[Senate Hearing 114-414]
[From the U.S. Government Publishing Office]
S. Hrg. 114-414
IMPROVING THE EFFICIENCY, EFFECTIVENESS, AND INDEPENDENCE OF INSPECTORS
GENERAL
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HEARING
BEFORE THE
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 24, 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 D'Adamo Singer, Deputy 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
Jonathan M. Kraden, Minority Senior Counsel
Peter P. Tyler, Minority Senior Professional Staff Member
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 Baldwin.............................................. 17
Senator Peters............................................... 19
Senator McCaskill............................................ 22
Senator Booker............................................... 25
Senator Ayotte............................................... 28
Prepared statements:
Senator Johnson.............................................. 39
Senator Carper............................................... 41
WITNESSES
Tuesday, February 24, 2015
Hon. Michael E. Horowitz, Inspector General, U.S. Department of
Justice........................................................ 4
Hon. Steve A. Linick, Inspector General, U.S. Department of State 6
Hon. John Roth, Inspector General, U.S. Department of Homeland
Security....................................................... 8
Hon. Patrick P. O'Carroll, Jr., Inspector General, U.S. Social
Security Administration........................................ 10
Alphabetical List of Witnesses
Horowitz, Hon. Michael E.:
Testimony.................................................... 4
Prepared statement........................................... 42
Linick, Hon. Steve A.:
Testimony.................................................... 6
Prepared statement........................................... 50
O'Carroll, Hon. Patrick P., Jr.:
Testimony.................................................... 10
Prepared statement........................................... 76
Roth, Hon. John:
Testimony.................................................... 8
Prepared statement........................................... 59
APPENDIX
FBI Statistics submitted by Senator Booker....................... 82
Responses to post-hearing questions for the Record:
Hon. Horowitz................................................ 85
IMPROVING THE EFFICIENCY,
EFFECTIVENESS, AND INDEPENDENCE OF INSPECTORS GENERAL
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TUESDAY, FEBRUARY 24, 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, Ayotte, Carper, McCaskill,
Baldwin, Booker, and Peters.
OPENING STATEMENT OF CHAIRMAN JOHNSON
Chairman Johnson. This hearing will come to order.
Senator Carper, Inspectors General (IGs), we certainly want
to welcome you and thank you for your thoughtful testimony that
was delivered well in advance of this hearing, which was very
helpful.
In preparing for this hearing, it was interesting, because
working with Senator Carper, we have issued a mission statement
for this Committee. It is simple: to enhance the economic and
national security of America. But, within that, we have also
listed a lot of priorities in terms of what this Committee is
about. Our third priority under the Governmental Affairs
section of this Committee was to identify, reduce, eliminate
duplication, waste, fraud, and abuse within government, and,
obviously, when you take a look at the IGs' authorization
language, that is really what you are about.
Two weeks ago, we held a hearing with the Government
Accountability Office (GAO), and at that hearing, I said,
particularly for this Committee, that agency is one of our
favorite agencies, not to slight you gentlemen, because within
the agencies, through the departments, certainly the Offices of
Inspector General (OIG) are just crucial for our mission and
for really accomplishing something we all agree on. I do not
care whether you are Republican or Democrat, whether you are a
big government person or somebody who is a little bit more
toward limited government, what government we have we all want
it to be as efficient and as effective as possible, and that is
certainly the role that you play within your departments and
your agencies.
In the GAO hearing, just in 2 years, the recommendations
that GAO had made resulted in about $40 billion worth of
savings, and in the course of the hearing, as we were hearing
additional recommendations, just a back-of-the-envelope
calculation showed there were about $100 billion worth of
potential savings there. And, looking through your testimony,
it is looking also like, with your efforts, we are saving
hundreds of millions, if not billions, of dollars, as well. So,
this is, I think, from my standpoint, an important hearing.
We certainly want to make sure that the Offices of
Inspector General remain independent, that you have full access
to the information that is required, and we are committed to
helping any way we can legislatively. I know Senator McCaskill
and Senator Grassley have been working on an Inspector General
reform bill. I want to be fully supportive of that. I think we
are looking at, hopefully, introducing that later this week
with an awful lot of input from this hearing. So, this is very
timely. We are going to want to use your testimony and your
advice in terms of how we can craft that. I am hoping that
Senator Carper will be a willing partner in that, as well.
Chairman Johnson. And, speaking of Senator Carper, I would
like to turn it over for your opening comments.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. Thank you very much, Mr. Chairman. Thanks
for pulling this together, and our thanks to each of you for
joining us.
It is especially nice to see John Roth. How many days have
you held your post now? Are you up to a year yet?
Mr. Roth. Not quite a year yet, Senator. Thank you.
Senator Carper. All right. I look forward to catching up
with you and seeing how it is going. But, thank you all for
being here.
I said to Michael, if he keeps showing up as often as he
does, we are going to have to put him on the payroll, because
he is one of our more faithful witnesses and valued, as well,
as you all are.
The Chairman has mentioned our interest in working with
GAO. I have a statement I want to enter for the record.\1\ I
will just say this. The Chairman has heard me say this to him.
Senator Baldwin has heard me say this. And, I do not know if
our colleague from Michigan has heard me say this, but when Dr.
Coburn and I for years led the Subcommittee on Federal
Financial Management, we learned how to leverage the
effectiveness of a small Subcommittee by working with the full
Committee.
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\1\ The prepared statement of Senator Carper appears in the
Appendix on page 41.
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And, then we learned how to leverage our effectiveness
further by working with the Office of Management and Budget
(OMB) and by working with GAO. And, then we figured out, maybe
we should work with the IGs, and we learned how to do that.
And, then we learned how to work with nonprofit organizations
that have a real interest in more efficient operation of our
government. And, by doing all of that, we were able to
accomplish a good deal, sometimes just by writing a letter,
sometimes just by announcing a hearing, sometimes by just
making a phone call, threatening to make a phone call,
introducing a bill. You name it, we can get things done.
But, we see you very much as our partners in this and part
of a, really, a good team. The key here is for all of us to be
pulling in the same direction, and part of the purpose of this
hearing is to find out how we are doing in that regard and are
there some things that we need to do legislatively, or maybe
with a phone call or a letter, that would enable you and the
people that work with you and your respective teams across the
Federal Government, would enable you to be more effective in
your work and more satisfied in your work.
But, the people of America are counting on us, and as the
Chairman says, there are a lot of things people do not agree
much on, but this is one they do. And, I from time to time talk
to folks who say to me, ``I do not mind paying taxes. I just do
not want you to waste my money.'' Or, ``I would be willing to
pay more taxes. I do not want you to waste my money.'' Nobody
wants us to waste their money. And, part and parcel of what you
help us do is to reduce that as best we can. And, we can always
do better, but today's hearing will enable us, hopefully, to do
better.
Thank you all.
Chairman Johnson. Thank you, Senator Carper.
I also have a formal statement. We will enter both of those
in the record.\1\ Without objection, so ordered.
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\1\ 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 if you would all rise and 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. Horowitz. I do.
Mr. Linick. I do.
Mr. Roth. I do.
Mr. O'Carroll. I do.
Chairman Johnson. Thank you.
I will introduce you right before you testify, so we will
start out with Michael Horowitz. He is the Inspector General
for the Department of Justice (DOJ) and Chairs the Council of
the Inspectors General on Integrity and Efficiency (CIGIE)--one
of my favorite acronyms, by the way. Prior to joining the
Inspector General Office, Mr. Horowitz had a decorated career
as a Federal Prosecutor in the Criminal Division of the
Department of Justice and in private practice at Cadwalader,
Wickersham and Taft.
Mr. Horowitz, we look forward to your testimony.
TESTIMONY OF THE HONORABLE MICHAEL E. HOROWITZ,\1\ INSPECTOR
GENERAL, U.S. DEPARTMENT OF JUSTICE
Mr. Horowitz. Thank you, Mr. Chairman, Senator Carper, and
Members of the Committee. Thank you for inviting me to testify
today, and thank you for the Committee's bipartisan support for
Inspectors General.
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\1\ The prepared statement of Mr. Horowitz appears in the Appendix
on page 42.
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Effective and independent oversight has never been more
important, but to conduct that oversight, an IG must have
timely and complete access to agency records. This is an issue
of utmost importance, as evidenced by the letter signed by 47
Inspectors General in August 2014 strongly endorsing this
principle.
The IG Act could not be clearer. Inspectors General are
entitled to complete, timely, and unfiltered access to all
documents and records within the agencies' possession. Delaying
or denying access imperils an IG's independence, impedes our
ability to provide effective and independent oversight, and
erodes the morale of the dedicated professionals that make up
our staffs.
My office knows these problems all too well. In particular,
the Federal Bureau of Investigations (FBI) continues to take
the position it first raised in 2010, that the IG Act does not
entitle my office to access to certain records in the FBI's
possession, such as Grand Jury, Title III electronic
surveillance, and Fair Credit Reporting Act information.
In May 2014, the Department's leadership asked the Office
of Legal Counsel (OLC) to issue an opinion addressing the FBI's
legal objections. However, 9 months later, we are still waiting
for that opinion. I cannot emphasize enough how important it is
that OLC issue its opinion promptly, because the existing
process at the Department undermines our independence and
essentially assumes the correctness of the FBI's position. The
status quo cannot continue.
We appreciate the strong support from Congress in trying to
address these issues. In December 2014, a provision was
included in the Appropriations Act, Section 218, which
prohibits the Justice Department from using appropriated funds
to deny my office timely access to records unless in accordance
with an expressed limitation in the IG Act. While the law only
recently went into effect, it is clear it has had a positive
effect with some components.
However, the FBI maintains its contrary legal position to
this day. As a result, it is continuing its costly, wasteful,
and time consuming process of reviewing documents responsive to
our requests to determine whether it can produce them to us. As
we are directed to do by Section 218, we have now recently
reported in three instances, including whistleblower cases,
where the FBI's process has been inconsistent with the
provision of Section 218.
It is long past time to resolve this legal dispute. The
FBI's position contradicts the clear intent of the IG Act,
Congress's intent when it created our office, the FBI's and the
Department's practice prior to 2010, where it frequently
provided the very same categories of information it is now
claiming it cannot provide us with, and two legal decisions by
Federal District Judges finding that, in fact, we, the OIG, are
entitled to access Grand Jury information.
We remain hopeful that OLC will conclude that the IG Act
entitles my office to access all records in the Department's
possession. However, should the OLC decide otherwise, I would
be pleased to work with the Committee to develop an appropriate
legislative remedy.
Let me briefly mention a few areas where the ability of
Inspectors General to conduct strong and effective oversight
could be enhanced.
One such area is the capacity of Inspectors General to
obtain testimony from former agency employees, contractors, and
grant recipients. While the IG Act empowers us to subpoena
records from individuals, we cannot require them to testify,
even if they have critical evidence. While I believe any such
authority should include protections to ensure it is used
appropriately and only when necessary and does not
inadvertently impair Justice Department prosecutions, I am
confident such protections can be developed while also
empowering Inspectors General to carry out their
responsibilities.
Another area where strong and effective Inspectors General
oversight could be enhanced is by enabling us to more
efficiently obtain and match readily available information that
we already have access to in furtherance of our efforts to
combat waste, fraud, and abuse. My colleague, Inspector General
O'Carroll, will address this issue further when he discusses
the need to address the Computer Matching Act limitations that
we face.
We also need to address concerns that have been raised
relating to the work of CIGIE's Integrity Committee, including
with respect to the timeliness of its work and the transparency
of its efforts. Inspectors General must maintain the highest
levels of accountability and integrity, and as Chair of the
Council of Inspectors General, I will make it a top priority to
improve the procedures of the Integrity Committee.
