    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                      ARMY FEE ASSISTANCE PROGRAM: PART II

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                             GOVERNMENT OPERATIONS

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                JANUARY 6, 2016

                                   __________

                               Serial No. 114-90

                                   __________

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

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

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                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                         JASON CHAFFETZ, Utah, Chairman
    JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland,
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
    JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of
    TIM WALBERG, Michigan                    Columbia
    JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
    PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
    SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
    TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
    BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
    CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
    THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
    MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
    RON DeSANTIS, Florida                TED LIEU, California
    MICK MULVANEY, South Carolina        BONNIE WATSON COLEMAN, New Jersey
    KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
    MARK WALKER, North Carolina          MARK DeSAULNIER, California
    ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
    JODY B. HICE, Georgia                PETER WELCH, Vermont
    STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
    EARL L. ``BUDDY'' CARTER, Georgia
    GLENN GROTHMAN, Wisconsin
    WILL HURD, Texas
    GARY J. PALMER, Alabama

                       Jennifer Hemingway, Staff Director
                     David Rapallo, Minority Staff Director
        Katie Bailey, Government Operations Subcommittee Staff Director
                           Patrick Hartobey, Counsel
                        Sharon Casey, Deputy Chief Clerk
                                     ------

                     Subcommittee on Government Operations

                     MARK MEADOWS, North Carolina, Chairman
    JIM JORDAN, Ohio                     GERALD E. CONNOLLY, Virginia,
    TIM WALBERG, Michigan, Vice Chair        Ranking Minority Member
    TREY GOWDY, South Carolina           CAROLYN B. MALONEY, New York
    THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of
    MICK MULVANEY, South Carolina            Columbia
    KEN BUCK, Colorado                   WM. LACY CLAY, Missouri
    EARL L. ``BUDDY'' CARTER, Georgia    STACEY E. PLASKETT, Virgin Islands
    GLENN GROTHMAN, Wisconsin            STEPHEN F. LYNCH, Massachusetts

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on January 6, 2016..................................     1

                                   WITNESSES

    The Hon. Carol Fortine Ochoa, Inspector General, U.S. General
      Services Administration
        Oral Statement...............................................     4
        Written Statement............................................     6
    Mr. Gerard Badorrek, Chief Financial Officer, U.S. General
      Services Administration
        Oral Statement...............................................    10
        Written Statement............................................    12
    Ms. Stephanie L. Hoehne, Director, Family and Morale, Welfare,
      and Recreation, G9, Installation Management Command, U.S. Army
        Oral Statement...............................................    16
        Written Statement............................................    18
    Ms. Lynette M. Faga, Ph.D., Executive Director, Child Care Aware
      of America
        Oral Statement...............................................    24
        Written Statement............................................    27

                                    APPENDIX

    Ranking Member Connolly Statement for the Record.................    48
    2015-11-19 GSA to NARA re Army Childcare Subsidy Program Records.    50
    RESPONSE from Mr. Badorrek to Questions for the Record...........    53
    RESPONSE from Ms. Hoehne to Questions for the Record.............    65
    RESPONSE from Dr. Fraga to Questions for the Record..............    69

                      ARMY FEE ASSISTANCE PROGRAM: PART II

                                  ----------

                           Wednesday, January 6, 2016

                      House of Representatives,
                 Subcommittee on Government Operations,
                  Committee on Oversight and Government Reform,
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 10:04 a.m., in
    Room 2154, Rayburn House Office Building, Hon. Mark Meadows
    [chairman of the subcommittee] presiding.
        Present: Representatives Meadows, Jordan, Walberg, Carter,
    Connolly, Maloney, and Lynch.
        Mr. Meadows. The Subcommittee on Government Operations will
    come to order.
        Without objection, the chair is authorized to declare a
    recess at any time.
        Good morning. Today's hearing is an opportunity to examine
    the efforts put forth by the GSA and the Army to fix a problem
    that should never have occurred in the first place, a problem
    that obviously was of their own making.
        The Army Fee Assistance Program, or the AFA Program, as
    it's commonly referred to, provides compensation to Army
    families that must pay for base third-party child care where
    on-the-base child care is not accessible. Army families rely on
    this program to help ensure that their children are taken care
    of so that their servicemember parents can continue to serve
    our Nation.
        In October of 2014, the Army transitioned administrative
    control of the AFA Program from the private contractor Child
    Care Aware to the GSA under the auspices of saving $4 million.
    Obviously, we love to save money, but during the GSA's
    administration of this program, it allowed the backlogs to
    build to more than 25,000 items.
        Thousands of phone calls and emails by families were left
    unanswered. Thousands of these emails and voicemails were
    deleted by GSA. And let me repeat that for those who may have
    missed the last part: Those were deleted by GSA.
        Thousands of invoices went unpaid, resulting in Army
    families having to struggle to pay for the necessary childcare
    services. At the time of the transition, these families had
    been assured that there would be no disruption in the payments
    and the transitions would be seamless. Sadly, this turned out
    to be completely false.
        The full committee held a hearing this past September in an
    effort to get to the bottom of how the management of this
    program went so wrong. Following that hearing, the GSA and Army
    began to make major steps in rectifying the problem faced by
    Army families under the GSA's administration.
        These improvements included reductions or eliminations of
    long-term backlogs in every major category and a transition
    away from the GSA's administration back to Child Care Aware of
    America, the contractor that had successfully managed the
    program prior to the GSA taking control.
        Now, while the work done so far deserves recognition,
    including the paying completely of the 9,100-plus unpaid
    invoices that existed, it does not mean that this program is
    out of the woods yet. GSA still faces a substantial backlog in
    the family actions category, a crucial first step in the AFA
    Program participation, and, as of December 21, the family
    action backlog stood at some 1,600.
        This is unacceptable. It's something that we have to
    address. And with the AFA Program at a new crossroad as it
    prepares to begin transitioning administrative control back to
    Child Care Aware in February, it is critical that the GSA work
    even harder to completely eradicate this backlog.
        The Army, the GSA, Child Care Aware are scheduled to begin
    a roughly 7-month process of transitioning families from GSA
    administration to Child Care Aware on February 22. Following
    that transition, CCA families will gradually transition to
    Child Care Aware based on the State in which they live, and I
    understand from Ms. Hoehne that that's going to start here in
    the D.C. metro area.
        Although this transition is a welcome and positive step
    towards getting the AFA Program back on track, it raises
    additional new and pressing concerns. Already, the transition
    is experiencing some delays in the rollout, and the structure
    of how the Fee Assistance Program administration will
    transition has a potential cause of--possibly causing confusion
    and hardships for our Army families. It is my hope that today's
    hearing will help ensure that those hardships and problems for
    our Army families and the ones that they would experience
    following the GSA transition will not reoccur and that this new
    issue can be prevented during the Child Care Aware transition.
        I want to thank each of the witnesses for appearing before
    the subcommittee today, and I look forward to their assistance
    in ensuring that our Army families in the Fee Assistance
    Program receive the service that they earned and deserve.
        And, with that, I now recognize the ranking member, Mr.
    Connolly, the ranking member of the Subcommittee on Government
    Operations, for his opening testimony.
        Mr. Connolly. Thank you, Mr. Chairman. And thank you for
    this followup hearing.
        We're looking at GSA's deplorable management of the Army's
    subsidized childcare program. Thousands of military families
    were saddled with the unacceptable financial hardships, not to
    mention the emotional strain, of footing the bill for child
    care that should and would have been subsidized if not for the
    string of shockingly bad decisions made by both the Army and
    the GSA.
        Today, we'll receive an update on steps that have been
    taken over the last few months to remedy this outrage and the
    effort to transition the program back to the private-sector
    company that had been successfully managing the program and
    continues to successfully manage it for other branches of the
    armed services.
        I appreciate the bipartisan nature of this ongoing
    investigation and your personal commitment to that, Mr.
    Chairman, and our shared interest in ensuring our military
    families receive the benefits that they've earned and the
    proper stewardship of taxpayer dollars.
        To briefly recap, the Fee Assistance Program helps
    subsidize off-post child care for military families when on-
    post care is unavailable. Each branch of the military operates
    its own program, and, until 2014, the same company, Child Care
    Aware of America, administered it for nearly all of the
    branches.
        The GSA, meanwhile, administered the program for
    approximately 200 Army families and made the claim that it
    could administer Army's entire program for half the existing
    cost, saving $4 million annually. Despite performing no
    analysis to support such a claim, the Army forged ahead with
    that promise. To say that GSA was unprepared for the surge in
    participation, from 200 to 9,000 families, is an
    understatement.
        The OIG cited serious lack of preparation with respect to
    both personnel and technology. For example, GSA's cloud storage
    for email and voicemail was inadequate to handle a 45-fold
    increase in requests that needed to be processed. Staff was
    quickly overwhelmed, and a backlog of parent and provider
    requests began to grow. It included more than 9,100 unpaid
    provider invoices, averaging $300 apiece per month, that
    military families had to cover--military families often not in
    a financial position to cover that kind of cash flow--more than
    5,000 unprocessed family applications and recertifications;
    more than 7,300 unreturned phone calls; and more than 4,500
    unanswered emails.
        Following our hearing, the GSA made what can only be
    described as surprising progress in reducing those backlogs,
    which, of course, was a precondition for Child Care Aware
    resuming efficient management of the program.
        GSA reports all backlog provider invoices were paid within
    30 days, though we would like to know what steps are being
    taken to address the one in five payments for which errors have
    been detected. And while the GSA is still working to reduce the
    backlog of family actions, including recertifications, it has
    made considerable progress after the Army authorized the
    suspension of those activities to focus immediate attention on
    paying out invoices. As of December, GSA reports it has
    eliminated the phone call and email backlogs.
        I'd note the committee has requested the National Archives
    and Records Administration open an inquiry into the actions of
    GSA employees who apparently deleted various family
    communications, though I understand those families have since
    been contacted.
        Mr. Chairman, while I'm pleased to see progress, I'm still
    troubled by the actions that created the situation in the first
    place. During our September hearing, we learned the Army had
    already spent an additional $4.4 million to allow the GSA to
    hire more contract personnel and update its IT systems. Have
    further costs been incurred since then to eliminate those
    backlogs?
        I also want to hear about how we're applying lessons
    learned as we move forward. The OIG cited GSA for lack of
    preparation in advance of the program transfer in October 2014.
    Has the Army certified that Child Care Aware has sufficiently
    ramped up its personnel and IT services after having to scale
    down when it lost the program management more than a year ago?
        Mr. Chairman, to their credit, both GSA and the Army seem
    to have recognized the error of transferring management of this
    program, first by proactively engaging the inspector general
    and now by transferring the program back to the initial
    competent contractor. While there are still issues obviously to
    be resolved, I certainly recognize that progress and commend it
    and hope it will continue.
        Mr. Chairman, I also want to say this is precisely the type
    of bipartisan oversight for which our subcommittee increasingly
    has become known, and I am very pleased to collaborate with you
    in this endeavor today.
        Mr. Meadows. Well, I thank my good friend, the ranking
    member, Mr. Connolly, for his kind words and really for working
    in such a hand-in-glove way to make sure that Army families in
    this particular situation are taken care of.
        I will hold the record open for 5 legislative days for any
    members who would like to submit a written statement.
        Mr. Meadows. We will now recognize our panel of witnesses.
        I'm pleased to welcome the Honorable Carol Fortine Ochoa,
    Inspector General of the U.S. General Services Administration;
    Mr. Gerard Badorrek, Chief Financial Officer of the U.S.
    General Services Administration; Ms. Stephanie Hoehne, Director
    of the Family and Morale, Welfare, and Recreation at G9--quite
    a title there--Installation Management Command of the U.S.
    Army; and Dr. Lynette Fraga, executive director of Child Care
    Aware of America.
        Welcome to you all.
        Pursuant to committee rules, all witnesses will be sworn in
    before they testify, so if you would please rise and raise your
    right hand.
        Do you solemnly swear or affirm that the testimony you are
    about to give will be the truth, the whole truth, and nothing
    but the truth?
        Okay. Thank you. Please be seated.
        Let the record reflect that all witnesses answered in the
    affirmative.
        And in order to allow time for discussion, I would ask that
    you please limit your oral testimony to 5 minutes. Your entire
    written statement, however, will be made part of the record.
        And, Inspector General Ochoa, you are now recognized for 5
    minutes.

