[Senate Hearing 114-413]
[From the U.S. Government Publishing Office]
S. Hrg. 114-413
RISKY BUSINESS: EXAMINING GAO'S 2015 LIST OF HIGH RISK GOVERNMENT
PROGRAMS
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HEARING
BEFORE THE
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 11, 2015
__________
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Keith B. Ashdown, Staff Director
Patrick J. Bailey, Chief Counsel for Governmental Affairs
Gabrielle A. Batkin. Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Troy H. Cribb, Minority Chief Counsel for Governmental Affairs
Laura W. Kilbride, Chief Clerk
Lauren M. Corcoran, Hearing Clerk
C O N T E N T S
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Opening statements:
Page
Senator Johnson.............................................. 1
Senator Carper............................................... 2
Senator Lankford............................................. 13
Senator McCaskill............................................ 17
Senator Baldwin.............................................. 20
Senator Heitkamp............................................. 22
Senator Peters............................................... 25
Senator Ayotte............................................... 27
Prepared statements:
Senator Johnson.............................................. 39
Senator Carper............................................... 40
Senator Ernst................................................ 42
WITNESSES
Wednesday, February 11, 2015
Hon. Eugene L. Dodaro, Comptroller General of the United States,
U.S. Government Accountability Office; accompanied by Cynthia
Bascetta, Managing Director, Health Care; Debra A. Draper,
Director, Health Care; Phillip Herr, Director, Physical
Infrastructure Issues; David Maurer, Director, Homeland
Security and Justice; J. Christopher Mihm, Managing Director,
Strategic Issues; David A. Powner, Director, Information
Technology; James White, Director, Strategic Issues; and
Gregory Wilshusen, Director, Information Technology............ 4
Eugene Dodaro, prepared statement................................ 43
APPENDIX
GAO Report submitted by Senator Baldwin.......................... 78
Statement submitted by the Department of Homeland Security....... 142
Information submitted by Mr. Dodaro for the Record............... 148
Questions submitted for the Record from Mr. Dodaro............... 149
RISKY BUSINESS: EXAMINING GAO'S LIST OF HIGH-RISK GOVERNMENT PROGRAMS
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WEDNESDAY, FEBRUARY 11, 2015
U.S. Senate,
Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:03 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson,
Chairman of the Committee, presiding.
Present: Senators Johnson, Lankford, Ayotte, Ernst, Sasse,
Carper, McCaskill, Baldwin, Heitkamp, and Peters.
OPENING STATEMENT OF CHAIRMAN JOHNSON
Chairman Johnson. This hearing will come to order.
I want to welcome everyone. I appreciate my colleagues
coming here and all the members of the audience and, of course,
Comptroller General Eugene Dodaro and other members of the
Government Accountability Office (GAO).
This is an important hearing. There is a reason this is the
third hearing that we are having in this Congress on this
Committee. The good work that GAO has done is demonstrated by
the fact over the last 2 years, just recommendations
implemented from previous High-Risk Lists have generated $40
billion of savings over the last 2 years. I mean, that is a
remarkable figure.
Today, we are going to be talking about the update to the
list. There is some good news. I am happy to report that the
Department of Homeland Security (DHS) management has made solid
progress and there are some prospects of DHS coming off that
list. We are looking forward to that. There has been progress
made in terms of the Department of Defense (DOD) contract
management, progress made with the Food and Drug Administration
(FDA's) oversight of medical devices.
Unfortunately, there has been some expanded scrutiny--tax
code enforcement and fraud. I appreciate the fact that the GAO
is pointing out the fact that cybersecurity is a real issue, a
real threat, and that is a top priority of this Committee, to
start taking pieces of legislation or be involved in the
passage of legislation that will address the first step in
providing some measure of additional cybersecurity, and that
would be information sharing. So, I appreciate that.
I hate to report that there are some new areas added.
Information technology (IT) acquisition--that is really not
much of a surprise, but it is very disappointing to hear that
Veterans Affairs (VA) Health Care, has been added to this, and
this hits pretty close to home with both Senator Baldwin and
myself.
We have a facility in Tomah. Over the last couple of years,
we have lost three veterans to the system. Two died with deaths
related to potential opiate drug over-prescription, and not
even a month ago, a 74-year-old veteran--I am not a doctor, but
pretty obvious stroke symptoms sat and waited in a waiting room
for 3 hours to be treated, probably had a stroke, was wheeled
into an examination room, waited another 45 minutes, had a
massive stroke, was finally ambulanced to a different hospital.
The CT scanner was apparently not operational, so they could
not administer anticoagulant drugs, and this gentleman died 2
days later.
So, it is noteworthy to understand that GAO has been making
recommendations to the Veterans Health Care System for a number
of years. There are more than 100 recommendations that have not
been implemented, about 80 percent of the recommendations.
So, certainly what I would like to get out of this
Committee, out of this hearing and hopefully out of Committee
action, is coming up with some kind of method, some kind of
control to make sure that these good recommendations that save
the taxpayer so many dollars, that could potentially save
lives, are actually implemented. I mean, that has to be a top
priority of this Committee. Let us utilize the guidepost of the
GAO High-Risk List and the other good work they do and let us
make sure these recommendations are finally implemented at the
agency level. It will save money. It will save lives.
So, with that, I would like to turn it over to our Ranking
Member, Senator Carper.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. Thank you, Mr. Chairman. Thanks for
convening us today.
And, to Gene Dodaro and to the many members of your team
that are in the audience and may be listening or watching
outside of the building, we want to just say a big thank you to
all of them for giving us a great to-do list. My wife is a big
believer in to-do lists, and every morning, I go down to the
kitchen and there on the island in the kitchen, usually is a
to-do list. Sometimes it is for her. Sometimes it is for me.
And, what you have provided, you and your colleagues at GAO
have provided us, is an incredibly important to-do list, and
you do this every 2 years. We take that responsibility on your
part seriously and we take the responsibility just as seriously
for ourselves.
It is interesting how you can make progress in addressing
any number of the areas that need to be addressed within that
to-do list you are providing for us. We can hold a hearing, and
over the years, we have been able to make real progress just by
scheduling a hearing and bringing folks to this table, in some
cases, folks who are in charge of acquisitions at the
Department of Defense for weapons systems. Just hold a hearing.
In other cases, we send letters, and they can have an amazing
effect.
We not only will introduce legislation, we will simply call
the Secretary of the Department or the senior person within the
Department and say, we want to meet with you and here is why.
And, you and your team are complicit in a very positive way in
all of that.
For those of you who have joined us, we had a press
conference here early on and I talked about from time to time
people say to me, ``I do not mind paying taxes. I just do not
want you to waste my money.'' I do not want to waste their
money, either, and this Committee is committed to making sure
that we continue to fight. It is like whack-a-mole, and the
government is so big, and there are so many people trying to
defraud our government for money.
I have an entire statement I want to make part of the
record,\1\ but I just want to say, the kind of passion and
commitment that we have brought to addressing the entire to-do
list remains. Tom Coburn is gone, but that spirit that he
brought to this Committee for all those years is still being
nurtured by me and, I think, by Ron, and by a new Member from
Oklahoma. A lot of work to do, and we are going to work it
together.
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\1\ The prepared statement of Senator Carper appears in the
Appendix on page 40.
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I will say one other thing that I think bears repeating. I
am a big believer in leverage. When I chaired with Tom and led
a Subcommittee of this Committee, we tried to be effective in
addressing waste, fraud and abuse in government, and we found
that we could be a lot more effective as a Subcommittee or this
full Committee if we partnered with you and with your team. We
found that we could be more effective if we would partner with
the literally dozens of Inspector Generals (IGs) across the
Federal Government. We found that we could be more effective if
we would partner with the Office of Management and Budget
(OMB), with the nonprofit organizations that are committed to
reducing waste in government, and it works. It actually works.
It is a little bit like changing the course of an air craft
carrier, but if you stick with it, you do not give up, you can
change the course of an air craft carrier, and we can change
the course of our government and improve the service that we
provide for the people of this country.
So, we look forward to hearing from you, anxious to watch
you read your notes yet again--actually, he never reads his
notes, and is one of the most amazing people I have ever seen
testify in the Congress. I always say this and hope maybe it
will spook him so that he will forget where he is. [Laughter.]
I remember Winston Churchill used to give speeches before
the House of Parliament and he would, like, memorize his
speeches, and one day he was giving a speech, a terrific
speech--you know how good he was--and he forgot his speech and
he lost his way. So, I keep waiting for that to happen with
you---- [Laughter.]
But I have been calling all these years, Gene, and you
never do, so I do not want to jinx you today, but thanks very
much for being here and talking with us and we look forward to
this conversation.
Chairman Johnson. That is that accounting background,
right?
I should have mentioned earlier, I do have a formal opening
statement that I would like to enter into the record.\2\
Without objection, so ordered.
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\2\ The prepared statement of Senator Johnson appears in the
Appendix on page 39.
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It is the tradition of this Committee to swear in
witnesses, so Mr. Dodaro and any other GAO employees that might
assist in the testimony, please rise. Raise your right hand.
Do you swear the testimony you will give before this
Committee will be the truth, the whole truth, and nothing but
the truth, so help you, God?
Mr. Dodaro. I do.
Ms. Bascetta. I do.
Ms. Draper. I do.
Mr. Herr. I do.
Mr. Maurer. I do.
Mr. Mihm. I do.
Mr. Powner. I do.
Mr. White. I do.
Mr. Wilshusen. I do.
Chairman Johnson. Please be seated. Mr. Dodaro.
TESTIMONY OF HON. EUGENE L. DODARO,\1\ COMPTROLLER GENERAL OF
THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE;
ACCOMPANIED BY CYNTHIA BASCETTA, MANAGING DIRECTOR, HEALTH
CARE; DEBRA A. DRAPER, DIRECTOR, HEALTH CARE; PHILLIP HERR,
DIRECTOR, PHYSICAL INFRASTRUCTURE ISSUES; DAVID MAURER,
DIRECTOR, HOMELAND SECURITY AND JUSTICE; J. CHRISTOPHER MIHM,
MANAGING DIRECTOR, STRATEGIC ISSUES; DAVID A. POWNER, DIRECTOR,
INFORMATION TECHNOLOGY; JAMES WHITE, DIRECTOR, STRATEGIC
ISSUES; AND GREGORY WILSHUSEN, DIRECTOR, INFORMATION TECHNOLOGY
Mr. Dodaro. Thank you very much, Mr. Chairman. Good morning
to you, Ranking Member Senator Carper, and Members of the
Committee. I am very pleased to be here today to discuss the
update to GAO's High-Risk List.
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\1\ The prepared statement of Mr. Dodaro appears in the Appendix on
page 43.
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We provide this update with the beginning of each new
Congress to help the Congress set its priorities for oversight
and to help the Administration focus on areas that we consider
to be of highest risk for either fraud, waste, abuse, or
mismanagement, or in need of broad-based transformation across
the government.
This year, we are reporting solid, steady progress in the
vast majority of the High-Risk Areas that we have had on the
list to date. We are also providing ratings for the first time
against each High-Risk Area's status and progress getting off
the list.
In order to get off the list, High-Risk Areas need to meet
five criteria. They need to have top leadership commitment.
They need to have the capacity, the resources, and the people
with the right skills to get off the list. They have to have a
good corrective action plan that goes to the root cause of the
problems. They have to have a monitoring effort with interim
milestones and metrics to make sure they are making progress.
And then they have to demonstrate that they are actually
beginning to fix the problem. They do not have to have it 100
percent fixed to get off the list, but they have to have
tangible progress that they are on the right path and are
actually fixing the problem.
Now, of the 30 areas that were on the list based on our
last update, 18 of those areas have at least partially met each
of the five criteria for coming off the list. Eleven of those
areas have fully met at least one or more of the criteria and
partially met the others. So, there is good, steady progress as
we report.
