[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


           GAO'S 2017 HIGH RISK REPORT: 34 PROGRAMS IN PERIL

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

                                HEARING

                               BEFORE THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 15, 2017

                               __________

                           Serial No. 115-15

                               __________

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              Committee on Oversight and Government Reform

                     Jason Chaffetz, Utah, Chairman
John J. Duncan, Jr., Tennessee       Elijah E. Cummings, Maryland, 
Darrell E. Issa, California              Ranking Minority Member
Jim Jordan, Ohio                     Carolyn B. Maloney, New York
Mark Sanford, South Carolina         Eleanor Holmes Norton, District of 
Justin Amash, Michigan                   Columbia
Paul A. Gosar, Arizona               Wm. Lacy Clay, Missouri
Scott DesJarlais, Tennessee          Stephen F. Lynch, Massachusetts
Trey Gowdy, South Carolina           Jim Cooper, Tennessee
Blake Farenthold, Texas              Gerald E. Connolly, Virginia
Virginia Foxx, North Carolina        Robin L. Kelly, Illinois
Thomas Massie, Kentucky              Brenda L. Lawrence, Michigan
Mark Meadows, North Carolina         Bonnie Watson Coleman, New Jersey
Ron DeSantis, Florida                Stacey E. Plaskett, Virgin Islands
Dennis A. Ross, Florida              Val Butler Demings, Florida
Mark Walker, North Carolina          Raja Krishnamoorthi, Illinois
Rod Blum, Iowa                       Jamie Raskin, Maryland
Jody B. Hice, Georgia                Peter Welch, Vermont
Steve Russell, Oklahoma              Matthew Cartwright, Pennsyvania
Glenn Grothman, Wisconsin            Mark DeSaulnier, California
Will Hurd, Texas
Gary J. Palmer, Alabama
James Comer, Kentucky
Paul Mitchell, Michigan

                   Jonathan Skladany, Staff Director
                    William McKenna, General Counsel
                      Katie Rother, Senior Counsel
                    Sharon Casey, Deputy Chief Clerk
                 David Rapallo, Minority Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 15, 2017................................     1

                               WITNESSES

The Hon. Gene L Dodaro, Comptroller General of the United States, 
  U.S. Government Accountability Office
    Oral Statement...............................................     4
    Written Statement............................................     6

                                APPENDIX

Response from the United States Government Accountbility Office 
  to Questions for the Record....................................   100

 
           GAO'S 2017 HIGH RISK REPORT: 34 PROGRAMS IN PERIL

                              ----------                              


                      Wednesday, February 15, 2017

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 10:02 a.m., in Room 
2154, Longworth House Office Building, Hon. Jason Chaffetz 
[chairman of the committee] presiding.
    Present: Representatives Chaffetz, Duncan, Issa, Jordan, 
Amash, DesJarlais, Massie, Meadows, DeSantis, Ross, Walker, 
Blum, Hice, Grothman, Hurd, Palmer, Mitchell, Cummings, 
Maloney, Norton, Connolly, Kelly, Plaskett, Demings, 
Krishnamoorthi, Welch, Cartwright, and DeSaulnier.
    Chairman  Chaffetz. The Committee on Oversight and 
Government Reform will come to order. And without objection, 
the chair is authorized to declare a recess at any time.
    Today, the committee will examine 34 Federal programs the 
Government Accountability Office has identified as high risk. 
Programs are selected, among other factors, for risks posed to 
public health or safety, national security, economic growth, 
and privacy or citizens' rights. With this hearing, we have an 
opportunity to better understand how to help agencies fully 
resolve the issues identified.
    Regrettably, many of the areas identified in this year's 
high-risk list are of no surprise. It's been 2 years since the 
GAO last issued its high-risk report. They do it for each 
Congress. Since then, only one program was removed. Three 
programs have been added. More concerning, six areas have been 
listed by GAO as, quote, ``high risk,'' end quote, since the 
report's inception 27 years ago. Twenty-seven years ago.
    Members on this panel, we need to pay attention to this. 
These are good people doing a lot of good work. They're telling 
us, they're screaming at us to actually get something done and 
address these issues.
    The six areas listed since 1990 are significant programs 
too such as Medicare, the DOD weapons system acquisition. These 
are big, weighty issues that need to be addressed. The agencies 
and these programs they administer must be doing better. And at 
a time when the national debt nears $20 trillion, addressing 
high risk can also have a meaningful impact on the fiscal 
health of the Nation.
    The GAO estimates the progress in high-risk areas during 
the past decade resulted in financial benefits totaling 
approximately $240 billion. It's an average of roughly $24 
billion a year, but there's much, much more to be done. And 
thankfully, progress is possible, and this year's report 
demonstrates that as well.
    GAO is removing one key area from the high-risk list. First 
added in 2003, GAO is removing, quote, ``interagency efforts to 
establish effective mechanisms for sharing and managing 
terrorism-related information,'' end quote, a very important 
topic that's important to all of our future.
    Notable progress also occurred in the Department of 
Defense's supply chain management and with the National Oceanic 
and Atmospheric Administration closing data gaps in weather 
satellite data. This progress is welcome news, but I want all 
the items on the high-risk list to be fully resolved as soon as 
possible. There would be nothing better than to have Mr. Dodaro 
come here and say, well, there's nothing on the high-risk list. 
But I think you got some job security and the people behind you 
have some job security because we aren't anywhere close to 
that.
    So there are literally billions of dollars that are wasted 
through poor management, slow response to emerging risks, and 
failure to prioritize.
    I look forward to discussing with the Comptroller General 
how to make significant and sustained progress towards 
resolving these most critical issues.
    And, Mr. Dodaro, we appreciate, you in particular have made 
yourself available at every turn, a great resource and 
understanding of how the government works and where it's not 
working.
    And I also want to thank all the men and women who serve in 
this effort to make our country and make the government as 
efficient and as effective as possible. We really do rely upon 
you and your staff to take the time and effort that--and when 
you issue these reports and have that perspective, it's my 
goal, my intention, my commitment that, you know, we need to 
pay attention to that to help fix these problems. You're 
identifying them and you're pushing these departments and 
agencies, but we also play a role in Congress to actually put 
in place the legislation that's needed in order to solve many 
of these issues. So we really do appreciate you in particular 
and, again, the men and women who serve in the GAO. Very, very 
helpful.
    I'd now like to recognize the ranking member, Mr. Cummings.
    Mr.  Cummings. Thank you very much, Mr. Chairman. And I 
thank you for having this hearing today.
    Mr. Dodaro, thank you for this in-depth work that you and 
all the dedicated professionals at the GAO put into updating 
this high-risk report every Congress. And I join the chairman 
in thanking everybody, because I know that you don't do this by 
yourself. Federal employees are very dedicated, giving blood, 
sweat, and tears to make sure the government functions properly 
and that we maintain this democracy.
    GAO reports, and I quote, ``solutions to high-risk problems 
potentially save billions of dollars, improve service to the 
public, and strengthen government performance and 
accountability,'' end of quote. The work at GAO complements 
this committee's mission, and we are indeed grateful for it.
    I was particularly pleased to see this year's report 
highlight that progress over the past decade has resulted in 
financial benefits totaling approximately $240 billion. That's 
a lot of money. Real progress has been made and, indeed, it 
must continue. We can always do better. We cannot afford to go 
backwards. Unfortunately, I fear that we may be on the brink of 
doing just that.
    Less than a month into office, the President's actions 
threaten to undermine many governmentwide recommendations the 
nonpartisan experts at GAO have issued. Progress of three high-
risk areas in particular are in jeopardy under President 
Trump's administration: Managing strategic human capital, 
modernizing the financial regulatory system, and managing 
fiscal exposure to the risks of climate change.
    First, on January 23, 2017, President Trump issued an 
executive order freezing employee hiring. GAO has stated in the 
past that hiring freezes, quote, ``disrupt agency operations 
and in some cases increase the cost to government,'' end of 
quote. In fact, this year's GAO report states, and I quote, 
``of the 34 high-risk areas listed, 15 areas had skill gaps, 
playing a contributory role,'' end quote.
    A hiring freeze could hamstring the ability of agencies to 
address the needs of the American citizens, businesses, and 
consumers. As one who represents a lot of employees at Social 
Security, Mr. Dodaro, I hear over and over again where the lack 
of employees has made it so much more difficult for people to 
do their jobs. That's people who at one time there were four 
people doing the job, then they've got one. And at the same 
time, we in Capitol Hill, folks on this panel, we expect them 
to still be able to produce. And what's happening in those 
instances is that some people are leaving because they just 
cannot take it. It could exacerbate skill gaps at the Federal 
agencies, making them less productive and less effective.
    Second, we owe it to the American public to continue 
implementing GAO's recommendations to modernize our financial 
regulatory system. That begins by protecting provisions of 
Dodd-Frank and shield American consumers, not by rolling back 
those provisions. That makes no sense. GAO recommends 
implementing the remaining Dodd-Frank regulatory rules to 
ensure the effective functioning of reforms to the United 
States financial regulatory system, and I wholeheartedly agree. 
We must continue to support this vital work, not undermine it.
    Finally, in order to protect America from fiscal exposure 
to the risk of climate change, we must address this issue head 
on. How can we work together to solve a problem if President 
Trump and some congressional Republicans do not even 
acknowledge its existence? Duh. The generations yet unborn 
deserve better than to be burdened by the potentially 
catastrophic cost of climate change risk my colleagues across 
the aisle seem to ignore.
    I implore my colleagues to fully consider the progress we 
have made on all of these issues and the harm that may be done 
if we go down the path of the current administration.
    I look forward to GAO illuminating all that is at stake 
today. And, again, I want to thank all the employees of GAO for 
doing what you do every single day.
    With that, Mr. Chairman, I yield back.
    Chairman  Chaffetz. Thank you.
    I'll hold the record open for 5 legislative days for 
members who would like to submit a written statement.
    I'd now like to recognize and welcome our witness for today 
at the hearing, the Honorable Gene Dodaro, who is Comptroller 
General of the United States Government Accountability Office.
    There are a number of people that we're also going to swear 
in. As we found in the past experiences, as we had very 
specific questions, there are subject matter experts. But in 
order to testify, they too need to be sworn in. These include: 
Chris Mihm, managing director for Strategic Issues at GAO; Mark 
Gaffigan, not to be confused with Jim, the managing director 
for Natural Resources--I'm sure I'm the first one ever to use 
that line. He's the managing director for Natural Resources and 
Environment at the GAO. Barbara Bovbjerg, managing director for 
Education, Workforce, and Income Security at GAO; George Scott, 
managing director of Homeland Security and Justice. All of 
these are at the GAO. Dave Powner, director of Information 
Technology; Greg Wilshusen--I hope I pronounced that right--
director of Information and Technology; Orice Williams Brown, 
managing director for Financial Markets and Community 
Investment; Nikki Clowers, managing director for Health Care; 
and Cathleen Berrick, managing director for Defense 
Capabilities and Management; Paul Francis, managing director 
for Acquisitions and Sourcing; and Kate Siggerud, who is 
managing director for Congressional Relations. Their expertise 
is needed in this hearing.
    Pursuant to committee rules, all witnesses are to be sworn 
before they testify. So we need to do this en masse. If you can 
please all rise and raise your right hands.
    Thank you.
    Do you solemnly swear or affirm that the testimony you're 
about to give will be the truth, the whole truth, and nothing 
but the truth, so help you God?
    Thank you. Let the record reflect that all the witnesses 
answered in the affirmative.
    Mr. Dodaro, you're a veteran in doing this. We'll give you 
as much time or latitude as you like. We do appreciate you 
being here, and we'll now turn the time to you.