                           WITNESS STATEMENTS

               STATEMENT OF THE HON. CAROL FORTINE OCHOA

        Ms. Ochoa. Good morning, Chairman Meadows, Ranking Member
    Connolly, and members of the subcommittee. Thank you for
    inviting me here today. I appreciate the opportunity to testify
    about the Office of the Inspector General's ongoing work
    monitoring the General Service Administration's administration
    of the Army childcare subsidy program, or Army Fee Assistance
    Program.
        Since September, my office has been monitoring GSA's
    metrics for the Army Fee Assistance Program. We released a
    status report on Monday of this week that notes progress in the
    following areas:
        Our analysis of invoices and data from GSA's invoice system
    supports GSA's report that by mid-October it had paid 94
    percent of the provider invoices that were outstanding at the
    date of the full committee hearing on this matter in September.
        Additionally, GSA call logs reflect that GSA personnel
    called back the nearly 2,000 telephone numbers corresponding to
    the unreturned voicemails that were outstanding as of September
    2015.
        As of December 21, 2015, GSA had decreased its total
    backlog to approximately 3,100 items from a high of nearly
    26,000 items reported in our September report.
        Also, the number of program complaints received by the OIG
    significantly dropped since GSA paid off the backlogged
    invoices.
        Regarding the transition of the program, the interagency
    agreement between the Army and the GSA was extended to March
    2016, with further options to extend the GSA's administration
    of the program through October 2016. GSA officials told us that
    on December 23 the Army signed a final contract with Child Care
    Aware of America for the administration of the program.
        In addition, the Army has provided GSA with a transition
    timeline, which we understand is subject to amendment, that
    projects the beginning of the transfer to the new contractor on
    February 22, next month. This transition schedule is lengthy.
    It consist of seven phases taking place over approximately 8
    months, with GSA continuing to manage Army families' accounts
    until the transfer is complete in October 2016.
        Thank you for the opportunity to testify and for this
    committee's support of inspectors general. I ask that my
    testimony and the OIG's report be made part of the record, and
    I'd be happy to answer any questions.
        [Prepared statement of Ms. Ochoa follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Without objection. Thank you for your
    testimony.
        Mr. Badorrek, you're recognized for 5 minutes.

                      STATEMENT OF GERARD BADORREK

        Mr. Badorrek. Thank you.
        Good morning, Chairman Meadows, Ranking Member Connolly,
    and members of the committee. My name is Gerard Badorrek, and I
    am the Chief Financial Officer of the U.S. General Services
    Administration. I have been the Chief Financial Officer of GSA
    since December 29, 2014.
        As you know, I was previously before the committee on
    September 10 to testify about GSA's management of the Army Fee
    Assistance Program. This program is a top priority at GSA so
    that Army families receive the customer service they deserve. I
    thank you for the opportunity to testify before you today about
    the progress that has been made in this program.
        By standardizing work, expanding resources, and fully
    implementing an improved information technology system, we have
    now eliminated the significant backlogs of family actions and
    unpaid invoices.
        The number of families enrolled in the program has reached
    12,785, an increase of 25 percent since September. As of
    December 18, the total inventory of family actions was 1,141,
    excluding 426 recertifications. This total was significantly
    reduced from over 5,000 at the time of the September hearing.
        Out of these 1,141 family actions, all but 35 had been
    evaluated, and the rest were in process. There are 724 actions,
    or almost two-thirds of this inventory, that is back with
    families or providers, awaiting information. The goal was to
    reduce the inventory to 2,000 or less by the end of the year,
    and we reached this goal on November 25.
        The program also made progress toward providing customer
    service levels that are aligned with Army-established quality
    and timeliness standards. We have reduced the backlog of emails
    and phone calls from approximately 4,000 in September to 299 by
    December 18 and can respond to most phone calls and emails
    within 24 hours.
        GSA fulfilled its commitment to the committee to clear the
    invoice backlog by October 10, and valid invoices are typically
    being processed within 3 to 4 days. In addition, the Army has
    worked very closely with GSA on policy changes that allowed us
    to streamline processes, including temporarily modifying
    payment policies and delaying recertifications. These changes
    help to reduce the backlog of erred invoices and allowed the
    program to focus on processing family actions. We are now
    researching invoice discrepancies and completing
    recertifications.
        In response to concerns about the security of Army
    families' personal information, GSA reopened free credit
    monitoring services from the first week of October 2015 until
    the transition is completed, and 243 families enrolled in
    identity protection and credit monitoring services.
        Shortly after the last hearing, we joined transition
    planning efforts with the Army and Child Care Aware. We
    participate in frequent meetings, and we will continue to
    support family and provider webinars hosted by the Army. GSA
    will support the Army and Child Care Aware in transferring
    family and provider information to ensure that Army families
    are not negatively affected by the transition.
        GSA is committed to ensuring that the AFA Program is
    staffed appropriately as the program transitions. We have
    structured contractor and staff resources to accommodate
    fluctuations in work volumes so that resources can be
    redeployed as necessary.
        The Army has developed a phased transfer of the program,
    and, as scheduled, GSA provided the childcare providers list to
    Child Care Aware on December 15. Later this month, GSA is
    scheduled to transfer a sample of family data to Child Care
    Aware to complete the data transfer testing. In February, we
    are scheduled to begin a transfer of completed active families'
    records. Childcare provider files will also be transferred so
    that Child Care Aware can pay invoices for transferred
    families.
        We will repeat this process for subsequent phases of the
    transition. GSA will continue to pay invoices received for
    families who have not yet been transferred.
        We will actively support this transition process until all
    families and childcare providers have successfully transferred,
    and we will work with the Army and Child Care Aware throughout
    each phase of the data transfer to mitigate any disruption to
    Army families.
        Our goal is to continue to support the Army and Army
    families to the greatest extent possible as the Army Fee
    Assistance Program transitions. GSA is working diligently to
    respond to family action requests and to provide a high level
    of customer service during this transition. We share your
    concern for the welfare of our military families and appreciate
    your interest in and oversight of this important program.
        I will be happy to answer your questions.
        [Prepared statement of Mr. Badorrek follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you for your testimony.
        Ms. Hoehne, you're now recognized for 5 minutes.

