[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
                           
                           
                           
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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

                              ----------                              
                                                                   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.]
    [Material submitted for inclusion in the record follows:]
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