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

       EXAMINING MISMANAGEMENT IN OFFICE OF JUSTICE PROGRAMS GRANTMAKING

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                             GOVERNMENT OPERATIONS

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 14, 2016

                                   __________

                               Serial No. 114-141

                                   __________

    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
                          Sean Brebbia, Senior Counsel
                        Sharon Casey, Deputy Chief Clerk
                     David Rapallo, Minority Staff Director

                                     ------

                     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 July 14, 2016....................................     1

                                   WITNESSES

    The Hon. Michael E. Horowitz, Inspector General, U.S. Department
      of Justice
        Oral Statement...............................................     4
        Written Statement............................................     6
    Ms. Beth McGarry, Principal Deputy Assistant Attorney General for
      Office of Justice Programs, U.S. Department of Justice
        Oral Statement...............................................    13
        Written Statement............................................    15
    Ms. Gretta Goodwin, Acting Director, Homeland Security and
      Justice, U.S. Government Accountability Office
        Oral Statement...............................................    20
        Written Statement............................................    22
    Mr. Jeffrey Sedgwick, Ph.D., Executive Director, Justice Research
      and Statistics Association
        Oral Statement...............................................    44
        Written Statement............................................    47

       EXAMINING MISMANAGEMENT IN OFFICE OF JUSTICE PROGRAMS GRANTMAKING

                                  ----------

                            Thursday, July 14, 2016

                       House of Representatives
                  Subcommittee on Government Operations
                   Committee on Oversight and Government Reform
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 2:14 p.m., in
    Room 2247, Rayburn House Office Building, Hon. Mark Meadows
    [chairman of the subcommittee] presiding.
        Present: Representatives Meadows, Walberg, Carter, and
    Plaskett.
        Mr. Meadows. All right. The Subcommittee on Government
    Operations will come to order. And without objection, the chair
    is authorized to declare a recess at any time.
        I want to thank you once again for the delay and for your
    graciousness with that.
        Obviously, the Office of Justice Programs, or OJP, as it is
    commonly referred to, is the largest of three departments--of
    the Department of Justice grantmaking entities. OJP gave out
    more than $4 billion in fiscal year 2015, with about $1.2
    billion issued for State, local, and tribal law enforcement,
    plus another $251 million for the juvenile justice initiatives.
        That is a lot of the programs and a whole lot of money.
    There is no doubt that grants can provide an important resource
    to State and local government entities, allowing them to do
    important work in many areas, including crime prevention and
    reduction of recidivism. The Office of Justice Programs has a
    responsibility to effectively manage its grants program, and it
    is our job in Congress to make sure that OJP is carrying out
    its responsibility and spending the taxpayer dollars
    responsibly and effectively.
        Over the last decade, OJP has made improvements in its
    grantmaking process, thanks in no small part to the oversight
    provided by GAO and the Inspector General. We are here today to
    discuss those improvements and also to discuss the status of
    some of the open recommendations made by both GAO and the
    Inspector General.
        While OJP has made progress in its grant management, the
    Inspector General's reports and audits show that there is still
    room for improvement. For example, the IG published a report
    last year that found that OJP's grant money was used to build
    two correctional facilities that were at least 250 percent
    larger than they needed at an excess cost of some $32 million.
    This was a $70 million grant to the Navajo Division of Public
    Safety to plan and construct a tribal justice facility, and
    somewhere along the way the plans changed, and there was a
    massive increase in the size and scope of that facility.
        One of the facilities had an approved plan for a 42-bed
    prison that ended up, they ended up building a facility that
    had 132 beds. This, despite having an average jail occupancy
    between 14 and 22 inmates a month. The other facility, with
    averages of 7 to 11 inmates, ended up with 80 beds.
        They built these buildings so big that they do not have
    enough money to fully staff them. They sit there today largely
    empty, a $70 million price tag for nearly empty prisons.
        Look, my issue here is not about the grant itself. I can
    tell you that in my district there have been the deployment of
    some of these grants in effective ways. But it is blatantly
    mismanaged taxpayer dollars, plain and simple, that we have to
    address, and here is the question I would like to get to today.
        Are we actually managing these grants at a sufficiently
    detailed level to achieve results, prevent waste, fraud, and
    abuse, or are we just checking the boxes? And so I am
    interested to hear from all of our witnesses today on the many
    issues presented by the DOJ's grant management and the progress
    that has been made and the progress that still needs to be
    made.
        And so, with that, I would like to now recognize my good
    friend, the gentlewoman from the Virgin Islands, Ms. Plaskett,
    for her opening remarks.
        Ms. Plaskett. Thank you so much, Mr. Chairman.
        And good afternoon to all of you. Thank you for attending
    this Subcommittee on Government Operations.
        I want to thank you, Mr. Chairman, for holding today's
    hearing to highlight very important office at the Department of
    Justice, that being the Office of Justice Programs. Currently,
    OJP oversees 7,000 active grants, some of which are mandated by
    Congress, totaling more than $7.5 billion.
        As a former prosecutor and also an official at the
    Department of Justice where, working under the Deputy Attorney
    General's office, I oversaw some of OJP's work, I know
    firsthand what an important partner OJP is to our local and
    State governments by providing resources for training,
    coordination, and equipment to support law enforcement efforts.
    OJP funds are used to support anti-gang initiatives,
    bulletproof vest purchases, and programs to counter spousal or
    child abuse and trafficking, human trafficking.
        These grants make a difference in people's lives. Just 2
    weeks ago, OJP reported that the Internet Crimes against
    Children's Task Force, funded through OJP grant program,
    arrested more than 1,300 suspected child predators. Last fall,
    OJP announced the addition of five cities to the Violence
    Reduction Network, a collaborative program between DOJ and
    cities which have contributed to the arrest of criminals
    suspected of violent crimes, such as sexual assault and
    homicide.
        As part of its own oversight, OJP assesses the risk of all
    grant applicants and grantees to identify any high-risk
    grantees that may require additional controls or corrective
    actions. In fact, OJP actually exceeds the 10 percent statutory
    goal for conducting extensive monitoring of grant dollars, and
    less than 1 percent of grants are currently considered as high
    risk.
        To supplement its internal efforts, OJP relies on the
    Office of the Inspector General. Independent audits of grantees
    and review of OJP grant management, like those conducted by the
    Inspector General and the Government Accountability Office,
    which are here with us this afternoon, have aided the office in
    making improvements to its management processes.
        While the both the IG and GAO--that is a lot of acronyms
    there--have singled out specific grant programs for concern in
    recent years, OJP has acted in good faith to implement
    corrective recommendations and close out those cases. As a
    result of IG recommendations, OJP has taken significant steps
    to change its policies and procedures, clarify or issue
    guidance, put in place performance control, and remedy
    unallowable costs.
        For example, OJP has requested Treasury send a collection
    notice to recruit unsupported expenditures from one grantee and
    has offered individualized technical assistance to all grantees
    under the DNA Backlog Reduction Program as it works to update
    its program guidance.
        In 2012, GAO found that DOJ needed to put into place better
    controls to reduce the risk of duplication of grant awards,
    including OJP grants. As a result, DOJ granting agencies now
    coordinate with one another to ensure that grantees are not
    unnecessarily receiving duplicative awards.
        OJP's improvements to its grant management controls over
    the past decade have been welcomed by grant applicants and
    recipients. For example, OJP created the Office of Audit
    Assessment and Management in fiscal year 2007 to conduct audits
    of OJP processes and risk assessments of grant programs,
    oversee program monitoring, and create policies to improve OJP
    grant management.
        Since then, applicants report experiencing better
    communication of the grant peer review process, receiving a
    more transparent and timely review of the strengths or
    weaknesses of the grant proposal, and have frequent
    communication about grant requirements and policy changes.
    These changes make OJP--and OJP are lowering the risk to
    taxpayers. But there is always room for improvement.
        It is essential for OJP to continuously evaluate its
    programs with the IG and with GAO for lessons learned and to
    identify ways to improve its oversight and monitoring of grant
    programs to ensure that funding is effectively and efficiently
    used by grant recipients. I look forward to hearing from
    today's witnesses about their observations and suggestions for
    assisting OJP and this subcommittee in conducting robust
    oversight of these grant dollars, which are vital to our State
    and local partners.
        Thank you.
        Mr. Meadows. I thank the ranking member for her comments
    and well thought out delivery.
        And so, as I enter into this, I just want to thank all of
    you for coming. I will hold the record open for 5 legislative
    days for any Member who would like to submit a written
    statement.
        Mr. Meadows. We will now recognize our panel of witnesses.
    Pleased to welcome the Honorable Michael Horowitz--welcome
    back--Inspector General of the Department of Justice.
        Ms. Beth McGarry, Principal Deputy Assistant Attorney
    General of the Office of Justice Programs at the Department of
    Justice. Welcome.
        Ms. Gretta Goodwin, a Ph.D., Acting Director of Justice and
    Law Enforcement Issues on the Homeland Security and Justice
    team at the Government Accountability Office. Welcome.
        And Mr. Jeffrey Sedgwick, Ph.D., Executive Director of the
    Justice Research and Statistics Association.
        Welcome to you all, and 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?
        [Response.]
        Mr. Meadows. Thank you.
        Let the record reflect that all witnesses answered in the
    affirmative.
        And in order to allow time for discussion, please limit
    your oral testimony to 5 minutes. However, your entire written
    statement will be made part of the record.
        And so, Mr. Horowitz, I recognize you for 5 minutes.