                    STATEMENT OF STEPHANIE L. HOEHNE

        Ms. Hoehne. Good morning, Chairman Meadows, Ranking Member
    Connolly, and distinguished members of the Government
    Operations Subcommittee. I am Stephanie Hoehne, the Director of
    Installation Management Command, G9, Family and Morale, Welfare
    and Recreation Programs.
        Thank you for the invitation to appear before you to
    provide an update on the administration of the Army Fee
    Assistance Program and share the measures taken to transition
    the Fee Assistance Program management from the General Services
    Administration to a private contractor, Child Care Aware of
    America.
        In September, the committee examined the factors leading to
    a backlog of unpaid Fee Assistance invoices affecting
    approximately 9,000 families. We acknowledge the lack of
    oversight that allowed this type of impact to families, and we
    are dedicated to putting trust back into the program and making
    sure that it is on track as we transition the program to Child
    Care Aware of America.
        Since September, we have eliminated the backlog of unpaid
    invoices and achieved steady state in processing family
    actions. We have made significant progress in transitioning
    Army Fee Assistance to Child Care Aware of America. The Army
    has also increased the level of communication and support to
    Army families.
        Committed to our oversight role, the Army and GSA review
    output metric reports daily and conduct weekly on-site visits
    to the GSA offices to validate the reports and GSA operations.
    The major focus of this oversight has been a combined emphasis
    on invoice payment and family action processing. In addition, I
    have directed retraining and a higher level of oversight on
    contract acquisition and monitoring contract execution.
        The timeline for the transition from GSA to Child Care
    Aware of America was developed jointly after a prolonged,
    deliberate process of discovery on the part of the contractor
    to ensure that they were equipped, trained, and ready to manage
    the workload and to ensure that families were kept well-
    informed and tracked throughout the transition. We have had the
    letter contract in effect since October and have now signed the
    definitive contract, effective December 23, to support the
    transition in full administration of the program.
        The Army anticipates the formal transition of family
    accounts to Child Care Aware will begin in late February and
    will consist of seven geographically defined phases. All
    families residing within a geographic region, defined by
    States, will be transitioned as a group, averaging about 1,285
    people per group.
        In addition to transitioning the families already--in
    addition, the families--to transitioning the families already
    in the Fee Assistance Program by phase, Child Care Aware of
    America will immediately, effective 22 February, take on any
    new families that come into the program, regardless of their
    location.
        This phased approach will also allow GSA to incrementally
    devote more assets to the annual recertification requirements
    just reinstated after a 6-month suspension and to reconciling
    invoice discrepancies. Recall that the 8,800 unpaid invoices
    cited during previous testimony resulted from discrepancies in
    what providers billed and what GSA records indicated was owed.
    Those invoices have been paid, but we still have to settle the
    accounting.
        The formal transition timeline has recovery periods built
    in. Each phase will be closely monitored. Success will be
    validated before moving to the next phase. The timeline can be
    shortened if we encounter no problems in each phase, but we
    were deliberately conservative in planning because care of the
    families is the priority driving this effort.
        We expect Child Care Aware of America to assume full
    administration of the Fee Assistance Program no later than
    October 2016. Although this is not the quick transition that
    the Army and the GSA would have preferred, it is one that will
    protect our Army families. We have learned from previous
    mistakes.
        Thank you again for this invitation, and I look forward to
    taking your questions.
        [Prepared statement of Ms. Hoehne follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you for your testimony.
        Dr. Fraga--is it ``Fraga'' or ``Fraga''?
        Ms. Fraga. ``Fraga.''
        Mr. Meadows. ``Fraga.'' Dr. Fraga.

                  STATEMENT OF LYNETTE M. FRAGA, PH.D.

