[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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              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:]
    
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    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:]
    
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    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:]
    
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    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:]
    
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    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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