                           WITNESS STATEMENTS

                 STATEMENT OF HON. MICHAEL E. HOROWITZ

        Mr. Horowitz. Thank you, Mr. Chairman, Ranking Member
    Plaskett, members of the subcommittee. Thank you for inviting
    me to testify today.
        From fiscal year 2011 through fiscal year 2015, OJP awarded
    over $10 billion in grants to thousands of recipients. During
    that same time period, the OIG issued approximately 100 audits
    of OJP grant awards, containing about 700 recommendations and
    identifying approximately $100 million in dollar-related
    findings.
        In fiscal year 2015 and 2016, Congress additionally
    authorized the department to issue over $5 billion in Crime
    Victims Fund awards, with the vast majority likely to be OJP
    grants. This significant increase in CVF grants requires OJP to
    have sufficient controls and oversight in place to ensure that
    those funds are used appropriately. We are currently conducting
    a risk assessment of OJP's management of CVF grants in light of
    this funding increase, and we're also auditing CVF grantees and
    subgrantees' use of these funds.
        Over the past several years, OJP and the department have
    made positive strides in improving their grants management,
    including implementing online grants management training,
    enhancing its management of high-risk grantees, and
    consolidating grant rules promulgated--that had been
    promulgated separately by three DOJ grantmaking agencies into a
    consolidated department grants financial guide.
        While these advances are encouraging, protecting taxpayer
    funds from mismanagement and misuse remains one of the most
    significant challenges facing the department. The department
    must undertake robust efforts to ensure that the billions it
    gives out in grants are appropriately spent and that the public
    receives the expected return on its investment.
        Our past work has identified several instances where the
    department grant monitoring was too limited and where site
    visits were too few. In particular, we found breakdowns in
    monitoring subgrantees to ensure that they are fulfilling all
    grant conditions. It's also important for the department to
    develop a results-oriented performance measures approach to
    ensure the grant programs are meeting their intended goals and
    producing a measurable outcome.
        Such measures are critical for the department to
    effectively assess which grant program should receive valuable
    taxpayer funds. In addition to our audit work, the OIG conducts
    grant-related investigations into possible fraud, embezzlement,
    and conflicts of interest. In the past 5 fiscal years, those
    investigations resulted in 13 criminal convictions and more
    than $6 million in restitution and recoveries.
        Our office participates in other efforts to improve grant
    management and reduce fraud across the Federal Government. I
    chair the Grant Fraud Working Group of the Financial Fraud
    Enforcement Task Force, a diverse coalition of IG offices and
    executive branch agencies. The working group looks to improve
    our ability to investigate and prosecute grant fraud matters.
    It played a key role in developing grant fraud training for
    special agents, Government prosecutors, and auditors. The
    working group also serves as an information-sharing platform
    regarding best practices and our ongoing data analytics
    efforts.
        In concluding, I want to thank the committee for its
    support, bipartisan support of the IG Empowerment Act. The bill
    contains several important provisions that will assist
    Inspectors General in conducting effective oversight, including
    of grant awards.
        For example, the bill ensures that IGs will have timely and
    unimpeded access to agency and grant recipient records. It
    allows OIGs to match data across agencies to help uncover
    improper payments and wasteful spending, which will improve our
    ability to detect grant fraud and uncover duplicative grant
    awards, and it provides OIGs with the testimonial subpoena
    authority, which will be a particularly helpful tool in
    enabling IGs to gain critical evidence when conducting civil
    and administrative grant fraud investigations.
        I very much appreciate the House of Representatives passing
    the legislation, and I hope that the Senate will take action
    soon so that all Inspectors General are able to conduct their
    important work effectively.
        Thank you, and I look forward to answering any questions.
        [Prepared statement of Mr. Horowitz follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you, Mr. Horowitz, and I want to thank
    you for your continuing work. As you know, the Inspectors
    General provide a critical role in a number of scenarios, and
    it is always good to have you before this committee.
        Ms. McGarry, you are recognized for 5 minutes.

                       STATEMENT OF BETH MCGARRY

        Ms. McGarry. Thank you, Chairman Meadows, and thank you,
    Congresswoman Plaskett and distinguished members of the
    committee.
        I am pleased to have this opportunity to discuss the Office
    of Justice Programs' commitment to rigorous oversight of its
    grants program and our collaboration with the Department of
    Justice Office of the Inspector General and the Government
    Accountability Office. These collaborations strengthen and
    support OJP's grant oversight process.
        I am Beth McGarry, the Principal Deputy Assistant Attorney
    General for OJP. Prior to my service in this position, I was an
    Assistant United States Attorney and a career Deputy Assistant
    Attorney General at OJP.
        Every day across the country, OJP grantees do amazing work,
    preventing and controlling crime, administering justice, and
    assisting crime victims. For example, two of our justice
    reinvestment initiative States, Georgia and North Carolina,
    have both reduced their prison populations and reinvested the
    cost savings to add community probation and parole officers and
    intervention and treatment programs.
        We are honored to call the recipients of these 7,000 grants
    partners, and we take very seriously our responsibility to be
    vigilant stewards of taxpayer dollars as we manage the public
    funds behind these grants.
        Key to these efforts is OJP's Office of Audit Assessment
    and Management, which was stood up in 2007. OAAM establishes a
    stronger oversight structure for OJP's multi-billion dollar
    grant programs. With congressional support and through OAAM's
    leadership, OJP has implemented a robust framework of oversight
    across its grants programs.
        Congress also requires OJP to conduct comprehensive
    monitoring of not less than 10 percent of total award dollars.
    Demonstrating its commitment to this requirement, OJP
    consistently exceeds this 10 percent level each fiscal year. In
    fiscal year 2015, OJP monitored 20 percent of award dollars,
    completing in-depth programmatic and financial monitoring twice
    the amount required by law.
        Given the magnitude of the oversight required, it is
    essential that we focus monitoring efforts on grants where
    there is the most risk to Federal resources. To accomplish
    this, OJP uses a risk-based assessment and analytic approach to
    oversight. This approach entails analyzing myriad criteria
    during both the grant application and post award phases.
        In addition, OJP developed rigorous monitoring standards
    and procedures to ensure that grant awards are assessed, the
    information collected is analyzed, and determinations made
    regarding the grantees' performance on all programmatic,
    financial, and administrative requirements of award.
        OJP recognizes that we must consider potential risk before
    individual grants are awarded. Last year, OJP implemented an
    enhanced pre-award risk process. Based on this analysis, OJP's
    program offices implemented actions to manage or mitigate and
    identify potential risks to the Government by requiring
    increased oversight and financial training.
        Once awarded, OJP assesses grants against more than two
    dozen risk factors and determines the appropriate monitoring
    plan. At a minimum, each grant award undergoes a desk review
    once a year. Informed by the annual desk reviews and quarterly
    risk-based assessment, OJP conducts in-depth programmatic and
    financial monitoring of selected grantees.
        We are honored that the Association of Government
    Accountants cited OJP's model as a best practice and that other
    Federal agencies and the OIG have requested OJP's assistance to
    replicate our risk-based model. For grants recipients deemed
    high risk, OJP provides extensive monitoring and in many cases
    intensive technical assistance. When warranted, we freeze
    grantee funds or refer the grantee for investigation by the
    OIG.
        The OIG is a critical part of the Federal oversight
    framework. OJP works as a liaison between the OIG and the grant
    recipient to ensure that the findings identified in the OIG
    audit reports are corrected properly. OJP also uses the audit
    reports to strength our internal controls and grant monitoring.
        Also we work with the GAO to strengthen our programs.
    Preventing wasteful duplication in Government programs is a
    critical priority for DOJ and OJP. The department's three
    grantmaking components collaborate closely on the development
    and implementation of grant programs. Each year, the grant
    programs conduct an assessment to determine the risk of
    overlap. Through this collaboration, we ensure that our tribal
    grants are not duplicate but support complementary justice
    purposes.
        OJP values transparency in our grant operations. We have a
    dynamic Web site, where we post all of our solicitations, grant
    awards, the DOJ financial guide, and grant information.
        I look forward to working with the subcommittee to ensure
    that our programs and activities meet the high standards that
    you expect of us and that the American people deserve. Thank
    you again for this opportunity, and I look forward to your
    questions.
        [Prepared statement of Ms. McGarry follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you so much for your testimony, and
    thank you for your service.
        Ms. Goodwin, you are recognized for 5 minutes.