        Ms. Fraga. Chairman Meadows, Ranking Member Connolly, and
    members of the subcommittee, good morning and thank you. I am
    Dr. Lynette Fraga, and I serve as the executive director of
    Child Care Aware of America. I am here today to provide
    information and answer your questions about the transition of
    the Army Fee Assistance Program from the General Services
    Administration back to Child Care Aware of America.
        This charge and responsibility is not only squarely within
    the nonprofit mission of Child Care Aware of America; it is
    also very personal. My father is a retired sergeant major who
    proudly served in the Army for nearly 30 years. I was the
    spouse of a former Active Duty soldier and reservist, and I
    have worked, among other professional roles with the Army Child
    and Youth Services, as the director of a child development
    center.
        Child Care Aware of America, formerly known as the National
    Association of Child Care Resource and Referral Agencies, aims
    to accomplish our vision in multiple ways, with one key
    imperative: to provide excellent personalized customer service
    to assist families looking for quality child care.
        Since 2004, Child Care Aware of America has operated the
    Navy, Marine, and Air Force Fee Assistance Programs as well as
    the Exceptional Family Member Fee Assistance Program for the
    Navy and Air Force since 2008 and 2011 respectively, and we are
    proud to continue to serve in this capacity.
        Through this work, we currently serve nearly 4,000 Navy,
    Air Force, and Marine families, process payments in 5 days or
    less, process completed application packages in 10 days or
    less, and distribute approximately $3 million in monthly
    subsidy payments. Most importantly, we build meaningful
    relationships with both families and childcare providers.
        Between 2004 and 2014, Child Care Aware of America operated
    the Army Fee Assistance Program, ensuring quality providers
    were available and assisting families in identifying providers
    that best meet their needs.
        In September 2014, the Army Fee Assistance Program was
    transitioned from Child Care Aware of America to the GSA. After
    the committee's hearing in September, we began discussions with
    the Army regarding transition of the program back to Child Care
    Aware of America.
        These discussions included a discovery period so all
    involved parties could effectively plan for an informed,
    deliberate, and orderly transition of all programmatic
    activities. A phased approach to transition will be employed to
    ensure we uphold our commitment to high-quality services for
    military families, communicate with both families and providers
    effectively, and ensure this transition is as smooth and
    seamless as possible.
        Since initial discussions with the Army, Child Care Aware
    of America has been developing the required infrastructure to
    ensure programmatic success. This includes a family-centered
    approach, exceptionally trained and experienced staff, and
    robust work flow and data management systems and protocols.
        High-quality customer service is the cornerstone of Child
    Care Aware of America and critical for the families and
    providers that participate in the programs that we administer.
    This includes the use of our very successful family-centered
    case management approach in working with families and
    providers. Our family case managers and provider case managers
    build relationships to help serve Army families and effectively
    meet their needs.
        We have assembled a high-performing team that includes
    staff who formerly worked on the Army Fee Assistance Program
    prior to its transition to GSA and leadership with many years
    of fee assistance and military experience.
        Child Care Aware of America has also implemented an in-
    depth, 80-plus-hour training and mentoring program for new
    staff, spanning customer service and Fee Assistance Program
    policy to State-by-State childcare licensing and accreditation
    standards and supports. The expectation is that our staff are
    not only experts on the Army Fee Assistance Program but also in
    the field of childcare resources, armed with information to
    effectively meet Army family needs for child care.
        We have put into place systems and supports to ensure an
    effective transfer of parents and providers from GSA to Child
    Care Aware of America. Of paramount importance, we are working
    diligently to ensure we have the proper level of data
    protection. Child Care Aware of America is taking steps to
    ensure all documents containing personally identifiable
    information are kept strictly confidential and limited to the
    staff that work on the project. This includes keeping documents
    in a secure system with permissions only granted to high-level
    managers and only giving access to employees who have undergone
    a full, comprehensive background check.
        In order to facilitate consistent and effective
    communication throughout the transition, Child Care Aware of
    America, the Army, and GSA have developed a multilayered
    communications plan and schedule. This communication plan
    includes over 28 communications to parents and providers during
    the transition period and in multiple formats, including a
    dedicated Web site, webinars with chat functions, email and
    phone outreach, social media, and other forms of electronic
    communication.
        Under the terms of our contract with the Army, Child Care
    Aware of America will accept all new family and provider
    applications beginning February 22, 2016. For current cases,
    transition will occur in several phases by State groupings. As
    Child Care Aware of America assumes processing of applications
    by phase, GSA will relinquish administration of the program.
        We are confident that the full transition will be complete
    and Child Care Aware of America will be fully operating the
    program by 28 October 2016. We are excited to continue our
    tradition of excellence in operating the Army Fee Assistance
    Program.
        In conclusion, I would like to thank the subcommittee for
    the opportunity to testify today. We appreciate the sacrifices
    that military families make for our country, and Child Care
    Aware of America is proud to do our small part to support them
    in their mission-critical work. I am immensely proud and
    appreciative of the military servicemembers in my own family,
    and you have my personal commitment that we will do whatever it
    takes to ensure our military families have access to quality
    and affordable child care.
        I'm happy to answer any questions you may have.
        [Prepared statement of Ms. Fraga follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you.
        Thank you all for your testimony.
        And before I recognize the gentleman from Georgia, Mr.
    Carter, for a series of questions, I would just like to say, no
    matter how we focus on the particular questions during this
    particular hearing, I don't want to undermine the progress that
    has been made. And, specifically, it doesn't matter what you
    think. It really doesn't matter what we think. It matters what
    people like Captain Dyches think. And so, in talking to her
    before this hearing, I was able to hear that her particular
    situation has been solved.
        And so, as long as we do that across the board for Army
    families, that's what really matters. And so I would just like
    to say, coming out of the full hearing, for those of you that
    testified before and made commitments and have followed up on
    those commitments, I thank you.
        And we'll go ahead and recognize the gentleman from
    Georgia, Mr. Carter, for 5 minutes for a series of questions.
        Mr. Carter. Thank you, Mr. Chairman.
        And thank all of you for being here. We appreciate your
    presence here today.
        I represent the First Congressional District of Georgia,
    and we are very blessed to have two Army installations in our
    district. We have Hunter Army Airfield, and we have Fort
    Stewart. We care very much about our military and those
    installations and particularly the families. In fact, we have
    about 500 families that are participating in the Army Fee
    Assistance Program. And providing for our military families, as
    I say, is very important to me and to my staff and to all the
    citizens of the First Congressional District.
        Dr. Fraga, I want to ask you, is Child Care Aware of
    America ready to take on full administration of this program
    starting this year? Are you ready?
        Ms. Fraga. Thank you for the question.
        We have been working very diligently with the GSA and with
    the Army to ensure during our discovery period that we were
    able to unpack any questions, concerns, information that was
    necessary for us to put forward our recommendation on a
    timeline in the transition.
        We feel that we have worked very hard in addressing the
    ramp-up of taking back a program such as this. We understand
    its importance and its urgency, and we also want to ensure we
    do it right.
        We have been very successful in implementing this program
    in the past, not only for the Army but for the other military
    services. And we do believe we have created a transition plan
    that's deliberate, in coordination with the Army and with the
    GSA, that will reap success on the timeline we've described.
        Mr. Carter. Great.
        You're aware, of course, that you may acquire some of the
    backlog that existed. Now, are you prepared to take on that
    backlog as well as start administering the program?
        Ms. Fraga. As we have described the transition process in
    partnership with the GSA and with the Army, we actually are
    going to be taking on new families and new providers on
    February 22. And working in collaboration with GSA and with the
    Army over the course of the transition in phases, that would
    not necessarily include taking on a backlog but, rather,
    ensuring that we are taking on new families and providers and
    families that have, in phases, been able to take on--that we
    are going to be able to take on families in phases over time
    that have been addressed by GSA and their work over time. So we
    don't----
        Mr. Carter. Okay. So what you're telling me is that you're
    ready to take on the new families----
        Ms. Fraga. Yes.