In two areas, we report enough progress that we are
actually narrowing the scope of the High-Risk Area. First, in
FDA's oversight of medical devices, in the area of recalls, we
were concerned that they were not consistently applying recall
criteria, actually ensuring that the recalls were effective,
and did not analyze recall data over time to identify potential
trends that warranted some alerts to the industry. They are now
doing that. They have analyzed 10 years of data. They are
ensuring greater consistency in having recalls. They are
documenting whether the recalls have occurred and were
effective.
And, also, we have seen progress in their ability to
process new device requests. In the past, they were slow to
implement legislation that provided a dual-track process where
certain devices that were similar to those on the market could
go to an expedited review, but new devices that passed the
highest risks needed to go through a more stringent review.
They were slow to implement the Act. They have now corrected
that and they are on track to implement the legislation by this
year.
They still have issues in ensuring the adequacy and the
safety of medical products and devices in a global marketplace.
Right now, 80 percent of the active ingredients for
prescription drugs, 40 percent of finished drugs, and about
half of medical devices come from about 150 countries around
the world. So we have encouraged them to move from an oversight
process focused on overseeing domestic production to overseeing
what is now a global marketplace for drugs and devices, and
also to focus on drug shortages. They still have work to do in
that area, and many of these are life-sustaining and life-
saving drugs that are of concern.
We have also seen enough progress in the contract
management area at DOD to warrant narrowing that area,
particularly as it relates to contracting tools and techniques.
This is to ensure that they do not use overuse undefinitized
contracts and time and materials contracts, which are more
risky to the government. They also plan to ensure more
competition and they have better oversight over those processes
now. But, the remaining areas they need to fix are: (1) service
acquisitions, (2) ensure they have an acquisition workforce
commensurate with the challenges associated with that, and (3)
they have to make improvements in operational contracting where
they are using contracting to support military operations in
the theater.
We have also noted improvements in the Department of
Homeland Security management functions. That area has been on
the list for a number of years. We are very pleased with the
leadership commitment of that Department and the Secretary,
Deputy Secretary, and Under Secretary for Management. They have
a very good corrective action plan and they are starting to
make progress. They have received clean opinions on their
financial statements for 2 years in a row right now, but there
are other areas that they need to fix. They have fixed about 9
of the 30 areas that we have identified and they have agreed it
needs to be fixed. So, they have to fix the remaining 21 areas,
but they have a good plan. They just have to execute the plan
over a period of time, particularly in the acquisition area and
some remaining areas in financial management, particularly on
internal controls.
Now, we are adding two new areas. First is VA's provision
of health care services to our veterans. We have been very
concerned about this area and really have five overarching
themes of concern. One is ambiguous policies and inconsistent
processes over time. The fact that they have inadequate
oversight and accountability mechanisms. They have information
technology challenges that they have to solve. There is
inadequate training of VA staff and unclear resource needs and
allocation processes. And, I can talk more about this in the Q
and A session.
Congress has passed legislation providing them with
additional money, $15 billion, but the legislation has to be
implemented effectively. And, as Senator Johnson has mentioned,
we have over 100 recommendations that we have made to the VA
that have not yet been fully implemented and they need to do
so.
The other area, new, that we are adding is IT acquisitions
and operations. The report that we are providing today outlines
a litany of failed IT modernizations in the government, where
hundreds of millions of dollars, and in some cases billions of
dollars, have been spent, but the effort has been terminated or
failed. There is even a longer list of areas that have cost
overruns, schedule slippages, or provide less functionality
than initially intended, thereby not really improving
operations in the agencies that much.
Congress passed some legislation late last year, the
Federal Information Technology Reform Act, that gives Chief
Information Officers (CIOs) additional authorities and puts in
place in statute a number of good practices that we have
identified, but it has to be implemented effectively.
Typically, we have found these areas lack discipline and
requirements management and project management to actually
manage IT acquisitions effectively.
We also talk about operations. Fifty-eight of the $80
billion that is spent each year is on operations and support of
legacy systems that we believe may not be needed, may be
duplicative, and may no longer be performing as efficiently and
effectively as possible, particularly given opportunities in
the marketplace to get IT services at less cost.
In this new High-Risk Area, over the last 5 years alone, we
have made 737 recommendations and only 23 percent have been
fully implemented. So, again, Congress has made efforts in VA
and IT, but the efforts need to be monitored. Congressional
oversight is imperative, in my opinion. And, the agencies need
to make reforms.
We are expanding two areas. One is in tax administration.
We had been focused on the next tax gap, which the annual
latest estimate is $385 billion between taxes owed and taxes
paid. But, identity theft has become a growing problem, so we
are adding that to the list. The Internal Revenue Service (IRS)
was successful in stopping about $24 billion last year, but
they missed, on their estimate, about $5.8 billion in fraud. We
have some potential action to remedy this situation and
recommendations for the Congress and the IRS we can talk about
in the Q and A session.
The last area is cybersecurity. We initially designated
computer security across the entire Federal Government at High-
Risk in 1997. In 2003, we added critical infrastructure
protection, because most of the computer assets are in the
private sector. But, now, we are adding privacy to the High-
Risk issue as more personally identifiable information (PII) is
being collected. The number of incidents at the Federal
Government level involving inadequate controls over IT,
controls over the personally identifiable information, has more
than doubled in the last 5 years. There have been a lot of
high-profile incidents in the private sector, as well. Privacy
law was passed in 1974. We believe it needs to be updated to
provide greater controls, and we can talk about our
recommendations.
In closing, I would like to recognize that the progress
that we did note in many of the areas was due to the Congress
taking action, passing legislation. For example, five bills
alone in the cybersecurity area, but more is needed, as we have
talked about, in that area. Top leaders in the agencies and OMB
have been focused on our High-Risk list. I have regular
meetings with OMB Deputy for Management Beth Cobert and top
officials in the agencies to discuss the High-Risk Areas and
what needs to be done specifically to get off the list and to
make continued progress.
I appreciate the opportunity to be here today to discuss
this further and look forward to working with this Committee.
Fixing these high-risk problems as the potential to save
billions of dollars, improve services to the public, and
enhance trust and confidence in the Federal Government's
activities.
So, thank you very much for the opportunity to be here. I
would be happy to answer questions.
Chairman Johnson. Well, thank you, Mr. Dodaro.
Let me start with an apology. You are so familiar to me--
you are the face of the GAO--I forgot to introduce you to those
that may not be as familiar, so let me do it right now.
Eugene Dodaro has been the Comptroller General of the U.S.
Government Accountability Office since 2010 and has more than
40 years' experience at the agency, including as Acting
Comptroller General, Chief Operating Officer, and Head of the
Accounting and Information Management Division. So, you have
extensive knowledge and we certainly appreciate your service.
Let us talk dollars. We are both accountants. I was really
pleasantly surprised at the answer I got when I asked for how
much have we saved just in the last couple of years and the
figure was $40 billion. I will not investigate that. We will
take you at your word.
If we were to implement the recommendations on the current
High-Risk List--I realize this is impossible to probably
answer, but I would like you to take a stab at it--what would
you think might be the potential savings?
Mr. Dodaro. Well, I will just give you two benchmarks that
would give you some idea of the magnitude of the potential
savings. Improper payments this past year alone in the Medicare
program were $60 billion. In Medicaid, it was over $17 billion.
And, in the Earned Income Tax Credit, it was over $14 billion.
So, any effort to reduce the size of those improper payments
and ensure better integrity in the payment process can yield
billions, if not more, in savings, right in those three
programs alone on the list.
The DOD weapons acquisitions area has hundreds of billions
of dollars in potential investments. Some of the $40 billion in
savings have come from identifying weapons systems that were
not ready to go into production, that would have wasted funds,
and DOD or the Congress made decisions to reduce the
procurement orders for those areas.
And, let us take the tax gap alone. Any amount reducing one
percent the tax gap--right now, there is 84 percent compliance,
so we have about 16 percent noncompliance in the country, and
it goes across the range of different taxpayers, whether it is
business or individual taxpayers or small businesses. Any one
percent increase in collection of taxes owed is $4 billion
right there.
So, there is lots of money on the table that is not being
collected that should be collected. There is money being paid
that should not be paid. So, there are plenty of opportunities
to save money in these areas.
And, I am particularly concerned that in the Medicare and
Medicaid area, because they are the fastest growing Federal
programs, if the Centers for Medicare and Medicaid Services
(CMS) does not get a better handle on these areas, that problem
will get a lot worse before it will get better.
Chairman Johnson. Well, my back-of-the-envelope
calculation, you are already talking about close to $100
billion just right then and there.
I know Senator Carper talked about Senator Coburn earlier
using GAO reports. Senator Coburn always used to publish the
``Waste Book,'' unfortunately, after the money was spent. My
goal would be, let us publish a ``Waste Book'' before the money
is spent, and again, you gave us the guideposts for doing that.
Talk about implementation. I mean, what can we do? What
could this Committee potentially do to induce, might I say,
force implementation, because you have so much money at stake.
And, like I say, it is not just money. Take a look at the VA.
It could be lives. I mean, what can we do to prompt, induce,
force as full implementation of your recommendations as
possible?
Mr. Dodaro. I will give you an example of one of the things
that I have done that I think could be replicated in the
Congress to really induce more progress. One is, since I became
Comptroller General, I went to OMB and I said, look, you have
real serious problems here across the spectrum of the Federal
Government. During the Bush Administration, GAO started having
meetings with OMB and the agencies on the High-Risk List, but
it was usually at the Assistant Secretary level and below.
And I said, look, if you get the head or the deputy of the
agency here to the meeting and the Deputy Director for
Management is at the meeting, I personally will participate in
those meetings to focus on what needs to be done to make
improvement. We have been doing that for the past couple of
years. I attribute raising the elevation of that level to the
top agency leaders in the agency to the degree of progress that
we have seen over the past several years.
I believe engagement with those top officials, whether it
be in a hearing or it be in a private meeting, it be with
correspondence or other efforts, with the Congress and with the
agency, is really important.
The second major thing Congress could do, on the High-Risk
List, you will see an asterisk beside every area that requires
Congress to act and pass legislation in order to rectify the
High-Risk Area. Financing the Nation's surface transportation
system is an example. Postal Service reform is another example
in that area. And, there are many other areas on the High-Risk
List where Congress is an integral part of actually fixing the
problem, and we have noted that so that the Congress could
focus on those areas.
So, those are two real fundamental things that I think are
very important, and ensuring continuity over time so that
progress can be achieved.
One of the reasons I was very convinced to put VA Health
Care and IT acquisitions and reform on those areas is because,
I believe neither one will be fully resolved during this
Administration's watch and will have to be continued and
sustained into the next Administration. And, so, it is very
important to have that continuity to focus on these problems.
Chairman Johnson. Well, certainly, one of the things we can
do with this Committee is hold those hearings. We will work
very closely with you to schedule those hearings and have you
have a seat at the table as we are talking to those agencies.
Mr. Dodaro. We would be happy to.
Chairman Johnson. I do want to, in my remaining time, I
want to drill down in terms of the VA Health Care System. A
hundred recommendations. Over what time period have you been
issuing those recommendations? Why have they not been
implemented? And, can you just kind of speak to the major
recommendations that you think really need to be prioritized
for implementation.
Mr. Dodaro. Sure. I will ask my colleague, Debbie Draper,
who is focused on that work, to come to the table to help me
answer the questions, but I will start.
We first started reporting on this problem in the year
2000, so the recommendations have been made over a number of
years. And, I might point out, in a number of these cases, VA
agreed to implement the recommendations, but they were not
being implemented over time effectively. I met with Secretary
Eric Shinseki when he was there, talked about the need to
implement the recommendations. I have just met with Secretary
Robert A. McDonald and he agreed to make it a priority to
implement the recommendations.
Most of them are on access to care issues, where they do
not have good scheduling systems put in place. The IT system
that supports the scheduling system is about 30 years old. One
of the IT failures that we point out in our report explained
that after 7 or 9 years and over $200 million, they terminated
their effort to upgrade and modernize that system.