Finally, I would like to note that there are currently many
vacancies in the Inspector General community. As this Committee
has recognized previously, Acting Inspectors General and career
staff carry on the work of the offices during a vacancy and
they do it with the utmost of professionalism. However, a
sustained absence of confirmed leadership is not healthy for
any office. On behalf of the Inspector General community, I
would encourage swift action with respect to selecting and
confirming candidates for current and future vacant Inspector
General positions.
In conclusion, I look forward to working with this
Committee to ensure that Inspectors General continue to be
empowered to provide the kind of independent and objective
oversight for which they have become known and for which the
taxpayers deserve.
I would be pleased to answer any questions the Committee
may have.
Chairman Johnson. Thank you, Mr. Horowitz.
Our next witness is Steve Linick. He has been the Inspector
General for the Department of State and the Broadcasting Board
of Governors (BBG) since September 2013. I would note that was
a position that was held vacant for quite some time, correct?
Prior to his appointment, he served as the first Inspector
General of the Federal Housing Finance Agency. Mr. Linick.
TESTIMONY OF THE HONORABLE STEVE A. LINICK,\1\ INSPECTOR
GENERAL, U.S. DEPARTMENT OF STATE
Mr. Linick. Thank you, Chairman Johnson, Ranking Member
Carper, Members of the Committee. Thank you for inviting me to
testify today regarding the work of OIG at the Department of
State and the Broadcasting Board of Governors.
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\1\ The prepared statement of Mr. Linick appears in the Appendix on
page 50.
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I have had the privilege to lead the OIG and its talented
staff for the past 17 months. This OIG differs from others in a
number of respects.
First, OIG's focus is on U.S. Government operations
worldwide, involving more than 72,000 employees in 280 overseas
missions. This is in addition to OIG's oversight of the
Department's and BBG's domestic operations.
Second, OIG has historically and as required by law served
as the Department of State's inspection arm. We have highly
experienced inspectors who inspect domestic and overseas units
around the world. The reports of these inspections, which focus
on issues ranging from security to leadership, are highly
valued within the Department and the larger foreign affairs
community. Since the beginning of my tenure, we have redoubled
our efforts to focus on improving security for our people and
facilities, improving oversight of contracts and grants, and
enhancing information technology security. Let me elaborate a
bit on each.
First, protecting the people who work in the Department is
our top priority. OIG has inspected physical security at
overseas posts for years. However, since the September 2012
attacks on U.S. diplomatic facilities in Benghazi, Libya, OIG
has stepped up its oversight efforts related to security. There
is no doubt the Department has made progress in improving
overseas security. Nonetheless, challenges still remain.
Through our inspections and audit work, we continue to find
notable security deficiencies. For example, our audit of the
Local Guard Program found that firms providing security
services were not fully vetting local guards they hired to
protect our embassies, placing at risk our posts and personnel.
Also related to security, OIG is currently involved in
reviewing the Department's reported compliance with
recommendations made by the Accountability Review Board (ARB)
convened in the aftermath of the 2012 attacks in Benghazi.
Second, OIG has enhanced its efforts to oversee the
Department's management of contracts and grants, which totaled
approximately $10 billion in 2014. Contract and grant
management deficiencies, including lack of training, weak
oversight, and inadequate monitoring, have come to light
repeatedly in our audits, inspections, and investigations over
the years. They were highlighted in two recent Management
Alerts that I provided to senior management officials.
Last, we continue to be very concerned about the
Department's management of information technology (IT)
security. OIG assessments of the Department's efforts to secure
its IT infrastructure have found significant recurring
weaknesses, including inadequate controls around who may access
and manipulate systems. Vulnerabilities in the Department's
systems also affect OIG's systems, which is part of the same
network. As we noted in a November 2013 Management Alert, there
are thousands of administrators who have access to the
Department's databases. That access runs freely to OIG's IT
infrastructure and creates risks to our operations.
Since joining OIG, I have adopted certain practices to
enhance the effectiveness and efficiency of OIG's independent
oversight of the Department and the BBG. Let me take this
opportunity to briefly mention some of them.
As IGs, we work together with our Departments, contributing
to their success by assisting them in becoming more efficient,
effective, and economical. To be successful at this job, it is
important to have effective and cooperative working
relationships with Department principals, as well as open lines
of communication. To this end, I meet regularly with Deputy
Secretary Heather Higginbottom, about once a week, and
periodically with Secretary John Kerry to discuss OIG's work as
well as the most critical issues facing the Department. I also
meet with Under Secretaries and Assistant Secretaries.
In addition to meeting regularly with Department
principals, I adopted the practice of issuing Management Alerts
and Management Assistance Reports. They supplement and enhance
the impact of our audits, inspections, evaluations, and
investigations by alerting senior officials in the Department
to significant issues that require immediate corrective action.
Often, these issues are systemic or cross-cutting. To date,
senior management has engaged with us on the issues we have
highlighted and have begun to take steps to respond to our
concerns.
We have also created a new office in OIG, the Office of
Evaluations and Special Projects (ESP). This office publishes
evaluations and special projects, including some of our
Management Alerts, while complementing the work of OIG's other
offices. For example, we are currently undertaking a joint
review with the Department of Justice OIG of a number of
shooting incidents in Honduras in 2012 involving the Drug
Enforcement Agency (DEA) and Department of State personnel and
resources. An attorney in this new OIG office is leading our
office's efforts to enhance whistleblower protections.
Before I was Inspector General, I spent many years as a
Federal Prosecutor. One of my areas of focus was procurement
fraud. Through that work, I came to appreciate the value of
criminal and civil remedies, including suspension and
debarment, to combat such fraud. Since arriving at OIG, we have
enhanced our efforts in both our Office of Audits and
Investigations to identify and refer appropriate cases to the
Department for suspension and debarment.
Drawing on my experience as a prosecutor, I have also
initiated a program to place one or more qualified OIG
employees as Special Assistant United States Attorneys in
appropriate positions in the Department of Justice. We have
found that having knowledgeable employees in such positions
leads to quicker and more effective investigation and
prosecution of fraud cases.
Finally, I would like to close by talking about the impact
of our work. In my written testimony, I quantified some of the
financial metrics demonstrating OIG's positive return on
investment to American taxpayers. But, financial statistics do
not adequately reflect some of our most significant impacts:
The safety and security of people and the integrity of the
Department's operations and reputation. Those are key
motivators for our employees, many of whom are on the road for
long periods of time or who serve for extended periods at
dangerous locations. I am honored to serve alongside and lead
them.
In conclusion, Chairman Johnson, Ranking Member Carper, and
Members of the Committee, thank you again for the opportunity
to testify today. I take seriously my statutory requirement to
keep the Congress fully and currently informed and I look
forward to your questions.
Chairman Johnson. Thank you, Mr. Linick.
Our next witness is Mr. John Roth. He has served since last
March as the Inspector General for the Department of Homeland
Security (DHS). In addition to previous work for the Food and
Drug Administration (FDA), Mr. Roth had a 25-year career as a
Federal Prosecutor, including Chief of Staff to the Deputy
Attorney General. Mr. Roth.
TESTIMONY OF THE HONORABLE JOHN ROTH,\1\ INSPECTOR GENERAL,
U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. Roth. Chairman Johnson, Ranking Member Carper, and
Members of the Committee, thank you for inviting me here today
to testify.
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\1\ The prepared statement of Mr. Roth appears in the Appendix on
page 59.
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For an IG, independence is the coin of the realm. The GAO's
yellow book describes it as the State of mind that allows an
individual to act with integrity and exercise objectivity and
professional skepticism. Professional skepticism is an attitude
that includes a questioning mind and a critical assessment of
evidence, and in a nutshell, that is my job. I am a
professional skeptic. I act as an agent of positive change
within the Department by having the freedom to be independent
and objective. I am here to ask the difficult questions, to
challenge the Department I work for to be better, to be more
efficient, to ensure rigor in Departmental operations, and to
look for and eliminate waste.
I am independent of the Department while, at the same time,
part of it. The Inspector General Act gives me significant
authority and substantial protection from undue influence. My
salary is fixed by statute and I can be removed only by the
President. I have, with very few narrow exceptions, the
authority to conduct any investigation or any audit and write
any report concerning Department operations that, in my
judgment, is necessary or desirable. The law gives me the
absolute right to protect the identity of whistleblowers, upon
whom I depend to expose waste, fraud, and abuse. I have control
over my own personnel and operations and employ my own counsel.
Yet, for all the substantial power and protection the
Congress has given me, it still requires the men and the women
within my office to have the dedication and the courage to
ensure compliance with the Act, and it requires the Secretary
to understand the very valuable role that the Inspector General
plays.
In addition to independence, transparency is critical to my
work. The Act contemplates that my reports, to the greatest
possible extent, are available to the public. Openness and
transparency are critical to good government. The Department
sometimes raises objection to certain information in our
reports, marking parts of our reports as ``For Official Use
Only,'' or ``Law Enforcement Sensitive.'' These designations
are not recognized in the law, and in my experience, they risk
being used to attempt to avoid revealing information that is
embarrassing to the agency involved.
That being said, we, of course, need to ensure that
information that could cause harm to DHS is not revealed. In
those situations, I use my discretion to redact information
from public reports. To assist me in exercising that
discretion, I require requests to come from the component or
agency head, coupled with an articulation of the actual
specific harm that would result from such a disclosure. Too
often, the fear of harm is highly speculative and fails to
balance the need for transparency against the risks of
disclosure.
Recently, we have had issues with the Transportation
Security Administration (TSA) designating material as
``Sensitive Security Information (SSI), within a report
concerning the IT operations at JFK Airport in New York. The
designation of SSI is in the absolute and unreviewable
discretion of the Administrator of TSA and improper disclosure
of it by me would carry significant administrative and civil
penalties. What was especially troubling about our episode, in
my view, was the length of time it took--almost 6 months--to
get resolution of this issue, and the fact that my security
experts who wrote the report were confident that the
information that they wanted to publish did not harm IT
security, and that similar information had been published only
months earlier in previous audit reports without objection.
The SSI designation is a useful tool to protect sensitive
information in a manner that gives TSA flexibility. However, I
am worried that SSI can be misused, as I believe it was in this
circumstance, to prevent embarrassment. We intend to conduct a
formal review of TSA's stewardship of the SSI program and
report those results to the Secretary and the Committees with
jurisdiction over it.
A brief word about resources for the OIG. The budget for
our office is relatively tiny. We represent just 0.23 percent
of the DHS budget, yet we have an outsized impact on the
operation of the Department. For every dollar that is given to
the OIG, we return more than $7 in savings, as reflected by our
statutory performance measures. This number, in fact, vastly
understates our performance, because much of our best work--
audit and inspections report that shed light on problematic
programs, for example--do not carry with it a cost savings, yet
the value to the American taxpayer is incalculable.
Unfortunately, our budget has actually shrunk since fiscal
year (FY) 2012. As a result, our onboard strength has decreased
by about 15 percent. We have been forced to cut training to
less than a third of what we have deemed to be appropriate,
reducing our ability to do our job and decreasing morale. And
yet, at the same time, DHS's authorized workforce has grown by
about 5,000, representing a 2.3 percent increase. So, the
Department continues to grow, but the Inspector General's
Office, the one entity that is charged with saving money and
creating efficiency, shrinks. This, I believe, represents a
false economy.
Finally, I should discuss briefly the shutdown of DHS,
which will occur this Friday unless Congress acts. For my
office, this means the oversight function will come to an end.
We will stop work on all our audits and reviews except for a
few auditors who are working on FEMA's use of the Disaster
Relief Fund, and our special agents in the field who are
engaged in criminal investigations. Those who stay will be
required to work, but be in unpaid status. In that regard, they
are like the majority of Homeland Security employees. We will
ask them to protect our borders, patrol our seas, ensure the
security of the airplanes we fly on, protect the President,
keep us safe from those who have sworn to do us harm, but we
will ask them to do so without an assurance of when their next
paycheck will come. Additionally, during this time, as it has
been since October, the Department will be deprived of the
budget stability necessary for coherent management of DHS
programs and operations.