        Mr. Carter. --but the backlog, you're not necessarily going
    to concentrate on that initially.
        Ms. Fraga. The backlog--no, we are not going to be focused
    on the backlog at the outset.
        Mr. Carter. Will you at any point?
        Ms. Fraga. By phase. So each of the phases----
        Mr. Carter. And those phases are--how much time are we
    talking about?
        Ms. Fraga. Each phase is approximately 1 month.
        Mr. Carter. Okay. So in a matter of months you will be
    accepting that backlog.
        Ms. Fraga. Yes. And we are prepared and feel that, by the
    end of the 7-month to 8-month period, by October, we will be
    fully operating the Fee Assistance Program, which would include
    all families across the country.
        Mr. Carter. And all backlogged?
        Ms. Fraga. And hopefully all--there will be no backlog. But
    we do anticipate that, by the end of October of 2016, that all
    of those families will be within our system and we will be
    fully operating the Army Fee Assistance Program.
        Mr. Carter. Okay.
        Has the Army authorized you to use the pay and chase
    system?
        Ms. Fraga. I am not familiar with that system.
        Mr. Carter. The pay and chase system. Ms. Ochoa, are you
    familiar with that system? Are any of you familiar with the pay
    and chase, where you go ahead and pay and then you go back and
    try to recoup any payments, any overpayments?
        Ms. Hoehne. Sir, that's what we did in order to pay the
    8,800 backlog of provider invoices. We authorized GSA to pay
    the invoiced amount, and we are in the process of now
    reconciling what we paid against what updated records show was
    actually owed.
        Mr. Carter. Show what was actually owed.
        Ms. Hoehne. Yes, sir.
        Mr. Carter. So were there any overpayments in that?
        Ms. Hoehne. There were both overpayments and underpayments,
    and we're not through with the reconciliation process.
        Mr. Carter. When do you think you'll be finished with that
    process?
        Ms. Hoehne. It's an ongoing process. As families transition
    to GSA, that gives more resources that our families----
        Mr. Carter. Can you be more specific than ``ongoing''? Come
    on, you got to give me something.
        Ms. Hoehne. Sir, we have 8,800 invoices to reconcile. At
    this point, we have reconciled about a thousand invoices. So
    it's going to take some time to reconcile all of them. Many are
    due to incomplete records that have to be researched.
        As families transition to Child Care Aware, GSA can devote
    more assets to reconciliation and speed up the process, but I
    can't give you a definitive timeline at this point. By the time
    everything is transferred to Child Care Aware, we will have the
    full scope of what needs to be reconciled within the backlog.
        Mr. Carter. Okay.
        Ms. Ochoa, it's been reported that there was an 18-percent
    error rate in over 40,000 invoices. This would be some 7,200
    errors, correct?
        Ms. Ochoa. That was as of our September report, yes.
        Mr. Carter. Now, do you know how many of those were
    overpayments?
        Ms. Ochoa. I do not. The reconciliation process that we've
    been hearing about is one that's controlled by Army procedures
    and policy. Army did instruct the GSA to go ahead and pay off
    the invoices whether or not they met the authorized amounts in
    the system. And GSA is taking their instructions about the
    reconciliation process from Army.
        Mr. Carter. Mr. Chairman, I appreciate you being liberal
    with my time here, but I just want to make this point, okay?
    Obviously, we had a mess here.
        Dr. Fraga, you got an opportunity to start off anew and to
    get this right, and I hope that you will do that and not get
    into the situation that we find ourself in here, a very
    embarrassing situation, where we've got over 7,200 errors that
    we got to somehow try to reconcile during this time. So, you
    know, get it right the first time. That's the most important
    thing, okay?
        Thank you, Mr. Chairman. I yield back.
        Mr. Meadows. I thank the gentleman.
        The chair recognizes the ranking member, Mr. Connolly, for
    5 minutes for questions.
        Mr. Connolly. I thank the chair. I'm going to yield my time
    to Mr. Lynch, my friend from Massachusetts.
        I also want to welcome Captain Dyches myself. You snuck in
    before I got to see you. Welcome. Glad you rejoined us.
        And, with that, I would ask that my time go to Mr. Lynch
    right now.
        Mr. Meadows. Mr. Lynch, you're recognized.
        Mr. Lynch. Thank you, Mr. Chairman.
        I want to start off by saying thank you and well done to
    the chairman, Mr. Meadows, and Mr. Connolly. When I was here in
    September at this hearing, we were in a much different place.
    And I know that everything hasn't gone as, you know, as well as
    possible, but we've made tremendous strides. From digging a
    hole, I think we've stopped that, and we're actually climbing
    out of the hole, and we're helping families.
        And I think that you all--I'm the caboose on this train.
    You know, Mr. Meadows and Mr. Connolly, you've taken a lead on
    this. And sometimes bureaucracy is just so frustrating in terms
    of trying to turn it around, but you've done a great job here
    in a relatively short time. Four months is not a long time in
    Congress.
        And I want to thank the witnesses, as well. You've all
    chipped in and done a commendable job.
        And I do not want to neglect both Captain Dyches and Kaela
    Hensley, who came before the committee back in September and
    told about their family situation and really put a personal
    face on this problem.
        So, Inspector General Ochoa, you've done a very good job, I
    think. And I just want to go back. In the previous hearing when
    we had a conversation, you said, ``In the event this program is
    transferred elsewhere, GSA should obtain Army agreement and the
    transferee's agreement on conditions for program transfer.''
    Was that in fact done?
        Ms. Ochoa. Yes. The GSA has been working closely with the
    Army and with Child Care Aware on this transition plan.
        Mr. Lynch. Okay.
        Ms. Ochoa. There remains a lot of work to be done,
    obviously, but they have been coordinating.
        Mr. Lynch. Understood. Understood.
        You also recommended that GSA should establish--and I'm
    going to quote you again--``a plan with performance indicators,
    benchmarks, and implementation strategies to eliminate the
    backlog,'' which we've talked about and the gentleman from
    Georgia has talked about, ``and achieve customer service
    timelines that are satisfactory to the Army and to ensure the
    security of Army families' sensitive information.''
        Would you agree that the GSA has made significant progress
    on that?
        Ms. Ochoa. Yes. GSA submitted action plans to us which we
    approved.
        Mr. Lynch. All right.
        Is there anything more that can be done, in your view, to
    tighten this up?
        Ms. Ochoa. Well, what remains is for GSA to continue to
    support the transition efforts, to do everything in its power
    to make sure there's no further disruption to Army families in
    the course of this lengthy transition.
        Mr. Lynch. Right.
        I do want to spend a little bit more time on the security
    of families' personal information, because that was such a
    disaster.
        Dr. Fraga, you've gone over some of that in your testimony,
    and I just want to sort of amplify that issue again. What is
    being done now to prevent, you know, breaches and the improper
    dissemination of families' personal information?
        Ms. Fraga. The first steps that are taken are the screening
    and background checks of staff. And that's a very first
    important step. And second is in regards to staff training in
    handling PII data as being critical. Finally, to ensure that
    access to those systems are limited and the details of ensuring
    that how the data is input and stored are protected. So those
    are the major areas that we have implemented at this point.
        Mr. Lynch. Okay. And we're going to continue to monitor
    that. Is that correct?
        Ms. Fraga. Yes.
        Mr. Lynch. Okay.
        I don't have much more than that other than, Ms. Ochoa,
    your recommendations and your view of the problem and, again,
    your recommendations to fix this were instrumental in this
    whole process. So I really want to thank you for your service
    and your help here in putting the energy and the attention
    where it needed to be. So you did a great job.
        Thank you all for your service to our country.
        Thank you. I yield back.
        Mr. Connolly. Mr. Chairman, reclaiming that time, I just
    want to thank my friend from Massachusetts for his gracious
    remarks. It is a reminder, I think, Mr. Chairman, that
    sometimes, you know, just bashing people and calling for their
    heads doesn't solve problems. And I so much thank Mr. Lynch for
    noting that, because there's a process this committee, on a
    bipartisan basis, can set in motion in a collaborative way with
    the executive branch to try to actually resolve or address
    problems rather than belabor them. And I really thank Mr. Lynch
    for noting that.
        Mr. Meadows. The chair recognizes himself for a series of
    questions.
        And I would echo that, Mr. Lynch. Thank you. Obviously,
    having a compliment coming from the other side of the aisle is
    rare. It may affect reelection, but--no. I do thank you because
    I know the heart that it represents, and I appreciate it,
    because you have been an advocate not only for Army families
    but for the Federal workforce families each and every time. And
    when you see something is wrong, you have consistently spoken
    up loudly and clearly without any regards to politics. And that
    is certainly appreciated by the ranking member and I, and I
    thank you.
        I want to go forward, and let's talk a little bit about
    logistics, because we've made great progress. What I don't want
    to do is be in the red zone and fumble the ball. And I think
    that that is the key. And we're hearing great reports today in
    a very short period of time. I thank you both, because
    commitments were made in that hearing that have been fulfilled.
        There were commitments made in the hearing that haven't
    been fulfilled, as well, and part of that has to do with this
    transitioning period. And so let me ask the question, because