They do not have good data in a lot of areas to compare
whether it is cheaper for certain particular services to give
treatment in a VA facility or send the person to a non-VA
facility, and this is really important because Congress has
just given them $10 billion to make those decisions. They do
not have good information to make well-informed decisions in
those areas.
But, Debbie has been doing a terrific job. I will ask her
to elaborate a little bit more.
Chairman Johnson. Please.
Ms. Draper. Thank you. So, we made 167 recommendations over
the past 5 years, and there are actually more prior to the 5-
years, but more recently, it is 167. Just over 20 percent of
those have been completely implemented and closed. So, there is
a large number of recommendations, as Gene talked about. There
are a lot related to access to care. And, it is not just the
policies. It gets back to the five broad buckets of why we
included VA Health Care in the High-Risk List.
Inconsistent processes that play out at the local level--
you have a lot of variation at the local level, and this is
really attributed to ambiguous policies, which are widely
interpreted. Policies do not tend to be standardized processes
across the VA Medical Centers (VAMC). We also see certainly
inadequate oversight and accountability and, for example, VA
tends to rely on self-reported compliance with policies, and
that information is often not verified. So, when we go in, we
look at those compliance issues and, contrary to what the
facilities have reported, most of the times, they are not in
full compliance with the policy. So, there are a lot of
different areas, but there are a large number of
recommendations that remain open.
Chairman Johnson. Well, thank you. We will work very
closely with you in terms of trying to push and prod the VA to
implement those recommendations as rapidly as possible, so we
look forward to working with you. Senator Carper.
Senator Carper. Thank you, Mr. Chairman.
You mentioned how large the tax gap is, and I think the
number you mentioned, Gene, was $385 billion, is that correct?
Mr. Dodaro. Yes. That is the net amount. There is a gross
amount, and then IRS expects to collect so much. Yes.
Senator Carper. Is that money that is owed in one-time
money, or is it money that is lost on a recurring basis?
Mr. Dodaro. It is the latest estimate based upon tax year
2006. One of the reasons that the IRS has been on the list for
many years, and the original list in 1990, was tax
administration, where they were not measuring the tax gap. And,
so, after a number of years and prodding by us and the
Congress, they finally started measuring it. It is expensive to
measure it, so that is the latest estimate. But, it is an
annual estimate.
Senator Carper. All right. The Commissioner of the IRS is a
fellow named John Koskinen, whom you probably know. Have you
met with him?
Mr. Dodaro. I have worked with John in many areas over the
years. He used to be the Deputy for Management at OMB.
Actually, John and I worked to put in the Chief Financial
Officer structure into the government and on legislative
initiatives to actually create CIOs across the government and
fixing the Y2K problem. So, I have much knowledge of working
with John and I have met with him in his new capacity.
Senator Carper. That is good. He is a very impressive
leader, and I am hopeful he is going to provide wonderful
leadership at the IRS.
He testified before the Finance Committee last week, and
later I met with him in my office. One of the things that he
mentioned to me is that for every dollar that we invest in the
IRS and their people and their technology, they generate
roughly $10 worth of revenue. And, if you look at the amount of
money that we provide for the IRS to do their job now, we
actually provide less than we did a few years ago. And, as you
suggest, we are leaving about $400 billion of money on the
table of money that is not being collected. Would you just care
to comment on his observation?
Mr. Dodaro. Yes. We have reported--in fact, we rate IRS as
``not met'' in the capacity area to fix this problem, largely
because of some of the resources and the uncertain budget
environment in this area going forward. Now, that being said,
though, we also have a number of recommendations that they need
to look at and evaluate the return on investment that they are
getting from different enforcement efforts, and they could do
more with the resources that they have been given and
prioritize those efforts. So, we have a number of
recommendations in those areas.
But, that is an area that I believe needs attention to make
sure that they have the resources necessary to be able to
improve collections. They have been having budget cuts and they
have been given increased responsibilities in the Affordable
Care Act and a number of other----
Senator Carper. And, the other thing they have been given
is a tax code that is not made more simple every year, but
generally made more complex. And, we muck around with it and
change it at the last hour or do not change it and we make it
difficult for them to actually provide the information to
people who want to file their taxes in a timely way. There is
plenty of work to be done here, but a good deal of that work is
to be done by my colleagues, not just on this Committee, but
our colleagues in the House and Senate working with the
Administration, and thank you.
Mr. Dodaro. And there are some things that Congress could
do to help IRS. One thing to do would be to increase the
requirement for electronic filing. Another would be to give
them additional math authority where they could fix errors
right on the spot rather than generating and spending a lot of
time over those errors. So, we have a lot of recommendations.
Obviously, simplifying the tax code would be tremendously
helpful.
Senator Carper. They have also been asking for legislation
that would enable them to better ensure some quality in terms
of capability of the people who help prepare returns and file
returns.
Mr. Dodaro. Yes.
Senator Carper. I think that is a very large problem.
Mr. Dodaro. Yes. We have made that recommendation. We
studied the use of that in Oregon. Oregon was actually piloting
it for their own State and they found that making
certification, training requirements for paid tax preparers
increased their collections and we recommended that IRS do it.
They went forward and the courts have ruled they did not have
the authority to do it, and so it is really in Congress' hands
right now to give them that authority. We continue to recommend
that would be a good thing to do.
About 60 percent, of the people go to paid tax preparers.
We have done work in the past where we have sent undercover
teams in to paid tax preparers, and the last time we did it,
three out of ten were making mistakes and particularly errors
in the Earned Income Tax Credit area.
Senator Carper. Good. Thank you for that.
You mentioned the number of items that have been listed on
the High-Risk List for years, and I think there are hundreds
that still remain to be fully addressed and resolved. But, we
have made progress. The agencies throughout the government have
made progress. You mentioned a number of those areas where that
progress has been made. Some of it is in the Department of
Homeland Security, which we have jurisdiction over. We are
pleased with that. Some is within the Department of Defense,
and they have a lot more to do, but there is some good work
that is being done.
But, if you think about the areas, where it is department-
wide or with respect to specific parts of the departments'
jurisdiction where actually real progress is being made, the
real attention is being paid to the recommendations that they
are receiving from you and, frankly, the hearings that we hold
and the oversight that we conduct. What are the factors that
better ensure progress? I like to say, find out what works, do
more of that.
Mr. Dodaro. Right.
Senator Carper. What are the factors that appear again and
again to be successful here?
Mr. Dodaro. Yes. No. 1 is top leadership commitment. If you
do not have the head of the agency or the deputy focused on
this issue, you will make marginal progress, at best, in those
areas. And, what I have seen, in Homeland Security, I have
talked to Secretary Janet Napolitano, Secretary Jeh Johnson,
the deputies, Jane Holl Lute, and Alejandro Mayorkas are
focused on this, as well as the Under Secretaries for
Management, just to give one example. The same thing at
National Aeronautics and Space Administration (NASA). The
deputy has been focused on this, Bob Lightfoot, and I know John
Koskinen at IRS. So, the top people need to be focused. These
are big, tough problems. They require prioritization in the
agencies. They require changes in the culture of the agencies,
and if they are not led from the top, they are not going to be
successful.
Second thing is a good plan. A number of agencies start
initiatives. There are no real performance measures or metrics
in the initiatives. There is no way to hold people accountable
for interim progress. The next thing you know, they are gone
and there is a new political person that we are dealing with in
the agency and we kind of start all over again. If there is a
plan in place that has been followed, that is a good plan that
has milestones and metrics that can transcend changes in
political leadership in the Departments.
And, so, those two things are really very imperative, and
the third thing would be engagement from the Congress. If it
does not matter to the Congress and does not matter to the
agencies appropriation and does not matter to its oversight, it
is not going to matter to the agency. And, I can say all that I
can say and encourage them, but Congress has to be a real
partner in this effort to ensure success.
Senator Carper. Thank you for all that. Let me just
conclude, Mr. Chairman, on one last point.
I say to my colleagues, particularly those that are new,
improper payments are a huge problem, and while they are being
actually addressed, satisfactorily addressed in a number of
areas, a big one that is still the elephant in the room is
health care, Medicare especially, where the improper payments
have gone up by about $15 billion, and Medicaid, which has
ticked up by about another few billion dollars.
Dr. Coburn and I introduced in the last Congress something
called the PRIME Act. It had over 25 cosponsors, and some of
you on this Committee were cosponsors. We put it in the
sustainable growth rate (SGR) fix, could not get it passed, but
we are going to reintroduce it. My hope is that many Members of
this Committee will be cosponsors of that legislation. We need
to get it done. It will help ratchet down some of those
improper payments, especially in Medicare and Medicaid, and we
need to make progress.
Mr. Dodaro. Senator, if I might add, one additional area
that I think Congress needs to focus on is the Temporary
Assistance for Needy Families program. Right now, the
Department of Health and Human Services (HHS) does not believe
it has the authority to collect information from the States to
measure improper payments, so it is one large program where
there is no measurement going on at all, and I think Congress
needs to send a signal----
Senator Carper. Good.
Mr. Dodaro [continuing]. That needs to be taken care of.
Senator Carper. Thank you. We will add that to our ``to-
do'' list. Thank you. Thanks so much.
Chairman Johnson. Thanks, Senator Carper. I think you can
rest assured that this Committee will be engaged, and the two
of us working together, we will.
Before I call on Senator Lankford, you mentioned a 10-to-1
payback for the IRS. I did not mention in the Committee but I
mentioned in the press conference, we often talk about cutting
budgets and all we are really talking about is reducing the
rate of growth in spending. Unfortunately, the GAO is one of
these agencies where we have actually cut spending. We have
gone from $556 million in 2010 to $480 million in 2013 and $522
million in 2014.
A quick back-of-the-envelope calculation in terms of
payback, using your $40 billion figures, that is a 76-to-1
payback. Now, some of those may be one-time savings. But, if
you add the $100 billion of Medicare and Medicaid and the other
things you mentioned, that is a 268-to-1 payback. So, I would
recommend that certainly all the Committee members be somewhat
supportive of making sure that the GAO is fully funded because
it is a pretty effective payback. Senator Lankford.
OPENING STATEMENT OF SENATOR LANKFORD
Senator Lankford. Comptroller Dodaro, thanks for being
here, and thanks for all the work you and your whole team do to
help keep us informed on some of these issues.
I want to mention one thing that has been on your list for
quite a while and that is managing Federal real property. I was
surprised, because I know there has been a big initiative to
try to lower the footprint of the Federal Government and the
real property that are both owned and leased, the Freeze the
Footprint Initiative that started several years ago to try to
at least drop our hold to what we have.
I was a little surprised to see in your report that it
listed that you all had done some studies on some of the Freeze
the Footprint data and the drop, the 10 million square feet
that we have actually reduced, when you actually studied and
looked at it, you said it actually did not happen. They had
either just moved to the General Services Administration (GSA)
or it was just a timing issue. I wanted to give you a chance to
talk about that a little bit, because this is a big issue that
we have to resolve at some point. We have a lot of Federal real
property out there.
Mr. Dodaro. Yes. I am going to ask our expert in the area,
Phil Herr, to come up and talk about it, but you are exactly
right. I mean, what we found was that many of the initiatives
that were underway before they started Freeze the Footprint
activities, so they really were not attributable to the
initiative.
A big problem in this area is lack of reliable data.
Senator Lankford. Right.
Mr. Dodaro. That is one of the biggest problems. The
government has a lot of underutilized or not utilized at all
properties that need to be taken care of. There is an over-
reliance on leasing in the Federal Government, where it may be
more cost advantageous to have ownership over those areas over
time. We have pointed out the program is not doing a very good
job in securing the property, as well.
But, Phil can talk a little bit more about that particular
study that you have talked about, but your characterization is
accurate, for sure.