                   STATEMENT OF GENE L. DODARO

    Mr.  Dodaro. Thank you very much, Mr. Chairman.
    Good morning to you, Ranking Member Cummings and members of 
the committee.
    I appreciate the opportunity to discuss our latest edition 
of the high-risk list. As has been pointed out in both of your 
opening statements, there have been areas, many areas, where 
solid progress has been made. In fact, 23 of the 32 areas we 
had on the high-risk list in 2015 have either met or fully met 
the five criteria for coming off the list. Those criteria are 
leadership, the capacity, planning, monitoring, and actually 
demonstrating some progress, which is the most difficult 
criteria to meet.
    That progress was achieved through a lot of hard work by 
the agency leaders and the staff in those agencies and by the 
Congress. I really want to compliment the Congress over this 
last 2-year period. Over a dozen pieces of legislation were 
passed to address individual high-risk areas and some 
governmentwide issues as well. And Congress held over 250 
hearings on subjects covered by the high-risk hearings.
    And this committee in particular is to be commended, Mr. 
Chairman, Ranking Member Cummings, for the bipartisan approach 
that has been taken to address many of these issues, which is 
really needed. And so I look forward to working with you to 
help resolve all these areas.
    I share your interest in getting as many areas off this 
list as possible. I made that a goal during my confirmation 
hearing. And, you know, we'll maintain our independence. We're 
not going to take anything off the list till it's ready, but 
we're trying to do what we can to be specific and get them off 
the list.
    The one area you mentioned, managing information sharing of 
terrorism-related information, has really shown steady progress 
over the years, met all criteria, so it's coming off the list. 
But I want to assure this committee when something goes off the 
list, it's not out of sight. So we're still monitoring and 
we'll keep an eye on it to make sure we don't have any 
regression in that area.
    On the other side, there's a number of areas that really 
need some substantial attention: Veterans' health care, which 
we put on the last update in 2015. DOD financial management, 
which we've talked about in the past, still needs substantial 
attention.
    Protecting our information systems from cyber attacks and 
our critical infrastructure throughout the United States is 
important. We first put cybersecurity across the Federal 
Government on the high-risk list in 1997. So it's the 20th 
anniversary of us warning about this issue, and there's still a 
lot that needs to be done.
    Information technology acquisitions and operations, which 
this committee has shown a lot of good oversight in a number of 
hearings. Two of the subcommittees in particular have been 
working together on that area, so I commend the committee in 
that regard.
    And reforming housing finance in the Federal Government. 
Fannie and Freddie are still in conservatorship. They've been 
there since 2008. The Federal Government is assuming too much 
risk in the housing market, in my opinion, and things need to 
be done in that area as well.
    We are--as you mentioned, we're adding three new areas this 
year. I'll quickly cover them in closing. Number one is Federal 
activities to work with tribes and their members. Wherever we 
look, if it's helping them with education, ensuring safety at 
schools, ensuring adequate health care for Indian tribes and 
their members, or allowing them to take energy resources off 
their land and put them into production so it can generate 
revenues. There is inadequate Federal oversight and support. 
We've made a number of recommendations, 41. Thirty-nine are 
still outstanding. This needs attention.
    Secondly is the growth in environmental liability. This is 
to clean up nuclear weapons complex waste as well as disposing 
of civilian waste generated through nuclear power plants. This 
liability has grown. It's approaching one-half trillion 
dollars, and we don't believe that's even the total estimate 
yet that's accurate. The government's been spending tens of 
billions of dollars to try to clean up this activity over the 
past several years, but the liability keeps growing. We've made 
a number of recommendations. We need a more risk-based approach 
in this area.
    And then lastly, the decennial census, the 2020 census. If 
you look back on the high-risk list, the census is one we put 
on the 2010 census in 2008, and it needs attention. The cost 
exceeded $12 billion for the 2020 census. This one's on track, 
if you use the old methods, to be close to $18 billion. I'm 
sorry, I think I said trillion. It's $12.3 billion. And on 
track to be close to that. But they're trying some innovative 
measures, which I can talk about in the Q and A. But those 
measures, such as using the internet for response and 
developing innovative ways not to do physical canvassing on 
street-walking all the communities introduces a lot of risk, 
and we think there's--much more needs to be done to manage that 
risk so we have a cost-effective and an effective census, which 
is very important.
    So, Mr. Chairman, Ranking Member Cummings, I appreciate 
your comments about the GAO workforce. We have a very talented, 
dedicated group of people. We look forward to working with you 
to resolve all the areas on the high-risk list. So thank you 
for the opportunity to be here.
    [Prepared statement of Mr. Dodaro follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman  Chaffetz. Thank you. Thank you for being here.
    We'll now start by recognizing the gentleman from 
Tennessee, Mr. Duncan.
    Mr.  Duncan. Thank you, Mr. Chairman.
    And, Mr. Dodaro, thank you for your work. I do appreciate 
the work that you do and your agency. It's very helpful to this 
committee.
    There are several areas I'd like to get into very quickly, 
but the ranking member mentioned Dodd-Frank. And we had a 
hearing in here 2 or 3 months ago with the head of the FDIC, 
and it's been brought out that something like one in five banks 
and credit unions have gone under since Dodd-Frank, or have 
disappeared. And you mentioned in your report, quote, 
``mounting regulations stemming from Dodd-Frank.''
    Do you and your experts--we had one witness who said you 
have to have probably at least $1 billion in assets to survive 
in the banking business today. Do you and your experts foresee 
a continuation of this, of so many banks going under or being 
forced to merge or at high risk?
    Mr.  Dodaro. There have been a number of areas we've looked 
at, particularly small community banks and what the burden 
would be for them. The number of banks--you know, we do the 
audit of the Federal Deposit Insurance Fund. The number of 
banks that have failed have been going down over this past 
several years, and the number on the troubled list or the watch 
list that they have has been going down as well. So it may be 
in some other sectors of the economy.
    I have Orice Williams Brown here. But there are definitely 
some things that need streamlined, and we've made 
recommendations. The stress test that the banks are put under. 
I think we have to look for ways, and the way we've advised the 
Congress is looking for ways to make refinements that reduce 
the regulatory burden but still do not undermine the need for 
banks to have adequate capital reserves to withstand downturns 
in the economy. We're looking very carefully now at the bank 
examination process because of concentrations in commercial 
real estate lending and auto lending as well.
    Ms. Brown is with me today. She's our expert in this area. 
I'll just ask her to address this issue.
    Ms.  Brown. We currently have work underway looking at the 
effect of various pieces of legislation on small banks, 
community banks. So we're looking at the issue of regulatory 
burden. We are trying to identify if there are certain 
characteristics of legislation or laws that particularly impact 
small banks. We're also looking at exemptions and a variety of 
issues. So that work will be coming out later this year that 
specifically addresses this issue.
    Mr.  Duncan. Well, you do agree, I think everyone agrees, 
that this regulatory burden is much more difficult for the 
small banks to work with than these large, giant banks. And the 
total deposits of the five largest banks have gone up from 22 
percent total deposits to 44 percent since the passing of Dodd-
Frank.
    Let me ask you, Mr. Dodaro, about another area. Several 
years ago, I received a letter from the BLM and a 
recommendation from OMB. BLM identified over 3 million acres of 
land that they would like to sell or dispose of. And we did 
pass a bill last year, the Federal Assets Sale and Transfer 
Act. The GAO has identified 273,000 buildings that the Federal 
Government either leases or owns.
    Are we making any progress toward raising some money from 
some of the sale of some of these lands? We seem to have 
continued taking over more land instead of getting rid of some 
of this land that even the government, even the different 
agencies don't want.
    Mr.  Dodaro. There's some progress being made. There's a 
national strategy that was issued. You mentioned the 
legislation. Congress passed two pieces of legislation late 
last year that will help in that area.
    One property we reported in our testimony is Cotton Annex, 
they've been trying to sell. We understand they just got a bid 
on that. I think this board that the Congress has set up to 
independently identify some high-value properties is an 
important area as well. And the agencies need to make sure that 