                      STATEMENT OF GRETTA GOODWIN

        Ms. Goodwin. Chairman Meadows, Ranking Member Plaskett, I
    am pleased to be here today to discuss GAO's work examining the
    Department of Justice's grant program practices.
        Grants are an important tool the Federal Government uses to
    provide program funding to State and local governments. In
    fiscal year 2016, it is expected that the Federal Government
    will provide States and localities more than $650 billion in
    grants to fund a wide range of public policies, some related to
    criminal justice.
        DOJ has three granting agencies, which provide grants that
    support victims assistance, technology and forensics, juvenile
    justice, mental illness and substance abuse, policing, and
    other activities. My testimony today summarizes the progress
    DOJ and its largest granting agency, the Office of Justice
    Programs, or OJP, have made in addressing 17 recommendations
    from earlier GAO studies.
        I will highlight our key findings and the agency's efforts
    to address them in the following three areas--DOJ's overall
    grant administration practices, OJP's management of the
    Bulletproof Vest Partnership Program, and OJP's management of
    the Victims of Child Abuse Act grant program, or VOCA.
        With respect to DOJ's overall grant management, in 2012, we
    examined the extent to which overlap existed across DOJ grant
    programs and whether that contributed to the risk of
    unnecessary duplication, whether DOJ had taken steps to reduce
    overlap and the potential for unnecessary duplication, and how
    DOJ used monitoring and assessment to determine grant program
    effectiveness, as well as how it used the results to enhance
    its grant programs.
        We found that DOJ had not assessed its grant programs to
    identify overlap, nor had DOJ routinely coordinated grant
    awards to avoid unnecessary duplication. We also reported that
    DOJ could take steps to better assess the results of its grant
    programs.
        We made eight recommendations to DOJ to enhance its overall
    grant administration practices. DOJ has implemented seven and
    is making progress on the final recommendation related to
    codifying new policies and procedures.
        We also assessed how well OJP managed its Bulletproof Vest
    Partnership Program, which I'm going to refer now as the body
    armor program. In 2012, we examined the efforts OJP had
    underway to support State and local law enforcement's use of
    body armor, the extent to which there were controls in place to
    manage and coordinate these efforts, as well as factors related
    to body armor's use and effectiveness and the steps OJP had
    taken to address them.
        We found that OJP could enhance grant management controls
    and better ensure consistency in its program requirements by
    improving grantee accountability, reducing the risk of grantee
    noncompliance, and ensuring consistency in its efforts to
    promote law enforcement officer safety.
        We made five recommendations to OJP to address each of
    these areas. OJP has implemented all five.
        Finally, in our assessment of OJP's management of VOCA
    grants, in 2015 we reported on the extent to which OJP had
    ensured the timely expenditures of VOCA grant funding and
    assessed the performance of VOCA grantees. We found that OJP
    had several administrative review and approval processes in
    place that contributed to delays in grantees' ability to begin
    spending their award funds.
        We also found that OJP did not have complete data to assess
    VOCA grantees' performance against the measures it had
    established. We made four recommendations to OJP, and as of
    this July, one has been implemented. OJP is making progress on
    the three remaining recommendations, which relate to examining
    its administrative processes and project length and
    establishing and enforcing clear program requirements.
        As you know, GAO annually conducts recommendation follow-
    up. So we will continue to monitor the implementation of our
    recommendations to DOJ and OJP.
        Chairman Meadows, Ranking Member Plaskett, and members of
    the subcommittee, this concludes my remarks. I'm happy to
    answer any questions you have.
        [Prepared statement of Ms. Goodwin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you for your testimony, and thank you
    for your service.
        Mr. Sedgwick?

                  STATEMENT OF JEFFREY SEDGWICK, PH.D.