Mr. Herr. Yes. I would just add that it is a great example
of the need for continuity and to followup. We know that OMB is
working with GSA on a governmentwide strategy that is due in
2015. That is one we will be looking at closely. But, it is
also really important, and I think it emphasizes the point that
the Comptroller General just made, about just looking at the
data and ensuring that there is integrity and looking and
making sure those calculations are correct. When we did that,
we found that there were some questions about double-counting,
things being counted in multiple years, so--and that is a good
example for the kind of oversight your Committee can do.
Senator Lankford. When we deal with actual disposal of
property, obviously, we have all gone through for years the
difficulty of actually disposing of real property that we own.
Mr. Herr. Correct.
Senator Lankford. So, have you all done any examinations
for those independent disposal authority, those agencies that
have that, their capacity to be able to dispose of property
versus other agencies in the Federal Government, or when you
deal with, for instance, the Department of Interior (DOI) and
some of their authorities to be able to move out properties
versus others?
Mr. Herr. We have not looked through that particular lens.
The one thing we have looked at consistently are some of the
barriers that agencies encounter in doing this. There is the
processes--we just did a report on the McKinney-Vento process
and how that might be streamlined and how there could be better
accountability, because that is something the property has to
go through--agencies have to go through before proceeding with
the disposal.
Senator Lankford. So, the Department of Interior that has
the expedited conveyance process, where they can look at State
and local governments, if this is going to be transitioned into
other public uses, seems to be a faster process. Have you all
had any opportunity to be able to examine that process and see
if it is being effective----
Mr. Herr. Not in real depth, but that would be something we
would be happy to work with the Committee on.
Senator Lankford. OK. that is one of the issues that I hope
we can take a look at some point, to find out what is working,
because it does not seem like every agency has this issue, but
a lot of agencies do----
Mr. Herr. They do.
Senator Lankford [continuing]. To find out which agency is
being effective at actually transitioning property that really
works and what process is helping us in this.
I want to go back to some of our conversation on tax
issues, as well, if I can jump back to that. The identity
theft, you all brought up a very interesting set of statements
there and I would like to go into a little greater depth on it,
about the W-2 form and the time period of the W-2 form and how
we have identity theft basically because the W-2 form does not
come in late and we are doing returns early and there is a
great opportunity for identity theft. How does that get
resolved?
Mr. Dodaro. Under the current approach, IRS starts
processing returns early. They do not receive the W-2s from the
employers until April. They go to SSA first. There is a
different deadline in statute. So, we are recommending that the
Congress should give IRS authority to require employees to file
W-2s earlier. But, IRS really has not studied the costs and
benefits of that. It may impose some burdens on the employers,
and so we are recommending IRS study that. So, that is No. 1.
Senator Lankford. So, is it possible to just have that the
returns cannot go out until the W-2s are in?
Mr. Dodaro. Well, that is another possibility, but it will
delay refunds, and, the----
Senator Lankford. People get pretty excited about that.
Mr. Dodaro. Yes. Right. [Laughter.]
Particularly those that are expecting a big refund----
Senator Lankford. Sure, but we have also $5 billion of
fraud that is sitting out there from identity theft----
Mr. Dodaro. Right.
Senator Lankford [continuing]. And people are filing their
taxes and finding out someone has already filed under that same
number.
Mr. Dodaro. Yes, and that is why we are asking IRS to study
this thing, so Congress can make an informed decision. You
might want to delay it a little bit and accelerate the
reporting. I mean, there is a lot of room between the end of
January, when employees receive their statements, and April.
But, right now, the only way they find out that there is fraud
is when the honest taxpayer actually files their return and IRS
says, whoops, we already paid the refund to somebody else who
used your identity. And, the way people can get the information
to file fraudulently now, either at the Federal or at the State
level, is so easy to be able to do it.
The other thing that could be done is to give IRS math
authority. In some cases, they know that a return is incorrect.
They could fix it right away and not cause a problem over a
period of time.
And, the third thing would be what we were talking about a
little bit earlier, in having certification requirements and
training requirements for paid preparers in a lot of cases. We
know in some cases paid preparers are not giving the best
advice to people. In the vast majority of cases, they do.
So, those three things, we think, can really help address
this problem.
Senator Lankford. One quick transition, as well, and that
is to the surface transportation. I know that you looked at
some of the needs, obviously, that are sitting out there that
are financial needs and that Congress needs to address. Have
you had the opportunity to be able to look at the expansion of
what is considered a Federal project over the last 20 years,
just on the number of miles or roads or type of roads, because
there has not only been an expansion of the need, but there has
also been a tremendous expansion--my perception is--of the
number of miles that are considered Federal project or the
number of things that are considered Federal project in the
last 20 years.
Mr. Dodaro. Phil also happens to be our transportation
expert so he is----
Mr. Herr. I will double-dip here. We have done some work
related to that. I mean, one of the things that gets put into
the Highway Trust Fund, you get a lot of the safety programs
and things of that nature. Transit is also funded out of the
Highway Trust Fund. So, you have a lot of things that have been
put in there, a lot more demands, and the system is aging, so
additional resources need to go into that to just help maintain
those systems. And, the Interstate is now 50 years old, so
rebuilding that is a big part of it.
Mr. Dodaro. Yes, and our focus has been on the financing
streams that go in there. Obviously, the Highway Trust Fund has
not been able to meet the needs, and it is declining for a wide
number of reasons.
Senator Lankford. Right.
And part of my question was just related to the actual
roads themselves. I understand the safety and the transit and
other things, but the actual number of roads that are
considered Federal projects versus 20 years ago, the number of
roads that were considered Federal projects.
Mr. Herr. Well, they worked to bring in the National
Highway System, so that would be one area where you Federalized
some of those. But, we can get back to you with additional data
on that.
Senator Lankford. Thank you. I yield back.
Chairman Johnson. A real quick question. Is not the W-2 a
multiple-part form? Would not a pretty simple solution be to
add another copy?
Mr. Dodaro. I will talk to our experts about it and see
what----
Chairman Johnson. Senator McCaskill.
OPENING STATEMEN TO SENATOR MCCASKILL
Senator McCaskill. Yes. I was going to say the same thing.
If the employee gets it in January, or early, that means the
employer has it, so it is not like we are asking the employer
to produce something earlier, because it has already been
produced. We are just asking employers to get it in the hands
of the IRS earlier. So, I do not know that asking the IRS to
study this is a good idea--because I know what that ``study''
word means. It means we are going to be at this for much longer
than we should be at it. So, Mr. Chairman, I would like to----
Chairman Johnson. We will cosponsor a bill.
Senator McCaskill [continuing]. See if we cannot, with the
protection of the Chairman, who would stand for the proposition
that we are not trying to burden businesses, maybe we can get
through this.
Chairman Johnson. They should not be a burden.
Senator McCaskill. There we go.
Our Subcommittee last year held hearings, as you know.
First of all, good to see all of you. Your stuff is required
reading in my shop. Someone asked me about how depressing it
must be to be in the minority, and I said, one thing about
oversight, a GAO report is the same when you are a Democrat in
the majority and the same when you are a Democrat in the
minority. Thank you for all of your work and please share that
with all of your colleagues at the mother ship. [Laughter.]
We held a hearing last year, in the last Congress, about
the overpayments in medical equipment, as you know. I want to
make sure everybody understands how bad this is. In 2012,
according to the data provided by the Centers for Medicare and
Medicaid Services, they made improper payments on medical
equipment of almost $6 billion. So, that means there is $6
billion worth of pure waste, overpayments being made, on
durable medical equipment. And, that is an error rate--just so
people have a concept of how bad it is--of 66 percent. They
recover hardly any of these payments. I think in the last data
we had available, CMS recovered only $34 million of an
estimated $5.2 billion in improper payments.
We learned in that hearing that they do not do anything up
front to screen. They keep sending to one address, thousands of
businesses registered at one address, until after the fact,
then clawing back and they are gone. They are indicted. In
fact, one of the companies was at that hearing. As you recall,
I was very suspicious about their name. Their name was Med-
slash-Care. They were calling seniors and saying, ``This is
Medicare.'' And you can get this and you need this. They were
sent all this stuff out and they were criminally raided by the
FBI a few weeks ago.
So, your recommendations to CMS have not been followed.
What is your sense as to what is the problem at CMS that they
will not accept and adopt the recommendations in this
incredibly low-hanging fruit where we could save a lot of
money?
Mr. Dodaro. Yes. Cindy Bascetta is our expert in that
health care area. I will give my take and I ask her to provide
more detail.
First of all, part of this is changing this culture that
had been ingrained in CMS for years. It was to pay fast and get
the money in the hands of the providers to make sure there was
nobody who needed care that was not receiving care, and so that
culture is really ingrained in the process over a period of
time.
And, they have established a Payment Integrity Center, but
they are slow to implement these recommendations. You have to
keep bad actors out of the system. One of the things was to
establish a surety bond up front so that there is money that
the contractors have put up. They finally now have gotten to
where they have a contractor that can do fingerprint and
background checks ahead of time, so they are going to put that
in place.
So, the first thing is to stop bad actors from getting into
the system to be providers, and that has been difficult for
them to grapple with, and they are starting to move slowly in
that area.
The other thing is they give an incredible amount of
discretion to the contractors who are making these payments in
error. You would think Medicare was one system, but it really
is not. There is a lot of discretion given to the contractors.
We have been trying to say, get the contractors to identify
their best practices for preventing payments and recovering the
funds and to share that with all the contractors so that there
can be best practices. That has not been implemented. We have
encouraged them to set up core compliance programs that
providers have to follow. That has not been implemented yet.
I have tried to raise this as an issue. I have met with
Secretary Sylvia Mathews Burwell and the former head of CMS,
Ms. Tavenner, and I emphasized these open recommendations we
had and the need to implement the changes. So, I have certainly
been doing everything I can. I think additional congressional
oversight would be really helpful in this area, and I will let
Cindy give anymore details.
Ms. Bascetta. I would just add that we have also encouraged
them very strongly to move more quickly on their predictive
analytics, which would really help prevent the overpayments in
the first place and identify bad actors rather than recoup
payments. With respect to durable medical equipment (DME), I
just point out that their competitive bidding program that was
instituted several years ago----
Senator McCaskill. It is working.
Ms. Bascetta [continuing]. Has, indeed----
Mr. Dodaro. Yes.
Ms. Bascetta [continuing]. Yielded many savings. We are
watching carefully to make sure that they do not get to the
point where there might be negative effects on beneficiary
access to the equipment that they need. But, they are making
progress in that area.
Mr. Dodaro. But, you are right. The problem is bad.
Senator McCaskill. It is bad.
Mr. Dodaro. And it is going to get worse, because of the
fast----
Senator McCaskill. It is going to get worse, and there are
things that can be done to fix it.
Mr. Dodaro. Right.
Senator McCaskill. So, I know Chairman Susan Collins--she
and I are serving on the Aging Committee now--I know we are
going to continue this investigation, and continue to put
pressure on CMS.
In the comprehensive immigration reform bill that was
passed by a wide bipartisan margin in the Senate, we funded an
additional $46 billion in border security. I am confident, no
matter how the immigration politics play out over the coming
months in this Congress, that all of us agree that there has to
be additional significant funding on the border. I am worried
about whether or not DHS management is ready to absorb this
flood of funding. I am trying to remember--53 miles of the
border, I think, we did for a billion dollars. That is not
exactly encouraging, that it took us a billion dollars to do 53
miles.
I would like, just briefly, if somebody could speak to
that, and, frankly, if you have an opinion, I think the
Chairman is a former businessman and I know if he did not know
if his receivables, if and when they were ever going to arrive,
it would be very hard to manage an ongoing enterprise? And
whether or not the fact that we are budgeting by crisis in fits
and starts and continuing resolutions (CRs) and threatening
shutdown, if that is contributing to some of the mismanagement
at DHS.
Mr. Dodaro. Well, I can just speak from trying to run the
GAO under continuing resolutions; it is a difficult process. I
told our appropriators one of the things I never aspired to be
in public service was an expert at managing under continuing
resolutions. It does create a lot of uncertainty and make it
difficult to manage.