the property, some of the properties are properly maintained 
and upgraded so that they're actually able to be sold or 
disposed of in adequate means. So we're making some progress in 
that area, but there's a lot more that still needs to be done.
    Mr.  Duncan. I think it's pretty clear that the Federal 
Government owns or leases far too many buildings.
    Let me quickly get into one other area. The President has 
advocated a $1 trillion increase in spending on transportation, 
yet you say in your report that spending has not improved 
system performance in the transportation area. Why do you think 
that is?
    Mr.  Dodaro. Yeah. That's because the programs that were 
set up by the Department of Treasury--or, excuse me, 
Transportation really did not adequately measure the results of 
the investment that the Federal Government had made. We knew a 
lot of money was being spent, but was it actually improving the 
safety of the system, the condition of the roads, the condition 
of the bridges? So Congress mandated a more performance-based 
system, which Transportation's in the progress of issuing 
regulations and will soon be implemented. So by the next 
update, we'll know whether that's working well or not.
    But our putting this on the high-risk list emanated from 
the financing issue, that there's really--the Highway Trust 
Fund has not been adequate enough for a number of years now. 
Congress has been supplementing that with general appropriation 
funds. They really need to find a permanent financing vehicle. 
Congress did find a temporary one that will get us through 
2020, but between 2021 and 2026, CBO is estimating there'll be 
over $1 billion shortfall in what's needed to maintain the 
roads.
    So there are two issues: Finding the money and then making 
sure the money is producing the right results. And that's what 
we've been focused on.
    Mr.  Duncan. All right. Thank you very much.
    Chairman  Chaffetz. I thank the gentleman.
    We'll now recognize the gentleman from Virginia, Mr. 
Connolly, for 5 minutes.
    Mr.  Connolly. Thank you, Mr. Chairman.
    And welcome, General Dodaro and your team. I don't know if 
anyone is left at GAO today, but we're glad you're all here.
    And, Mr. Chairman, I want to thank you for this hearing. 
And I think this is one of the most important hearings we have 
every year, and I think this is one of the most signal pieces 
of work done by the Federal Government about the Federal 
Government. And I thank GAO for the contribution, because it 
could virtually be the work plan of this committee. And it 
brings us together, it's not partisan, and there's a lot of 
good work we can do in collaboration with our colleagues at 
GAO. So thank you.
    I was listening to Mr. Duncan, who got in a little dig at 
Dodd-Frank. So since we passed Dodd-Frank, did I understand 
you, Mr. Dodaro, to say the fact of the matter is bank failures 
have gone down, not up? Is that correct?
    Mr.  Dodaro. That is correct.
    Mr.  Connolly. And is it also true that there have been no 
bailouts since that legislation was passed? Any additional 
bailouts?
    Mr.  Dodaro. I can't think of any. I don't think so.
    Mr.  Connolly. Not any, yes. And in 2008 and 2009, what was 
the total amount of banking bailouts to the taxpayer in this 
country?
    Mr.  Dodaro. Well, it was a lot. It was hundreds of 
billions of dollars.
    Mr.  Connolly. Hundreds of billions of dollars, right. 
That's a lot, I agree.
    Mr.  Dodaro. Right.
    Mr.  Connolly. It's a technical term, ``a lot.''
    I want to talk about the census, if I can, because to me, 
that's the intersection of IT and the function of government. 
The census is a critical piece of work that must be done. A lot 
flows from it, including representation in this body. The 
people, you know, have their representation allocated based on 
the findings of that census. Allocation of resources from the 
Federal Government to the States flows from data from the 
census.
    And in looking at your report, I want to make sure I 
understand this, you state that with the technology they're 
using in field tests, 25 percent of households could not be 
contacted by Bureau enumerators even after six attempts. Is 
that correct?
    Mr.  Dodaro. Let me call up our expert in that area, Mr. 
Mihm.
    Mr.  Connolly. Mr. Mihm, welcome.
    Mr.  Mihm. Thank you, sir. Yes, sir, that is correct.
    Mr.  Connolly. That's astounding. Twenty-five percent. That 
calls into question the accuracy of the census itself. What's 
the nature of the problem?
    Mr.  Mihm. Well, it's a number of things, and a lot of it 
is just the changing nature of American society. We have 
increasing gated communities, and so it can be very difficult 
to work with property managers and others to get access then to 
the individual housing units. You have increased, obviously, 
diversity in languages. We have to make sure that we send 
enumerators that can speak the language in the community in 
which they're enumerating. A lot of--it's a lot of the 
complexity there.
    There are also some changes that we were urging in census 
rules on how they do that followup, to make sure that they're 
not just following up at the same time on repetitive days, that 
they're actually going at different times. They need to adjust 
their rules to allow them to do that.
    Mr.  Connolly. One of the problems, though, I think you 
highlighted was--I get that and, obviously, that's not a 
technology problem. But the technology piece there is the 
software makes it hard to leave notes when an enumerator, in 
fact, knocks on your door and you're not home. Is that correct?
    Mr.  Mihm. Yes, sir. And that's also part of what I was 
mentioning. The third element there is allowing then subsequent 
enumerators to know not to go back. You know, if they go at 
noon for three straight days in a row and there hasn't been 
someone there at noon, if people are all working, they need to 
be able to say, okay, we'll come back at 5 o'clock or we'll 
come back before, you know, people leave for work.
    Mr.  Connolly. This committee had hearings with the Census 
officials on the technology piece. And what happened in 2010 
was kind of a disaster in terms of technology, custom-made, you 
know, handheld devices and so forth. And so this time, they 
were going to use off-the-shelf, you know, with modifications, 
and it was hopefully going to lower cost. The 2010 census was 
the most expensive in history, $12.3 billion.
    Mr.  Mihm. Yes, sir.
    Mr.  Connolly. So how is that working out for us, in terms 
of these modified off-the-shelf devices and the hopeful goal of 
lowering the cost?
    Mr.  Mihm. It's still an open issue, sir. I mean, there are 
three big technology issues that they're confronting is, one, 
to make sure that we can have the internet response option. 
Second is that they have a major processing technology----
    Mr.  Connolly. Let me interrupt you when you say that just 
so we all understand what that means. In other words, a 
subject, a citizen, can go on the internet and respond if an 
enumerator hasn't reached me.
    Mr.  Mihm. Yes, sir.
    Mr.  Connolly. Yeah.
    Mr.  Mihm. And the second is a major processing effort, 
which is called CEDCaP. And then the third then is the mobile 
devices, and which you alluded to was a big problem last time.
    There are unresolved issues with all three of these major 
technology issues. It was a major driver as to why we put the 
2020 census on the high-risk list.
    Mr.  Connolly. My time has run out, but just bottom line, 
how worried should we be that, here we go again, the Census 
Bureau, with best intentions, is facing 3 years out a serious 
problem both with the technology and with the budget, the cost 
of this enterprise, or are these just glitches that we're 
confident can be worked out?
    Mr.  Dodaro. If we weren't worried, we wouldn't put it on 
the list.
    Mr.  Connolly. Thank you, Mr. Dodaro.
    Thank you, Mr. Chairman.
    Mr.  Mihm. I agree.
    Chairman  Chaffetz. Mr. Mihm, if you can just stay right 
there. I'm going to go ahead and recognize myself. I want to 
follow up on what Mr. Connolly was saying about the census.
    What's your biggest worry right now?
    Mr.  Mihm. The biggest worry right now, I think, is that 
they have a series of innovations that are very important 
potential innovations that can have huge cost-savings 
implications if they work out. So they have a series of these 
innovations at the same time that they are canceling tests in 
the field for later this year and into 2018.
    They need to make sure that they are able to have these 
innovations, the internet response, increasing use of 
administrative records, and others, be able to work together in 
concert in census-taking operations. That's a----
    Chairman  Chaffetz. How far behind schedule are they?
    Mr.  Mihm. It's not so much that they're behind schedule. 
It's that they're, in a sense, racing to--they need to make 
sure that they maintain the schedule that they're on. They've 
canceled a test that's coming up, you know, for a variety of 
reasons, which they say is primarily driven by budget concerns, 
you know, budget concerns related to the continuing CR and 
other issues.
    We're quite concerned that they need to make sure that all 
these innovations are tested in census-like operations. That's 
key to making sure that they maintain the quality of the 
census, but then also delivering on a more efficient census as 
well.
    Chairman  Chaffetz. Now, one of the things that is 
important to executing on a census are going out and finding 
what ends up being a couple hundred thousand people to go out 