    I'm concerned about our phased-in approach. You know, we took
    one approach and said, all right, last November 2014, and it
    all went to GSA.
        And so, Ms. Hoehne, I'm hearing that you learned from that
    mistake and said that that was not the best way to do it and
    that we're going to phase it in.
        I'm really concerned about the phased-in approach because
    of the ambiguity for our military men and women on who do they
    go to--do they go to GSA? Do they go to our contractor?--and
    how that all transitions. Because they move around, as well.
        And so I'm looking at the phased-in approach. And so we're
    going to start here with Maryland and District of Columbia,
    being big, and go out to Wyoming, Vermont. Why the diversity
    geographically, Ms. Hoehne?
        Ms. Hoehne. Sir, I'm glad you asked that question. One of
    the lessons that--to answer the first----
        Mr. Connolly. Could you please turn on your mic or bring
    the microphone to your face?
        Mr. Meadows. Yeah, just get the mic close to you.
        Ms. Hoehne. Okay.
        I'm glad you asked that question. One of the lessons that
    we learned from the previous system was families were
    apparently not clear on where they could go for help. And we
    have established the capability to have two-way communication
    with our families at multiple venues--through Facebook, through
    Twitter, through email, and through phone calls--and directly
    to us, in addition to GSA, in addition to Child Care Aware,
    setting up Web sites and capability. So if a family is confused
    about where they should go for help, they can come to us, and
    we can clarify for them.
        We've established a webinar that we've already held once
    for the families and once for the providers announcing the
    transition and talking about the phases and giving them the
    information on who's in what phase. We will have another
    webinar at the beginning of each phase for those families
    affected to address their specific concerns.
        But we recognize that communication was an absolutely
    essential element to making this work, but, this time, two-way
    communication so the questions come back to us.
        Mr. Meadows. Well----
        Ms. Hoehne. The first webinar generated 70 questions.
        Mr. Meadows. Yeah. And I guess here's my concern with that,
    is with that it all sounds great when we have all this
    wonderful conversation, but it doesn't really do anything
    unless it's producing results. And I think your Twitter
    followers are 17 and your Facebook is 310, and that's a very
    small fraction of the overall population. I mean, we're looking
    at 1,600 in backlog.
        And so the question becomes, is the communication
    meaningful, meaning that does it produce results? Or are we
    going about the system--you know, so let's say North Carolina,
    which is in phase two, you have somebody there. How do they
    know that they come to GSA and you or they go to Dr. Fraga? How
    do they know that today?
        Ms. Hoehne. Sir, today, it doesn't matter if they come to
    us, if they go to Child Care Aware----
        Mr. Meadows. So you're going to be the conduit that gets
    them one way or the other.
        Ms. Hoehne. We are all talking to each other. I am getting
    copies of IG issues sent to GSAIG. I am getting copies of that
    so that my folks can be involved in helping to work the issues.
    Fortunately, those have dropped off recently.
        Mr. Meadows. So would it be better for the 1,600 that are
    in backlog currently with GSA, or with you, I guess,
    technically with you--but would it be better for those 1,600 to
    just reapply with Dr. Fraga?
        Ms. Hoehne. No, sir, they should come to us. They should
    come to----
        Mr. Meadows. I understand they should come to you, but
    would it be quicker if they go to her, if she's going to be
    accepting new applications?
        What is the timeline between when a family comes to you and
    they get approved? What's the length of time?
        Ms. Hoehne. The length of time for Child Care Aware is
    going to be, let's see, 5 days for a family action as long as
    the paperwork is complete; 3 days to notify----
        Mr. Meadows. Okay. And what is it under GSA right now?
        Ms. Hoehne. Ten days is the goal.
        Mr. Meadows. So your testimony here today is we've got a
    1,600-person backlog and that can be eliminated in 10 days?
        Ms. Hoehne. Sir, that is not all new family actions. It is
    a variety of actions. Some of them are recertifications, which
    are done in----
        Mr. Meadows. Okay. Well, help us then, because----
        Ms. Hoehne. Okay.
        Mr. Meadows. --what I'm getting at are the 1,600. How do we
    get rid of those? Are they better off going with her or going
    with GSA?
        Ms. Hoehne. Sir, of the 1,600--there's a certain span of
    time allowed to work an action. And if----
        Mr. Meadows. And what is that?
        Ms. Hoehne. Depending on the action. If it is a new
    application, the standard had been get it within 10 days for
    GSA. They are making progress towards achieving that standard.
    They are generally getting it within 2 weeks at this point.
        Mr. Meadows. So your testimony here today, Ms. Hoehne, is
    that a military mom or dad can come in, they can fill out the
    application, and within 10 days they can get approved?
        Ms. Hoehne. If the application is complete. If it is not
    complete, they have to be notified of what is missing and be
    given an opportunity to provide that. That is the sort of thing
    that causes a lag in getting approval.
        Mr. Meadows. So it's their fault that it's not getting----
        Ms. Hoehne. Not always.
        Mr. Meadows. Okay. All right.
        Ms. Hoehne. But that can contribute----
        Mr. Meadows. I see Mr. Badorrek is wanting to jump in here.
        Do you want to clarify any of this?
        Mr. Badorrek. Yes. I can talk to the 1,600. That includes
    roughly, I believe, about 400 recertifications. The key----
        Mr. Meadows. So what is a recertification? I'm ignorant.
    What are we talking about? Is it making sure that their child
    is still with them or----
        Mr. Badorrek. That they're still eligible to participate in
    the program. The family actions, which I said was an inventory
    of just over 1,100, are actions that are requested by families
    to add a child, to change a rate, to----
        Mr. Meadows. So how long does that take?
        Mr. Badorrek. Okay. Today, it takes us 2 to 3 days to
    evaluate the application, and if the application is complete,
    it's taking us roughly another 7 or 8 days to complete the
    application.
        The 1,600 that you're talking about, we have about a
    thousand that are back with families or providers for more
    information. So if we are--and we have already evaluated them
    and sent them back to families. The number of applications that
    we haven't evaluated is running about a day or two worth of
    inventory.
        Mr. Meadows. So your testimony here today is, if those
    families get you the needed information, you can make a
    determination within 10 days. Is that your testimony?
        Mr. Badorrek. If they get us the information----
        Mr. Meadows. Because that's fast.
        Mr. Badorrek. --and the application is complete, we should
    be able to process that within 10 days.
        Mr. Meadows. Okay.
        Well, I've gone way over my time, so I'm going to recognize
    the ranking member, Mr. Connolly.
        Mr. Connolly. Thank you, Mr. Chairman, but I'm going to
    yield to my good friend from New York, the gentlelady, Mrs.
    Maloney.
        Mrs. Maloney. Thank you, Mr. Connolly, for yielding and the
    chairman and all of the participants today.
        So, as I understand it, the Army decided they were going to
    transfer this program to GSA in order to save $4 million, but
    it turned out that they spent $4 million more, $4.4 million by
    September, and that the backlog grew dramatically and the
    services to the families diminished.
        Is that a fair assessment, Dr. Ochoa?
        Ms. Ochoa. If you're looking at our September report, I
    think that is a fair assessment. There has been progress since
    then in meeting the commitments made to this--made to the full
    committee in September.
        Mrs. Maloney. But they did transfer it to save $4 million
    and they ended up spending $4 million more. Is that correct?
        Ms. Ochoa. That is correct.
        Mrs. Maloney. And, also, the backlog became longer, right?
    Is that correct?
        Ms. Ochoa. The backlogs grew continually through the summer
    of 2015.
        Mrs. Maloney. Well, who made this decision that cost the
    taxpayers more money and hurt the families and their services?
    Who made the decision to move away from a program that was
    providing services on time and on budget without a backlog to
    GSA that then cost so much more money?
        Why does it cost so much more money under GSA than it did
    under the Child Care Aware of America program?
        Ms. Hoehne. Ma'am, I'll take that one.
        The Army at the time was looking for ways to save money. We
    were facing sequestration.
        Mrs. Maloney. I know that was difficult.
        Ms. Hoehne. The decision was a good decision at the time.
    It was going to an interagency agreement, eliminating a
    contract at an apparent savings bid of $4 million vice $8
    million to provide the service from an entity that was known to
    already be providing the service.
        The problem was in the execution and the oversight of the
    transfer and the oversight of ensuring that GSA was prepared to
    take on the full volume of work. But the decision itself was a
    good decision at the time.
        Mr. Connolly. Would my friend yield?
        Mrs. Maloney. Absolutely.
        Mr. Connolly. Ms. Hoehne, you say the problem was in the
    execution. Wasn't some of the problem in the due diligence as
    to capability in the first place? There's a prior concern here,
    what is the capability of GSA to accept this transfer from Ms.
    Fraga's organization? And isn't it fair to say that that
    assessment was, at the very best, quite loose and ultimately
    inadequate?
        Ms. Hoehne. Sir, I agree with you. I consider that--the
    problem in execution of the transfer is--verifying the
    capability was one component of it, certainly.
        Mr. Connolly. Okay.
        I thank my friend for yielding.
        Mrs. Maloney. But now we're transferring it back to CCAOA,