        Mr. Sedgwick. Chairman Meadows, Ranking Member Plaskett,
    and members of the committee, I'm pleased to have the
    opportunity to speak with you today about the Department of
    Justice's progress in improving the operations and management
    of the Office of Justice Programs.
        I say progress because, as you know from my resume, I've
    intermittently worked in the Office of Justice Programs and its
    predecessor--the Office of Justice Assistance, Research, and
    Statistics--since 1984. Currently, I serve as the Executive
    Director of the Justice Research and Statistics Association, a
    national nonprofit association of analysts, researchers, and
    practitioners throughout the justice system dedicated to
    providing accurate and timely information in support of sound
    policy development.
        Created by the State Statistical Analysis Centers in 1974,
    JRSA works closely with the Bureau of Justice Statistics and
    other Federal agencies to promote the effective use of criminal
    and juvenile justice information.
        I have the somewhat unique perspective of having worked
    within OJP to strengthen its management and then, after a lapse
    of 6 years away from OJP, coming back to view it from the
    outside as head of an organization that performs a significant
    amount of research, training, and technical assistance
    supported by OJP grants. That permits me to comment from my
    present position on whether the management improvements
    initiated 8 years ago have persisted and perhaps been extended,
    judging, of course, from the perspective of an outside
    observer.
        Members of this committee may remember the management
    challenges confronting OJP 8 years ago. Significant numbers of
    expired grants that had not been closed out, with unexpended
    funds reverted to the Treasury, questions about the integrity
    of the grantmaking process and whether or not awards were
    properly reflective of peer reviewers' scores of competing
    proposals, concern over whether grants and contracts were
    properly monitored and audited to assure performance and uphold
    OJP's fiduciary responsibility to the American taxpayer, and
    the lack of clean financial audits for OJP.
        Upon my departure in January 2009, OJP had a clean
    financial audit. The backlog of expired, but unclosed grants
    was eliminated with all de-obligated funds properly reverted to
    the Treasury. A process was instituted that assured any
    deviation from peer reviewer scores in awarding grants were
    clearly documented and justified by reference to publicly
    announced criteria, and the Office of Audit Assessment and
    Management was stood up, fully staffed, and headed by an
    exceptionally talented and qualified leader.
        Six years later, I returned to Washington to assume my
    current position, giving me an opportunity to see OJP
    management from the outside rather than the inside. I'd like to
    share with you my observations and the inferences I draw from
    them about the trajectory of management in OJP.
        First, I notice a number of new features of the grantmaking
    process which I heartily applaud. OJP now posts on its Web site
    a funding resource center listing all upcoming, current, and
    closed opportunities. This allows associations like mine to
    plan ahead, assemble good teams, and write excellent proposals
    to perform needed work on behalf of OJP bureaus.
        I also notice that there is a considerable degree of
    uniformity across solicitations issued by OJP bureaus with
    common performance and reporting requirements, common scoring
    criteria for proposals, and a common set of statutory and
    financial management requirements. Equally pleasing to me is
    the longer window of time between the issuance of a
    solicitation and the deadline for proposal submission. Short
    deadlines disadvantage newer and smaller organizations that
    often have the most innovative ideas.
        And I've noticed that OJP now routinely returns to each
    applicant, successful or not, the peer reviewer's comments on
    his or her proposal. In the past, applicants had to request
    peer reviewer's comments, and they were often delayed as bureau
    staff edited those comments.
        In fairness, any organization that takes the time to write
    a grant application deserves prompt and complete feedback on
    their proposal so they have the opportunity to improve.
        All of these changes encourage more applicants to apply and
    increase the chance that taxpayer dollars will go to those with
    the most innovative ideas and the strongest subject matter
    expertise on their teams, a sign of good management.
        Supporting these improvements in the application process is
    a much more detailed and accessible grants management system
    with an extensive online training tool providing step-by-step
    guidance for meeting the OJP-specified reporting requirements
    and making necessary adjustments to projects as they unfold
    through the submission of grant adjustment notices.
        The detailed online training offered to every grantee at a
    time of their convenience is an enormous aid to grantees with
    everything spelled clearly out through step-by-step
    instructions. Again, a sign of good management.
        And finally, I'd like to comment on a small change, but one
    that says a great deal about the integrity of the current
    grantmaking process in OJP. Since my return to Washington, I've
    noticed something new. Bureau heads and program managers will
    not meet with the head of an organization while a solicitation
    is open to which the organization may respond with a proposal.
        Every applicant plays on a level playing field whether they
    hover on downtown, the beltway, or the heartland. No
    preferential treatment, no insider access during proposal
    writing. Again, a sign of good management.
        As I commented at the beginning, I'm no longer in a
    position where I can knowledgeably comment on the specific
    management practices currently deployed in OJP, but I can make
    inferences from what I observe as one who does business with
    OJP on a now regular basis. My inference from what I have
    witnessed these past 18 months is that the trajectory of
    management improvement that I testified to previously in this
    chamber in September 2008 continues, and I applaud those
    responsible for carrying on in OJP a culture of continuous
    improvement.
        [Prepared statement of Mr. Sedgwick follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Meadows. Thank you so much for your testimony.
        Thank each of you for your testimony, and I am going to
    recognize the vice chair of the Subcommittee on Government
    Operations, the gentleman from Michigan, Mr. Walberg, for an
    opening statement.
        Mr. Walberg. Thank you, Mr. Chairman, and I thank you for
    holding this hearing about how we can bring much-needed
    transparency and accountability to the Federal grantmaking
    process.
        This is a bipartisan issue, which is why earlier this year,
    we passed my bill, the GONE Act, requiring Federal agencies to
    take action to identify thousands of expired grant accounts,
    which are costing the taxpayers millions of dollars.
        I am pleased that legislation was signed into law, and that
    took a step in the right direction toward responsibly managing
    our grant accounts and eliminating wasteful spending. However,
    this process and in this hearing process more work needs to be
    done to make sure agencies are appropriately monitoring and
    managing their grant accounts.
        These grants open opportunities and provide important
    resources to law enforcement and our communities. So we have a
    duty to ensure these funds aren't being wasted and taking away
    opportunities from other potential recipients.
        So, again, Mr. Chairman, I appreciate the hearing, you
    holding it even as others are leaving, and we have an
    opportunity to finish some work that is good work.
        Thanks much. I yield back.
        Mr. Meadows. Well, I thank the gentleman from Michigan and
    the ranking member for hanging with me on a fly-out day. You
    can normally smell the jet fumes shortly on leaving, and so I
    understand that you both may have other places to be, but we
    really appreciate you being here.
        So let me--I am going to recognize myself for 5 minutes for
    a series of questions. Before I do that, I want to thank the
    staff. You know, so many times, we ask questions, we look at
    things, and good oversight really comes down to our staff and
    how well they do it.
        And we are about to leave for 7 weeks. They are so excited
    about that, but I want to make sure that part of the record is,
    is that we thank an incredible staff. Both on majority and
    minority, the staffs do a great job in providing this.
        Ms. McGarry, I want to come to you a little bit because we
    hear a lot of glowing success stories, and yet I am a little
    bit perplexed. We wouldn't be here today if everything was
    rosy, and so I want you to help me understand a little bit
    about what I mentioned in my opening statement about the
    prisons that were opened, I guess, on Navajo lands.
        I want to be the first one to be very clear. I have the
    Eastern Band of the Cherokee Indians, who has enjoyed a grant
    by your group, and a justice center in my home county. I am one
    of the few Members that actually--in fact, maybe the only
    Member that has a congressional office on tribal lands, and so
    I enjoy an extremely good relationship with my Native American
    constituents and yet recognize they are a sovereign nation as
    well.
        So this is not designed to really single this out as an
    entity is more as, hopefully, an anomaly and how we can make
    sure that it doesn't happen again if it is as bad as what I
    read. And I guess, when did the prisons open?
        Ms. McGarry. Chairman Meadows, thank you for your question.
        The grant was funded in 2009, and the OJP and OIG are still
    working to resolve these audit issues. And we rely heavily on
    the OIG's intensive, in-depth audits. And whenever issues are
    brought to our attention, we take action.
        And, in fact, in the next several weeks, members of OJP
    leadership are going out to the Navajo Nation to meet with the
    Navajo leaders to discuss an agreement that will satisfy the
    OIG's concerns, but also meet the criminal justice needs of the
    Navajo Nation.
        So this audit is still--we're still resolving the issues
    with the OIG, but we take this matter very seriously, and we
    look forward to our continuing dialogue with the IG.
        Mr. Meadows. Well, I appreciate that. So when did the
    prisons open?
        Ms. McGarry. Chairman Meadows, I'm going to have to get
    back to you on the exact date. I believe that the Tuba City
    facility opened last year, and the Kayenta facility is just
    waiting one last construction permit for it to open, a water
    cooler ----
        Mr. Meadows. So one of them is open, one of them is not. So
    the one that is not open, I would assume it has no inmates in
    it?
        Ms. McGarry. Not until it has the final certificate of
    occupancy.
        Mr. Meadows. So what is the monthly occupancy of the one
    that is open?
        Ms. McGarry. Chairman, I'm going to--I will have to get