and do the enumeration.
    You know, I've been an advocate since I've been here to tap 
into the Postal Service. We actually have a workforce of people 
that have uniforms. They have clearances. We trust them. We've 
identified them. And they're familiar with the neighborhoods. 
They don't need to go remap the world.
    Have you done anything or looked at anything? We're working 
towards introducing a piece of legislation that would allow 
postal workers to do this. They may need to make more money to 
do it. It's going to take money to still train them. But 
they're already walking the routes. They already know the 
neighborhoods. Have you looked at that at all?
    Mr.  Mihm. We've looked at it indirectly. I mean, I know, 
as you mentioned, Mr. Chairman, this is an issue that has been 
or a question that's been asked of the Census Bureau for at 
least the last two or three census about the increasing use of 
the Postal Service in taking the census. There are cost 
implications.
    Chairman  Chaffetz. Sure.
    Mr.  Mihm. Typically, a letter carrier will make more than 
a census enumerator that would take place. It is, you know, 
pretty labor-intensive, and so we'd have to figure out where 
they could find the time within their schedule.
    On the other hand, as you point out, they do know the 
neighborhoods and, in fact, in many cases would know where the 
hidden households are, which is a major challenge that the 
Bureau faces. It's not just a postal address but are there, you 
know, basement units or something like that. That's the 
tradeoff that would have to be made.
    Chairman  Chaffetz. And we also trust them I think is a big 
part of that issue.
    Mr. Dodaro, I want to go back to the post office. This 
committee is looking at legislation dealing with the post 
office. What happens if we do nothing? The current financial 
trajectory of the post office, what's your view of that?
    Mr.  Dodaro. Well, right now, they're not making the 
prepayments for the retirement benefits area, and that's a big 
problem. That's a growing issue. That means at some point, 
those benefits are going to have to be paid. And if the Postal 
Service hasn't prefunded it over a period of time, that's going 
to be a problem. They're already maxed out on their borrowing 
from the Treasury Department at $15 billion. They can't borrow 
any more money from the Treasury at this time. Their other 
liabilities for workmen's compensation are going up. Their 
total liabilities, I think it's about 130 percent of their 
revenues at this point.
    So--but the underlying problem is the business model's 
really broken. You're not--first-class mail has been going 
down. It's likely to go down for the foreseeable future. It's 
the most profitable margin that they have. And they've taken 
major cost-cutting moves, but they don't have any major other 
cost-cutting activities planned. So they really need help.
    So we've put on a list. Congress has to act. There needs to 
be a reform in this area.
    Chairman  Chaffetz. And we're looking at a bailout if we 
don't fix it, correct?
    Mr.  Dodaro. Yes.
    Chairman  Chaffetz. This is something that I think is of 
urgent need for this committee, and I'm glad that we're on top 
of it, but we do need to pass a piece of legislation to fix the 
systemic problems.
    Fannie and Freddie, they--as a quasi-government agency, 
there isn't much exposure that the public gets to see and look 
under the hood. I'm working on a piece of legislation to give 
Freedom of Information Act requests that the public could 
actually issue a FOIA request to Fannie and Freddie. Do you 
have any opinion or thoughts on that?
    Mr.  Dodaro. I could give that some thought. I mean, 
generally, I'm a supporter of the Freedom of Information Act.
    Chairman  Chaffetz. Is there any reason you can think of 
off the top of your head, though, why they shouldn't be subject 
to FOIA requests?
    Mr.  Dodaro. Not off the top of my head, unless--there's a 
lot of litigation right now, and I think that may be a 
complicating factor, but that is true for every Federal agency.
    Chairman  Chaffetz. That is true for every agency. It just 
seems that the American public--we have all the liability for 
Fannie and Freddie, correct?
    Mr.  Dodaro. That's correct.
    Chairman  Chaffetz. Do you have any--again, you're amazing 
with numbers off the top of your head, but what is the ongoing 
liability at Fannie and Freddie?
    Mr.  Dodaro. Well, there's in law, I think it's over $200 
billion that potentially--Orice has the specific numbers. But 
it's over $200 billion that they could still potentially draw 
from the Treasury Department. They've paid more back than what 
the government lent them during the crisis, but if there's 
another downturn in the housing economy, their capital reserve 
is going toward zero by 2018. At least at this time, we have a 
regulatory entity. You know, for years we warned that they 
weren't regulated enough, but it came too late.
    Chairman  Chaffetz. Did you have anything you wanted to add 
to that?
    Sorry, your microphone.
    Ms.  Brown. So Freddie and Fannie received $187.5 billion 
from the Treasury. They have $258.1 billion available that they 
can receive in additional assistance. And they have repaid more 
than $250 billion in dividends to the Treasury. So right now, 
they've paid more to Treasury than they received initially in 
assistance.
    Chairman  Chaffetz. It just seems to me, with so much 
exposure to the Federal taxpayers, the taxpayers should be able 
to issue a Freedom of Information Act request.
    Mr.  Dodaro. I might say also, Mr. Chairman, on this, we've 
issued a number of reports about a framework that could be used 
to make decisions on Fannie and Freddie and some of the options 
available. So we'd be happy to share that information for the 
record.
    Chairman  Chaffetz. Thank you.
    I now recognize the ranking member, Mr. Cummings.
    Mr.  Cummings. Mr. Dodaro, the high-risk report states that 
the Office of Personnel Management and the Chief Human Capital 
Officers Council, along with agencies, identified six 
governmentwide occupations with mission-critical skill gaps. 
One of these occupations is auditor.
    As you know, agencies across the government have auditors 
within the Offices of Inspector General who are tasked with 
helping detect and prevent fraud, waste, and abuse, a mission 
that helps our committee in oversight. Do the auditor positions 
described in the report include those within the Inspector 
General's office?
    Mr.  Dodaro. Yes.
    Mr.  Cummings. And so is it correct to say that the IG 
offices do not have enough highly skilled and qualified 
auditors?
    Mr.  Dodaro. Well, I think that's always a concern for that 
community. I know, you know, we have issues we're focused on as 
well.
    So let me ask Mr. Mihm if he has any more insight.
    Mr.  Mihm. Yes, sir, it's two things. It's in one case, or 
in some cases, it's obviously just a number of people. It's 
also a skill set that's an issue. As, I mean, this committee 
and others was instrumental in passing the DATA Act, which will 
provide just a wealth of additional information. And so data 
analytics is a skill set that both agencies need but also 
auditors need to better target their audits. And so it's both 
skills in terms of competencies as well as numbers of people.
    Mr.  Cummings. Well, President Trump ordered a hiring 
freeze during his first week in office. What will be the likely 
impact of a hiring freeze on the government's ability to 
address the mission-critical skills gap of auditors?
    Mr.  Dodaro. It will make it more difficult. I mean, we've 
looked at hiring freezes in the past by prior administrations, 
and they haven't proven to be effective in either reducing 
cost, and they cause some problems if they're in effect for a 
long period of time.
    Now, in this case, they've made a number of exceptions to 
that area.
    Mr.  Cummings. Is this one of them? Is this one of them?
    Mr.  Dodaro. I don't believe so. But they're supposed to 
come up with a plan. I think a lot of it will depend on what 
kind of plan they come up with at the end of this temporary 
hiring freeze. But a sustained hiring freeze is not the best 
way. It's better to do it through a budget or workforce plan.
    Mr.  Cummings. What kind of problems does it cause?
    Mr.  Dodaro. Well, it causes--you already--we know there 
are already skill gaps. You mentioned in your opening statement 
that----
    Mr.  Cummings. Social security.
    Mr.  Dodaro. Well, social security. I mean, cybersecurity, 
acquisition workforce, oil and gas management, petroleum 
engineers. A number of areas on our high-risk list have human 
capital. Nurses at the VA. You know, there's a lot of areas. 
And there will be, likely, emerging skill gaps. And you're 
going to have a lot of people retiring. There's a lot of people 
retiring in the Federal Government. So you have to be able to 
realign the workforce. The retirements give you an opportunity 
to realign your workforce, but you have to have that committed.
    I mean, if you want to reduce the number of Federal 
employees, in my opinion, you have to reduce the functions that 
those employees are doing. If you don't reduce Federal programs 
or eliminate programs or reduce things or find some other way 
to do it, if you just eliminate the people but keep all the 
functions there, you're going to have a problem.
    Mr.  Cummings. Yeah. If the ability to hire skilled 
personnel to address the skills gap is taken off the table, you 
know, one of my fears is IGs will be hampered in their capacity 