Mr. Chairman, that concludes my prepared statement. I, of
course, welcome any questions.
Chairman Johnson. Thank you, Mr. Roth.
Our next witness is Patrick O'Carroll, Jr. He has been the
Inspector General for the Social Security Administration (SSA)
since 2004 and served a number of years prior to that in the
office. Mr. O'Carroll has also 26 years of service for the
United States Secret Service. Mr. O'Carroll.
TESTIMONY OF THE HONORABLE PATRICK P. O'CARROLL, JR.,\1\
INSPECTOR GENERAL, U.S. SOCIAL SECURITY ADMINISTRATION
Mr. O'Carroll. Good morning, Chairman Johnson, Ranking
Member Carper, and Members of the Committee. I want to welcome
the new Members of the 114th Congress and the new Members of
this Committee. Thank you for the invitation to participate in
this discussion.
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\1\ The prepared statement of Mr. O'Carroll appears in the Appendix
on page 76.
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In 2010, my office identified a thousand people who were on
Social Security Disability while also collecting Federal
Workers' Compensation, but without reporting that to the Social
Security Administration. We determined that the Social Security
Administration overpaid these people over $40 million.
Unfortunately, we did not have a computer matching agreement
with the Department of Labor (DOL), so SSA could not recover
those funds and we could not pursue criminal cases.
Today, I would like to highlight three tools that would
strengthen our ability to detect fraud, waste, and abuse,
report operational weaknesses or vulnerabilities, and invest in
program integrity initiatives.
First, my office has shown that data matching can be
extremely effective in identifying Social Security improper
payments. For example, our auditors matched Homeland Security
travel data against SSA records. We identified thousands of
Supplemental Security Income recipients who were outside of the
United States for more than 30 days, making them ineligible to
receive these payments. Based on the match, we estimated that
35,000 people improperly collected $150 million.
We notified SSA and made policy recommendations, but we
could not take action on specific individuals because we did
not have a computer matching agreement. The Computer Matching
and Privacy Protection Act (CMPPA) requires us to secure a
matching agreement through SSA's Data Integrity Board.
Unfortunately, the process is difficult and can take a year or
more. Thus, we undertook this Homeland Security match for
statistical purposes only, which is allowed under the CMPPA
without an agreement. But, similar to the Workers' Compensation
match I mentioned earlier, we could not forward any names to
SSA nor could we explore any criminal prosecutions.
We also have delayed a promising investigative project with
the Department of Transportation Office of Inspector General.
With a data match, we could identify licensed commercial
drivers who concealed work activity so that they could collect
disability payments. GAO examined this issue in 2008 and
referred critical findings to us, but we have not been able to
undertake this type of work without a matching agreement.
The CMPPA requirement compromises our independence and
delays time sensitive audit and investigative efforts. An
exemption to the law to permit matches related to audits and
investigations designed to identify fraud and waste would
greatly benefit the IG community and all taxpayers. A matching
agreement exemption would allow other potential projects,
including matching Social Security data against State marriage
records, Workers' Compensation data, and vehicle registration
databases. These and other data can help our office and SSA
identify fraud and prevent improper payments.
The Health and Human Services (HHS) and its OIG are already
exempt from data matches designed to identify fraud, waste, and
abuse. It makes sense to extend this exemption to all OIG data
matches for the same purpose.
Additionally, an exemption to the Paperwork Reduction Act
(PRA) for general audits or investigations would benefit the IG
community. Because we oversee a benefit program, our audits
require us to survey beneficiaries and other members of the
public. Often, we want to collect identical information from
many individuals. OMB has indicated that these audits are
subject to approval under the Paperwork Reduction Act. However,
this process can take several months, which hinders our ability
to complete audits on critical issues and provide timely
responses to our stakeholders. A PRA exemption for general
audits would improve our ability to be responsive to you and
allow us to identify more improper payments and fraud.
For example, we would like to interview representative
payees serving vulnerable beneficiaries who have been overpaid
many times. We want to determine if payees are aware of and
understand SSA's reporting requirements. With PRA exemption, we
could complete this audit without delay, to determine if SSA
needs more outreach to the representative payees, and make
payees more accountable for the funds that they oversee.
In my role at Social Security, I have long been an active
member of CIGIE. My colleagues here today, and all CIGIE
members, work to address common challenges and share oversight
best practices. As this Committee knows, my office has taken a
lead role for CIGIE in measuring agency compliance with recent
legislation and mandates to reduce Federal improper payments.
To strengthen our ability to identify and prevent improper
payments, we support the establishment of a self-supporting
fund for integrity activities. We have proposed to make
available to SSA and our office a portion of the actual
collected overpayments. These funds would be used only for
integrity activities that would provide a significant return on
investment.
An integrity fund could prove effective for deceased payee
fraud investigations, a significant workload for our special
agents. Last year, we investigated over 600 people who misused
the Social Security benefits of someone who was deceased.
Criminal convictions of about 150 people generated $35 million
in recoveries and restitution. If we had an integrity fund, we
could reinvest a portion of those funds for other integrity
work.
In conclusion, skillful, independent, and timely oversight
is paramount to the integrity and efficiency of all Federal
agencies. My office has a 20-year distinguished history of
conducting effective audits and leading high-impact
investigations. However, we still face obstacles in our efforts
to promote the integrity and efficiency of SSA's programs and
operations. In sum, three specific tools can help us do our
work better and faster: a CMPPA exemption, a PRA exemption, and
an integrity fund. We appreciate this forum for our discussion
and we look forward to working with you as you consider our
proposals.
Thank you again for the invitation to testify today and I
will be happy to answer any of your questions.
Chairman Johnson. Thank you, Mr. O'Carroll.
I think as we all just witnessed here, we have four
Inspectors General, great integrity, and I just really
appreciate your thoughtful testimony.
Senator McCaskill, I did mention before you got here in my
opening comments the work you have been doing with Senator
Grassley on a bill to certainly codify some of the requests
they had, and if you want to do it right now, that is fine, or
before your question.
Senator McCaskill. I can do it before my questions, but
thank you for asking that.
Chairman Johnson. No, I appreciate your efforts on that.
There are a number of suggestions that have been made here,
some recommendations of things that we need to, I think,
legislatively provide so you can do your job. I do want to go
first to Mr. Horowitz and probably Mr. Roth about Acting IGs. I
know in terms of the Veterans Administration (VA), we have had
an Acting IG. We have had some real problems in the VA. Senator
Baldwin and I have certainly witnessed what is happening in
Wisconsin. I am concerned about that. Senator McCaskill and I
were involved in, I guess, investigations regarding the Acting
IG in the Department of Homeland Security, and we saw the
problem there.
The question I have for you, Mr. Horowitz, what is the
problem in appointing permanent IGs? In terms of the VA, it was
well known, I think it was back in November 2013, that the
permanent IG was going to retire as of December. That position
has been vacant now for basically 14 months. What is the hang-
up in terms of identifying? Is it just lack of available
individuals? Is it lack of will?
Mr. Horowitz. That is an excellent question and I think one
of the issues is simply making these positions priorities in
terms of the nominating process, the vetting process, and then
the confirmation process.
Speaking--I think you have three, actually, of us are in
agencies that have had this issue arise. My own agency, Glenn
Fine, my predecessor, announced in 2010 that he was going to be
leaving in January 2011. I was nominated in July 2011 and
confirmed in March 2012. So, even with sufficient notice, the
process took a lengthy period of time.
There are plenty of available candidates who are interested
in becoming IGs. I know from 6 weeks now on the job as Chair of
the Council of IGs, we send resumes to the Presidential
Personnel Office of interested candidates that we have looked
at and vetted, and there has to be a commitment to move these
nominations promptly.
Chairman Johnson. How many vacancies are there, and how
many people have been nominated for those positions?
Mr. Horowitz. If I recall correctly, both Presidentially
confirmed positions and designated Federal entity positions, I
believe the number is 11 vacancies, and there is one nominee
for those 11 slots pending.
Chairman Johnson. So, I think that is a problem. If there
are plenty of people that are available for the position, we
need to get those nominated, and certainly, I think, this
Committee will be dedicated to move those through the
confirmation process as quickly as possible.
Mr. Roth, you obviously got into a Department in the Office
of Inspector General where there were some real morale problems
and we had an Acting Inspector General. Senator McCaskill and
I, in our investigation of that position, certainly saw the
corrosive and the improper result of having an Acting Inspector
General that might be vying for the permanent Inspector
General. Can you speak a little bit to what you found when you
entered your office.
Mr. Roth. Well, certainly, unfortunately, or perhaps
fortunately, you are in as good a position as anyone to
understand the effect on the morale of the individuals there,
both because of the threat to the independence of the IG as
well as the appearance of the threat to the independence of the
IG. And, it really does not matter if you are independent or
not independent. Once you have lost that perception of
independence, you are pretty much done, because the only
difference between, as I like to tell Secretary Johnson, the
only difference between me and the rest of the 225,000 people
in the Department of Homeland Security is that I am, in fact,
independent and am perceived to be that way. That is the value
that we add, and once you lose that, you can never be effective
again.
Chairman Johnson. In your testimony, you used, I think, an
important word. You said ``courage.'' Can you describe an
instance of courage that was required by an Inspector General?
Mr. Roth. I think this happens all the time, and I think
you see that, for example, with Mr. Horowitz's situation with
the FBI, where this is a situation in which two very powerful
forces are at loggerheads. And, the fact that you have a
confirmed Inspector General who has all the protections of the
IG Act--that our salary is fixed, we do not get a bonus, they
cannot fire us, we can do any audit that we choose to do that
we believe is incredibly important to be able to really speak
truth to power. And, that is, in fact, part of our job.
Chairman Johnson. What type of pressure do you come under,
do Inspectors General come under, that require courage to push
back on?
Mr. Roth. Well, you have to admit, we are not very popular
sometimes, because no one likes to be audited, right. We are in
the bad news business. Oftentimes, we go in and we expose
programs that have significant waste or significant problems to
it, and we do so with a certain rigor based on the training
that our auditors receive to be able to do it in a regimented
sort of logical way. And, that is very unpleasant for the
people being audited, and, of course, there is going to be
push-back with regard to that and it is very important to be
able to simply hold your guns with regard to that.
I will say that I am fairly fortunate, because the
Secretary in my Department understands the value of the IG and
is a fairly sophisticated individual when it comes to my role
versus his role. So, I am fortunate there, but I think other
people may have some horror stories.
Chairman Johnson. Thank you. I will get to the other two. I
want to go back to Mr. Horowitz because Mr. Roth just used a
word I was going to use, ``push-back.'' In the case of the FBI
denying you access to information, is there legitimate push-
back from them? Is there a legitimate reason for their
classification? And, I will be asking across the board, whether
it is matching or some of these other areas that you need help
on. What are the legitimate reasons why there are so many
Department personnel that do push back? Specifically talk about
the FBI.
Mr. Horowitz. In the access area, we got access to
information up to 2010 in all of these categories. No law
changed in 2010. No policy changed. The IG Act stayed the same,
the Grand Jury statutes. Everything stayed the same. It was
simply a decision by the General Counsel's Office in 2010 that
they viewed now the law differently, and as a result, they were
not going to give us that information.
In the national security letter reviews that we did, we
have done a lot of national security reviews of the FBI's use
of the authorities Congress has given to them. In the middle of
our third review of the national security letter matter, which
we released last year, information we got at the start of the
review, prior to 2010, was no longer given to us after the
change in legal position, credit information. It made no sense.
And, it is, frankly, from my standpoint, inexplicable, other
than a new lawyer making a new decision about a law that had
not changed. And, it should not be allowed to stand.
There is nothing more I can do at this point, frankly,
other than having testified about seven times now and sending
the letters pursuant to the Appropriation Act to the
appropriators and to you and the other Committees that oversee
us and try and get some action. Our power comes from speaking
out publicly and hoping that there is followup and action as a
result.