Dave Maurer is here. He is in charge of our work at DHS. I
do think they are still struggling in the acquisition area to
properly manage their acquisitions. That is something we are
keeping an eye on and we will focus on this additional funding.
Dave.
Mr. Maurer. That is absolutely right. Acquisition is one of
the major challenges DHS faces on the management front. They
also face some significant challenges in other aspects, as
well. Employee morale, for example, at DHS has consistently
been bottom-of-the-barrel compared to other departments. Their
numbers have been going down at a faster rate than in other
Federal agencies. That is something of concern. We are
encouraged by the fact that the Secretary and the Deputy
Secretary have taken some efforts to address both of those
issues head on--both acquisitions and morale. It is something
we are going to be watching very carefully in the coming years
and months.
Senator McCaskill. Thank you, Mr. Chairman.
Chairman Johnson. Real quick, to answer your question of
the Chair, it is our side of the aisle that is actually trying
to get a bill on the floor to be debated to fund the
Department, so----
Senator McCaskill. Well, we would disagree on that.
Chairman Johnson. I think, also, Senator Baldwin and I will
also agree that I think our paper industry would kind of like
our W-2 fix, so we will work on that.
Senator McCaskill. That is right.
Chairman Johnson. Senator Baldwin.
OPENING STATEMENT OF SENATOR BALDWIN
Senator Baldwin. Thank you, Mr. Chairman, and Mr. Dodaro,
thank you for being with us today.
I would like to focus in on the problems that you have
identified in the GAO report with the Veterans Health
Administration (VHA), both systemwide but also in Wisconsin and
facility-based issues. The GAO report provides ample evidence
to corroborate what I have learned in disturbing detail over
recent weeks, that the VHA suffers from mismanagement and
inadequate oversight, especially of individual facilities. It
appears that the Veterans Health Administration lacks not only
clear and appropriate systemwide policies and protocols, but
also lacks the ability to ensure that they are followed at the
facility and the regional Veterans Integrated Service Networks
(VISN) level.
For example, at the Tomah VA facility in Wisconsin, current
and former employees and veteran patients have brought to my
attention allegations of inappropriate opioid prescription
practices and abuse of administrative authority, including
retaliation against whistleblowers. This facility is currently
under investigation by Secretary McDonald and we all hope that
it yields appropriate and positive results. But, make no
mistake, extremely troubling issues have come to light
regarding the VA and this specific facility, and I believe that
Congress is going to have to act in a variety of ways to make
improvements so that our veterans in Wisconsin receive the care
that they deserve.
Mr. Dodaro, in the case of the Tomah VA facility, a report
initiated in 2011 and concluded in March 2014 from the VA
Office of Inspector General found evidence of troubling opioid
prescription practices that were at considerable variance from
peer facilities in the regional network. This report
recommended changes to address those problems at the facility
level, and subsequently, actions were taken.
In the last month, however, media reports have revealed
that whatever those actions were that took place to remedy the
problems had either not been implemented, not been implemented
effectively, or were entirely insufficient. It is also unclear
if any senior VA official ever was made aware of the report
that the Inspector General did or the remedial actions that
were recommended or taken at the Tomah VA.
In your view, does the Veterans Health Administration have
adequate oversight controls in place to ensure that facility-
level problems are first, identified, and then sufficiently
addressed?
Mr. Dodaro. I will ask Debbie Draper to elaborate on this.
She is our expert in the VA area.
But, one of the areas we point out in the report we are
releasing today is there really is inadequate oversight and
accountability. The individual facilities have been given wide
latitude to implement the policies and procedures. There are
not reviews being done by headquarters that should be done of
the facilities to make sure that they are adequately following
the policies and procedures. And, when we go in, we find that
those reviews are not done. They are relying on self-reported
data from the facilities, which is not consistent with proper
internal controls, and to have a good accountability and
evaluation of function and program. So, it is a real problem
over there that needs attention, but I will ask Debbie to
elaborate.
Ms. Draper. I mean, it is certainly a system that is in
need of major transformation, and I think that we have seen--
and one of the reasons we have added it to the High-Risk List
is that over and over in the past 5 years, the reports that we
have issued have constantly highlighted the inadequate
oversight and accountability and ambiguous policies and
inconsistent processes. So, there is an aversion to
standardization within the VA, but when you have that much
autonomy at the local level, you often hear the story, you have
seen one VA medical center, you have seen one VA medical
center, and that is really true, because there are, like, 150
different processes that play out at the local level.
We are particularly concerned because of the growing
demands on the VA Health Care System. So, between 2002 and
2013, the number of veterans enrolled in VA health care
increased from 6.8 million to 8.9 million, and over that same
period of time, the number of outpatient medical appointments
increased by 40 million. So, if you have weaknesses in place
and you do not correct them, then the problems are going to
really become much bigger.
Senator Baldwin. Mr. Chairman, I have a second question on
Tomah, but I believe I am not going to have time to get to a
third question on a GAO report that was issued in November 2014
regarding protocols with treatment of veterans with major
depressive disorder. I would like to be able to submit that
remaining question for the record and get a response after the
fact.
But, to my next question in the case of Tomah, there seemed
to be virtually no internal Veterans Administration
communication and certainly no external communication to
Congress or the public regarding the problems at this facility.
In fact, when I first contacted the Tomah facility and the VA
headquarters here in Washington on behalf of a constituent who
had raised a number of concerns covered in the Office of
Inspector General (OIG) report that I just referred to, no one
at any level of the VA talked about the existence of this
report or informed me of the existence of this report.
And, in light of this lack of transparency, I wonder if you
think that a GAO-type model of investigating, issuing
recommendations, and requiring the affected agency or group to
formally and publicly respond would improve the Veterans Health
Administration's ability to perform successful oversight at the
regional and individual facility level and hold them
accountable for any wrongdoing uncovered.
Mr. Dodaro. Well, there definitely needs to be
accountability over reacting to audit findings. In fact, there
is existing OMB guidance that agencies are supposed to track
audit reports and track followup efforts and have a response. I
met with Secretary McDonald last Friday, actually, and he said
he has given high priority to begin following up on IG
recommendations and GAO recommendations. So, hopefully, this
will be addressed.
But, you are exactly right. There are policies and
procedures already in place that should have assured that they
followed up on every IG report and recommendation that would be
in place, and GAO reports, as well. Those could be
strengthened, and there may be a need to do that in this
particular case. But, those policies exist. So, it is a lack of
compliance with existing policies that it sounds like. I mean,
we have not looked at this specific information, so I really do
not know for sure, but it sounds like from your description
that they just did not adhere to the policies that already
exist.
Senator Baldwin. Thank you, and I will submit for the
record the GAO report\1\ that was issued in November 2014
regarding veterans who are diagnosed with major depressive
disorder. It appears that there is a huge deviation from VA
guidelines with regard to the treatment that you have uncovered
and I think that is very disturbing and that we need to do more
in followup to that, too.
---------------------------------------------------------------------------
\1\ The GAO report submitted by Senator Baldwin appears in the
Appendix on page 78.
---------------------------------------------------------------------------
Mr. Dodaro. And we will be happy to respond.
Chairman Johnson. Thank you, Senator Baldwin. I can assure
everyone, this Committee will be fully engaged to make sure
these recommendations are carried out, and we are going to do
everything we can to make sure they are carried out. Senator
Heitkamp.
OPENING STATEMENT OF SENATOR HEITKAMP
Senator Heitkamp. Thank you, Mr. Chairman.
I want to get to process, because if we were going to go
through each one of these and debate their relative merits,
Comptroller, we would be here all day. And, so, I want to talk
about why we have these hearings and then everybody retreats,
goes back to their agency, goes back to what we do, and then we
come a year later and have another discussion.
So, I want to ask about ongoing supervision and get to the
heart of what you were talking about earlier, which is agency
heads change, administrators change, and then you are back in
the game again trying to educate or re-educate on why these
recommendations were necessary. Let us just presuppose that
every time something like this was done, we had a sit-down, we
had a strategic plan put together, time-lined, with
accountability measures that everybody agreed to and said,
``Yes, we are going to do it,'' taking a look at--I think
earlier, Senator McCaskill talked about return on investment,
low-hanging fruit, prioritizing those things that actually give
us the biggest bang for the buck, and then periodically
actually getting reports on whether we are meeting those
requirements so that this process becomes institutionalized
between the Congress and the agencies and GAO.
Mr. Dodaro. I think that would be an excellent idea and I
would be happy to participate.
Senator Heitkamp. I think it would be an excellent idea,
but I have a tendency to fall in love with my ideas, so I just
need---- [Laughter.]
I need people to argue against me frequently, but----
Mr. Dodaro. Well, I will not argue on this one.
Senator Heitkamp. I think that is the level of frustration
that we all have here, which is----
Mr. Dodaro. Well, and I have the same frustration. I try to
do what I can, working with the agencies and the Congress, but
we need more concentrated focus on this. I mean, our
government's financial condition is not sustainable over a long
period of time and we are wasting too much money on these
inadequate processes and procedures. So, whatever process that
you can convince your colleagues to do, I will participate in.
Senator Heitkamp. Well, it does seem to me that that would
be a critical kind of component of followup, because the great
work that you do and actually going out there and identifying
these problems, identifying the areas of concern, if we do not
have a systematic process piece to go behind it, we really are
only talking to each other----
Mr. Dodaro. Right.
Senator Heitkamp [continuing]. And wringing our hands and
decrying the waste of Federal dollars instead of actually
fixing the problem.
Mr. Dodaro. Yes. A good model is what we have been doing
with DHS, for example. When I first met with them, the Deputy
Secretary, they said they really did not know what to do to get
off the High-Risk List, so I sent them a 29-page letter and
specified all the things that they needed to do to get off the
list. [Laughter.]
But, to their credit, they said, ``OK, we understand now.
We agree.'' They put a corrective action plan together. That
plan has withstood changes in political leadership over at DHS.
I meet with the current Deputy and they are making good, steady
progress to that area. We have informed the Congress of these
matters and Congress has given some attention. So, most of this
stuff, except maybe for NASA, it is not rocket science, but----
[Laughter.]
And it just requires disciplined follow-up.
Senator Heitkamp. Well, and it requires some continual
oversight that is not sporadic----
Mr. Dodaro. Right.
Senator Heitkamp [continuing]. That is meaningful. And, I
think that is to the extent that you guys need us to play bad
cop, we are way willing to do that. So, we will work on a
discussion, I think, going back and forth on what that process
could be.
I want to just, in the time that I have left, talk about
the IRS and talk about what seems to be a systemic failure to
institutionalize processes that would prevent fraud. And, I
want to start out by saying, obviously, if someone has a W-2 in
their hand, there is a W-4 somewhere that has been filed with
someone relaying this information. But, this information,
according to Social Security dollar amounts, is relayed every
time there is a payroll, is it not?
Mr. Dodaro. I am not sure. Jim, do you know? This is Jim
White, who is our tax expert.
Mr. White. Some come in throughout the year, but the
information that IRS needs to match, they do not have all of
that information until after April 15 for the prior year----
Senator Heitkamp. But Social Security has it.
Mr. White. Social Security----
Senator Heitkamp. When is the W-4 due to Social Security?
Mr. White. It depends on whether it is paper or electronic,
but it is due either February or March----
Senator Heitkamp. Give me the date, though.
Mr. White. Well, some of them are due at the end of
February. Some are due at the end of March.
Senator Heitkamp. So, the employer can have prepared W-2s,
but transmittal of those W-2s to Social Security does not occur
until the end of February?
Mr. White. Correct. And, part of the reason for that is
there does need to be a window in there for employers to
correct errors, so they give it to the employee. Sometimes the
employees go back. There are errors there that need to be
corrected. Social Security also has an error correction
process. And then those go to IRS.