to detect and prevent waste, fraud, and abuse. So you, I take 
it, based upon what you just said, would agree with that?
    Mr.  Dodaro. Well, we're going to monitor that issue. If it 
stays in effect for a long period of time, it's going to have 
effects. What we found before was that it reduced revenue 
coming to the government because IRS wasn't able to hire 
revenue agents. It caused agencies to hire contractors or 
temporary employees. It really didn't end up saving much, 
reducing the size of the workforce as much as anticipated, and 
it caused agencies problems in implementing their missions.
    Mr.  Cummings. So when we go out and we hire these 
contractors, what kind of problems does that--I mean, have you 
looked at that overall?
    Mr.  Dodaro. Yeah.
    Mr.  Cummings. I mean generally.
    Mr.  Dodaro. Yeah, yeah. I mean, there's a number of 
contract management issues already on the high-risk list. We've 
got DOD contract management. We've got DOE, Energy Department 
contract management, NASA, acquisitions.
    And so managing--having the right people to oversee the 
contractors is very, very important. And if you don't have that 
in place, then you don't have necessarily a good prospect of 
getting the requirements right in the first place and proper 
direction and oversight over the contractors.
    Mr.  Cummings. Now, your report also states, and I quote: 
``According to OPM, data governmentwide, over 34 percent of 
Federal employees on board by the end of fiscal year 2015 will 
be eligible to retire.''
    It also says, and I quote: ``A potential wave of employee 
retirements could produce gaps in leadership and institutional 
knowledge and threaten to aggravate the problems created by 
existing skill gaps.''
    Can you explain how a retirement wave exacerbates the skill 
gaps? And then I'm finished.
    Mr.  Dodaro. Yeah. Chris.
    Mr.  Mihm. Well, it's in two senses or at least in two 
senses. One is that if you have staff with critical skills that 
are retirement eligible and they leave without effective 
succession planning programs within agencies and knowledge 
transfer programs, you can have basically some of your very 
most skilled people walking out the door. Likewise, at a 
leadership level, that you can lose a core of your senior 
executive and other leadership can go out if you don't have a 
good succession planning program.
    As the comptroller general has mentioned, is that it 
provides an opportunity for agencies to rethink what their 
skill gaps or what their competencies are that they need. So 
retirements are not necessarily a bad thing. It's just 
retirements that aren't factored in as part of a succession 
planning program are a bad thing.
    Mr.  Cummings. All right. Thank you very much.
    Mr.  Palmer. [Presiding.] The chair now recognizes the 
gentleman from North Carolina, Mr. Walker, for 5 minutes.
    Mr.  Walker. Thank you, Mr. Chairman.
    Mr. Dodaro, would you take a few minutes and, as we 
discussed the Medicaid program, I have a couple questions 
there. And I don't know how you are able to do this so much 
from memory, but we'll give it a shot here as we move forward.
    Can you tell me what the improper payment rate of the 
Medicare program is right now?
    Mr.  Dodaro. I think it's over 10 percent, and it's gone up 
recently.
    Is that correct, Nikki?
    Yes, that's correct. It's over 10 percent. It was about $36 
billion last year in improper payments in Medicaid. And I don't 
believe, Mr. Walker, Congressman Walker, that that's even the 
true magnitude of the problem, because the managed care portion 
of Medicaid shows very small improper payment rates, because 
they're only measuring what they pay the contractor, not what 
the contractor pays the beneficiaries.
    Mr.  Walker. Okay.
    Mr.  Dodaro. So we got them to put a new rule in place that 
I think will shed more light on this. They're going to audit 
the Medicare contractors. Medicaid, excuse me.
    Mr.  Walker. Thank you. Is that 10 percent higher or lower 
than last year?
    Mr.  Dodaro. It's higher.
    Mr.  Walker. So we're trimming, obviously, the wrong 
direction.
    Mr.  Dodaro. Well, I'm very concerned about both Medicaid 
and Medicare. They're the fastest growing programs in the 
Federal Government's portfolio. They're estimated to continue 
to grow at, you know, over 6 percent for the foreseeable 
future. And most of the improper payments--governmentwide was 
$144 billion. $60 billion of that was Medicare, $36 billion was 
Medicaid.
    Mr.  Walker. Okay. Let's drill down a little bit further if 
we can then. How did the improper payment rate change from 
before the Patient Protection and Affordable Care Act was 
enacted to after States began to expend Medicaid?
    Mr.  Dodaro. Nikki.
    Ms.  Clowers. The rate has continued to go up over the past 
2 years.
    Mr.  Dodaro. Yeah. One of the reasons that they cite, 
Congressman, for the rate going up is that States didn't have 
the proper systems in to determine eligibility under the new 
Affordable Care Act regulations. So it's had some effect on 
that. Not to say that some people may not be; they just haven't 
been able to demonstrate that they're eligible.
    Mr.  Walker. Okay. Is there anything that you guys are 
doing or have done or could do, past, present, or future, in 
examining the reasons why these rates continue to change?
    Mr.  Dodaro. Yeah. We've had a lot of recommendations in 
those areas. First is to get better data. The Medicaid data is 
really not good at all that the Center for Medicaid and 
Medicare studies has. It's old data. It's a year or two out of 
date. It's very inaccurate, very unreliable.
    We've recommended that they audit these managed care 
providers. I've worked with State auditors. In fact, the State 
auditor from North Carolina was involved in our discussions to 
try to get the State auditors to do more oversight and 
continuous auditing of the Medicaid program since it's such a 
large percent of the State budget activities. We've suggested 
and Congress has given the go-ahead to take the Social Security 
numbers off Medicare cards. We thought that that was leading to 
a problem. We tried for about almost a decade to do that.
    Mr.  Walker. Okay.
    Mr.  Dodaro. So we've got a number of other 
recommendations, but they need to----
    Mr.  Walker. Sure.
    Mr.  Dodaro. We're working on it. I've given this a high 
priority. You know, since Congress has required improper 
payments to be reported, measured and reported, since 2003, 
it's over $1.2 trillion that have been reported. And last year, 
it was 112 programs at 22 different agencies. So it's not just 
confined. Medicare and Medicaid are the largest, but it's more 
of a pervasive problem than I would like to see.
    Mr.  Walker. Speaking of the different States, I'm going to 
pick one. I'm going to pick Arkansas. A recent review of the 
Medicaid enrollees in Arkansas found 43,000 people who had 
moved out of the State, yet remained on Medicaid. Seven 
thousand of these had appeared to have never lived in the 
State. So it is very likely that two States may be paying two 
different insurance companies for that same individual.
    Any proposal of what we can do with such a problem?
    Mr.  Dodaro. Yeah. Yeah. Well, we've recommended that they 
make sure that they have adequate eligibility determination. 
There are two issues: One is providers, to make sure that only 
proper providers are in the programs; and second is eligibility 
determination.
    Let me ask Nikki if there's anything else she wants to add.
    Ms.  Clowers. I was going to mention the eligibility 
determinations as well as checks for duplicate coverage, that 
they need to do that on a regular basis.
    Mr.  Walker. Thank you, Mr. Dodaro.
    Thank you, Mr. Chairman. I yield back.
    Mr.  Palmer. I thank the gentleman from North Carolina.
    The chair now recognizes the gentlelady from Illinois, Ms. 
Kelly, for 5 minutes.
    Ms.  Kelly. Thank you, Mr. Chairman.
    Welcome to the witnesses.
    Mr. Dodaro, your report states, and I quote: ``Over the 
past several years, GAO has made about 2,500 recommendations to 
agencies aimed at improving the security of Federal systems and 
information. These recommendations would help agencies 
strengthen technical security controls over their computer 
networks and systems, fully implement aspects of their 
information security programs, and protect the privacy of 
personally identifiable information held on their systems. The 
implementation of these systems are critical to addressing the 
privacy concerns of citizens in an age where hacking seems 
rampant.''
    Can you explain why, as of October 2016, close to half of 
those information security-related recommendations have not 
been implemented?
    Mr.  Dodaro. I've been very concerned about the pace of 
agencies implementing our recommendations in this area. As I 
mentioned in my opening statement, we had first identified this 
as a governmentwide problem--it was the first time we ever 
designated anything across the entire Federal Government high 
risk--in 1997. It was hard to get agencies' attention to put in 
place comprehensive systems.
    Secondly, there's a lot of legacy systems, old systems, 
where they just can't keep up with patching things 
appropriately, and they need to replace the legacy systems, as 
I know you're aware of that as well. They don't have 
comprehensive systems in place. And despite the breaches that 
have occurred most recently, there's more attention being given 
to this area but not enough, from my opinion, sense of urgency 
and actually fixing these problems.
    So I'm hoping, as I meet with the new officials from the 