    and let's hope that this transition is a more seamless, better
    one. I am sure that the families gaining the service are going
    to be thrilled that they're going back to one that will process
    their claims within the 10-day limit.
        Ms. Hoehne, prior to GSA, the Child Care Aware of America
    operated a large portion of the AFA Program for 10 years, from
    2004 to 2014, and, by all statistics, appeared to be operating
    appropriately. Is that a correct statement?
        Ms. Hoehne. Overall, yes, ma'am.
        Mrs. Maloney. Yeah.
        And, during that time, Dr. Fraga, CCAOA provided AFA
    Program benefits to approximately how many families?
        Ms. Fraga. I don't have the answer to that question, ma'am,
    but it was a number of families--thousands.
        Mrs. Maloney. Thousands. Okay. And during those 10 years,
    had you received any indication--did the Army ever tell you
    that they were unhappy with your services?
        Ms. Fraga. Over the time of our contract, as far as I
    understand it, we received very high accolades about the work
    that we did, particularly from testimonials from families.
        Mrs. Maloney. And did the families themselves face the type
    of backlogs and hardships that they are confronting now, with
    the backlogs and hardships that were reported in testimony
    today?
        Ms. Fraga. Certainly not during my tenure at Child Care
    Aware of America, which began in October of 2012.
        Mrs. Maloney. And was CCAOA, or your organization,
    regularly processing subsidy payments within Army's
    requirements of 10 days?
        Ms. Fraga. We were.
        Mrs. Maloney. So, I mean, I fail to understand. I'm
    mystified that they transferred it in the first place. So here
    you have a contract performing well, on time, providing
    services. Okay. And you got praise for it. You were literally
    praised by the Army.
        As far as you know, did CCAOA's performance level have any
    impact on Army's decision to transfer the contract to GSA in
    2014?
        Ms. Fraga. Ma'am, I had no indication that there was a
    performance challenge to the contract.
        Mrs. Maloney. Okay.
        And so, Ms. Hoehne, do you dispute what she's saying? Do
    you agree with what she's saying?
        Ms. Hoehne. I have no basis to dispute what she's saying.
    The decision occurred in 2013, late 2013. I came on board in
    March of 2014 when the beginning of the transition was
    occurring. But the driving force for the decision to transfer
    was not dissatisfaction with Child Care Aware. It was the
    opportunity to save $4 million when the Army was scrambling to
    look for ways to save money.
        Mrs. Maloney. But it didn't save money. They obviously did
    not do a proper analysis. It ended up costing $4 million. And
    there was no reason to transfer when, by the testimony, unless
    it's disputed, the services were being provided on time, on
    budget, and as prescribed by the contract, with families being
    pleased and with getting high applause.
        So approximately how many families, combined, are enrolled
    in the Fee Assistance Program for these three military
    branches? Apparently, the Navy, Air Force, and Marines, they
    all contract with the CCAOA, correct? They're all with the
    CCAOA?
        Ms. Fraga. Yes, ma'am.
        Mrs. Maloney. Okay. Well, I don't think that anyone would
    deny that CCAOA has established really, I would say, a stellar
    record in managing this program. I would say congratulations to
    you. You should have been given a raise instead of losing the
    business that then ended up costing much, much more.
        So, in light of their proven track record, I hope that the
    Army families are pleased to learn that the program is
    returning to the CCAOA's capable hands. And it's wonderful in
    this Oversight Committee to hear a report of services being
    provided on time, on budget, with families pleased with the
    services they're getting, and on time and under the 10-day
    rule. Now we have backlogs of thousands of people, backlogs of
    months and months behind. So I'm pleased that it's transferring
    back. And I trust that you will be vigilant in this transfer
    and management.
        I yield back.
        Mr. Meadows. I thank the gentlewoman.
        The chair recognizes the gentleman from Virginia's 11th
    District, the Honorable Mr. Connolly.
        Mr. Connolly. I thank my friend from North Carolina's 11th.
        Following up on Mrs. Maloney's line of questioning, Ms.
    Fraga, putting a human face on this, what does it cost per
    month for the average family to have a child in your program,
    per month?
        Ms. Fraga. Are you asking how much child care is per
    family----
        Mr. Connolly. Yes.
        Ms. Fraga. --per month? It varies across the country.
        Mr. Connolly. Okay, but give me a number. Give me an
    example.
        Ms. Fraga. So a family may pay a thousand dollars a month
    for child care.
        Mr. Connolly. So if there's a backlog in processing
    reimbursement for subsidies, how much of a financial burden
    would a thousand dollars unreimbursed going for perhaps months
    at a time and getting multiplied during that time period be on
    your clients?
        Ms. Fraga. The impact, the financial impact, on families
    who receive subsidy under this program absent receiving their
    subsidy payment is extensive. It can be a significant hardship
    for families.
        The calculation of how much subsidy a family would receive
    varies by family, as well, with the highest-need families
    obviously receiving a higher subsidy. So with the amount of
    cost of child care for a family in their family's budget being
    very high, not receiving subsidy could be an incredible
    hardship on families.
        Mr. Connolly. It could, in fact, make it unaffordable to
    continue with the care.
        Ms. Fraga. It would absolutely make it unaffordable.
        Mr. Connolly. Yes.
        Ms. Ochoa, when we had you here in September, you talked
    about 26,000 action items in the backlog by July of last year.
    Is that correct?
        Ms. Ochoa. Correct.
        Mr. Connolly. Where are we today? 26,000 in September. What
    is it now?
        Ms. Ochoa. As of December 21, it was at 3,100 total items.
        Mr. Connolly. 3,100?
        Ms. Ochoa. Yes.
        Mr. Connolly. Okay. Great. I thought for a minute you were
    going to say 31,000. I thought, ``Uh oh.'' But that's good to
    hear.
        Mr. Badorrek, we talked about the--with the best of
    intentions, we hoped to save $4 million. And, in fact,
    unfortunately, we didn't save that. We, in fact, expended an
    additional $4.4 million above what we thought we would spend
    for this program. Is that correct?
        Mr. Badorrek. Yes. We had approval to spend an additional
    $4.4 million in fiscal year 2015.
        Mr. Connolly. What additional costs have we incurred since
    we had our hearing in September? Between September and December
    31, do we know how much over that $4.4 million we, in fact,
    are?
        Mr. Badorrek. For fiscal year 2015----
        Mr. Connolly. And if I could ask you to pull that in front
    of you, just like Ms. Hoehne.
        Mr. Badorrek. Yes.
        Mr. Connolly. That way, we can hear you perfectly. Thank
    you.
        Mr. Badorrek. The $4.4 million raised the projected cost
    for GSA for fiscal year 2015 to $8.4 million. We spent $6.7
    million during fiscal year 2015, so we came in below the
    projection that we had provided to Army. Since----
        Mr. Connolly. Well, excuse me. What you mean is--correct me
    if I'm wrong. $6.7 million actually is additional cost, but
    it's less than the projected additional cost.
        Mr. Badorrek. Less than the projected. It's $2.7 million
    above what we had intended to--we had originally agreed to in
    the initial agreement. It was not the entire $4.4 million. That
    is what we spent in fiscal year 2015.
        Mr. Connolly. Okay.
        I'm looking at the backlog of family actions. And, again,
    Ms. Ochoa, your report to us was in September. And that figure
    was 5,000 at that time. Is that correct?
        Ms. Ochoa. That's correct.
        Mr. Connolly. And what is that number today?
        Ms. Ochoa. Again, as of December 21, 1,600.
        Mr. Connolly. Okay. So, again, progress.
        There were unpaid invoices of 8,000, also in your report in
    September.
        And, Mr. Badorrek, at that time, you committed to paying
    those invoices, all of them, within 30 days. Where are we on
    that today?
        Mr. Badorrek. We paid all of those invoices. All the
    invoices were valid. We've been able to keep up with the
    invoices that are coming in. We are processing invoices within
    a few business days.
        The IG report I believe showed a couple thousand invoices
    that needed to be processed. On a given day, we could get 1,200
    invoices in. We average about 600 a day. So that's a few days'
    worth of inventory that we have not yet processed.
        Mr. Connolly. Okay. But are you on an expedited schedule to
    make sure that they are?
        Mr. Badorrek. Absolutely.
        Mr. Connolly. Can you make a commitment, at least a
    tentative commitment--we understand things happen--but can you
    make a tentative commitment to us today in terms of getting
    that to zero?
        Mr. Badorrek. I have to explain the difference between
    inventory and backlog. If we receive a thousand invoices today,
    we may not process them today, but we will process them in the
    next 3 or 4 business days.
        Mr. Connolly. Okay.
        Mr. Badorrek. So if we happen to get 2,000 in a day, that
    number could be 2,000. And the reason that--this number can
    range between 500 to 2,000. It just depends how many come in.
    But we want to make sure we process the invoices in a timely
    fashion.
        Mr. Connolly. Okay. Thank you. I appreciate the
    distinction.
        Just one more followup, if I may, to Mr. Meadow's question
    to you, which--understanding recertification. We were talking
    about a 10-day window in which to process. If it's a
    recertification, presumably all of the legwork was done on the
    original application. So we're checking to make sure you still
    live where you live, the income is the same, the number of
    children you've got is the same, the child or children in
    daycare are who they were in the original application--no
    changes. Isn't that right, on a recertification?
        Mr. Badorrek. Yes. We are revalidating the information.