Chairman Johnson. Well, hopefully, the seventh time is a
charm.
Mr. Horowitz. Yes. [Laughter.]
Chairman Johnson. With that, Senator Carper.
Senator Carper. Thanks, Mr. Chairman.
Again, our thanks to each of you for your testimony and for
your responses to our questions.
I want to first take up the issue of those agencies for
whom no permanent or Senate confirmed IG is in place. A year or
two ago, Dr. Coburn and I, along with a number of people on
this Committee, sent a letter to the President, and we said
this is a problem and it needs your attention. And, I think we
got some response, and there were a number of IGs that were
nominated subsequent to that.
But, I believe there are at least two off of that list that
we wrote to the President about some time ago that are still
situations where the IG is there in an acting position. Do you
know if that is correct?
Mr. Horowitz. I believe that is correct. There are--in each
of--in several of the open positions, vacant positions, several
IGs who have spent many months as acting, done a very strong
job, but are sitting there in acting positions for over a year.
Senator Carper. Mr. Chairman and colleagues, we may want to
do again what we did a year or so ago and keep raising this as
an issue, try to establish a sense of urgency, and I would hope
that the other colleagues on our Committee would like to join
us in doing that.
Mr. Roth, Chairman Johnson, and Senator Sasse, who is a new
Member of our Committee, were down on the Mexican border in
South Texas a couple of weeks ago, and one of the things we
heard in terms of strengthening the border, from a number of
folks who said the real key to border security is technology
and finding and deploying force multipliers to help make the
men and women on the ground, the Border Patrol and others, more
effective in their work.
One of the force multipliers that we witnessed personally,
up close and personal, were drones, and we talked a lot with
the folks there about that technology and its effectiveness and
how cost effective it is. I am not going to get into this today
in a public setting, but we very much need to somehow reconcile
the findings of your office with the needs and the perceived
needs, strongly held views, if you will, of the Department of
Homeland Security.
I hope this year we are going to take up again Homeland
Security legislation, immigration reform, I hope, border
security legislation, and there is going to be a strong
interest in deploying more assets in terms of drones. We have
to make sure that the money that we are spending, the taxpayer
money that we are spending, is cost effective. So, we need for
you to work with us. We need for you to work with the agency to
try to resolve this issue so that we make informed decisions
going forward. We will just leave it at that for right now.
Mr. O'Carroll, I once asked a member of my staff--he was
talking to me about a Death Master File (DMF), and I said, what
is the Death Master File, and he said it is a file you do not
want your name to be on, because---- [Laughter.]
Because if it is, you are dead. And, I said, well, you are
probably right. I am not ready for that yet. But, I understand
that, as you know, and you spoke to it in your testimony, a lot
of people whose names are on that file who still receive
benefits from a variety of Federal agencies, and I am led to
believe it has something to do with our reluctance at the
Social Security Administration to more broadly share that
information to other agencies who have a legitimate need for
that in terms of program integrity.
I think you touched on this in your testimony. Come back
and help me. Drill down on this with us, if you will, because
we actually passed legislation out of this Committee last year
as part of our improper payments legislation. We ran into a
brick wall over in the House of Representatives, in the
Subcommittee of Ways and Means, and I just want to get to the
bottom of this and see if we cannot avoid that brick wall and
if we cannot actually get this done this year. I think we are
leaving a lot of money--tens of millions, maybe hundreds of
millions of dollars--on the table, and it is not just
unfortunate, it is tragic. Please.
Mr. O'Carroll. Well, Senator Carper, about 2.5 million
people die every year, and that information is shared with SSA
by the States, and that is usually done electronically.
Sometimes, it is very good. Sometimes, it is not as good. And,
as you were saying, you do not want to be on that list for a
couple reasons. One is you do not want to be on the list
because you are dead. But, you also do not want to be on the
list and be alive but everyone thinks you are dead, because you
will not be able to get credit.
So, anyway, we have done a lot of work on that. We have
worked with SSA. We have kept your Committee and the Committees
on the House side informed on this. And, I guess an easy
example of where there is an issue on it is that every year,
with the amount of information coming into SSA, if a person is
not on benefits, oftentimes, that record may not be corrected
by SSA.
So, as an example, on an audit that we just did, we found
about 6.5 million people that are on SSA's records that are
over 112 years of age.
Senator Carper. How many?
Mr. O'Carroll. Six-point-five million people are on SSA's
records as alive when they are over 112 years of age.
Senator Carper. That is remarkable.
Mr. O'Carroll. I was going to say, usually a handful of
people are in that age group as it is.
So, anyway, that is a major issue. So, when the Death
Master File is released, that information on it is going to be
showing that a person who is deceased is alive. Then, fraud or
other misuse can happen with that information. So, that is one
issue on it.
The other issue is that that information is only shared
right now, or the death information that SSA has is shared with
about eight benefit-paying agencies. So, if you are not a
benefit-paying agency, you are not getting all that death
information. So, it is turned over from SSA first to the
benefit-paying agencies and then the Department of Commerce,
and the Department of Commerce then sells a public version to
the financial industry. And, when it hits the financial
industry, that is where the problems are with the accuracy. So,
if it is showing you as dead when you are alive, or alive when
you are dead, you are going to have those type of credit
issues.
Recent legislation mandates a delay in sending out the
information, so that if it is incorrect and you are alive and
you are reflected as deceased, there will be 3 years to fix it
before it goes out. Now, as it goes out immediately, you are
going to be spending a large amount of your time trying to go
to all the credit industries and explain to them that you are
alive when, because of a glitch you are on the Death Master
File.
So, anyway, we have done a lot of work on the Death Master
File. We have made a lot of recommendations. We are trying to
get SSA to share more with the Federal agencies through the
``Do Not Pay'' initiative so that they will have the most up-
to-date information. And, we have also asked SSA to extend
resources to fixing the records of those six million people
that are over 112 years of age, but SSA is saying that they are
unable to do it because they are using their resources just to
take care of people that are on benefits and that it would be a
bridge too far for them to go back and make those corrections
at this time.
Senator Carper. All right. Well, we look forward to
continuing to work with you on this. Thank you all very much.
Chairman Johnson. Thank you, Senator Carper.
The order of questioning will be Senator Baldwin, Senator
Peters, Senator McCaskill, and then Senator Booker. Senator
Baldwin.
OPENING STATEMENT OF SENATOR BALDWIN
Senator Baldwin. Thank you, and I want to thank you, Mr.
Chairman and Ranking Member Carper, for holding this very
valuable hearing.
And, I want to thank the witnesses for being here today and
sharing your insights and your time. Inspectors General are
clearly essential to the proper functioning of government, and
you and your staffs are internal auditors. You are the stewards
of taxpayer dollars, the agents of quality control, and the
enemies of waste, fraud, and abuse. But, to achieve your goals,
Inspectors General must be properly resourced as well as
provided with unfettered access to both required information
and agency officials. Inspectors General must also be empowered
to followup on findings and recommendations of their audits and
investigations. And, without an ability to compel the agency in
question to take remedial action, an IG's impact is severely
limited.
As the Chairman referenced in his opening remarks, he and I
have seen an example of this in the case of the Department of
Veterans Affairs Office of Inspector General and the Tomah VA
Medical Center in Tomah, Wisconsin. I recognize that there is
not a representative here from the VA Office of Inspector
General, but I guess I have some more general questions about
best practices but, let me just go a little bit further. I have
questions for each of the witnesses as to how each of your
offices handle issues of followup and transparency.
In the case of the Tomah VA facility, the VA Office of
Inspector General found evidence of troubling opioid
prescribing practices and recommended certain changes at the
facility and the regional level. However, the Secretary's
Office in Washington was unaware of these recommendations, and
it seems that whatever reforms and recommendations were put in
place at the local facility, Tomah, either had not been
implemented, had not been implemented effectively, or were
insufficient to address the issue.
It makes no sense to me that an IG would make
recommendations to solve problems at a local facility and then
entrust that facility solely, or with regional oversight, to
implement these changes without Federal oversight, without
oversight from its managers who may be in Washington or based
elsewhere. So, I have three questions related to this for each
of you.
If an Office of Inspector General recommends changes at a
local Federal facility, should the Federal offices in
Washington who are charged with overseeing those local
facilities be made aware of these recommendations? Second, how
do you ensure recommendations are implemented effectively? And,
third, what role do transparency and communication play in
assuring compliance? And, why do we not just go starting with
Mr. Horowitz.
Mr. Horowitz. Thank you, Senator. We regularly do followup
reviews. So, for example, we are in the middle of a followup on
the Fast and Furious matter to see if the Bureau of Alcohol,
Tobacco, Firearms and Explosives (ATF) has implemented the
recommendations that we made. We just issued our third report
on Section 215 of the Patriot Act and how the FBI has used
those authorities. I mentioned the national security letters
review. We did multiple followups of the FBI's use of those
authorities. And, in each instance, look at our prior
recommendations and made new recommendations on top of the old
ones.
We regularly make known our recommendations to leadership.
We make sure we are following up to ensure implementation. In
some cases, obviously, we initiate additional reviews, but we
do followup and, in fact, put in place a process by which we
are now periodically sending our open recommendations report to
the Deputy Attorney General and the Attorney General so they
can see how many are open and how long they have been open and
what they are about. And, we modeled that, frankly, after this
Committee's letter to us and the House Oversight and Government
Reform Committee's letter to us annually about open
recommendations so that we can make those known to the
Department's leadership.
And then, finally, in terms of transparency, we make all of
our reports, our audits, and reviews public, subject to,
obviously, classification issues. So, in some instances, we are
not able to do that, but where the law allows us to make it
public, we will make it public.
Senator Baldwin. Mr. Linick.
Mr. Linick. Thank you, Senator. You raise a good point. As
IGs, we cannot require the agencies to comply with our
recommendations. So, we can only try to persuade them to do so.
We can publish those recommendations in our semi-annual
reports. We can tell Congress and try to exert influence that
way. So, this is a difficult area for IGs.
We, too, have a followup compliance review process. We have
units in our office which do compliance followup reviews. The
problem is, the agencies can agree all they want to implement
recommendations, but the rubber meets the road when they are
actually implementing them, and sometimes agreeing with
implementing them is not the same as actually implementing
them.
We are currently doing a followup review with respect to
our report or the Benghazi situation. We actually issued a
report looking at the Accountability Review Board process. And,
we are also looking at how the agency is complying with our
recommendations, which we issued in September 2013. But, in
addition to that, the Benghazi Accountability Review Board
issued 29 recommendations which are vital to the security of
our folks overseas, and the extent to which the Department
complies with those recommendations is absolutely critical. So,
we are doing a compliance review on the Benghazi ARB reports.
It is someone else's report, but we are looking to see their
compliance on that. And, we do that in other cases where there
are critical recommendations.
The other thing I would mention is this. Another tool that
we use to ensure compliance with recommendations is our
Management Alerts. We have recently issued a number of
Management Alerts where we found recommendations were not being
followed, in part because the recommendations were narrow in
the previous reports. So, we have issued these Management
Alerts to broaden our recommendations to aim them at senior
leadership, because compliance with the recommendations has to
come from the top down. So, using Management Alerts is another
way we do that.
And, like IG Horowitz said, our reports are also public,
and the taxpayer has a right to see what we say and how the
Department is complying with what we say.
Senator Baldwin. Mr. Roth.
Chairman Johnson. To be fair to other Senators, we can come
back to that in a second round. Your time has expired, Senator
Baldwin. I would like to go to Senator Peters next.
OPENING STATEMENT OF SENATOR PETERS
Senator Peters. Thank you, Mr. Chairman, and thanks to each
of the witnesses today and your testimony, which is very
interesting.