The other problem is IRS does not have the information
systems, the computer systems that would allow them to do real-
time matching. So, that would be another part of this. If the
forms came in earlier, IRS would need improved computer systems
to be able to match real time to taxpayers' tax returns.
Senator Heitkamp. It is really hard for those of us who
deal with the complexities of Amazon.com to really believe that
in this day and age, they do not have real time matching
capability. And, so, that is something, obviously, that needs
to be funded if we are going to be serious about fraud
detection.
I want to get to the identity theft, because none of this
would really solve the problem of someone seizing that Social
Security number, filing a fraudulent return, and what would be
a way that we could prevent that if, in fact, the real taxpayer
does not file until April 15?
Mr. White. Well, you are right. The crooks file early. They
need to beat the honest taxpayers' tax returns. So, they file
early. When the honest taxpayer files, IRS at that point
discovers they have duplicate returns and they know they have a
problem. But, they do not find out until after they have issued
the refund to the crook, and at that point, then they are
trying to chase the money.
Senator Heitkamp. Yes.
Mr. White. So, the solutions--the pre-refund matching,
getting the W-2s in in time to match to taxpayers' tax returns
before refunds are issued, would put a big dent in the fraud.
It is not the only solution.
Another solution----
Senator Heitkamp. That, I do not understand, and I am
obviously out of time, but if somebody is going to seize that
Social Security number and file a fraudulent return, you need
to know that that is a fraudulent return if you are simply
matching it against--are you suggesting that because the dollar
amounts would vary, that would----
Mr. White. Right.
Mr. Dodaro. Yes. The person perpetrating the fraud really
does not know what is in the other person's W-2----
They are just making up the numbers. The other thing that
is related to this is another recommendation we have. For 54
million Americans that are enrolled in Medicare, their Social
Security number is right on their Medicare card, and we have--
--
Senator Heitkamp. Yes. Not good.
Mr. Dodaro. Not good.
Senator Heitkamp. Mr. Chairman, if I can just ask one more
question, if we take and actually use old data--by that, I mean
old numbers, this is your employer on that Social Security
number, and use the previous tax year, you might actually get
at least a bank of those returns that would be incorrect or
would not match unless that taxpayer changed their status or
changed their address or changed their job. Would that not be a
screening technique we could use?
Mr. White. It is a possible screening technique. The
tradeoff there is, given the number of Americans that change
jobs, change home addresses each year, IRS would have millions
of false positives with that kind of match so they really need
current information.
Senator Heitkamp. I agree, but what I am saying is at least
then you might be down to 20 percent of those returns that you
do not know. I mean, I do not think more than 20 percent change
jobs or change addresses every year.
Mr. White. Yes, and IRS has made real progress with their
filter system, so they have caught--they have prevented $24
billion worth of fraud because of filters that do some of what
you are talking about right now. The problem is the $6
billion--it is the $5.8 billion of fraud that is still getting
out the door.
Senator Heitkamp. Thank you, Mr. Chairman.
Chairman Johnson. Senator Peters.
OPENING STATEMENT OF SENATOR PETERS
Senator Peters. Thank you, Mr. Chairman.
Mr. Dodaro, thank you for your testimony, and for appearing
before this Committee this morning. I certainly appreciate all
the work that you have done with your agency in developing a
High-Risk List that we are discussing today. We are looking for
common ground in Congress. I think we all can agree that trying
to eliminate fraud, waste, and abuse, mismanagement, those are
things we should all be able to agree on, focus on, and work to
achieve.
But, as you know, in many cases, there is only so much that
a Federal agency can do to deal with some of these issues
without legislation and congressional action, and the GAO has
identified a substantial number of High-Risk List areas that
will many times require some sort of legislative action in
order to be addressed.
Last Congress, when I was in the House, I introduced with
my colleague Cory Gardner, who is now a Senator with me here,
legislation that would have modified some of the House rules,
put a process in place to require Committees to hold hearings
on programs, agencies, offices, and initiatives with
duplicative goals identified by your annual GAO report, which I
always find a fascinating report. One example I often give,
particularly in my district, is the example where you have
multiple folks that inspect catfish in this country.
Now, I would think we should at least have one government
agency that regulates catfish. I would agree with that. I like
to know when I am eating catfish that it is safe and it has
been raised properly. But, whether or not we need more than one
does not make a whole lot of sense to me, and oftentimes it is
Congress, because of different jurisdictions that we have with
our Committees, that we like to hold on to those jurisdictions,
it is Congress is the problem here, not just the agencies, as
to why we have to have that duplication, and I certainly think
that we can do better.
In the House, I also introduced with another one of my
colleagues now, Senator Lankford, who is actually on the
Committee with me here, a followup to a report that I requested
from the GAO. I appreciate the reports that I get from you.
Your report studied the use of remanufactured auto parts in the
Federal vehicle fleet and found that these parts can reduce
operation and maintenance costs, sometimes significantly. To
ensure that the findings of this report are available and
considered by all Federal fleet managers, together, we
introduced the Federal Vehicle Repair Cost Savings Act to
encourage all Federal agencies to consider remanufactured
vehicle parts, and we are going to continue to work on that in
this Congress.
However, the reason I bring this up is I am concerned that
too many of your GAO recommendations--I have heard that from
some of the other questions here--are never implemented and
Congress never follows up on these recommendations. It is
Congress, the folks right here in this room and other places,
that never followup on these.
So, I am going to ask you to be candid. I am going to ask
you to give us a critique of Congress. In your experience, how
effective has this body been in actually responding to the
incredible work that the GAO does? And, again, please be
candid, and we will not hold it against you. I certainly will
not. I know the Chairman will not, either.
Mr. Dodaro. Well, that is good to know. [Laughter.]
In the overlap and duplication work that we do and issue
our annual report, we actually have a separate scorecard for
the Congress and a separate scorecard for the Executive Branch
in terms of responding to the recommendations. And, we found
that the Congress was responding to the recommendations a tad
less, the rate--but still responding--than the Executive Branch
activity. So, on a comparative basis, the Congress's record was
relatively less favorable to the Executive Branch, if my memory
is correct. I will go back and I will give the exact numbers
for the record.
Our next report will be out this April. It will be our
Fifth Annual Report. So far, we have made 440 specific
recommendations for change in those areas. But, there is much
more that Congress could and should do.
Last time we updated the High-Risk List, I was before this
Committee and I raised the issue of the need for legislation on
the Postal Service. Their business model is broken. They are
losing billions of dollars. One of the first hearings the
Committee held was on the Postal Service. I testified at that
hearing. The next one was on cybersecurity, and eventually,
there were bills passed on cybersecurity. So, there is a lot
more that the Congress needs to do in order to rectify these
High-Risk Areas and address the overlap and duplication
problems.
If legislation is introduced again along the lines of what
you talk about, that require hearings in the overlap and
duplication area, my suggestion would be that it also require
joint hearings of different Committees, because, really, the
most difficult problems are because of jurisdictional issues in
the Congress.
But, that is not the only problem. The problem is in the
Executive Branch, too. I mean, they are compartmentalized the
same way that the Committees are compartmentalized in terms of
jurisdiction, and I have difficulty getting OMB's attention
to--and prioritize, because they only have limited resources--
to get the agencies to work together or to say, these things
ought to be combined into one function. So, that problem exists
in the Executive Branch and the Congress, which compounds the
difficulty in getting solutions to those areas.
That is about as candid as I could be----
Senator Peters. Well, we appreciate that.
Mr. Dodaro [continuing]. At this point, and thank you for
the question.
Senator Peters. Well, I appreciate that, and what I am
hearing from your answer, and obviously, there are problems in
both the Executive and Legislative, but as you are saying, with
the scorecard, we actually in Congress perform less than the
agencies, which is not a good standard for us. We think the
agencies should be doing a lot more, and if we are behind them,
that just shows that we have more work to do, and particularly
when you are as--which is a great suggestion about having the
joint hearings to deal with some of the turf battles that are
there.
But, I think you would agree, then, that if we introduce
bills like I have introduced with some of my colleagues here in
the House and do that here, and putting in place a more formal
process that forces Congress to deal with this in a formalized
way, you think that is a good idea? You would support it and
encourage it?
Mr. Dodaro. Yes. And, I would participate.
Senator Peters. Right.
Mr. Dodaro. I would be here any day to testify.
Senator Peters. Great. And be equally as candid.
Mr. Dodaro. Yes.
Senator Peters. Thank you, sir.
Mr. Dodaro. Sure.
Chairman Johnson. Senator Peters, coming from a
manufacturing background, I certainly understand, without a
good process, you do not have a good product. So, I appreciate
your enthusiasm. I see you are on the Subcommittee under the
Government Affairs part of this. We will stay engaged. I am
looking for low-hanging fruit. When we are passing through the
Senate, we need six Democrats joining us. We have seven on this
Committee. That is an aspirational goal. Let us find those
areas, and certainly the biggest bang for the buck, but also
just those areas of agreement. So, we are committed to doing
that and appreciate your engagement on the issue. Senator
Ayotte.
OPENING STATEMENT OF SENATOR AYOTTE
Senator Ayotte. Well, thank you for your important work. We
appreciate it. And, I think Ronald Reagan once said, there is
nothing closer to eternal life than a government program.
[Laughter.]
So, one of the things is to followup on Senator Peters'
comments, is I am not surprised that we have a low score in
terms of when it comes to duplication and overlap. In fact,
Senator Manchin and I have a bill--it is called the Duplication
Elimination Act--and I hope the Chair might consider taking a
look at that bill. Because this issue, as you have identified,
is a problem on both ends. It is the Executive Branch and it is
the Congress.
And, so, this bill would actually require the President to
submit to Congress a joint resolution to implement or reject
GAO recommendations when they are made. And, if they are
rejected, let us know why. If they are accepted, let us know
why and how we plan to do it. And then it would require us in
Congress to actually undertake an expedited review of those and
to vote on them so that we could adopt things more quickly,
because you do excellent work. GAO does excellent work and it
sits on the shelf too often. The last thing we want is to
continue funding programs that are not effective where we have
places we need resources and it is a better allocation of
resources.
So, I am hoping that might be a bill we might consider
making, but, basically, we all need a kick in the pants on
this, and with your help, I hope we can do that, because what
ends up happening, and I do not need to tell anyone here what
happens. I have done it. Offer an amendment on eliminating or
reforming one program on the Senate floor in an appropriations
bill, and every program has a constituency. So, even if it is
underperforming for almost every constituent it serves, that
one constituency comes to their Senator and argues for it and
here we are and nothing gets done.
Well, we need to look at the big picture here, and I know
that you are doing that and that is important, and so I am glad
to hear Senator Peters focus on this, because this is a
bipartisan issue. It is really--the Chairman, as well. And, I
thank you because the work you are doing is excellent.
I wanted to followup on the VA issue, because for New
Hampshire, on the Choice Card issue, we are getting, as a State
that is one of the States that does not have a full-service
Veterans Hospital, the Choice issue in the veterans bill is
very important to my State. So, what I am hearing from people
in New Hampshire is that the third--the Choice Card is being
processed through a third-party contracting agency and that we
have veterans calling the office essentially saying that there
is not enough information being given to veterans, that
veterans are saying that they want to--if a veteran comes to
you and says, ``I want to see a particular doctor,'' that might
allow them to go and connect the veteran with the doctor. It
may or may not. That has been complicated on that end. But,
also, that if the veteran just says, ``I need this service,''
they are sort of left hanging.
And, one, I wanted to get your thoughts are, is one of the
things that was identified on the veterans' end in the report
that you issued is the provision of non-VA care. So, in a State
like mine, it is really important, because we do not have a
full-service Veterans Hospital. It is addressed in the bill.
So, we are giving our veterans access to more non-VA care. Are
you going to do further work on this non-VA care issue, because
Congress clearly shifted and expressed a preference to
introduce more opportunities for our veterans in it. It seems
to me, though, that the Veterans Administration has been really
resistant to reform. And, we talk about access in veterans
facilities, but they seem somewhat resistant in terms of
informing veterans on what their rights are on the non-VA care.