        Mr. Connolly. Right. And in light of that, I would assume,
    to your answer to Mr. Meadows, there's less time on a
    recertification being validated than on an original application
    being validated. Or there should be, shouldn't there?
        Mr. Badorrek. We go through the same process. It's more
    likely with a recertification, because the family is familiar
    with the program, they're able to provide us with all the
    information that's needed to process it. The 10 days is our
    goal for processing applications once we have deemed them to be
    complete.
        Mr. Connolly. Irrespective of whether it's an original
    application or a recertification?
        Mr. Badorrek. Yes.
        Mr. Connolly. Really? The same 10 days?
        Mr. Badorrek. Yes.
        Mr. Connolly. That puzzled me, Mr. Chairman.
        Because I would have guessed there actually is a difference
    between the two, and you're saying there really isn't.
        Mr. Badorrek. No. I believe that we have to receive just
    about all the information that we receive in an initial
    application when we recertify.
        Mr. Connolly. All right.
        Mr. Chairman, thank you.
        Mr. Meadows. I thank you.
        Mr. Badorrek, let me--before I do that, I've got a letter
    here from the GSA to Mr. Beers with the National Archives and
    Records Administration. And I would ask unanimous consent that
    we'd just put this forward for the record.
        Without objection, so ordered.
        Mr. Meadows. Mr. Badorrek, let me follow up, because you
    mentioned a word that is a concern. You mentioned that your
    goal was 10 days. Now, your testimony earlier said that you did
    them in 10 days. And you just, in talking to Mr. Connolly, said
    your goal is 10 days.
        So let's look at the 1,600, because I'm curious with the
    backlog. Ms. Ochoa said that the original backlog was 5,000 and
    that it is now 1,600. Those are round numbers, and so the round
    numbers typically suggest that we're guessing at backlog
    numbers. But maybe they're exactly accurate and we just happen
    to have exactly 5,000 and exactly 1,600.
        But what are the oldest--of the 1,600, what are the oldest
    ones that are there waiting to have a determination made? You
    said your goal is 10 days. So if I were to find the oldest one
    in the 1,600, how long has it been there?
        Mr. Badorrek. I don't know that. I can get that to you. I
    would expect that has to do with those that are back with
    families. I can give you the specific numbers. They're round
    numbers, but we have specific numbers in the inventory on a
    daily basis.
        Mr. Meadows. So are you averaging 10 days for a
    determination? That's your goal.
        Mr. Badorrek. Yes. We did a review in the middle of
    November, and once the application was complete, we were
    processing--based on the review we did, we were processing it
    within just under 8 days.
        Mr. Meadows. Because, you know, this particular situation
    was news to the ranking member and I. You know, if it hadn't
    been for NBC and Mr. MacFarlane doing a report and raising the
    issue, a lot of us would not have realized the significance of
    this problem.
        And then going forward from there, what I don't want us to
    do is to talk in generalities and negate all the positive stuff
    that we've been able to make, this progress, with, you know,
    leaving here singing ``Kumbaya'' and saying everything is nice,
    while we have military families that are still saying that
    hearing may or may not have been accurate.
        So your testimony here today is that, out of the 1,600, if
    the family gets you what you need, you can get a determination
    in 10 days. Is that correct?
        Mr. Badorrek. Yes. If we have all the information, we'll
    process it----
        Mr. Meadows. All right.
        So, Dr. Fraga, let me come to you. This phased-in approach
    that we're doing, is it true that your group is not capable of
    taking everybody on February 22?
        Ms. Fraga. That is correct.
        Mr. Meadows. So you have recommended, along with Ms.
    Hoehne, this phased-in approach.
        Ms. Fraga. Yes. In collaboration with the Army and with the
    GSA, our staff team has determined that a phased approach is
    the most appropriate way forward to ensure that Army families
    are taken care of.
        Mr. Meadows. Okay.
        I do see that the vice chair of the subcommittee has
    returned, and so I recognize him for a series of questions at
    this time.
        Mr. Walberg. Well, thank you, Mr. Chairman. And thanks to
    the committee. I'm sorry I had to leave. I had the EEOC
    Commissioner in my office. Not a violation on my staff, but
    doing my due diligence for my chairmanship.
        But I did have a question, Ms. Fraga, for you. What did
    Child Care Aware's build-up for assuming administrative control
    of the AFA Program entail? In other words, did Child Care Aware
    have to lay off staff following the transition of AFA Program
    administration to GSA, and if so, how many?
        Ms. Fraga. Yes, we did experience a reduction in force post
    the transition of the Army Fee Assistance Program from the
    organization. Upwards of over 50 staff were reduced from the
    organization.
        In preparation for the transition of the Army Fee
    Assistance Program back to Child Care Aware of America, one of
    the obvious necessities was to build back up our staff
    capacity. And we have done, I think, a tremendous job of
    identifying and screening staff who have a profile that is
    supportive of the kind of quality and skills that we need for
    these important staff positions.
        We have a leadership team, however, over 90 percent of whom
    were experienced in any of the other military fee assistance
    programs, as well as former staff on the Army Fee Assistance
    Program in past years. So we have a management team that is
    well versed in the Army Fee Assistance Program.
        Mr. Walberg. On the staffing level, the lower staffing
    level, what is it at present now, and what will it need to
    become?
        Ms. Fraga. So we are on-boarding, currently, approximately
    50 staff. And those staff----
        Mr. Walberg. Fifty beyond what you have now?
        Ms. Fraga. Right. These are 50 staff--approximately 50
    staff who we are currently on-boarding.
        We anticipate up to 80 staff at a steady state and
    potentially and likely more staff during the transition year to
    ensure that we have the capacity necessary to alleviate and
    mitigate any challenges, unforeseen or foreseen, over the
    coming year. But we anticipate about an 80-staff capacity in a
    steady state once the transition is complete.
        Mr. Walberg. Do you expect the annual program cost to be
    equal to the $8 million that it was before the GSA transition?
        Ms. Fraga. At this time, we have a contract that was just
    recently signed with the Army. And I am more than happy to
    provide you information--it's proprietary and confidential at
    this point, and I'm more than happy to provide information
    subsequent to the hearing.
        Mr. Walberg. I appreciate that. If you could provide that
    to the committee, that would be helpful.
        Thank you, Mr. Chairman. I yield back.
        Mr. Meadows. I thank the vice chair.
        We're going to go ahead and wrap this up. But, Mr.
    Badorrek, before we do that, I want to follow up on one
    particular thing that I covered in my opening statement, and it
    had to do with deleted emails and phone calls, voicemails.
        And I guess my question is, can you explain why the GSA
    feels that deleting all those does not violate, you know, NARA
    requirements?
        Mr. Badorrek. We did an investigation after the last
    hearing. The emails that were in question were transferred to
    the system of record, which was ImageNow. That was a system
    that was being used to retain documents and process documents
    related to child care. They were deleted from the original
    email system. That was a process that was in place. And they
    were transferred to ImageNow. So while the emails were deleted
    from the email system, they were retained in the system of
    record.
        Today, we use Salesforce. The emails are automatically
    captured in that system, so we don't have to do that transfer.
        Mr. Meadows. And so what about the voicemails?
        Mr. Badorrek. The information in the voicemails, the caller
    number and the date were retained in a call log. The process
    was to work off the call log to call families back. That was
    the process that was in place. As we know, GSA had a backlog.
    The IG, in the recent report, confirmed that we did call the
    families back that were on the call log.
        Mr. Meadows. So it's your sworn testimony here today that
    there were no records, Federal records, that were ever deleted
    or done away with.
        Mr. Badorrek. To the best of our knowledge, no records were
    deleted. The process was to transfer emails to the system of
    record and to record the calls on the call log so that we could
    call them back.
        Mr. Meadows. All right.
        I'm going to go ahead and close out. I want to thank all of
    you for your time, for your dedication to our military
    families.
        And I would ask this. And I believe that I speak for the
    ranking member. As we look at this phased-in approach, let's be
    as diligent with that as we had at trying to fix this
    particular problem. I don't want--because originally we said we
    were going to have transfer done by January.
        And I'm going to hold you to, Ms. Hoehne, your October
    deadline. And what I would ask from you and Dr. Fraga is that,
    if you see that that is not going to be met, that you let this
    committee know the minute that you see a problem and the reason
    why it is so that we can go to work in a bipartisan way to make
    sure that Army families are supported in the manner that they
    have earned and that they deserve.
        And so, with that, I thank you for your commitment to the
    families. I thank all of you for your testimony.
        And, without objection, if there's no further business, the
    subcommittee stands adjourned.
        [Whereupon, at 11:20 a.m., the subcommittee was adjourned.]

                                    APPENDIX

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                   Material Submitted for the Hearing Record

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