Mr. Roth, I know you mentioned that all of you are not real
popular with the agencies, but I will say you are very popular
with this Committee. We really appreciate the work that you do,
the service you give to this country, not only saving taxpayers
money, but also making sure that the policies that are in
place, that we put in place and others, are actually followed.
So, thank you to all four of you for your work and your service
to this country.
I would like to address, in fact, one of those policies
that I think is of interest to the folks on the Committee and
that deals with homeland security generally, but Mr. Horowitz,
I would like to discuss briefly the Terrorist Watch List as
well as the No Fly List. As you know, it can be a serious
problem if an individual who should be on the No Fly List is
not on that list for some reason. We are reminded in my area in
Detroit, we had the so-called ``Underwear Bomber'' on Christmas
Day back in 2009 that was known to the U.S. Government as a
potential threat, but was not on the consolidated list.
But, it is also a problem when folks get on the No Fly List
when they perhaps should not be on that No Fly List. I am very
proud to represent a very large Arab American population. In
fact, the largest Middle Eastern population outside the Middle
East resides in Michigan, and I hear repeatedly of folks who
find themselves on this list and they are unsure why they are
on that list and it disrupts their plans dramatically. In fact,
I was at an Arab American Chamber of Commerce meeting and heard
from a number of individuals who have been disrupted and feel
that they do not have an opportunity for due process to get off
that list.
I know your office has looked into this and you have
studied that and audited that. If you have some recommendations
for this Committee as to how we might be able to deal with this
issue, because it certainly raises some civil liberties issues.
Mr. Horowitz. Senator, we have looked at the issue. In
fact, to Senator Baldwin's last question, we just completed our
fifth review of the FBI's management of the Terrorist Watch
List. There are obviously multiple agencies that deal with the
Watch List and getting people's names on the No Fly List. We
have the FBI portion of it, obviously. IG Roth has the TSA's
portion of it. And, the intelligence community has other
portions of it.
But, in our most recent audit, we found that there were
still both issues as to the FBI's cases and how they were
getting names both on the list that should be on the list and
getting names off the list that should not be on the list. And,
we addressed and have in our most recent report the public
version--there is a redacted classified version that the
members, obviously, have full access to--that shows how the
timing of the removals--speaking specifically on removals now--
has improved, but how there are still issues about how promptly
the FBI is addressing removing individuals from the Watch List.
We made a recommendation to the FBI that it evaluates further
its timeliness metrics and figures out how it can more timely
remove people from the Watch List when the cases are closed,
the reviews are closed, when they otherwise learn that those
individuals should not be on the Watch List.
Senator Peters. Great. Thank you.
And, Mr. Roth, good morning. I wanted to followup a little
bit on this, as well. I also want to say we share the same law
school, a graduate of Wayne State University in Detroit, both
undergraduate and law, so it is great to have you here in this
position here in Washington. And, so, you are certainly very
familiar with the dynamics in Michigan, as well, from being
there.
Now, I have heard complaints from Customs and Border
Protection, or that Customs and Border Protection agents have
been consistently asking some of the Muslims in Michigan about
their religious practices and affiliations as they cross the
border from Detroit-Windsor, which is a very active border
crossing, as you know. Has your office investigated some of
these complaints, and can you talk about some of your office's
investigations into racial profiling at the DHS and share what
you have found.
Mr. Roth. We have not looked at that specific issue,
Senator, but we certainly would be pleased to do so. Part of
what we do is a fairly fulsome civil rights--civil liberties
practice that we share in conjunction with the Office of Civil
Rights and Civil Liberties within DHS. It is something that DHS
takes very seriously. But, unfortunately, not having done work
in that specific area, it is difficult for me to comment.
Senator Peters. Very good.
Mr. Horowitz, back to you, your office has a number of
oversight efforts that are related to the Bureau of Prisons
(BOP). And, specifically, if you could share any findings that
might inform Congress's decisions related to the exploding
price tag. We are now spending nearly $7 billion within the
Justice Department's budget for the Bureau of Prisons. If you
could share with this Committee some of your findings or
suggestions for improving the Bureau of Prisons inmate and
custody management programs, as well as things related to
prisoner reentry, which is also a very important aspect if we
are going to reduce cost.
Mr. Horowitz. Certainly, Senator. We have done a fair
amount of work in that area. It is among our top challenges
that we have put in our two most recent top management
challenges report. As you note, it is about a quarter of the
Justice Department's budget. It is an ever-growing percentage
of the budget. And, it is beginning to crowd out other
priorities for the Department.
We have done work to look at the Bureau of Prisons handling
of its Compassionate Release Program, its handling of the
Treaty Transfer Program, both of which Congress has authorized
the Bureau of Prisons to use to deal with inmates who meet the
qualifications in those programs. We are currently looking at
the growth in the aging inmate population at the Bureau of
Prisons, which creates significant issues, including the fact
that the Bureau of Prisons is now spending $1.1 billion on
inmate health care costs. That is about 3 percent of the
Justice Department's budget is going to inmate health care, and
a growing number, as well. So, we are looking at that, as well.
On the reentry side, we have looked consistently at halfway
houses and the operation of halfway houses. We are looking and
considering how to look further at reentry, whether the
programs are, in fact, working, and what the metrics show with
regard to their success rates.
Senator Peters. Do you have adequate data to perform that
analysis, particularly when it comes to reentry programs? Are
there data sets out there that you can access?
Mr. Horowitz. That is actually one of our biggest
challenges, Senator, that you have just touched on, which is
that there is not reliable data that we have found that shows
recidivism rates for some of these programs, success rates for
education, training, drug treatment programs, and when we are
doing reviews, we often have to do the metrics ourselves--in a
very rudimentary way, but to try and do some metrics around
that.
Senator Peters. Right. Something we definitely need to do,
then.
Mr. Horowitz. It is critical. If you are going to do
performance-based reviews of government programs, you need
strong metrics and underlying data to do that. That is one of
the biggest challenges we have in the prison area.
Senator Peters. Great. Thank you so much. Thank you.
Chairman Johnson. Thank you, Senator Peters.
Again, I want to acknowledge the good work that Senator
McCaskill has done on a bill that I hope we can introduce. She
has been working with Senator Grassley. I have been very
supportive. I hope this Committee, on a very bipartisan basis,
can be supportive. It addresses almost all of the issues that
you are addressing here, so I will give you an extra minute----
OPENING STATEMENT OF SENATOR MCCASKILL
Senator McCaskill. Thank you, Senator.
It is always terrific to have you here. I think all of you
know the affection and affinity I have for your community. As a
former prosecutor and a former auditor, I understand both the
power you have and the limitations of the power that you have.
That is why we have tried diligently in my office to not only
use your work to inform what we do in the Senate, but also to
try to do everything we can to support your community.
I think the legislation that we have worked very hard on is
getting to a point that it is really good, because I think we
can address the data matches. I think we can address the
challenges that you have. And, frankly, Mr. Horowitz, nobody
understands better than a State prosecutor the frustration you
have with the FBI. [Laughter.]
This is a cultural issue within the FBI about sharing
information, even with local police and local prosecutors. I
think we can really address a lot of these issues.
I think, also, providing an appropriation for CIGIE is
important. I have been very frustrated with the amount of time
the Integrity Committee has taken with some of the
investigations. Particularly the investigation into Mr. Edwards
at DHS, where we were anxious for CIGIE to complete the work as
we were trying to put pressure to clean up an office that is so
vitally important to our Nation. Also, the National Archives
IG. Both of those investigations languished.
I want to talk a little bit today--I really appreciate, Mr.
Roth, your characterization first of the importance of
independence as the coin of the realm, and second, the
importance of transparency. Let me clarify the different kinds
of Inspectors General we have. I do not think a lot of people
understand that the two kinds are completely different animals.
We have the Presidentially appointed Inspectors General
that must be confirmed by the U.S. Senate. This provides more
independence in terms of appearances than the other kinds of
IGs we have, which are the Designated Federal Entity IGs. They
are not appointed by the President. They are not confirmed by
the Senate. They are, in fact, appointed by their agencies. We
have worked at reforming this because, on its face, that is a
problem. Now, I do not think people realize that we have more
of the Designated Federal Entities (DFEs) than we have of the
Presidentially appointed IGs. Correct me if I am wrong, but I
believe we have 34 Designated Federal Entities and only 30
Presidentially appointed.
So, let me ask you this question. Is there a list of the
salaries of the Designated Federal Entity Inspectors General?
Mr. Horowitz. I believe, Senator, it would simply be that
you would have to look through the public records----
Senator McCaskill. It is not there.
Mr. Horowitz [continuing]. But there is no----
Senator McCaskill. It is not there.
Mr. Horowitz. There is no list that I am aware of.
Senator McCaskill. Well, would CIGIE not be in a position
to request that information? If we are going to talk about
transparency, we have been trying to get this information----
Mr. Horowitz. Right.
Senator McCaskill [continuing]. And guess what? All this
talk about transparency among the IG community, guess who does
not want to tell us how much money they are making? The
Inspectors General in these Designated Federal Entities.
Now, I am a cynic, too, Mr. Roth. Based on my years of
experience doing what you do, I started out a cynic. I am
distrustful of an Inspector General community that does not
want the public to know how much money they are making. I would
like your ideas on how we can facilitate getting the
information about the annual salaries of the Designated Federal
Entity IG--the majority of the Inspectors General that are out
there.
Mr. Horowitz. I will followup promptly on that, Senator.
Senator McCaskill. Would you be surprised to find out that
there are Inspectors General in some of these small agencies
that are making twice as much as the four of you?
Mr. Horowitz. I would not be surprised. I actually know
that is an issue in the Inspector General community.
Senator McCaskill. Is that not a scandal?
Mr. Horowitz. I think it is a significant issue.
Senator McCaskill. Well, why would it not be a scandal? Why
in the world would an Inspector General at the Farm Credit
Agency be making twice as much as the Inspector General at HHS?
Mr. Horowitz. I do not know how the pay scales have worked
out. I do know that for the Presidentially appointed Inspectors
General, there is also apparently a range of salaries, given
some of the exceptions that have been put into statutes over
the years.
Senator McCaskill. What percentage of the IGs contract out
their financial statement audits?
Mr. Horowitz. I do not know the answer to that. I can check
on that----
Senator McCaskill. That would be something I think we need
to find out. I am particularly interested in the Inspectors
General that are in the Designated Federal Entities. What
percentage of them contract out their financial statement
audits? For a bunch of them, that is just almost all they do.
If they are getting paid twice as much and they are contracting
out the financial statement audit, Houston, we have a problem,
do we not?
Mr. Horowitz. Well, I would certainly want to know what the
facts were there, Senator.
Senator McCaskill. Do you keep track of the work product of
the Inspectors General? And, by the way, for these smaller
Inspectors General, is it not true that they are not getting
peer review on a lot of their work because they are not
adhering to the Yellow Book?
Mr. Horowitz. I can followup on that, Senator, and talk
with our Audit Committee about----
Senator McCaskill. Well, do you not have a pilot program
looking at whether or not CIGIE can, in fact, begin peer review
on these reports that they do not adhere to the Yellow Book
standards? For the record, the Yellow Book standard--you all
know, that is, in fact, the government approved auditing
standard. That is the bible for a government auditor. Because
these are so small, a lot of these DFEs, they do not have the
capability of actually adhering to Yellow Book standards. And,
if you do not adhere to the Yellow Book standards, you cannot
get peer review, is that not correct?
Mr. Horowitz. We are looking at the issue, and I will
followup. I have to say, 6 weeks into the job as CIGIE Chair, I
do not know the answer to that off the top of my head.
Senator McCaskill. OK. Well, I believe there was a pilot
program about looking at how CIGIE could help with peer review
on these reports. If you are not doing very many, and you are
making twice as much as the IGs in the largest agencies--I
mean, look at Social Security. Imagine the work you need to be
doing. What do you make, Mr. O'Carroll? I think you make about
$170,000 a year?