And, so, I wanted to get your thoughts on what further work
we think we need to do on this provision of non-VA care. How do
we get this, the Veterans Administration, to stop being so
resistant to reform, because Congress has clearly expressed on
a bipartisan basis it is about the veteran and we want to make
sure that we get them proper care.
Mr. Dodaro. Yes. Well, I would just say that we will do the
work necessary in the future to make sure that this issue gets
resolved satisfactorily. Debbie Draper is our expert in this
area. I would like her to speak to the issues that need to be
resolved. But, in putting this area on the High-Risk List, a
couple areas I was really troubled by. One was the fact that VA
does not followup to make sure if there is a referral that it
actually happens, and they do not have good information to know
whether it is more economical----
Senator Ayotte. Right.
Mr. Dodaro [continuing]. To give VA care or non-VA care.
Senator Ayotte. So, what makes me worried about all this is
I hear it, because for New Hampshire, really important, and the
issue is this, is that if the VA almost wants to--I mean, I do
not want them to want to undermine the access to non-VA care,
because if we have good data, we may find down the line that
this is actually a better way to serve veterans, to avoid wait
lists, and the cost efficiencies may be there. But, if they do
not follow through on this, it is almost a self-perpetuating
failure----
Mr. Dodaro. Yes.
Senator Ayotte [continuing]. Which is contrary to what
Congress wanted to happen in the reform bill. So, I appreciate
your being here.
Ms. Draper. Yes, we have several concerns. I mean, before
the Act was passed, we had done prior work looking at non-VA
care and we found that the payment to providers was slow or
often inaccurate and community providers were really unwilling
to take some of the VA patients.
But, beyond that, it was intended to improve access to
health care, the timeliness of care. However, there was no
infrastructure in place to really monitor wait times, how long
people are actually waiting to get into those community
providers. So, we do have a number of concerns and that is one
of the reasons that we put VA health care on the High-Risk
List.
Many people see this as a panacea for some of the access
problems. I think there is a lot of work that needs to be done
to make sure that the infrastructure is in place, to make sure
that people are actually getting timely care through that
system. And, I think another important point is the VA Health
Care System is a difficult system to navigate. So, now you are
introducing a second system for someone to navigate. So, it
just compounds the problems that exist or could exist.
So, we do have a number of mandates under that Act to
really look at the issue. So, we will be doing that over the
next couple of years, looking at the non-VA care.
Senator Ayotte. I think it is really important, and I hope
that you also look at, as you look at this, how embracing has
the VA been of access to non-VA care, because, again, I worry
that if the VA does not embrace giving veterans access to non-
VA care, then you can basically ensure that it really does not
give veterans that option and it really becomes self-
perpetuating in terms of the conclusions that can be drawn from
it.
And, for veterans in New Hampshire, for example, they were
on buses being shipped to Massachusetts and other places. If
they can go to a local provider in their community, which,
obviously, people have been able to do through other Federal
programs, then that, in the end, if you look at the cost
efficiencies of not paying for the transportation, of access to
care in terms of quality--now, not everything is going to fit
in that category, but a lot of care can.
So, I am hopeful, in the long term, that we are not just
allowing the VA to want to perpetuate their own system, but we
really do look at what is best for the veterans. So, I know
that you can be a very important voice on this. Thank you.
Ms. Draper. And, just one other thing. I think we have seen
a lot of variation, as we do with most other things related to
VA, about how each facility is handling the non-VA care. And,
so, that is something that, again, there are not standardized
processes, and they also rolled out this program very quickly,
so over a couple months, Choice Cards were mailed to veterans--
--
Senator Ayotte. Yes, and they were not told anything about
them and they were, like, all contacting our office. So,
information, I think, is important, as well.
I know I have gone over my time. I have a couple of
additional questions that relate to the IRS and also the Earned
Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC)
tax payments that I will submit for the record. I appreciate
all that you do. Thank you.
Chairman Johnson. Thank you, Senator Ayotte.
I think you can tell by the number of questions, by the
depth of the concern, how much, first of all, we appreciate the
fact that you are highlighting the problems in the VA, and so
you can, again, rest assured, you will have support and we will
continue to be fully engaged, which is certainly what you
mentioned in terms of the process to make sure these reforms
are implemented across your High-Risk List.
You will have full engagement by this Committee on all the
items, but in particular, that you can rest assured that the VA
system is going to be a top priority of this Committee.
Just real quick, I do want to followup on IT acquisition. I
have been meeting with the different agency heads within DHS
and I am pleasantly surprised by the repeated, I guess,
assurance that they are starting to look more at off-the-shelf
solutions as opposed to having the government specify something
and have through government contract, trying to have some IT
solution created specifically for the government, which is not
particularly efficient. Are you finding that not only within
DHS, but is that a reoccurring theme? Is that something you
support, or are there any dangers to that?
Mr. Dodaro. Well, we have long said that commercial
solutions, and even if you have to change your business process
a bit, are more efficient than customized software development.
So, that has been something we have been emphasizing over time
to agencies.
Dave Powner is our expert in the IT area and he has a good
vantage point, across government, so I will ask him to
elaborate on that.
Mr. Powner. Yes, Senator Johnson. If you look at commercial
solutions, that actually is one area you should look at instead
of building. That is buy. There are a couple of things in our
High-Risk Area that endorse that. If you look at incremental
development, if we go with smaller, quicker deliveries,
commercial solutions will be considered more heavily.
The other area is cloud computing. We need to look more at
cloud solutions and have providers actually provide those
services to agencies instead of always building them and go
more to the cloud. So, I think with commercial, both
incremental and the cloud solutions, which is emphasized in our
High-Risk Area, will be quite helpful.
Chairman Johnson. Well, thank you. Again, I am really
encouraging that. Coming from the private sector, I never liked
reinventing the wheel, so it just makes perfect sense.
Before we conclude the hearing, I do also want to just
touch a little bit on cybersecurity. Our first hearing was on
cybersecurity. That is a top priority of this Committee, is
that first step. Can you just speak to the privacy that
Americans are going to lose if we do not address this problem?
Again, part of the reason we have not been able to pass
cybersecurity legislation is because we have not been able to
provide the liability protection to facilitate the needed
exchange of information within the private sector, the private
sector to the government, and back down.
And, again, there are legitimate concerns of privacy. But,
one of the points I tried to make in the hearing and I think we
need to underscore, and I just want to get your comment on it,
if we do not take that first step, if we do not allow that
information sharing, which does allow us to share that threat
signature which can prevent attacks--it is not a panacea. It is
not going to protect everything. But, the more attacks we can
prevent, we are protecting Americans' privacy. Can you just
comment on that?
Mr. Dodaro. First of all, I think people need to understand
that the amount of information that is collected, disseminated,
and stored in the Internet by most projections is expected to
double and triple every 2 years going forward. So, you have a
tremendous amount of information available now, but the storage
capacity is--such that so much more information is going to be
collected and it is going to be shared and disseminated,
including personally identifiable information, over time.
The only way to deal with this, and we have been advocating
sharing, partnerships with public-private sector for many years
now, since we have been focused on this area, and people have
to understand that the best safeguard is continuous monitoring
and diagnostics and preventing these events from occurring.
Greg Wilshusen is our expert in this area. I will ask him
to elaborate on it. But, we will do whatever we can to help
people understand that information, more information is going
to be available. The question is how best to protect that from
getting into unauthorized hands and information sharing is a
critical component of that protection.
Chairman Johnson. I would also, quickly, like to point out
that every time you agree to the privacy statement of an
application, you are giving up so much information that is
widely disseminated in the private sector, and so people need
to also understand that.
Sir.
Mr. Wilshusen. Yes. And, I would just like to say, too,
that the need for sharing information, particularly about
actionable cyberthreat information and incident information, is
really critical to help better protect our critical
infrastructures.
A couple years ago, we did a report which identified among
our private sector partners that they said that their
expectations of the public-private partnership for protecting
critical infrastructure, that 98 percent of them indicated that
receiving actionable cyberthreat information and incident
information from the Federal Government was of a great need for
them. However, only 27 percent of the respondents to our
survey, who were the critical infrastructure owners and
operators, said that they were actually receiving that type of
information to a satisfactory degree from the Federal partners.
So, it is critical that the information sharing processes be
improved.
Chairman Johnson. One of the hangups always has been that
liability protection, and I am not the person to say exactly
what that liability protection ought to be, but I can say that
the metric is going to be if we pass something with liability
protection, the success or failure is whether or not that
information actually is shared. I mean, can you speak a little
bit in terms of the reluctance of private sector companies to
share the information the threats they really do feel in terms
of lawsuits if they share that information, and the reluctance,
as a result, to share it without really strong liability
protection.
Mr. Wilshusen. Well, certainly, I think, liability
protection is one of the areas that is an inhibitor to some of
the private sector companies. Our reviews have also shown is
that often when private sector companies do provide information
to their Federal counterparts, they do not really receive
anything in return. It is like giving this information and
there is not really getting much in return for that. So, they
are somewhat of a disincentive to provide that information.
In addition, it is not always clear. They want to make sure
that the information they do provide is sufficiently anonymized
in order to allow it to be used by government agencies in an
appropriate manner and not necessarily be shared with others.
Chairman Johnson. Let me talk about that personal
information. In terms of preventing further attacks, in other
words, that threat signature, there is really no reason to have
personal information attached to that information that is
shared, correct?
Mr. Wilshusen. I would say, generally, that would be the
case.
Chairman Johnson. But, if you actually want to solve the
crime, if you want to trace back, where did that hacking come
from--which, quite honestly, to prevent further attacks, it
would be awful nice to find out who these bad actors are, who
the criminals are--that is where you need some personal
information, potentially. How much can we limit that?
Mr. Wilshusen. Well, part of the what you would need would
be, for example, the IP addresses from which these attacks are
originating. And, so, while that may not be considered
personally identifiable information, it is a key part of trying
to trace attacks and the sources of those attacks.
Chairman Johnson. OK. Oh, Senator Carper is back. He has
returned. I have no further questions. Senator Carper.
Senator Carper. Thanks so much.
Some days are busier than others. This is a day where, when
my train finally got here, I had the opportunity to participate
with you and Senator Johnson and others in a press conference
announcing the updated list the High-Risk List. And then we
have almost simultaneously a markup and we are voting on
legislation, part of which I authored, in the Finance
Committee, and defending, and the Environment and Public Works
Committee is having a hearing as we speak on clean air
legislation, which is very important to my State, which is
threatened by rising seas, and this important hearing. So,
there is a lot going on. People from Delaware want to see me.
And, so, I apologize for being in and out.
People sometimes say to me, I do not know if they say to
Ron, but they say, ``Can we come to Washington and meet with
you?'' And, I say, my life here is frenetic. Why do we not meet
in Delaware? I go there every night. But, thank you for bearing
with us.
I want to ask you a question about the Federal workforce,
but before I do, let me preface it by making this observation.
One of the pieces of cybersecurity legislation that this
Committee adopted, reported out, and was ultimately signed into
law by the President was one that strengthens the ability of
the Department of Homeland Security to hire people, well-
qualified people, to better enable them to help defend not only
the Federal dot-gov world, but also to help businesses, the
private sector and others, to defend their personally
identifiable information, their intellectual property, and to
give the Homeland Security Department actually the ability to
do some of the hiring and retention for employees that they
have not been able to do.
When I was Governor of Delaware, we used to lament the fact
that on IT projects, we would hire people to work in the IT
world for us, train them, they would become better and more
proficient, and then they would get hired away. And, the same
kind of thing actually happens with the Department of Homeland
Security with their cyber warriors and they have asked for the
tools to enable them to hire good people, retain people, and we
have done that, and I am pleased the President has signed that.
It is one of three or four pieces of legislation that has
actually come through this Committee, signed into law last
year, that will strengthen our cybersecurity.
