I got accosted by a bunch of--we used to call
them broaching snatchers, little kids who then came to ask me a
question about the Constitution. I passed the question. I got
this sticker.
Mr. Walden. Congratulations.
Mr. Shimkus. So I am very proud. So I would call it
Constitution Day, but they were calling it Liberty Day. So,
first of all, I wanted start with that.
Secondly, in the testimony, it does give us an opportunity
just to pause, and we do have some very good committed civil
service employees in the Federal Government throughout the
agencies, and we want to make sure we pause and recognize that
they are there and they are working hard and sometimes with not
a lot of support from, you know, other folks like us sometimes.
So having said that, and Congresswoman Eshoo is not here,
but we serve and we have been working on 911 issues since I
have been here and as a member of the House, and so, Mr.
Wilkins, my question really deals with a policy issue that has
been resolved policy-wise, and even in the agency it is just
implementation of that, then I want to follow up on the
question, and so it all deals from the Middle Class Tax Relief
and Job Creation Act of 2012 where we required the commission
to create the Do Not Call Registry for PSAPs, or public service
answering points, to address the automatic dialing problem,
which can tie up the safety lines, and safety lines are no good
if they are tied up.
The commission released a notice of proposed rule making in
May 2012 and an order on October 17th, 2012. I have addressed
this a couple times with the commission. Obviously it has not
been enacted and we haven't moved forward. So as a new man in
charge of getting the commission to do, actually then
implement, I wanted to make you put on record that we are
watching and offer you any comments upon this issue if you have
got anything to mention?
Mr. Wilkins. Thank you, Congressman. Yes, we are absolutely
on top of that issue. As you said, the rule making is finished.
We have actually done the operational planning. I think, as you
may know, that that system sort of originally it is the Federal
Trade Commission and they have a contract. We have worked a lot
to understand what the most efficient way we can fill the
mandate.
So we basically have a plan, 5-year plan to fulfill that
mandate. It does require funding. In our 2015 requests, we have
a $500,000 line item to essentially launch that project, and
then, of course, once you launch that kind of an effort, it
does need to be sustained over the duration of the effort.
So we are ready to go and just want to make sure we don't
get over our skis in terms of the resources being there to
support it, but we absolutely are ready to go, and I have spent
a lot of time looking at it.
Mr. Shimkus. And then from our perspective, that is some of
this--the IG's report on who is spending what and how, then
that allows us to say: Well, maybe we haven't spent money well
in one area and if we do have a program that is ready to go but
is lacking authorization, I guess the question would come what
is the internal flexibility to move stuff around inter-
commission to get what some of us would consider a priority?
Mr. Wilkins. Right. So certainly to a point we can sort of
optimize that last bit of the budget. I think the thing that we
are cautious about with the PSAP project, it is a multi-year
effort that does have, actually, several million dollars' worth
of obligation against it eventually, and I think we have
actually looked at the question of well maybe we could find
some current funds to start it, but then it starts to become
fairly risky from a budget and planning standpoint, because
then if there is not follow on funding, you really do start to
cut in pretty deeply to what you have in subsequent years. So--
--
Mr. Shimkus. OK. And thank you for that, and let me just
finish with this.
Audit revenues are--some of it is allowed for internal
operating processes, and you have to account for those and make
sure that they are adequately and appropriately used.
Do you think you have got plans and policies in place to do
that?
Mr. Wilkins. For options?
Mr. Shimkus. Right.
Mr. Wilkins. Yes. Absolutely. So obviously the longstanding
issue at the commission, we use cost accounting method.
Wherever possible we literally do direct accounting. So an
employee has a time sheet ability to say: I spent time on
options, and that is you know, that is as direct as you can
get.
For IT costs where there is varying degrees of sharing
among IT systems, we actually take a e-system, try to really
decide how much of it was for options, and then there is a
small bit of overhead where we do use a ratio of time spent,
options/not options, to allocate a small amount of overhead,
and we have been audited many years on that and had auditors--
--
Mr. Shimkus. And you do a review. Is that review complete?
Mr. Wilkins. Well, no. So we constantly want to make sure
that we are treating those allocations correctly, and so that
is just an ongoing effort, and when--our auditors always ask us
to----
Mr. Shimkus. And if we followed up with a question on
sharing some of the results----
Mr. Wilkins. Sure. We can do that.
Mr. Shimkus [continuing]. You wouldn't have any problem
with that?
Mr. Wilkins. Absolutely.
Mr. Shimkus. All right. Thank you very much.
Mr. Walden. Thank the gentleman for his questions.
We turn now to the gentleman from New Jersey as our last
questioner.
Mr. Lance. No questions.
Mr. Walden. And then we are done.
So thank you very much to our panel. We will have some
questions for the record that we will be submitting to you in
the due course of time, and I imagine there may be some other
members who had conflicting hearings today that might also have
questions. We appreciate your response to all of our inquiries,
and I know sometimes there are a lot of inquiries, but we are
trying to do our oversight job just as you are trying to make
the agency run better from every perspective.
So thanks for sharing your thoughts with us, your
investigations, and the progress that you are making I commend
you for and we look forward to continuing this dialogue.
The subcommittee is adjourned.
[Whereupon, at 11:45 a.m., the subcommittee was adjourned.]
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