new administration, the Cabinet officials, I put this on their 
radar screen for prompt attention.
    Ms.  Kelly. Thank you. In your report, you also discuss the 
need for the Federal Government to improve its ability to 
detect, respond, and to mitigate cyber incidents. To that end, 
we've heard encouraging news about the implementation of 
continuous diagnostics and monitoring, or CDM. In your opinion, 
how are DHS, GSA, and other agencies doing in its 
implementation and what challenges are they facing?
    Mr.  Dodaro. Greg Wilshusen is our expert in this area. He 
has good insights in that. Greg. Hit the mic.
    Mr.  Wilshusen. Yes. Certainly, we believe that CDM is a 
tool that can help agencies better secure their systems by 
looking at the configurations of those systems, making sure 
that they're in compliance with agency standards, identify 
vulnerabilities, and even just to identify the devices on the 
networks.
    What we have found and what we will be looking at, because 
we are going to be starting an engagement to look at the CDM 
program specifically, is that agencies generally do not do a 
very good job of configuring their systems in accordance with 
sound security principles. It's something we identify at just 
about every agency we go to, including just the installation of 
patches, for example, in a timely manner and using software 
that's no longer supported by the vendors.
    CDM and having a continuous monitoring program in place 
that's effectively in place across the entire enterprise will 
help to identify those instances and, hopefully, agencies will 
act on that information.
    Ms.  Kelly. Okay. Now, CDM is just one of the many steps 
that we need to take if the Federal Government is to be a 
leader in cybersecurity. And we also passed the bipartisan 
Modernizing Government Technology Act, or MGT. But we also need 
to improve cybersecurity in the procurement process.
    In 2013, GSA and DOD published a report recommending the 
incorporation of cybersecurity standards into the Federal IT 
acquisition process. How helpful would these standards be in 
improving the Federal Government's overall cybersecurity?
    Mr.  Wilshusen. Well, I would just like to say that it's 
critical for information security controls to be designed into 
systems at the very beginning. Trying to come back and add on 
security features after the system is up and running is usually 
not as effective and more costly. So, clearly, designing and 
including security controls in those acquisition is key.
    What's also key is making sure that the acquisition 
officers and the team that's acquiring this have the 
cybersecurity expertise in order to assure that those security 
controls are being specified in the contracts and indeed are 
being adhered to by the contractors.
    Ms.  Kelly. And one last question. What chief 
recommendations does GAO have to directly deter cyber attacks 
from other nations?
    Mr.  Wilshusen. Well, one would be, of course, in terms--
one is just for the agencies to be adequately secure to help 
prevent those attacks, but recognize that attacks are going to 
continue, and even in good security, they're likely to succeed, 
because of their sophistication.
    In terms of working against--with other countries, one of 
the key things is to have an international strategy that 
addresses cybersecurity and come to an agreement with agencies 
of like mind to identify what those cyber norms are and to try 
to come up with procedures to protect against it. And when 
those countries or whomever attack us is make sure that there's 
some sort of consequence as a result.
    Ms.  Kelly. Thank you. I know I'm out of time.
    Thank you, Mr. Chair.
    Mr.  Palmer. The chair now recognizes the gentleman from 
Georgia, Mr. Hice, for 5 minutes.
    Mr.  Hice. Thank you, Mr. Chairman.
    I'd like to probably go down a similar path here while 
we're on it. Of course, we spend billions of dollars developing 
and acquiring the best technologies that we can have for our 
military. Obviously, we want to maintain the advantage as much 
as possible.
    As I understand it, protecting these technologies, there 
are a lot of different agencies involved in administering the 
protection, from DOD to DHS and State, Treasury, a host of 
different administration. Are any of these agencies more 
effective than others at protecting our technologies?
    Mr.  Dodaro. Yeah. Mr. Francis is our expert in this area. 
It's a good question.
    Mr.  Francis. I think the agency--there are at least six 
agencies involved. I don't know that any one is doing better 
than another, but in the export control area, where we actually 
have a formal process for end items, State and Commerce are 
doing, I think, a pretty good job in coordinating their 
licensing list and their licensing processes.
    It's the individual efforts by other agencies on antitamper 
and things like that, where the individual programs are not 
well coordinated. And we've made a simple recommendation, why 
don't you all just get together once a year and talk about what 
you're doing. That's not happening yet.
    Mr.  Hice. Why is that not happening, do you think?
    Mr.  Francis. I don't think there's an incentive to do it. 
The agencies are all working----
    Mr.  Hice. This is a major deal. Obviously, our 
technologies are massively critical to the national security of 
our country and so forth. What would need to happen to get the 
proper incentive for those communications to occur?
    Mr.  Dodaro. Yeah. I think legislation by the Congress. 
Where we've seen very effective interagency coordination 
mechanisms, there needs to be a statutory underpinning for 
those mechanisms so they transcend administrations, and having 
regular reporting requirements to the Congress.
    I've been having meetings with OMB and the agencies on the 
high-risk list for a number of years now. And I think when we 
had one on the export control area, it might have been the 
first time everybody got together to talk about these issues. 
And so I think it's very important to do this, because, as Paul 
mentioned, all these agencies have interrelated pieces, and 
they need to work together very effectively in order to make 
sure and keep things up to date, share information. Technology 
is rapidly advancing, as you point out, Congressman, and they 
need to be on top of this. But it'd be very effective, I think, 
to have some legislation. We'd be happy to work with you on 
that.
    Mr.  Hice. Okay. Yes. Well, let's please do.
    So you're saying the coordination is not there. Is that 
correct?
    Mr.  Dodaro. Particularly in the nonexport area. This would 
be, as Paul mentioned, the antitamper area, foreign military 
sales, and some other things. So on export control, they're 
doing a little bit better job in that area. They have a plan to 
reform it to go further, but they'll need legislation. So 
legislation is going to be needed in both areas, in my opinion.
    Mr.  Hice. Okay. If you would please, work with our office. 
Let's see how we can get that. This is a critical issue that 
needs to be addressed.
    Mr.  Dodaro. Sure.
    Mr.  Hice. Speaking real quickly, and I know I don't have 
much time, but you mentioned NASA a little while ago. And, of 
course, they are, from what I understand, planning another big 
major launch sometime next year, latter part of 2018, I 
believe. Do you have concerns that NASA may not be ready for 
that type of big-scale launch?
    Mr.  Dodaro. Go ahead, Paul.
    Mr.  Francis. Yes, we do have concerns. It has three 
elements: It's the launch system, the ground system, and the 
Orion space capsule. Right now, they're all on fairly high-risk 
schedules, not much margin left. They're not all that well-
coordinated. We think it's a very high risk of them not making 
that November 2018 date.
    Mr.  Hice. All right. But they believe that they are right 
on schedule, meeting all the requirements. You would disagree 
with that, with their assessment?
    Mr.  Francis. I think they know they're on the edge.
    Mr.  Hice. On the edge of what?
    Mr.  Francis. Not making it.
    Mr.  Hice. So why are they saying that they're making it, 
that they're on schedule?
    Mr.  Francis. Well, I think they've done internal analysis. 
They have not come out and said they can't make it yet. But 
every indication we have, it looks very unlikely that they are. 
So I think maybe it's a matter of time.
    Mr.  Hice. So in that case, you would disagree with their 
internal analysis?
    Mr.  Francis. Yes.
    Mr.  Hice. Okay. All right. Thank you very much. Appreciate 
you all being here.
    I yield back.
    Mr.  Dodaro. Congressman, I would also like to thank you 
publicly for help in our bill to get the mandates reduced to 
GAO. It's helped us focus on our more important areas. Thank 
you.
    Mr.  Hice. Well, thank you. And I appreciate your letter 
saying so. It meant a great deal to me. Thank you.
    Mr.  Palmer. The gentleman yields.
    The chair now recognizes the gentlewoman from Florida, Mrs. 
Demings.
    Mrs.  Demings. Thank you so much, Mr. Chairman.
    And good morning Mr. Dodaro, and to all of our witnesses, 
welcome.
    The GAO has found that sufficient progress has been made 
since 2005 to remove the high-risk designation from one area 
this year establishing effective mechanisms for sharing and 
managing terrorism-related information to protect the homeland.
    In its 2017 high risk report, GAO states, and I quote, 
``While the progress is commendable, it does not mean the 
government eliminated all risk associated with sharing 
information or terrorism-related information.'' I understand 
that GAO has switched the designation of this area from risk--