Mr. O'Carroll. That is correct, Senator.
Senator McCaskill. Yes. So, I am trying to figure out what
is rotten in Denmark here, and I think, Mr. Chairman, we need a
whole hearing on what has happened. The other part of this that
is incredibly troubling to me is that in an effort to do away
with bonuses for this IG community, we inadvertently put them
in a situation where their salaries are now adjusted according
to the people who work at their agencies.
So, let us say we have something like the Federal Reserve,
and the head of the Federal Reserve, the Board gives them a
bonus. Well, guess what happens? The IG gets a bonus, because
he is hooked or she is hooked to the salary of the agency head
that they are overseeing.
So, let me see if I get this straight. You have an
Inspector General who makes what the boss makes if the boss
gets a bonus. Now, how likely is it that the Inspector General
will expose that the boss has problems? Guess whose salary is
going to be impacted? The salary of the Inspector General. Now,
that is absolutely unconscionable within an auditing community.
I would have to sit and think, ``now, if I expose the head of
this agency for wrongdoing, they are not going to get a bonus,
And if they do not get a bonus, I do not get a salary increase.
I do not go to $320,000 a year, or $270,000 a year.''
This is a huge problem, and I would like you, as the head
of CIGIE, to report back to this Committee and to the Chairman
about how you would propose us dealing with what is clearly an
ethical problem within the Inspector General community.
Thank you, Mr. Chairman.
Chairman Johnson. Thanks, Senator McCaskill. All good
questions. Maybe we can address that in this legislation that
we are about ready to introduce. Senator Booker.
OPENING STATEMENT OF SENATOR BOOKER
Senator Booker. Thank you very much, Mr. Chairman, and I
want to thank the gentlemen who are before me right now. I know
the work you do is essential to the strength of our Government,
and it truly is, in my opinion, righteous and in accordance
with the goals of the Committee that is assembled here.
I just want to jump right in, in the limited time that I
have, and Mr. Horowitz, I would love to have the opportunity to
talk to you, if you would ever one day want to come to my
office, because this line of questioning runs very deep for me.
So, first and foremost, I imagine all the Inspectors
General oversee policy procedures, even human resource policy
procedures, right?
Mr. Horowitz. Correct.
Senator Booker. And, then diversity, which is a big issue
for me, being down here for all of about 16 months, this place
is not that diverse, and I am talking about the Senate, but I
would love to know about employment practices, specifically
within the FBI. We had a courageous statement by the head of
the FBI talking about issues of race and law enforcement. But
then today, and I will put this in the record,\1\ we talk about
the declining rates of blacks and Latinos within FBI agents.
That is very troubling to me when it comes to the
investigations that they are doing and often the prosecution of
the so-called war on drugs and its massive disproportionate
impact on blacks and Latinos.
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\1\ The information submitted by Senator Booker appears in the
Appendix on page 82.
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So, I am wondering if your office does a lot of focus on
this area of diversity within the ranks of FBI agents as well
as the other agencies under your jurisdiction.
Mr. Horowitz. We have not issued any reports specifically
on the question of the diversity rates. We have done work on
various hiring, promotion, and removal practices and
allegations we have received about how those were undertaken
and whether they were fairly undertaken. But, we have not done
the broader question----
Senator Booker. Well, I would strongly encourage you to do
that. Here we are in a Nation right now where you literally
have had demonstrations coast to coast, north to south, about
law enforcement practices. And, one of the things we have seen,
for example, in Ferguson is that the diversity of the police
force was an issue.
Mr. Horowitz. Mm-hmm.
Senator Booker. And, so, if we have declining rates of
minority officers in the FBI, that should raise a concern, at
the very least, and especially when the head of the FBI himself
is talking about that this is a problematic issue within race
and law enforcement.
And, along those lines, I was surprised by the Senator from
Michigan when it comes to issues of reentry and issues of
recidivism and that the data that you are trying to find really
is not there and you are trying to piece it together in what
sounds like a less than scientifically sound manner.
Mr. Horowitz. What we have tried to do is take a
representative sampling of the data that we can get and use
that, but it is clearly not a large-scale effort that you would
want to have ready and available when you are looking at these
things.
Senator Booker. And, so, we have no objective measures
within the Bureau of Prisons about how one warden might be
doing in terms of recidivism rates versus another warden
holding constant, obviously, crimes and backgrounds and the
like, correct?
Mr. Horowitz. I am not aware of that.
Senator Booker. And, so, that is particularly problematic,
then, when it comes to the issue of private prisons. If there
are no standards whatsoever for empowering people that are in
prison not to come back to prison, there is a perverse
incentive, a profit model, so to speak, for private prisons and
private halfway houses to keep that, not virtuous, but vicious
cycle of people coming back in, correct? Would they not have a
perverse incentive not to do what is necessary to stop the
rates of recidivism?
Mr. Horowitz. There is certainly a risk, Senator, of that,
and, of course, the flip of that is you would want to know what
programs and practices are working to put best practices in
place in contract prisons and, frankly, across all of the
Federal Bureau of Prisons institutions.
Senator Booker. Absolutely. And, are you conducting
investigations of these private prisons and private halfway
houses? I have a high suspicious of people that are in charge
of imprisonment of folks, disproportionately minority,
disproportionately poor, and that have some profit incentive to
see more people coming into their institutions.
Mr. Horowitz. And, what we are doing right now, we have two
reviews going on in private contract prisons. One, we are
looking at specific prisons and how they are handling safety
and security issues. We are looking at the broader question, as
well, as to how the Bureau of Prisons is overseeing private
contract prisons. The problem with the question of how are they
doing on recidivism rates is we do not have the data to be able
to do that across dozens of institutions with our smaller audit
staff.
Senator Booker. So, in other words, this is an important
line of inquiry, but you are telling me you just do not have
the resources or staff to understand what, to me, is a
fundamental aspect of our country, this idea of liberty and
freedom, and we seriously have a problem within our criminal
justice system. But, you are telling me you do not have the
staff or the resources to conduct an adequate study.
Mr. Horowitz. We would not be able to do a broad-based
study like that, and one of the reasons why we have put it on
the top management challenges for the Department this past year
is the need for better performance-based metrics. This is one
of the examples of that. If you are going to run government
operations with 200,000 inmates, which is what right now exists
in the Federal Bureau of Prisons, 19 percent of them in private
contract prisons--all of those, by the way, are non-U.S.
nationals, that is where the Bureau of Prisons is housing them,
in contract prisons--you would certainly like to have the kind
of data that would allow you to look at who is running the best
contract prisons, who is running the best BOP institutions.
Senator Booker. And, then, the last thing, and very quickly
for me, we have a terrible problem in this country where people
who--for example, we have the last three Presidents who have
admitted to smoking marijuana, but the people who actually are
arrested and incarcerated for use and sale of marijuana, even
though there is no difference between the races, are
disproportionately Latinos, African Americans, and poor people.
Is this something that you are looking at, of why we have a
selective use of the justice system that disproportionately
impacts the poor and minorities?
Mr. Horowitz. We have not undertaken an audit or review at
this point of that area. I do know from my prior time on the
Sentencing Commission, the Sentencing Commission has looked at
some of those issues in some of its prior work, but it is
certainly an area of interest to us----
Senator Booker. So, we can talk about this.
In the last 10 seconds I have, Mr. Roth--and I am hoping we
can followup on it--you said that the potential shutdown of the
DHS, the words you used, it would create budget instability and
make it difficult for coherent management. Can you elaborate on
that briefly?
Mr. Roth. Sure. Since October, we have been on a Continuing
Resolution (CR), which means we do not know from week to week
what our budget situation is going to look like. So, what
happens in a Continuing Resolution situation is you basically
get an allowance that allows you to pay your light bill, pay
your rent, pay the personnel that you have on board, and really
nothing else. You are prohibited from engaging in any kind of
long-term planning, any sorts of management initiatives that
you believe would improve the Department. So, that is the case,
of course, from October to this point.
After Friday, of course, if there is a shutdown, then even
the administrative portion of DHS will go away. Certainly, the
oversight part of DHS will go away. And, people will engage in
jobs necessary to save life and property and do nothing else.
So, it is a significant challenge for the Department. As an
oversight entity, we see what occurs during a Continuing
Resolution and then, certainly, a shutdown, which is you cannot
improve the Department. You cannot make the Department better
because it is not possible to put programs in place that will
do so.
Senator Booker. I appreciate the indulgence of the
Chairman. And, so, you are saying even a CR is a threat to our
national security. It undermines our agency.
Mr. Roth. Absolutely. I believe that Secretary Johnson said
it is like driving a car across country where you have a gallon
of gas and you are not sure where your next gas station is
going to be. It is simply a stop-gap measure by which you are
running the Department.
Senator Booker. Thank you, Mr. Chairman.
Chairman Johnson. Thank you, Senator Booker.
Let me just respond a little bit. I think, as I have been
trying to do this Committee, is concentrate on shared purposes,
shared goals, again, that mission of enhancing the economic and
national security of America. That is something we share. I
think we all agree that we should absolutely fund the
authorized, the legal, the essential elements of the Department
of Homeland Security. I think we all want to do that, if we
concentrate in that area of agreement. There is certainly an
aspect of this funding issue that we do not agree on. Let us
set that off to the side. It is in the courts now.
This could be solved tomorrow if President Obama and
Secretary Jeh Johnson said, OK, let us let the courts decide
this. Let us fund those essential, the legal, the
constitutional, the authorized activity of DHS. You would not
be in this bind, Mr. Roth. So, again, I hope that we can do
that. It would have been very helpful if we would have at least
voted to get on the bill so we could start offering amendments,
so we could open up the process, so we could have the debate,
the discussion, set up a process where we could find some
measure of common ground, some kind of compromise. That has not
happened. That is regrettable. I hope we can do that in the
future. Senator Ayotte.
OPENING STATEMENT OF SENATOR AYOTTE
Senator Ayotte. Thank you, Mr. Chairman. I want to thank
all of you for being here.
Mr. Horowitz, in your testimony, you pointed out the
difficulties caused by the failure to nominate and appoint the
Inspectors General. Too often, you have many vacancies. So,
when you have those vacancies, you cannot do the oversight that
we depend on you within the agencies.
Last Congress, I had joined with Senators Boozman and
Shaheen to introduce a bill called the Verifying Agency Conduct
and Needs Through Inspectors General Act, recognizing the
important work you do. And, really, what we are trying to get
at is to require the nomination of a person to each Inspector
General position within 210 days. Now, that is a huge length of
time. I think these nominations should be made much sooner than
that. But, basically, to put an outside window on it, to have
them made within a certain time, and if not, the authority
would be transferred to the Congress.
So, can you explain to me what degree are Inspectors
General Offices impacted by the long-term vacancies and how
does that undermine what you are trying to do in terms of the
oversight function that is so important for the Inspectors
General. And, you identify a number of large agencies without
permanent IGs. Is this a lack of where does the issue fall? Can
we not find the talented and skilled people? Is it that people
do not want to come and be Inspectors General? Or, is it the
end and it just takes delays in terms of the Administration and
nominating, so we can understand how to get at this.
Mr. Horowitz. Senator, I think there are probably several
different issues that come up when you have an Acting Inspector
General, particularly for a lengthy period of time. Of course,
the staff stays, and they are very dedicated. They keep pushing
ahead on the work and get it done. But, we are constantly
facing challenges. We are constantly facing issues, as each one
of us have testified today, to our independence, to our ability
to get the job done. And, what comes with a confirmed position
is the ability to stand up and know that you cannot be removed
other than by the President.
Senator Ayotte. It gives you the protection to speak truth
to power, basically.
Mr. Horowitz. Correct. And, that is a challenge for any
Acting Inspector General. The best of them, and I had a
predecessor who served in that role for 15 months and she did
an outstanding job. But, everybody in the organization was
waiting to find out who is going to actually lead the
organization.