    back to you on the exact occupancy. I know that the Navajo
    Nation ----
        Mr. Meadows. Average occupancy. I mean, plus or minus two
    inmates?
        Ms. McGarry. I can't give you those specifics. I'll have to
    get back to you. I know that the Navajo Nation is working
    closely with the Bureau of Indian Affairs to hire and train
    staffing to be fully operational.
        Mr. Meadows. Oh, so it is not operational?
        Ms. McGarry. I mean, it's operational, but I mean, to be at
    full capacity. It's--I know--I know it's not at full capacity,
    but I don't know the exact number.
        Mr. Meadows. Okay. Because the numbers I have would suggest
    that it is far from full capacity. So the one that opened up,
    how many beds does it have?
        Ms. McGarry. I don't have the specifics of their ----
        Mr. Meadows. Mr. Horowitz, can you help illuminate some of
    those questions for me?
        Mr. Horowitz. I believe, and I could find it, I think,
    here, it's about 80 or so beds, if I recall correctly, 80 to 90
    beds.
        Mr. Meadows. All right. So the one that is open is the
    smaller of the two facilities.
        Mr. Horowitz. Yes. And our numbers that we last received,
    it appeared that it had about 82 percent vacancy rate at the
    point we last heard about it, which was probably towards the
    end of last year, early this year. In terms of its occupancy,
    only 2 of the 11 parts of the facility at that point were yet
    opened.
        And part of the issue being, as Ms. McGarry said and one of
    the criticisms and concerns we had, is the way the Federal
    Government has set up these facilities, the Justice Department
    funds construction through their grants, but the Interior
    Department funds the staffing or a portion of the staffing. And
    if those two agencies aren't ----
        Mr. Meadows. That is a real problem.
        Mr. Horowitz. It is, and it was here. We found that if
    those two agencies don't have robust dialogues with each other,
    a facility can be built that is far too big for what staffing
    either for its needs, as we thought here, but just generally,
    even moving away from this facility in particular, one that BIA
    can't afford to--the Bureau of Indian Affairs can't afford to
    staff.
        Mr. Meadows. Well, so the whole scenario ``If you build it,
    they will come'' is not necessarily true in this situation, as
    it relates to both inmates and people to actually have the
    facility staffed. Is that correct?
        Mr. Horowitz. That's correct.
        Mr. Meadows. So--so, Ms. McGarry, and I am going to close
    and go to the ranking member here, and we will have another
    round of questions. But I guess my concern is, is as we have
    this--and I understand your statement that you are taking it
    seriously.
        But with the lack of specificity with regards to, you know,
    it is almost like we have this unbelievable outbreak of crime
    on the Navajo facility that we start to build these huge
    facilities that we can't staff and we don't have enough inmates
    for them, how can we feel good about the process of the grant
    being given if, one, they're not finished, and we will get to
    $32 million of, I guess, money that is out there.
        I mean, do you see a real systemic problem with our
    process, or is this it just happened that somebody who was
    managing it on this particular case failed to do what they were
    supposed to do?
        Ms. McGarry. Well, Congressman, there have been two
    intervening laws that have increased the criminal jurisdiction
    for the Navajo Nation.
        Mr. Meadows. Yes, I am very aware of those. Like I say, I
    have got Native American tribes in my area, and they actually
    lobbied for some of that. But it doesn't necessarily translate
    into additional inmates. It possibly would, but it doesn't
    necessarily.
        But those two laws wouldn't indicate that we should build a
    facility that is two and a half times what the grant was made
    for, would it?
        Ms. McGarry. In this particular case, we consulted research
    from the National Institute of Corrections about planning
    correctional facilities for the future, recognizing that if
    there's intervening laws that greatly increase the criminal
    jurisdiction of a tribal community that you are to recognize
    that and to not build facilities that will last 20 years.
        Mr. Meadows. So, Mr. Horowitz, would you agree with that
    analysis?
        Mr. Horowitz. I think it's obviously fine and smart to plan
    for a 20-year period.
        Mr. Meadows. Sure.
        Mr. Horowitz. I think the issue from our standpoint was the
    building size is so disproportionate to what the current inmate
    population was and, frankly, still is once the prison is now
    open that, consistent with the master plan that was actually in
    place at the time at the Navajo Nation from 2007-2008, that
    master plan has proven to continue to be--look quite accurate
    and, in fact, that was a document that should have been
    followed.
        Mr. Meadows. So, so they adjusted the master plan that they
    started with. I guess you adjusted it after the laws were
    passed, thinking that it was going to change.
        Ms. McGarry. Yes, sir.
        Mr. Meadows. Okay. And you do see that was an error at this
    point?
        Ms. McGarry. We're still working through these issues with
    the IG.
        Mr. Meadows. Okay. Well, I will come back because I see it
    has a major error, and if that is going to be your testimony,
    we have got a little bit deeper dive to go into. You know, it
    is one thing to make a mistake. It is another to ignore a
    mistake and not admit that you have it. And I guess if your
    statement is, is that you think that the jury is still out on
    this, we will come back to that.
        I am going to recognize the ranking member for a gracious 9
    minutes if she needs it.
        Ms. Plaskett. Thank you.
        I want to thank you all for being here today and for the
    information that you are sharing with us.
        Ms. McGarry, I know that OJP has experienced some of those
    challenges that we are here talking about, and I understand and
    it appears from the testimony that improvement in your
    management processes are taking place. Can you verify the
    amount of closures in fiscal year 2015 of the amount of single
    audits and IG audit reports that were done?
        Ms. McGarry. Thank you, Ranking Member Plaskett, for your
    question.
        On those specific examples, I will have--the numbers, I
    will have to get back to you. But ----
        Ms. Plaskett. I have a listing of 208 single audits and 23
    IG audit reports, which means the closure and implementation of
    620 recommendations.
        Ms. McGarry. Yes. I recall that that is our figure for last
    year.
        Ms. Plaskett. Okay, Mr. Horowitz, it is good to see you
    again.
        Mr. Horowitz. Good to see you.
        Ms. Plaskett. And although I know that our staff are really
    happy for us to be gone for 7 weeks, I don't know about the
    district staff, how they feel about, you know, us being there
    for 7 weeks now.
        Mr. Meadows. It is not vacation.
        Ms. Plaskett. Right, right, right. So is it true that out
    of the 54 recommendations your office made in the 6 audits
    being highlighted here, OJP has closed 44 and resolved 8. So
    leaving only two recommendations unresolved?
        Mr. Horowitz. I don't have the precise numbers with me,
    Congresswoman, but those numbers wouldn't surprise me
    generally. I think that what we found is we generally work with
    OJP to resolve our recommendations when they come out, and we
    have found that with many of the recommendations that they move
    forward and have closed them. And we work with them to try and
    address the remaining audits because as--open recommendations.
        Because as Ms. Goodwin noted with GAO, we also continue to
    do regular follow-ups with OJP and make sure that that happens.
        Ms. Plaskett. How long do those take for the closing out of
    those audits, the recommendations being implemented?
        Mr. Horowitz. It depends. The vast majority get closed
    within, I would say, 2 to 3 years.
        Ms. Plaskett. Two to 3 years? Is that a small--is that
    quick, or is that long?
        Mr. Horowitz. I think from our standpoint, we hope to close
    all recommendations out within 1 to 2 years. So once
    recommendations remain open for 2 years or longer, they start
    becoming a concern to us. And one of the things that we've done
    starting last year was post on our Web site all unimplemented
    recommendations, all open recommendations.
        So the public can see essentially an aging report of our
    open recommendations. And since we have posted that, there has
    been considerable follow-up in the department, including
    through the leadership of the Deputy AG's office to try and
    move some of those to closure.
        Ms. Plaskett. Do they always agree with the recommendations
    you are making and then implement them, or are there instances
    where they are like, ``No, we don't agree with you, and we are
    not going to implement that.''
        Mr. Horowitz. During my tenure in the 4 years I've been
    here and my understanding from my predecessor, it was rarely
    the case and it has been rarely the case where we have not
    agreed. The Navajo Nation audit is one where there are open--
    from our standpoint, open, unresolved recommendations. And we
    are continuing the dialogue with OJP to try and move towards a
    resolution process.
        Ms. Plaskett. Okay. And Dr. Goodwin, I know that the GAO
    reports, they are not audits. But is it true that DOJ has
    implemented about 13 of the 17 recommendations your agency has
    made to DOJ regarding department-wide and OJP-specific grant
    administration?
        Ms. Goodwin. Yes. That's correct. The report we issued in
    2012, that had eight recommendations, and as of this July,
    they've closed seven. There is one, the final one they are in
    the process of getting us the documentation so we can--we hope
    to close that out soon. But we don't close anything out until
    we've done our own review.
        Ms. Plaskett. So every year, approximately how many audits
    or recommendation--reports do you do for OJP?
        Ms. Goodwin. I don't have the exact numbers on that, but we
    are continuously, you know, being asked to look at OJP
    programs.
        Ms. Plaskett. Okay.
        Ms. Goodwin. So it's quite a few.
        Ms. Plaskett. And since I get a little more time, the audit
    of the DNA Backlog Reduction Program, I was hoping to discuss
    that one. According to the IG's office, OJP requested that this
    audit be done to better ascertain the extent to which grantees
    were accurately reporting and using program income as well as
    how the National Institute of Justice could better manage the
    program.
        Ms. McGarry, is that an accurate representation of how the
    audit and why the audit was initiated?
        Ms. McGarry. Yes, Congresswoman. And this is a great
    example of our collaborative working relationship with the OIG.
    We looked at the program income of the DNA grant program and
    saw that we thought there were issues and that we would rely on
    the expertise of the IG, who has forensic auditors that we
    don't have to come in and help us examine this issue.