to risk rather than high risk. Is that correct?
    Mr.  Dodaro. That's correct.
    Mrs.  Demings. This is a concrete step, no doubt, in the 
right direction, and I hope we can continue to build on this 
progress, but I have to admit that I am worried that we may be 
losing some of the progress we have made in this area.
    Recently, the President issued an executive order 
pertaining to homeland security without seeking advice or 
conferring with Congress or any of the agencies whose mission 
it is to protect our Nation. Orders meant to truly protect our 
country should be implemented and conducted in a thorough 
fashion and one that shares information in a productive manner. 
The American people deserve a government that directs its 
resources at well-planned and well-communicated efforts.
    Mr. Dodaro, how important is information sharing to the 
security and well-being of our Nation?
    Mr.  Dodaro. It's absolutely essential. I mean, that was 
one of the issues after the September 11, 2001, attacks that 
was cited as a weakness. Congress passed an Intelligence Reform 
Act that there be established an information-sharing 
environment, so there was sharing among all the agencies and 
that's what's been implemented effectively.
    It's taken a number of years, a number of steps, and we've 
made a lot of specific recommendations, but they've made a lot 
of progress over the period of time and have demonstrated some 
result. Particularly in geospatial information, sharing law 
enforcement databases, and also in maritime domain awareness 
where there--in monitoring the sea.
    So we've seen some good progress. We'll be keeping a 
watchful eye to make sure that that progress continues.
    Mrs.  Demings. What are some of the things you would 
suggest that we can do to sustain the progress or maximize it?
    Mr.  Dodaro. George.
    Mr.  Scott. Good morning. A couple areas where we think 
that continued focus is needed. It's important to ensure that, 
as we've said in the report, while we've taken it off the high-
risk list, that does not mean that the risk does not remain. 
And so just ensuring that there is continued leadership, 
attention, and focus on this issue.
    Oftentimes, a number of the issues that we face, whether it 
is information sharing or other issues, it's less about sort of 
technology challenges; it's more about sort of leadership 
commitment and staying focused on these issues. So I think that 
is one area where we can continue to pay attention in this 
area. And the other issue is making sure that they continue to 
develop and measure their progress in meeting goals for the 
program.
    Mrs.  Demings. Thank you very much. I yield back.
    Mr.  Palmer. The gentlewoman yields.
    The chair now recognizes the gentleman from Florida, Mr. 
DeSantis, for 5 minutes.
    Mr.  DeSantis. Thank you, Mr. Chairman.
    Mr. Dodaro, in terms of the DOD acquisition, I know there 
has been problems with the F-35, with the LCS. What steps is 
DOD taking to ensure that that doesn't happen in the future?
    Mr.  Dodaro. Yeah, I'll ask Mr. Francis, our expert in this 
area to address that. But you're--I'm concerned.
    Mr.  Francis. Good morning. Yes, DOD is taking a number of 
steps. They have an initiative called Better Buying Power that 
involves doing better cost estimates, better monitoring. 
They're doing a report every year to check on how they're 
doing, so we think those are good things. They've improved the 
acquisition workforce, also good things.
    But we still see programs that are going forward without 
really measuring up to all the best practices they should, at 
start, like technology maturity, design, and having good cost 
and schedule estimates. And if those programs aren't right at 
the beginning, we're playing catchup the rest of the way. So 
DOD is not doing quite as well there, and I think there's a 
real important role for the Congress there to hold programs 
accountable and say no to programs that aren't measuring up.
    Mr.  DeSantis. Yeah. And the problem that we have is we 
don't do it at the beginning, like you said. Once you get to 
the F-35, there's so much money invested. It'd be stupid to 
say, now we're not going to do it and just abandon it. So we've 
got to get this right early on.
    So did you read--there was an article in the Washington 
Post at the end of the year about a report that had been 
commissioned within the DOD. It identified a number of 
effectively dead weight costs that could be mitigated over a 5-
year period. I think it was 125 billion. As I read the article 
in the report, none of that really affected the actual 
warfighter. DOD kind of deep-sixed it. Have you been able to 
review that report, or are you familiar with the issues?
    Mr.  Francis. Go ahead.
    Mr.  Dodaro. Yeah, we're familiar with the issues. That was 
a defense business board report, and their estimate over the 
125 billion was over a number of years. They cited a lot of the 
same areas that we've cited where there are opportunities for 
savings. Some of the areas we were comfortable with their 
numbers; others we weren't.
    So, no, they were headed in the right direction. I'm not 
sure there's that magnitude of savings available over that 
reasonable period of time, but there are savings to be had and 
it's----
    Mr.  DeSantis. Do you know why the DOD leadership was so 
hostile to it after it had been put out?
    Mr.  Dodaro. Where's Kathy? Excuse me. She knows. This is 
Kathy Berrick.
    Mr.  DeSantis. Revolving door, whatever works----
    Mr.  Dodaro. Yeah right.
    Ms.  Berrick. They agreed with aspects of the study and, in 
fact, have internal reviews within DOD where they're looking 
for efficiencies. They had some disagreements on the amount of 
money that could be saved. But I would say, overall, they had 
some agreements with the specifics of the study, but weren't in 
full concurrence with the overall conclusions about how much 
money could be saved. Some of these efforts are still ongoing 
within DOD, some of these reviews. So ultimately, it could 
result in some savings moving forward.
    Mr.  DeSantis. So we on the committee here, we are going to 
be reviewing kind of that report. I think that's going to 
happen in a couple weeks. We're going to do the full committee 
hearing. And I think the thought is is that obviously we have 
budget pressures, defense is our number one priority. Whatever 
deadweight is in there, I mean, to be able to get and root some 
of that out, that ultimately is going to free up more money for 
the warfighter so it really benefits the people who are on the 
front lines.
    But my fear is, if you don't start early in a new 
administration, a lot of this stuff just goes by the wayside. 
So we would definitely want to take your recommendations. We're 
going to do some fact finding but then try to facilitate even 
more reforms, because if we get this right, it could 
eventually, I think, really be helpful to folks who are 
frontline warriors.
    Mr.  Dodaro. No, I agree with you completely. Actually, if 
you look at the high-risk list, probably a third of the areas 
on high-risk lists are DOD business management practices. I 
mean, we have the best military in the world, but when it comes 
to the business practices, there's a lot of room for 
improvement. We can help. But the fundamental----
    Mr.  DeSantis. What can we do though for the business 
systems? Are there recommendations?
    Mr.  Dodaro. Oh, we have lots of recommendations. We'll 
share with you all those recommendations. But the fundamental 
problem that everybody has is the lack of reliable information 
over there. DOD is the only major Federal agency that's never 
been able to pass a test of an independent audit.
    And so therefore, the room for people to quibble over the 
data is--there's a large playing field there that there 
shouldn't be, even in, you know, how to gain the $10 billion 
Congress has mandated in headquarters reductions. You know, 
what's the baseline? How do you measure that? So we have a lot 
of insight into those areas. We can help you a great deal.
    Mr.  DeSantis. No, absolutely. And it was supposed to be 
audited, I think, in the early 1990s, just never happened. And 
so it does make it more difficult; there's no doubt about it. 
So, I appreciate you guys, and I yield back the balance of my 
time.
    Mr.  Dodaro. Thank you.
    Mr.  Palmer. The gentleman yields. The chair now recognizes 
the gentleman from Pennsylvania, Mr. Cartwright, for 5 minutes.
    Mr.  Cartwright. Thank you, Mr. Chairman.
    And General Dodaro, welcome back.
    Mr.  Dodaro. Thank you.
    Mr.  Cartwright. It is a pleasure to have you back here. I 
first met you 4 years ago when you came in with the high-risk 
report at that time. And at that time, that was the first year 
you had climate change on one of the action items for the high-
risk report.
    I just want to cite a statistic I saw today: ``Between 2005 
and 2015, FEMA issued more than $67 billion in grants to assist 
communities and individuals devastated by extreme weather 
events.'' And Mr. Dodaro, you guys picked up on this. GAO has 
reported on climate change for a number of years now. The high-
risk report cites climate change findings of the National 
Research Council and the U.S. global change research program.
    The report states, quote, ``According to the National 
Research Council, although the exact details cannot be 
predicted with certainty, there is clear, scientific 
understanding that climate change poses serious risks to human 
society and many of the physical and ecological systems upon 
which society depends.''
    GAO has done substantial work on the issue of climate 