Senator Ayotte. So, where are things getting held up? Can
you help us understand? Is it that we cannot attract people to
do this, or is this delays in Administration? Is it a delay in
Congress? I just think it is important--or, is it a
combination, and how do we cut through this?
Mr. Horowitz. I think it is a combination of issues. I have
been Council of IGs Chair now for 6 weeks, and one of the first
things I did was meet with the Presidential Personnel Office to
talk about moving vacancies, and we have sent over resumes of
candidates, a number of individuals who are interested in
positions, who are very capable. I think the process needs to
be sped up on the selection side, on the vetting side, and on
the confirmation side. I think you see all three at various
times.
My predecessor, Glenn Fine, announced he was leaving in
mid-2010, gave 6 months' or so, I believe, notice, and I was
not not nominated until the end of July, July 31, I think it
was, of 2011.
Senator Ayotte. Wow.
Mr. Horowitz. And, then I waited 8 months to get confirmed.
Senator Ayotte. Wow.
Mr. Horowitz. So, you have a buildup in each of the
processes, and I had no opposition when I got confirmed. So, I
think there are at each stage--having gone through the vetting
process, having waited for the nomination, I think I can say
that at each of the stages, there could be greater effort to
move these.
Senator Ayotte. Excellent. Well, we have one piece of
legislation, but this is really important, because the work you
do is very important to the agencies and the oversight and we
need you to be in there, have that confirmation so that you can
feel free to speak without, obviously, anyone either in the
agency or outside the agency trying to remove you. So, I
appreciate it.
I wanted to ask Mr. O'Carroll, your testimony on improper
payments, it is sobering, really, with $8 billion in 2013,
including more than 9 percent of all Supplemental Security
Income, SSI program, payments. Unfortunately, we know that it
is not just SSI payments that we are dealing with improper
payments. There are some other large programs.
For example, I have been focusing on the risk of improper
payments in the Earned Income Tax Credit (EITC) and the
Additional Child Tax Credit (ACTC). And, according to a 2014
Inspector General report, the Internal Revenue Service (IRS)
estimates that $14.5 billion, or 24 percent of EITC payments
made in 2013, were paid in error. And for the ACTC, Additional
Child Tax Credit, the estimates are a potential improper
payment rate for 2013 between 25 and 30 percent, which is
staggering. The problem is, is that this is a lot of money and
then it does not go to those people who perhaps deserve it and
goes to people who do not, and nothing gets my constituents
more upset than that, as you can imagine.
So, you mentioned that the Social Security Administration
has implemented 86 percent of your recommendations. That seems
high, frankly, compared to what we hear about other agencies,
obviously, where we see that very few recommendations get
implemented. So, can you describe the future impact of the high
rate of adoption of your recommendations. What kind of feedback
are you getting from leadership in getting them to adopt these
recommendations? And, are there actions we can take to drive
other agencies to adopt more IG recommendations, because this
improper payment issue, I mean, this is one where we are just
throwing money after money. It is not right. It is not fair.
And, it is billions of dollars that could be better put to use.
So, any thoughts you have for us on how do we get the
agencies to adopt it? What can we do to be more effective in
helping you implement these recommendations? And, how do we
drive other agencies to do the same?
Mr. O'Carroll. I will start at the top in terms of improper
payments, and you identified it well, that my office is
representing the Council of IGs on improper payments, in
general. So, we are dealing with OMB. We are dealing with
Congress. And, we are identifying $106 billion worth of
improper payments every year----
Senator Ayotte. A hundred-and-six billion dollars?
Mr. O'Carroll [continuing]. Across the government----
Senator Ayotte. Another reason we need to get the IG
positions filled sooner, right?
Mr. O'Carroll. Yes. So, we are identifying that, and we are
noticing--and this is kind of what you are saying, is that
through the transparency of it, the accuracy is improving. So,
since we have been reporting improper payments on it
originally, it was about 2009, it was about 94 percent payment
accuracy in government, and that has now gone up to about 96.5
percent. And, I think a lot of that is because of the
transparency and everybody having to report what your improper
payments are. And, just as you mentioned, the problem agencies,
HHS has a large amount of improper payments that are causing
problems, much like IRS, and I think those reporting on it is
focusing the attention.
Kind of an interesting one on the Earned Income Tax Credit
that you were talking about. We have just done audit work with
Social Security in terms of people that are claiming earnings
so that they can get the Earned Income Tax Credit, but that
disqualifies them for SSI, or Supplemental Security Income. So,
they disclaim the wages so that they can get SSI, and at the
same time, they are still getting an Earned Income Tax Credit.
So, we are working very closely with the IRS----
Senator Ayotte. They go hand in hand.
Mr. O'Carroll. Yes. And, kind of an easy example on that
one, which is very frustrating, is that the Department of
Treasury sends the same checks to the same people. So, they
will be getting a benefit check from one agency and an Earned
Income Tax Credit from the other----
Senator Ayotte. And are they talking to each other?
Mr. O'Carroll [continuing]. And they are not talking to
each other.
Senator Ayotte. Oh, you are kidding.
Mr. O'Carroll. So, that is why I think the identifying of
improper payments is very important, to plug gaps like that in
government.
Senator Ayotte. Well, I know my time is up, but any
thoughts you have for us, how we can help that. When we do not
have Treasury and HHS, or Social Security and Treasury, or any
of these talking to each other, then that is a big problem. So,
any thoughts you have on how we can better help you make sure
that we are not sending these multiple checks in a situation
that would be inconsistent under the law would be tremendously
helpful. I really appreciate your work. Thank you.
Chairman Johnson. Thanks, Senator Ayotte.
Senator Baldwin, if you would like to refresh Mr. Roth's
and Mr. O'Carroll's minds in terms of the three questions you
would like them answering.
Senator Baldwin. Thank you.
So, in a scenario where you have an audit or an
investigation conducted by the OIG that recommends changes at a
Federal facility, a local one, an entity or an office, in our
case in Wisconsin, a hospital, should the Federal officials in
Washington of that agency who are charged with overseeing local
facilities be made aware of those recommendations? That is No.
1.
No. 2, how does the IG's Office ensure recommendations are
being implemented effectively?
And, No. 3, what role do transparency and communication
play in ensuring compliance?
And, before I get to Mr. Roth and Mr. O'Carroll, I wanted
to go back to Mr. Linick on that first point, in particular,
that if there are recommended changes in an audit or
investigation, should those with oversight responsibilities, be
informed?
Mr. Linick. So, the analogy in the Office of Inspector
General for the Department of State, we do not have local
offices, but we have embassies, approximately 280 of them all
over the world, and we inspect them. When we do inspections or
audits, we do notify the senior leadership of the outcome of
those inspections and audits, so they do not just go to the
embassy, but they will go to the regional bureau which is in
charge of that particular embassy and they also find their way
to Washington, as well.
Senator Baldwin. Mr. Roth.
Mr. Roth. Yes. Certainly, if we are looking at a local
office, many times, our recommendations will not be addressed
to the person running that local office, but those
recommendations will be then addressed to, for example, the
Commissioner, if it is the CBP, or a program manager within
Customs who has the authority and the ability to effect change.
So, in many ways, is the recommendations that are addressed to
people other than the folks who are at that locale.
Second, to ensure implementation, DHS has, I think, a very
proactive approach to audit liaison and audit resolution that
has dramatically changed, for example, the number of open
recommendations that we have, and it is run by the Under
Secretary of Management, but ultimately chaired by the Deputy
Secretary. So, there is a certain high-level engagement as to
what is occurring with these open recommendations.
And, the way we ensure compliance of open recommendations
is that we will keep them open until we get sufficient evidence
under our auditing standards to believe that the recommendation
has been satisfied. Oftentimes, that is some sort of
documentation or other kinds of assurances that they have taken
our recommendation and they have implemented it in a way that
makes sense to us. In certain cases, we will go back, as Mr.
Horowitz has talked about, and do a compliance review to
actually go back on the ground and figure out whether or not
those recommendations have been complied with.
And, then, last, we have, of course, what I call the bully
pulpit, the transparency and the communication that I think is
critically necessary to ensure compliance, and we have done
that in a number of occasions and I think that tends to focus
the mind, as well.
Senator Baldwin. And, Mr. O'Carroll.
Mr. O'Carroll. Senator, one thing that works with us in
terms of what you are asking on the local level, if we
identified something, how would it be fixed--the way we work
with the Social Security Administration is that our audit
liaison is centralized in their headquarters. So, any
recommendation that we are make to any component of SSA rises
to the management level so it is overseen by all of SSA.
I guess another example of what we do on that is, one, we
are, of course, publishing it. It is going on our website. It
is going out to all of our customers whenever we issue an
audit. Also, one of our oversight committees asked us every 6
months to provide a report on what recommendations we have
made, that have not been adopted by the agency. So, that is
good for oversight.
Another thing that I do, is I attend once a month--we are
not considered part of the Commissioner's staff, so I keep my
independence, but once a month, I go to the executive staff
meeting, and I report out to all the executive staff of SSA,
about audits that are of importance. These are the ones that we
have recommendations on. These are the responses we are getting
back from Social Security. And, usually, it will be addressed
there in front of all the peers of each of the components. So,
if one component is lagging that is going to be brought to the
attention of all their peers.
Another thing that we do is the trust but verify part of
it. After we make the recommendations, we go back to see if
they are enacted, and if it is problematic we will do another
just to see if what they told us what happened when they
corrected the problem, if it really happened.
An easy example of that one would be SSA, with all of its
records and information. We were talking earlier about the
Death Master File. One set of records within SSA is keeping
track of who all the people are, and whether they are alive or
dead, and then another system keeps track of the payments that
are going out, and sometimes the two systems are not talking to
each other. So, one database says you are dead. The other one
says that you are getting benefits. So, we have made
recommendations on that. SSA prioritizes it, and says that they
are going to fix it, and every 3 years we go back. We do
another audit and say, we have identified these number of
people that are listed as dead on one file and alive on the
other one and bring it to the attention of everybody.
And, it works quite well that way.
Chairman Johnson. Thanks, Senator Baldwin.
Mr. Linick, has Secretary Kerry asked you to open up an
investigation or inspection of the closing of the Yemen
embassy?
Mr. Linick. He has not asked me that.
Chairman Johnson. Is that something just on your own
initiative, something you are going to look into?
Mr. Linick. Well, I cannot really talk about investigations
and so forth. Those are typically confidential matters. But, we
initiate our own investigations. The Secretary does not direct
us to do any of that.
Chairman Johnson. OK. Mr. Horowitz, in terms of subpoena
power, is it basically true that you do get push-back from the
Department of Justice in terms of your ability to subpoena
people that are no longer employees of the Federal Government?
Mr. Horowitz. My understanding is last year when this issue
came up, that the Department of Justice objected to the effort
by Congress to give us that authority, the concern being that
we somehow might interfere with Department of Justice
investigations. To my mind, that can easily be addressed. From
my former time in the Criminal Division at the Justice
Department, we dealt with immunity issues and similar issues
regularly, coordinated among 94 U.S. Attorneys. It is very
doable.
Chairman Johnson. Well, let us easily address that, then. I
mean, we would really like to, because I think that is a very
appropriate power you need to access the information you need
to do your investigations and your inspections, so let me work
with the Committee on that.
Mr. Horowitz. Absolutely.
Chairman Johnson. My final question, just as best
practices, Mr. Linick, you talked about your Management Alerts.
I was intrigued, reading your testimony about that. It sounded
like a really good idea. Is that only in your Office of
Inspector General, or is that happening throughout all the
Inspectors General? I will ask you, and then I will ask Mr.
Horowitz, as head of CIGIE.