        Ms. Plaskett. Great. I think that shows that, you know, OJP
    is being proactive in terms of its own management and oversight
    of its programs, and the audit produced valuable results.
    Although it only looked at a narrow sample of four grantees, it
    found that NIJ could do a better job of identifying grantees
    with the potential for generating program income and working to
    ensure that grantees understood how to calculate income and use
    it appropriately.
        And I think that is important because too often we leap to
    the conclusion that individuals who are not fulfilling the
    requirements are doing so because they are seeking to break the
    law, as opposed to it being individual and grantees simply not
    understanding the requirements that are put on them by taking
    the grant.
        Would you say that that is correct in some instances?
        Ms. McGarry. I would say that that is correct, and in fact,
    as a follow-up to the OIG's review, our Office of Audit
    Assessment and Management is doing a comprehensive program
    assessment of program income, and we've already put
    instructions into the solicitation to applicants to clearly
    provide that guidance that they need.
        Ms. Plaskett. Well, I am going to ask you, for my own
    purposes, for my own district, I know that the Virgin Islands
    has had a very difficult time with OJP and with the kinds of
    grants that they have been given, fulfilling it in the audits
    that they have, and it has really held up them moving forward
    and being able to provide assistance to the people of the
    Virgin Islands.
        And I understand that there has been quite a bit of
    discussion within our local agencies that have management and
    oversight over that to be able to get beyond what was in the
    past. Everyone has said that it had a lot to do with the
    technical support really providing the kind of compliance and
    management that they needed to have to fulfill the requirements
    of those grants.
        Do you find that you have resources and individuals who
    follow the grant from the beginning to the end? Because I think
    that one of the problems we have seen in the Virgin Islands is,
    is that they want to do the right thing. They have been
    audited, but the auditors change. And so they have a new person
    who then has to go and review all of that all over again.
        What are you doing regarding that?
        Ms. McGarry. For the Virgin Islands, we work closely with
    the IG. The recommendations came out of an IG audit, and that's
    where the role of the Office of Audit Assessment and
    Management, they provide that consultation and close work with
    the staff in the Virgin Islands, and they have made great
    progress over the last year resolving their issues.
        And then we work as the liaison between the Virgin Islands
    public safety staff and the IG to resolve and close those
    recommendations.
        Ms. Plaskett. Okay. Thank you very much.
        Thank you for your indulgence, Mr. Chairman. You are such a
    great guy.
        Mr. Meadows. Well, you are very kind. Can you write that
    down for me? No.
        [Laughter.]
        Ms. Plaskett. It is on the record.
        Mr. Meadows. Oh, thank you. Thank you.
        I recognize the gentleman from Michigan, the vice chair of
    the Subcommittee on Government Operations, Mr. Walberg.
        Mr. Walberg. Great guy, yes.
        [Laughter.]
        Mr. Walberg. Two hours ago, my wife texted me a picture of
    her holding our new 10-month-old granddaughter in her arms that
    she met at the airport in Detroit, and she is spoiling her
    right now while I am in this meeting. And so we will vote that
    later, Mr. Chairman.
        Mr. Horowitz, good to see you again. You discussed in your
    testimony the importance of monitoring grants to ensure that
    recipients fulfill whatever obligations or conditions they
    agreed to in the first place. Could you expand on it a little
    bit more how that takes place? Give us a sense of what your
    work has shown you about OJP's monitoring of grantees and their
    projects.
        Mr. Horowitz. Thank you, Congressman.
        What we have seen is, is as a general matter, OJP doing a
    fine job in ensuring that the reports they get back demonstrate
    the money that was distributed was used, generally speaking,
    for the purpose of the grant. The problems we find are when we
    go out and learn that those reports aren't necessarily accurate
    that are coming back, and we find problems behind the
    reporting.
        But what we're finding isn't done systemically at a level I
    think should be done is reporting back on performance measures,
    on not just is the money being used for the purpose it was
    sent, but what's the result of that investment by the
    Government and the taxpayers in the program?
        The example I like to cite to was a program where OJP gave
    out--and this is a few years ago now, but I think the example
    is still relevant--monies to two local police departments to
    buy drones.
        Mr. Walberg. Buy drones?
        Mr. Horowitz. Buy drones.
        Mr. Walberg. Okay.
        Mr. Horowitz. And in fact, the drones were purchased. No
    issue about a misuse of funds. They bought the drones. The
    problem was the two departments had not gotten the FAA
    certificates and other regulatory approvals they needed to
    actually use the drones.
        And so when we went out, we determined that, yes, they used
    the funds per the grant. There was nothing improper about their
    use of the funds. But from a taxpayer standpoint, the drones
    never flew. They were never used.
        And so an investment had been made by the taxpayers, used
    by the local police as required, but after the fact, they could
    never get them out.
        Mr. Walberg. No outcome, yes. Okay.
        Mr. Horowitz. And that's an example of the kind of
    measurement you really want to get to. You want to get past was
    there a fraud or a misuse to, hopefully, there isn't, and then
    what was the value in return.
        Mr. Walberg. I guess, following up, Ms. McGarry, do you
    believe that OJP is adequately monitoring these grants? We have
    just heard this testimony. Do you see additional layers in your
    monitoring process that you can add?
        Ms. McGarry. Thank you for the question.
        We're very committed to improving our monitoring process,
    and each year, we evaluate the recommendations from the OIG and
    the GAO to make those changes. And in fact, we are focusing
    very closely on measuring the success of our grants to ensure
    accountability of results.
        The Office of Audit Assessment and Management has stood up
    a business process improvement to look OJP wide through all the
    grant components to assess their performance measures and the
    progress reporting, and they're in the process--the business
    process improvement team is in the process of making
    recommendations. And we hope to implement to make our
    monitoring of performance more robust.
        Mr. Walberg. Give me an idea of what, at least as far as
    the draft so far of these proposals, what are some of those?
        Ms. McGarry. I have not seen the draft recommendations. I
    think they're still being developed. But I'm happy to get--to
    come back to the committee and share those recommendations when
    we receive them.
        Mr. Walberg. I would assume it would be in the field seeing
    exactly if the drone is flying, for instance, if the license
    hangs on the wall?
        Ms. McGarry. Oh, we have made absolutely specific changes
    around the purchase of drones. Now we put in standards and
    procedures in place immediately after receiving that report
    several years ago, and no law enforcement agency can purchase
    an unarmed aerial system without direct approval from the BJA
    director, and it must be accompanied by an FAA certification
    for operation.
        Mr. Walberg. Okay. I yield back.
        Mr. Meadows. I thank the gentleman, and I hope he makes it
    very quickly to hold that 10-month-old grandbaby. So we are
    going to do a second round as time permits here, and so I will
    recognize myself.
        So let me follow up just a little bit on some of the other
    information that we had because Mr. Sedgwick was talking about
    the progress that we have made and how from an outsider's point
    of view and from an insider's point of view we have seen some
    real progress. And so as I looked at that, you were nodding,
    and I was seeing that smile on your face that we can all
    applaud.
        One of the concerns that continues to keep coming up in
    this, this particular testimony is that you keep referring to
    the audit that the IG does. And as much as an audit is
    appreciated and as much as I rely on those, and Mr. Horowitz
    can tell you that I comb over them with great detail. And so as
    much as we start to rely on that, my concern really gets in
    terms of the internal controls, the ones that Mr. Sedgwick was
    talking about that we made great progress. In terms of
    performance, a performance matrix and saying, okay, we made the
    right decision and these are the right things that have
    happened, do you have that in place, and is that significant?
        And I guess what I would like to say is in a perfect world,
    those performance matrix on what is there and what needs to be
    there, maybe to have you, Ms. McGarry, tell me what is there,
    and then Ms. Goodwin and Mr. Horowitz comment on what you would
    like to see. So I will start with you.
        Ms. McGarry. Chairman Meadows, we have, as you heard, put
    many agency-wide standards, procedures, and internal controls
    to prevent and catch any problems, and we look at the continuum
    of the grant process. As I said, we've put in pre-award risk
    analysis to try to prevent problems, require financial training
    for new grantees that often are the ones that have trouble
    following the rules.
        We also have programmatic monitoring with recommendations.
    And the Office of Audit Assessment and Management follows up on
    all those recommendations.
        Mr. Meadows. And I guess I understand that, but that is not
    qualitative necessarily. You know, that is, again, it can be
    just a check of the box. We have checked with the going out,
    and they said, you know, we have got the drones, and we are
    working on it.
        What I am looking for is something that is more qualitative
    and quantitative perhaps in its measuring where you can, for
    lack of a better word, you can get a score that it is a 9.2 on
    compliance, and I don't expect that. But something that is--so
    do you see my point?
        Ms. McGarry. Absolutely. And that is a very good question,
    and we have begun to make those changes. In our in-depth
    programmatic and financial monitoring, we are requiring on our
    review to look at source documentation and not just take the
    word on a report, but to dig down and look at the source
    documentation and do that verification.
        This year, the Office of Audit Assessment and Management is
    setting up a quality review process to also dig in on these
    internal monitoring to make sure that, indeed, what is being
    reported is true from the grantees.
        Mr. Meadows. All right. Ms. Goodwin, what would you look to
    see from a GAO perspective?