But, with respect to the Federal workforce, as your report
highlights, there are gaps in mission critical skills in the
Federal workforce and they have significant impact on many of
the high-risk issues. Unfortunately, efforts to identify and
address current and emerging critical skill gaps have been slow
and not fully successful. Addressing these gaps needs to be a
priority, given their impact on so many important issues facing
our country.
Let me just ask what strategies you think have been most
successful. What strategies have been most successful in
identifying and addressing those skill gaps, and how can we
help to ensure that the Office of Personnel Management--and
other agencies, too--are using the best strategies and giving
this issue the focus that it deserves?
Mr. Dodaro. First, I think the efforts need to recognize
the skill gaps. I mean, we have pointed out this to a number of
agencies and it is almost like they are not identifying them
proactively on their own as much or using available authorities
for retention and recruitment that could be used in the
process. So, the first thing is sort of an awareness they have
an issue, and also planning ahead for the future to be able to
do this. At the same time you have critical skill gaps, you
also have succession planning problems throughout the Federal
Government because of the retirement of the Baby Boom
generation. So, you have a dual problem that needs to be dealt
with.
Chris Mihm is our expert in these areas. I will ask him to
elaborate on some specific best practices. But, this area
worries me as much as any on the list because it really goes to
the heart of the government's ability to effectively function,
and you cannot do it without the right people, whether you are
talking about petroleum engineers and making sure we are
getting our right oil and gas estimates, cost estimating
expertise at NASA, the right people in a lot of these different
departments and agencies, cybersecurity you mentioned. So, it
is a real critical issue. I am glad that you asked the
question.
Senator Carper. All right. Thank you.
Mr. Dodaro. Chris.
Mr. Mihm. Thank you, Senator. I agree very much with the
preface of your question, that many of the High-Risk Issues
that we find, a root cause of that is a critical skills gap in
agencies. You had a discussion this morning about the problems
over at VA. One of the five areas that you have heard about is
a skills gap issue associated with training of staff over
there. Skills gaps are certainly a big part of the acquisition
area, in the acquisition workforce, notwithstanding an awful
lot of attention that Congress and other agencies have given to
that. The IT area, as you referenced in your question.
When we see the successful efforts to get at this, it is
actually the two things the Comptroller General just mentioned.
First, it is heavy use of data analytics. There is a wealth of
Federal personnel information that is in our personnel files
that is not being effectively mined. We talk all the time about
big data. One of the big data things that we are not
effectively exploiting is Federal personnel information,
stripping out all the PII, of course. But, it can tell about
career paths and training and development and exactly what are
the succession planning challenges that an agency should be
expecting. So, mining this big data that is out there on
Federal personnel is one of the first key steps.
The second, as the Comptroller General also mentioned, is
really effective strategic human capital planning. All too
often in agencies, we go in and they seem to have a succession
planning approach that goes under the very inelegant name of
what is called ``truck sensitive,'' meaning if a truck hit the
person, they know who is next in line. They are not thinking
very far----
Senator Carper. I like that, truck sensitive.
Mr. Mihm. Well, unless you are the one that is being hit
on.
Senator Carper. Senator, what did you get out of your
hearing today? Well, truck sensitive.
Mr. Mihm. Well, here to contribute.
Senator Carper. Among other things. [Laughter.]
Mr. Mihm. Well, but they are not thinking, what are the
knowledge and skills that we are going to need to be effective
5, 10, and even 15 years in the future. We need to start
recruiting on that now. We need to start training based on
those skills now. We need to start developing those skills now.
We cannot have a government where the working assumption is,
the key to our future success is to be more like we are today.
Many of the personnel systems that we have, certainly the human
capital planning systems, seem to be implicit on that, is that
if we just hire the same people that were just like us, we are
going to be successful in the future. That is not going to be
workable in the context that we face today.
Senator Carper. All right. Thank you.
Last question and I will make it real quick and I will ask
for a short answer. This year's High-Risk Report discusses
improvement in a number of High-Risk Areas. We are grateful for
that. Unfortunately, no issues, I think, were removed from the
list from last year. Are there issues on the list that you
think are within striking distance of being removed from the
list, maybe, by 2017? And, for those issues, are there any
things that come to mind that you think are the final reforms
that are needed? Just touch on one or two, if you would.
Mr. Dodaro. Sure. I am very pleased with the progress that
we have made working with NASA on their acquisitions area. The
big challenge now is to get as many people trained up as
possible in their cost estimating and using Earned Value
Management techniques and issues.
The big hang-up we have had with NASA is to agree on an
approach to evaluate the design sophistication of their
technology and the stability of it early in the process, before
it develops along time, and they have implemented that for a
number of their smaller projects. The big issue will be, can
they extend that on their big major projects, like the James
Webb telescope, the Space Launch System, the Orion capsule. So,
we have been working with them. But, they have met, right now,
three of the five criteria and they have top-level attention.
They have a good plan. The question is whether they can execute
over a period of time.
I also believe the Department of Homeland Security is
within this if they stay the course in those areas. They really
have to improve their acquisition area, though. I am really
concerned about that. That is one that they have been late in
implementing. And, they have to improve their internal controls
environment and deal with their morale issues over there. I
mean, those are three. You need a workforce that is more
engaged and feeling better about themselves to be successful
over a period of time. You cannot have the situation that they
have right now and be successful. No business would be
successful with that level of dissatisfaction and no government
agency will, as well. But, so, there are challenges there in
those areas.
So, those are two that I would mention off the top of my
head that are successful and, I think, doable within a
reasonable period of time.
Senator Carper. Good. Mr. Chairman, I would just say that,
in closing, what Gene has said reminds me oh how important the
work is we have done to try to vet and clear and send on to the
Senate the leadership team that the President has asked for and
Jeh Johnson has asked for in that Department. There is one more
that we are working on, a fellow named Russ Deyo, who we have a
lot of respect for. He has been nominated for the No. 3
position there, for management, and it is critically important
that he be there.
I will close with--you mentioned NASA, and Mr. Chairman,
you may have heard this story, and Tammy, you may have heard
this story. A friend of mine was going through visiting NASA
one night. Most of the people had left and gone home for the
day. This one guy was still there working, and he was the
janitor. And my friend said to him, ``What do you do here? What
is your job?'' And, the man said, ``I am helping to put a man
on the moon.''
The folks that are working at NASA to help make sure that
they cleanup their performance with respect to high-risk, they
are helping to put men and women not on the moon, but all over
the galaxy and to do good things for our country. So, that is
kind of making it real. Thanks so much.
Chairman Johnson. Well, we certainly share that commitment
to make sure the agencies have the best people working for
them, and I continue--I have said this repeatedly--I am very
impressed with the people who work for the Federal Government.
Senator Baldwin.
Senator Baldwin. Thank you, Mr. Chairman, Ranking Member. I
did not expect to have a chance to return from the Budget
Committee, but, indeed, I am here, and I appreciate the chance
for another opportunity to ask a question that I was going to
submit for the record.
GAO found that local VA facilities are carrying out
processes inconsistently, including those dealing with the
provision of medical care. A GAO report from November 2014
found that about 10 percent of veterans who received health
care services through the VA were diagnosed with major
depressive disorder, and of those, 94 percent were prescribed
an antidepressant. VA policy states that antidepressant
treatment must be consistent with the VA's current clinical
practices guideline. However, the GAO's review of medical
records identified deviations from those guidelines for most
veterans reviewed, and I will quote the report now. ``As a
result, VA does not know the extent to which veterans with
major depressive disorder who have been prescribed
antidepressants are receiving care as recommended in the
clinical practice guidelines and, whether appropriate actions
are taken by VAMCs to mitigate potentially significant risks to
veterans.''
In other words, the VA does not know if veterans with
severe mental illnesses are getting the correct care. This is
completely unacceptable, and I am extremely concerned that the
VA may have a similar blind spot regarding the appropriate
standard of care for mental health patients at the Tomah VA, as
I have outlined earlier today.
Indeed, in a tragic example last August, former Marine
Jason Simcakoski died as an inpatient at the Tomah facility
from mixed drug toxicity. At the time of his death, he
reportedly was on 15 different prescription drugs, including
antipsychotics, tranquilizers, muscle relaxants, and opioid
painkillers. There are serious questions as to whether Mr.
Simcakoski was receiving the correct standard of care, and your
reports would indicate that the VHA's mental health treatment
programs, including the drugs prescribed to patients, are
deeply flawed.
So, I would love it if you could take a moment to explain
these findings from the November 2014 GAO report in further
detail and provide recommendations regarding how the VHA can
fix this problem as soon as possible.
Mr. Dodaro. Debbie.
Ms. Draper. Sure. We looked at a sample of medical records
from six different VA Medical Centers and we did find exactly
what you had talked about, and I think this really still gets
at the issue of why we are putting VA Health Care on the High-
Risk List. There are issues around oversight and
accountability. Training is an issue, looking at how practices
play out at the local level. Again, there are inconsistent
processes and ambiguous policy.
So, in this report, we did make a number of recommendations
to VA, and one was to implement processes to review the data
and assess deviations from recommended care, because it was a
large number of the records that we reviewed, they deviated
from the clinical practice guideline, and that included things
like a necessary initial review of the situation and then a
followup review. Those were not conducted as they were outlined
in the clinical practice guideline.
We also made recommendations--because in that same report,
we looked at the template that was used to complete information
about suicides and that information was also found to be
incomplete. So, what happens is that it really diminishes VA's
ability because they do not have complete data when they
develop processes or initiatives on suicide prevention. So, we
made a number of recommendations related to ensuring the
completeness of that information, as well.
Chairman Johnson. Thank you, Senator Baldwin.
Mr. Dodaro, again, thank you and all of the associates from
the GAO that have come here and provided some good information
for all your good works. You can tell by the level of
attendance at this hearing, you can tell by the level of
engagement--it might be an overstatement, but this is this
Committee's favorite agency. You do so much good work, and we
truly appreciate that.
From my standpoint, one of the major take-aways, of course,
is we are going to be supportive of making sure the
recommendations of the VA get implemented as quickly as
possible. But, also, we are looking at what we can do to
develop a process to ensure implementation of as many of your
recommendations, or all of your recommendations, across the
agency. So, we want to work very closely with you on that
process.
I was handed an interesting little fact. I talked about how
you actually were suffering budget cuts. I guess last year, GAO
had the fewest number of employees since World War II. Now, the
Federal Government has kind of grown a little bit since World
War II, so I think we would like to give you some more
resources and some more associates to continue your good work
and expand it so we can implement your recommendations.
So, again, thank you for your testimony. Thank you for all
your good work.
This hearing record will remain open for 15 days, until
February 26 at 5 p.m., for the submission of statements and
questions for the record.
Senator Carper. Mr. Chairman, just one quick closing
comment. If you read the Preamble--in fact, we all learned it
as kids in school, the Preamble to the Constitution--and one
part of it says, ``In order to form a more perfect Union''--
``In order to form a more perfect Union.'' It does not say,
``In order to form a perfect Union,'' but it does say, ``In
order to form a more perfect Union.''
What you and the folks that are sitting there behind you in
the front rows of this hearing room are trying to do is to help
us form a more perfect Union. We know we will never be perfect.
But we strive for perfection, because we know everything that
we do, we can do better.
This is a team sport. You are critical members of the team.
We like to think that we are, as well. Others within the
agencies spread across the government, the President, OMB, we
are all members of the team, and it is important that we pull
together in the same direction, because if we do, some amazing
things can happen. In fact, they already have, and we need more
of that. Thank you so much.
Mr. Dodaro. Thank you very much.
Chairman Johnson. Thank you, Senator Carper.
In manufacturing, good operations always engage in
continuous improvement. GAO helps the government continuously
improve, so, again, we thank you.
This hearing is adjourned.
[Whereupon, at 12:01 p.m., the Committee was adjourned.]
A P P E N D I X
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