Mr. Horowitz. Certainly, in my office, I have issued two
memos during the course of audits where we have found issues
that I thought needed immediate attention. One of them, we have
issued involving BOP's purchase of X-ray machines, where we
found serious questions about the value of those X-ray
machines. We, obviously, thought it imperative, once we found
that problem, to alert the leadership, and so we did that. And,
we do use that when we find it is necessary to do so.
Chairman Johnson. But, again, in what way does the
community, the IG community, share those best practices? I
mean, is it through CIGIE? I mean, do you have get-togethers,
conventions? I mean, is that a concerted effort to find out,
hey, this is really working great in our office. Everybody else
ought to be doing something similar.
Mr. Horowitz. We do. We do it both through the individual
committees, so, for example, in the Audit Committee, they would
look at, in their peer reviews and other discussions, best
practices on the audit side, similarly on the investigation
side. And, then, each year, we have a 2-day conference where we
get together as a community to share practices across our
community.
Chairman Johnson. Does anybody else want to add to that?
Mr. Roth. Yes. We have done these Management Alerts, as
well, sometimes in conjunction with a long-term audit. We do
not want to wait until the audit is completed, because, for
example, there is a significant management challenge that ought
to be fixed immediately. So, those are public and we will put
them on the website.
For example, we were doing an audit of our--DHS's warehouse
programs, whether or not those ought to be consolidated, and we
found a serious health and safety issue that Immigration and
Customs Enforcement, candidly, tried to hide from us. We were
able to find it and we were able to issue a Management Alert,
and as a result of that, a problem that had existed for a
number of years was fixed within weeks.
So, it is a highly effective tool. Again, it is that
disinfecting sunlight, sometimes, that makes a big difference.
Chairman Johnson. Mr. O'Carroll, it looks like you want to
press the button there.
Mr. O'Carroll. Yes, Chairman. I agree with that. It usually
takes about a year for an audit. So, early on in an audit, if
we identify a systemic problem or an issue that if it was not
corrected immediately would have a major effect on the program,
we do those type of alerts.
And, if we come up with an issue that does not even require
an audit, but it is something that needs attention , we will do
an alert. So, an easy example on that would be the Disability
Trust Fund for Social Security. On that one, we have done
reports on the solvency of that Trust Fund and our concerns
about it and we give it to our stakeholders, to Congress, and
show that we are not asleep at the switch and we realize there
is a problem there that needs to be addressed. So, we use
alerts often.
Chairman Johnson. Before I turn it over to our Ranking
Member, I just want to give each of you the opportunity, is
there something during the questions, during this hearing, an
issue raised that you were not able to address that you want to
quickly address now? I will start with you, Mr. Horowitz.
Mr. Horowitz. I cannot think of anything, Mr. Chairman.
Chairman Johnson. OK. Mr. Linick.
Mr. Linick. The only thing I would add to the question from
Senator Baldwin about ``What can Congress do to help with the
recommendations being implemented,'' through our Management
Alerts, the three that we issued last year, the 2015
appropriations omnibus bill contained explanatory language
requiring the Department to respond to our recommendations.
That was very helpful in terms of enforcement. So, I just
wanted to note that additional point for the record.
Chairman Johnson. OK, great. Mr. Roth.
Mr. Roth. I am good. Thank you.
Chairman Johnson. Mr. O'Carroll.
Mr. O'Carroll. One thing that Senator McCaskill brought up,
just to give a little clarity on, was the contracting out of
financial statement audits and her concern on it. And, I have
to say, in our case, we do contract out the financial statement
audit for Social Security. What we do, though, is that we work
hand-in-glove with whoever gets the contract.
But, one of the big issues that we are up against is that
so much now is IT-driven in terms of the management of an
agency. When you think of the largest social insurance program
in the world and $2 billion a day going out, information
security at SSA is so important, and we just do not have the
expertise and are not able to be hire the best and the
brightest every year to be taking a look at what deficits or
weaknesses SSA has in their systems. So, we contract that out.
Usually, whoever we are contracting with is going to have
significant resources to be taking a look at those type of
vulnerabilities. And, then, we work closely with them. So,
there is an advantage to contracting for the financial
statement audits.
Chairman Johnson. Coming from the private sector, we all
contract out our auditing, and as long as you maintain that
independence--I think Senator McCaskill, her point was you have
this Inspector General. They are supposed to be doing the
inspecting. Why do we not use the resources we have? But, there
are going to be costs somewhere, and I do not think that is per
se a problem myself. But, it is worthy in terms of looking
into. Senator Carper.
Senator Carper. Thanks, Mr. Chairman.
I am going to ask a couple of questions, but before I do, I
have one question I am going to ask of each of you and I am
going to ask you to be thinking about this question. It is an
easy one. You have given us--we have asked you different ways--
several of us have--what can we do to help you. What can we do
to bolster you and strengthen the ability of you and your teams
to do your job as watchdogs.
I am just going to ask each of you to give us one idea. If
we only did one thing that you would have us to do to help
support you, it could be writing the letters to get more IGs
out there, the Administration nominating more people, or
getting these agencies that have five or six, have not had an
IG for a while, it could be that. It could be something else.
But, just be thinking about one, if you can only do one thing,
do this for us. It will help us a lot.
OK, but while you are thinking about that, I will go back
to something, and I apologize for being out of the room. I was
on a teleconference call with my Governor and a bunch of other
people and sometimes my day job gets in the way from this job
here, so thank you for letting me be away from my post for a
while.
But, as Senator McCaskill briefly mentioned, several years
ago, the IG for the National Archives, Paul Brachfeld, was
placed on administrative leave while CIGIE and the Office of
Special Counsel investigated allegations of misconduct. It took
nearly 2 years until these investigations were fully resolved,
and during that 2 years, the Archives was deprived of a
permanent Inspector General, as you will recall. Mr. Brachfeld
was stuck waiting in limbo on administrative leave.
Maybe I will direct this to you, Michael, but as the new
Chair of the Inspector Generals Council, I just would like to
hear from you, your analysis of what went wrong with the
Archives investigation and what steps you and others are taking
to ensure that such a situation does not happen again,
certainly on your watch.
Mr. Horowitz. Certainly. I think there are two issues. One
is to ensure that the investigation by the Integrity Committee
happens within a timely manner, or happens in a timely manner.
And, what I have been talking to the FBI, which chairs the
Integrity Committee, and talking with members of the Council of
IGs, is how do we put in place timeframes for conducting the
reviews and investigations. I think that would help to better
manage the process.
I think we have to take other steps, as well, frankly. The
Integrity Committee process needs some revising. It has a Chair
that is at the FBI, managing a process with IGs, Special
Counsel, Office of Government Ethics, trying to manage another
IGs office that is doing the investigation, and I think there
needs to be better accountability for all the participants in
that process. I look forward to working with the Committee on
the statutory issues, but also with the FBI and the members of
the Integrity Committee, on the procedural issues that are
involved. So, I think we can do both.
In terms of the placing an IG on administrative leave,
whether a Presidential or non-Presidentially appointed IG, I
think the IG Act needs to address that issue. We are making a
recommendation as a community of IGs that that needs to be
considered. There are removal procedures, but there are not
administrative leave procedures in the IG Act. They need to be
clearly defined. There need to be clear bases for when that can
occur, and for how long it can occur, and under what conditions
can it occur, because that was a concern for many of us, that
an IG could be put on administrative leave indefinitely, if you
will. That is not good for the agency. That undermines the
independence of Inspectors General. And, that undermines the
confidence of this Committee and the public at large.
Senator Carper. All right. Thank you. When might we look
for those recommendations?
Mr. Horowitz. I am working now with our membership and the
FBI on proposing new procedures, which is what we can do
without legislative change, and I have met with staffs of this
Committee, other Committees, to talk about proposed legislation
that I know the Congress is considering that would also address
these issues.
Senator Carper. Good. Well, we will look forward to those
recommendations. Thank you.
Mr. Roth, as the Inspector General at DHS, you have
testified about the impact of the Department of operating on a
Continuing Resolution and the uncertainty of future funding.
Would any of the other witnesses care to weigh in and to
address this issue? I call it stop and go budgeting. It is
happening, and we have done it, and we do it too much. We are
still doing it too much. Sometimes, we shut down the
government, as you know, which is awful, and it is a hugely
wasteful thing. But, the others, if I could. We have heard from
you, John, but we would like to hear from the other IGs, if you
care to address this situation, which is, of course, again on
crisis budgeting.
Mr. Horowitz. I will tell you, in the 2\1/2\ years I have
been IG, I have faced the budgeting process where I do not
think in any year I have been here I have had a budget on
October 1 that I can plan around. It has come in either 3
months or 6 months into the year. And, it is very difficult to
plan when almost 80 percent, I believe, of our costs are
personnel costs. It is all about who we can hire and whether we
can hire, and it is simply impossible to plan for hiring if you
do not know 9 months from now whether you are going to continue
to have the kind of budget that would allow you to hire people
behind it. It is a very big challenge.
Senator Carper. All right. Thank you. Mr. Linick.
Mr. Linick. Yes. I would agree with IG Horowitz. In fiscal
year 2013, our appropriation was reduced almost $6 million
between the full-year CR and sequestration, and for an office
like ours, which is trying to grow and strengthen oversight, it
makes it very difficult.
Senator Carper. Mr. O'Carroll, last word on this question.
Mr. O'Carroll. Well, one, we are independent. We get a
special appropriation apart from Social Security. They are
supportive of us and we have been very fortunate in terms of
our appropriations. However, over the last few years, as
everyone well knows, we were going from Continuing Resolution
to another, which kept our base flat, and at the same time, our
costs were going up, and with cuts on top of that, we have had
a 10-percent reduction in staff over the last few years. So, as
all the demands are going up, our resources are declining. So,
we do need a sustainable budget into the future so that we can
make these important plans.
Senator Carper. All right. Thank you.
The Chairman reminds me we have to wrap up. Can I ask each
of you to just give us a couple of sentences on the one take-
away, if we only have one take-away that we take away with us,
what would that be? A to-do list for us.
Mr. Horowitz. From my standpoint, Senator, it would be
ensure that the FBI complies with the Section 218 provision
that the Congress put in place in the Appropriations Act.
Senator Carper. All right. Thank you. Mr. Linick.
Mr. Linick. From my point of view, it is funding for our
overseas contingency operation, Operation Inherent Resolve, for
which we have joint oversight responsibilities with the United
States Agency for International Development (USAID) OIG and
Department of Defense (DOD) OIG. We are basically taking money
out of our existing budget to fund these responsibilities.
Senator Carper. All right. Thank you. Mr. Roth.
Mr. Roth. I would say it is engaged oversight, Senator, to
read our reports, look at our reports. If you have questions
about our reports, we are available to brief you on them. But,
then, hold the agencies accountable for what it is that you
find.
Senator Carper. All right. Thanks. Mr. O'Carroll.
Mr. O'Carroll. Senator Carper, I would say we need an
integrity fund, which is what I was saying at the beginning. In
terms of all the billions that are being recovered by SSA and
by us, if we could be using those again to prevent fraud and
identify improper payments, it would help.
To give you an example, SSA doing continuing disability
reviews, bringing a person back in to see whether or not their
health has improved, has a 15-to-1 return on investment----
Senator Carper. Oh, wow.
Mr. O'Carroll [continuing]. So, if that type of money is
appointed to that, that will help. In my case, we have the
Cooperative Disability Investigative Units. Those are returning
10-to-1 on 9-to-1, to be exact. But, again, if we had
sustainable money from an integrity fund, that would really
help us.
Senator Carper. Good. Thank you all. Thank you.
Chairman Johnson. Thank you, Senator Carper. I want to
thank all my colleagues for their attendance, for their
thoughtful questions.
I want to thank our witnesses for your thoughtful testimony
and your answers.
This hearing record will remain open for 15 days, until
March 11, 5 p.m., for the submission of statements and
questions for the record.
This hearing is adjourned.
[Whereupon, at 11:56 a.m., the Committee was adjourned.]
A P P E N D I X
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