        Ms. Goodwin. I'll speak to the VOCA grant funds that we
    looked at.
        Mr. Meadows. Right.
        Ms. Goodwin. And of those recommendations, three are still
    open.
        Mr. Meadows. Right.
        Ms. Goodwin. And so if we think about one of the
    recommendations we made has to do with the 12-month project
    period length and some of the difficulties and challenges the
    grantees were having in kind of just getting their awards and
    starting to engage in those activities.
        So before a grantee can actually get the award, they have
    to be--OJP does this review process that takes about 2 months.
        Mr. Meadows. Right.
        Ms. Goodwin. And so that's 2 months of the 12 year--I'm
    sorry, of the 12 months that a grantee has to kind of engage in
    their activities.
        So when I mentioned that it was delaying a grantee's
    ability to kind of get their funds and then start engaging in
    those activities, the internal--the internal stuff that needs
    to happen at OJP is affecting a grantee's ability to really
    engage and do activities related to their grant funds. Since
    it's a 12-month period, 2 months are already gone.
        Mr. Meadows. So what you are saying--so what you are saying
    is the delay at OJP in terms of decisions that are made cuts
    into their 12-month window of deploying that grant?
        Ms. Goodwin. Exactly.
        Mr. Meadows. Okay. And you would agree with that, Mr.
    Sedgwick, from an outsider. Now I know you get grants. So I
    know you are going to be cautious on how you respond to this.
    You know, I found the ironic nature of somebody witnessing on
    somebody who is making the decision, but go ahead.
        Can you hit your mic?
        Mr. Sedgwick. Yeah, I actually coincidentally just finished
    writing my last grant proposal this cycle on Monday night at
    11:59 p.m. So a lot of this is fresh in my mind.
        There are, for example, in the proposal I just completed,
    pretty clearly the first 4 months of a 2-year grant are going
    to be spent not actually working on the grant, but actually
    kind of getting in place all of the agreements and all of the
    clearances and so on.
        Mr. Meadows. To make sure she is happy?
        Mr. Sedgwick. Yes. Now I will say one of the things in this
    proposal that I think speaks to the issue you're raising
    because I think the way I would phrase what you're asking a
    question about is it's one thing to ask people for outputs.
    It's another thing to ask them for outcomes, and I'd push it
    even further and then say, and what are the impacts?
        That is, you know, the output, presumably, affects people's
    behaviors in a positive direction, and that's an outcome. But
    then you have to ask the further question, if we improve the
    behavior of a bunch of people in the community, what's it do
    for the overall health or wellness of the community?
        And what I particularly--I think there's still some kind of
    areas for improvement in terms of clarifying that progression
    of outputs, which everybody is familiar with; outcomes, which
    people are getting more familiar with; but still the next step
    is the impacts.
        What I will give OJP tremendous credit on in this most
    recent proposal that I worked on that was very large was the
    emphasis, and I think this will get to the question you were
    raising, an emphasis on we had to link goal--a problem to a
    goal, to an objective, to a task, and then to a deliverable.
    And it was over and over again in that RFP that those
    deliverables had to be quantifiable.
        Mr. Meadows. Okay. Thank you.
        Mr. Horowitz, what about you?
        Mr. Horowitz. Well, I think that is a big part of it, what
    Mr. Sedgwick just mentioned, which is in the upfront, early in
    the process understanding what's the outcome that we are
    looking to achieve? If it's a grant related to reducing
    truancy, not measuring not just how many children have you put
    in the program, but what was the impact on truancy in the
    school, in the community?
        What measurements are you going to require the grant
    recipient to send to you? Because that's really what is
    required here. What goes on throughout this process is the
    inflow of information that's required of a grant recipient to
    OJP. That starts OAAM and other entities at OJP to look at
    that, and when they see anomalies, they'll often call us.
        But it's all because of the inflow of information that's
    demanded or required, pursuant to the grant. So it really
    starts right up front.
        I'll add one other part, one other issue to the discussion,
    which I think is important in that we're looking at in our
    ongoing review of the department's oversight of violent crime
    efforts that it has, and that is how are the three grantmaking
    components of the Justice Department coordinating with other
    law enforcement components at the Justice Department on the
    efforts to deliver to local law enforcement? Are those getting
    coordinated?
        Because that's another concern we've had is it looks as
    though, generally--this is a general statement. But the
    question that we're asking is, is the grantmaking that's going
    out to the local--State and local law enforcement, which
    obviously is partnering with Federal law enforcement ----
        Mr. Meadows. Right.
        Mr. Horowitz.--and the FBI and DEA and ATF and Marshals, et
    cetera, is there coordination going on within the Justice
    Department itself over how best to deal with and serve law
    enforcement needs at the local level? And so that's another
    issue.
        Mr. Meadows. And so you are saying that is not happening?
    Is that happening, Ms. McGarry?
        Ms. McGarry. Well, certainly ----
        Mr. Meadows. To the extent that it needs to happen. How
    about that? I will give you a qualifier.
        Ms. McGarry. Well, we share that goal of having
    coordination.
        Mr. Meadows. I understand that.
        Ms. McGarry. And we are doing it.
        Mr. Meadows. Is it happening or not?
        Ms. McGarry. Yes. In the Violence Reduction Network ----
        Mr. Meadows. Really?
        Ms. McGarry.--the grant components are working side by side
    with the DOJ law enforcement.
        Mr. Meadows. And so you have how it affects violent crimes
    and how it--the outcomes? So we would like to have a copy of
    that because I haven't been able to find that.
        Mr. Horowitz, what am I missing?
        Mr. Horowitz. We're in process of the audit. So I would
    probably be ----
        Mr. Meadows. So you are saying that you actually have that,
    Ms. McGarry?
        Ms. McGarry. Through ----
        Mr. Meadows. Because it is like building a school and
    educating someone and not having whether they get a job or not.
    That is the analogy that I make is that if we are going to
    invest this kind of dollars and we are--whether it is drug
    intervention or juvenile violence or abuse or any of those, we
    can do a lot of great programs. But if it doesn't stop what we
    are trying to stop, then it is just money that is being spent.
        It is like going to university and ending up coming back,
    driving a taxi cab because you can't get a job because of the
    degree you get. Do you follow me?
        Ms. McGarry. Absolutely. And we share your goal. And as Mr.
    Sedgwick said ----
        Mr. Meadows. So do you have--do you have the matrix to be
    able to figure out whether we are doing that?
        Ms. McGarry. We've put the matrix in the solicitation, and
    our business process improvement work we're doing is how can we
    better capture that to tell that complete story.
        Mr. Meadows. Okay. So will you commit to this committee
    that in the next 120 days that you will look at what you have
    put in, what Mr. Sedgwick just had to put his grant proposal in
    for, in terms of a way for you to monitor this going forward?
        And let me--this all comes back to what we see is the
    Navajo issue. And my big concern there is, as a fiscal
    conservative, I get beat up every time I give money for grants,
    and I have defended you. I have defended Department of Justice
    on a number of grant operations as a fiscal conservative.
        But any time that we build two prisons 75 miles apart that
    really are not being occupied and really don't have--unless you
    are going to ship in Federal inmates from outside the Navajo
    territory, it is going to be very hard to fill it up. I mean, I
    know the numbers, and I know what it is in my district, and you
    are going to be shipping in inmates to fill up something that
    you didn't have to build and that we have got a $32 million
    excess. Do you see the problem?
        Ms. McGarry. We certainly are taking this issue seriously.
        Mr. Meadows. So you don't see it as a problem?
        Ms. McGarry. I see it as an issue that we're still in the
    process of working with the IG and the Navajo Nation to
    resolve.
        Mr. Meadows. Okay. Here is my--and I am going to be nice. I
    want to go home, and you seem like a real nice individual. And
    so I am going to be a little bit perhaps indirect in my
    suggestion.
        We need within a 60-day timeframe for you to get back to
    this committee on how you are going to resolve the outstanding
    issues with the IG. And I don't mean that ``We are taking it
    serious, and we are working hard.'' I mean a real plan on how
    we are going to get this resolved.
        Because it inherently undermines the potential for future
    grants and future funding if this is believed to be across all
    of your grantmaking capability. And here your sworn testimony
    today is this is isolated, and you are committed to getting it
    worked. Is that correct?
        Ms. McGarry. We are committed to resolving these issues.
        Mr. Meadows. And this is isolated?
        Ms. McGarry. In my--this is an anomaly that we are working
    through.
        Mr. Meadows. All right. I recognize the ranking member for
    a series of questions.
        Ms. Plaskett. Thank you.
        Dr. Sedgwick, you have done some enormous work in this area
    and have a vast amount of experience with OJP. I wanted to talk
    with you about the arduous process for applicants that has in
    the past and there has been some discussion about the lack of
    transparency. And if we want the best programs to apply for OJP
    grant dollars, we must have a process that is completely fair.
        Now you talked in your testimony about the improvements
    that you have seen regarding detailed online training and
    releasing unedited peer review comments and et cetera. You have
    also testified about that in your tenure, the Office of Audit
    Assessment and Management was created. Can you tell us why this
    office was created?
        Mr. Sedgwick. I think to get at a lot of the questions that
    you all have been asking today. These are not new questions.
    The whole notion--you know, the Office of Justice Programs
    distributes a very large amount of money to law enforcement and
    to public safety in all its various manifestations in the
    United States. And there's always questions about was that
    money appropriately used, and did it have the intended effect?
        So this is--you know, these are not new issues. These have
    always been there, and I think they always will be there. And
    so that's why in my written statement, I ended with a comment
    about the importance of a culture of continuous improvement
    because I think, you know, during my tenure and my experience
    in OJP and its predecessor, OJARS, the organization has come a
    long way.
        But there's always going to be challenges, in part because
    the nature of the problems that OJP is trying to address are
    constantly changing. I'm kind of struck by when I was in the
    Bureau of Justice Statistics in 1984, the only thing anybody
    cared about were the FBI index crimes. So you really worried
    about seven crimes.
        I'm away for 22 years. I come back to BJS in 2006, and all
    of a sudden, people are talking about Internet crimes against
    children and human trafficking and a whole set of crimes that,
    quite frankly, nobody even thought about in 1984. And so, you
    know, you've got an agency that is grappling with an ever-
    changing mix of what constitutes illegal behavior in the United
    States.
        At the same time that that's going on, so it's trying to
    chase a moving target, the bar is being raised. And I think OJP
    has been--has worked very hard at raising its own performance
    and moving along that continuum that I mentioned earlier where
    in the old days, you only monitored outputs.
        Now we're well into the era of monitoring outcomes in terms
    of, all right, you ran this many people through your program,
    how did you move the needle? Tell me what improvement looks
    like, and how does that get measured?
        And I think now we're on the cusp of people beginning to
    say, well, okay, if we change the behavior of X number of
    citizens in a community, what's that do to make that community
    better, safer?
        We toss around the phrase ``community wellness,'' but I
    think that has to be taken very seriously. How is the community
    qualitatively improved as a result of the programs that are
    being funded by the Office of Justice Programs?
        Ms. Plaskett. And is that what the Office of Audit
    Assessment and Management ----
        Mr. Sedgwick. Very much was part of helping--first of all,
    helping applicants understand their responsibility in terms of
    measuring the effectiveness of what they were doing and
    reporting it to OJP. Then also helping OJP use that information
    that they were receiving from the field to say, all right, how
    is this particular grantee performing? Okay. They've got a
    great proposal, looks good, but is the needle moving, and how
    would we know, right?
        And I think that's--you know, I think that's a very
    important part of what the purpose of the Office of Audit
    Assessment and Management was. I can remember, I was in BJS
    when that agency actually first got authorized and stood up,
    and kind of taking a whole set of bureaus within OJP and
    getting them to accept the idea that this Office of Audit
    Assessment and Management was going to kind of get them to
    adopt a common set of performance measures was a bit of a
    chore.
        I mean, if you go way back to my beginning, 1984, before
    the reauthorization of the Justice Department, in 1984 every
    one of the bureaus in what is now OJP was by statute completely
    independent, except for one thing. The Assistant Attorney
    General had to approve your press releases, but everything else
    you could do on your own.
        So part of what you're kind of looking at and the kind of
    challenge is overcoming a culture, now you might say that's 32
    years ago, but in organizations and bureaucracies, 32 years is
    like saying before lunch today, right? I mean, for us, it seems
    like a generation, but in organizational terms, a lot of
    organizations, 32 years is the blink of an eye. And it takes a
    lot of work to move a culture of an organization like OJP,
    where you have a history of autonomy and get people to
    cooperate, right, and to work together.
        Ms. Plaskett. And you feel that it is moving that way?
        Mr. Sedgwick. Absolutely. I don't have any doubt at all.
        Ms. Plaskett. Okay, thank you.
        Mr. Sedgwick. Yes.
        Mr. Meadows. The chair recognizes the vice chair of the
    subcommittee, Mr. Walberg.
        Mr. Walberg. Thank you, Mr. Chairman.
        There was a gun buyback program, PSN--Philadelphia Safety
    Net program. And in that program, the policy was to give away
    $100 gift cards in exchange for guns. However, hundreds of the
    gift cards went missing, and the sole employee and executive
    director of PSN reportedly used grant money to pay for personal
    things like parking tickets, hotel stay, gasoline purchases,
    clothing, restaurants, meals, and cash withdrawals.
        And so, Ms. McGarry, did OJP know before PSN gun buyback
    program was concluded in March of 2012 that funds were being
    misspent?
        Ms. McGarry. Well, we've put several agency-wide standards
    and procedures in place to catch these type of problems. And we
    became aware of the issues, and our prevention mechanisms now
    are this grantee was an earmark and now would be put through
    the pre-award risk. And as a new grantee and as a small
    nonprofit would be required to do financing training to prevent
    these type of problems.
        Mr. Walberg. But did you know before it was concluded that
    the misspending had taken place?
        Ms. McGarry. I'm not personally aware. I believe that we--
    our managers did not know the extent of the problem.
        Mr. Walberg. Has there been any check to find out why the
    managers didn't know that there was a problem?
        Ms. McGarry. Yes. And that's part of our continuous
    improvement. We've enhanced our grant manager training. We've
    added questions for programmatic managers about financial when
    they're going out, to give them checks to look more deeply into
    financial conditions of grantees. So that is part of our
    continuous improvement. Always learning from these
    irregularities and issues and making changes to help prevent
    them in the future.
        Mr. Walberg. Feel pretty confident now that an entity like
    that with basically one sole manager of the program, executive
    director, with this much money is detected hopefully before --
    --
        Ms. McGarry. Yes. I think the measures of our pre-award
    risk assessment, intensive oversight of this type of a grantee
    would be--would be solid to detect and prevent these problems.
        Mr. Walberg. Mr. Horowitz, what was OJP's oversight like
    throughout that program as you looked into it?
        Mr. Horowitz. Well, we obviously saw a series of concerns
    there in the way the funds were being used, the lack of
    controls matching up, the gift cards that were given out with
    the firearms that were being purchased. In fact, there are
    still unaccounted for numbers of gift cards because there were
    more gift cards given out than there were guns collected.
        Mr. Walberg. Guns brought in.
        Mr. Horowitz. One of the things particularly concerning to
    us was that the executive director of the agency received
    almost $350,000 in compensation awarded by his sister, who was
    the chairman of the board.
        So those kinds of self dealing conflicts, lack of controls
    over program obviously ----
        Mr. Walberg. Would that have been expected as normal to see
    that if you saw that type of relationship, brother and sister
    running a program with that much money attached to it, handing
    out gift cards, over $300,000 salary? Should that have been
    something that would have been sniffed out very quickly?
        Mr. Horowitz. It's certainly something that if not done
    quickly, given the lapse of time, certainly we would have hoped
    that at some point along the way that those kinds of controls
    that were lacking in a place like PSN would have been
    identified sooner.
        And again, part of this goes to reporting back on results.
    What were the results of this audit? Well, if the executive
    director is taking a third of the money or so for himself, then
    there is a problem with the program.
        Mr. Walberg. At what point during the process would PSN
    have reported to OJP what it was spending the money on? I ask
    that of Ms. McGarry.
        Ms. McGarry. Each grantee has to submit a quarterly
    financial report, and in that report, they would designate what
    the money was being spent for. And this is one of the
    improvements we've put in place is to not just rely on these
    reports, but to have our managers look for source documents
    through the process.
        Mr. Walberg. And stay on top of it? Okay.
        Ms. McGarry. We're trying.
        Mr. Walberg. Mr. Chairman, I yield back.
        Mr. Meadows. I thank the gentleman.
        This has been a good hearing. I want to just thank each of
    you for your time. We have a few ``to dos'' that are out there,
    and Ms. McGarry, I would encourage you strongly to work with
    Ms. Goodwin and Mr. Horowitz in terms of those measurable
    matrix that I talk about, performance standards, how we can
    make sure.
        You have such a kind way of coming back that it makes a guy
    like me actually have empathy for you, and I guess that is a
    good thing. So it is--but in doing that, I want to underscore
    the seriousness of some of this, and I would love to come and
    visit with your sub-agency and thank your workers for the job
    that they do.
        It is real easy when we start to focus in on these problem
    areas to suggest that everything is awful, and we didn't hear
    that today that everything was awful. I think we heard some
    real things that concern us. And what concerns me is not just
    with the hard-working American taxpayer dollar that we are
    looking at in this $32 million discrepancy.
        What concerns me is the long-term viability of a grant
    program that I see a real need in, that has been benefited my
    constituents, and that if we allow these kind of things to
    happen and continue to happen, that the money will go away.
    Because they are going to use the Navajo example or perhaps the
    buyback program example, and they are going to paint a broad
    brush.
        And what that means is that there will be individuals
    without protective body armor perhaps, if there were not the
    right amounts of money spent. And so to put it in perspective,
    and I really want you--we have made a commitment here to work
    on these two outstanding issues with Mr. Horowitz and his team,
    but I want to put it in perspective.
        When we look at increasing something 250 percent. So we
    went from the original design, we expanded it 250 percent based
    on a couple of jurisdictional areas that should not increase
    the inmate population that much. It is like building--
    originally setting out to build the Capitol, this facility, and
    instead building Nationals Stadium and then building Nationals
    Stadium again.
        So do you see why it really creates a real problem? The
    numbers are going to have to--I am going to continue to follow
    up, and I want to hear back from you, as we have suggested.
        But again, I want to thank all of you for your testimony,
    and if there is no further business before the committee, the
    Committee on Government Operations stands adjourned.
        [Whereupon, at 3:41 p.m., the subcommittee was adjourned.]

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