change. The question is, what does the body of scientific 
literature suggest as to whether climate change is, in fact, 
occurring?
    Mr.  Dodaro. Yeah. Well, we've deferred largely to the 
scientists at national academies and the global research group 
that you mentioned which are made up of the agencies.
    Our angle on this, and the reason we're concerned, is the 
fiscal exposure of the Federal Government.
    Mr.  Cartwright. Me too. Fiscal exposure, that's what we're 
all here to talk about, the fiscal exposure of the Federal 
Government. And you wrote in your report, ``The Federal 
Government is not well organized to address the fiscal exposure 
caused by extreme weather events.'' Right?
    Mr.  Dodaro. That's correct.
    Mr.  Cartwright. So how large are these exposures, and how 
high might the associated cost of inaction be?
    Mr.  Dodaro. Yeah. The exposures are in several different 
forms. We don't have an overall number, I'll say that upfront.
    Number one is the Federal Government as a property owner. 
I'm very concerned. DOD has raised this issue on the impact on 
its own operations, but this--particularly on coastal areas, of 
protecting all those DOD assets that we built both domestically 
and internationally.
    Second is on the Federal Government as an insurer. The 
flood insurance program already owes over $20 billion to the 
Treasury Department. It is not actuarially sound, and it's 
subject to a lot of additional exposure.
    Crop insurance, the payments for the Federal Government for 
crop insurance have doubled over the last several years from 
what they were before so there's likelihood there.
    The other issue is the Federal Governments never reform the 
criteria it uses for declaring a natural disaster that it's 
going to step into. We're still using a per capita amount, you 
know, in individual States. We suggested that needed to be 
reformed.
    And then the budgeting area is another area. We don't 
budget as a national government for major disasters. We budget 
for anything that's under $500 million. But when something big 
hits, we just go--you know, we take care of it----
    Mr.  Cartwright. You take care of it.
    Mr.  Dodaro. --but we've got to borrow.
    Mr.  Cartwright. So we're talking about the American 
taxpayers are property owners, they are insurers----
    Mr.  Dodaro. Right.
    Mr.  Cartwright. And they bail out when there's a FEMA 
emergency.
    Mr.  Dodaro. Right.
    Mr.  Cartwright. And this is why this is on the high-risk 
report because we need to prepare for these crises. And your 
finding was that the Federal Government is not well organized 
to plan ahead for resilience and planning and things like that.
    So I have introduced legislation working with your office 
to create an oversight and governance structure and a process 
that requires agencies to implement governmentwide resilience, 
preparedness, and risk management priorities, and elevating the 
role of OMB to ensure proper funding and implementation for 
these initiatives.
    The support for this has been bipartisan. My brother, Mr. 
Farenthold, is a cosponsor of this. He's not here right now, 
but we also have a lot of taxpayers groups that love this 
legislation: Taxpayers for Commonsense, National Taxpayers 
Union, Coalition to Reduce Spending, Taxpayers Protection 
Alliance, even the Reinsurance Association of America.
    People who are concerned about fiscal soundness and saving 
taxpayers money love this bill. It is the PREPARE Act. I will 
be reintroducing it again this Congress.
    And I want to thank you for all your work and your 
foresight in working on this problem.
    Mr.  Dodaro. Thank you very much.
    Mr.  Cartwright. I yield back.
    Mr.  Dodaro. Congressman Cartwright, thank you.
    Mr.  Palmer. The gentleman yields.
    The chair now recognizes the gentleman from Michigan, Mr. 
Mitchell, for 5 minutes.
    Mr.  Mitchell. Thank you, Mr. Chairman.
    General Dodaro, you may have to change, rotate experts 
there, sir.
    Mr.  Dodaro. I need a chair on wheels.
    Mr.  Mitchell. What's that?
    Mr.  Dodaro. I say, I need a chair on wheels.
    Mr.  Mitchell. Yes, you do in here. If you're a Member of 
Congress, you need wheels as well. Trust me on that.
    I'd like to talk a little bit about transportation, surface 
transportation. The GAO report found--yep, somebody knew. The 
GAO report found that several agencies failed to document key 
award decisions when making decisions regarding discretionary, 
I would say, allegedly competitive grants that resulted in poor 
decisionmaking.
    Specifically, GAO found that DOT failed to document key 
decisions and deviated from established procedures in awarding 
the TIGER grants, the Transportation Investment Generating 
Economic Recovery grants. What were your offices findings--
recommendations regarding that matter?
    Mr.  Dodaro. Yeah. We were very concerned about the lack of 
documentation and the clear--and the transparency on which 
these grants were awarded. Ms. Siggerud can explain the details 
there. We've made some recommendations. They've taken some 
actions, but not enough, so I think congressional follow-up 
would be helpful.
    Kate.
    Ms.  Siggerud. GAO has looked at several different types of 
discretionary grants given by the Department of Transportation, 
including the TIGER grants that you mentioned, as well as more 
recently some transit grants related to emergency situations.
    Mr.  Mitchell. Sure.
    Ms.  Siggerud. In all of those cases, we found both a lack 
of transparency at the beginning about the criteria and then 
explanation of how those criteria were applied throughout the 
entire process, including documentation of any decisions that 
were made outside or not in agreement with those criteria.
    So we made sort of a wrap-up recommendation in December of 
this year regarding all of the discretionary grant programs at 
the Department, and we will be monitoring how the Department 
looks at both that upfront criteria setting as well as the 
decisionmaking and the documentation throughout.
    Mr.  Mitchell. Did you look at how much money was spent 
outside the anticipated intent or guidelines? Did you look at 
the amount of money that was, let's say, misallocated, for lack 
of a better term? Did you get an estimate of that?
    Ms.  Siggerud. I'd like to get that number to you for the 
record. We did look at grants and identified some that were 
elevated above others in apparent disagreement with the 
criteria that were originally established.
    Mr.  Mitchell. When you provide that, if you could provide 
not only the amount but which grants and which locations they 
were for.
    Ms.  Siggerud. I'd like to get back with our team on that 
so we could determine the level of detail that we have.
    Mr.  Mitchell. Sure, if we could.
    And if we could put that in the record, Mr. Chair, when we 
do receive that, I would appreciate it.
    Mr.  Palmer. Without objection.
    Mr.  Mitchell. One more quick question for you while I have 
time. One of the findings you note is that funding for 
transportation, highway transportation has eroded in part 
because of inflationary impacts and failure to raise the gas 
tax.
    Has the Department made any recommendations regarding 
efficiency, regarding administrative cost cuts that can be made 
at DOT to, in fact, put more money in the highways?
    Mr.  Dodaro. We've not--we've not--you mean, by the 
department, you mean the GAO?
    Mr.  Mitchell. Oh GAO, yes, sir.
    Mr.  Dodaro. Yeah. I'll get back. I'll look at that and 
we'll get back to you for the record. Nothing springs to mind 
offhand in that area. I think our main recommendations have 
been mostly geared toward making sure that the States' use of 
the highway money is producing good results.
    Mr.  Mitchell. Sure.
    Mr.  Dodaro. And that has been our primary area of concern. 
I don't think we've identified other areas that could be cut to 
shift money into that area.
    Mr.  Mitchell. Well, the question I would ask is, how 
efficient are we being with the money and how much money is 
being transmitted onto the States rather than spent on, I would 
say, bureaucratic overhead that, in fact, doesn't put highway 
miles, doesn't fix roads, which in Michigan and across this 
country, is significant concerns.
    Mr.  Dodaro. Right, right. No, while go back--I'll go back 
and take a look and submit something for the record for that 
area. Offhand, nothing comings to mind.
    Mr.  Mitchell. I appreciate the review. Thank you very 
much.
    And I yield back, Mr. Chair.
    Mr.  Palmer. The gentleman yields.
    The chair now recognizes the gentlewoman from New York, 
Mrs. Maloney, for 5 minutes.
    Mrs.  Maloney. Thank you Chairman Palmer for yielding.
    And it's always good to see you, Mr. Dodaro, and we all 
rely on the GAO in our daily decisions for your independent and 
professional judgment, so thank you.
    I'd like to direct my questions on the Consumer Financial 
Protection Bureau. And as you know, the CFPB has returned over 
$12 billion to over 27 million Americans who have been victims 
of fraud and deception. And you rightfully applauded them for 
this achievement.
    Now, the high-risk report indicates that the Consumer 
Financial Protection Bureau has addressed all of GAO's previous 
recommendations. In fact, the report states that Congress 
should consider, and I quote, ``transferring other regulators' 
consumer protection authorities to the bureau.'' I can assume 
that these statements are due to the bureau's effectiveness and 
efficiency.
    Specifically, why are you recommending that other 
regulators and consumer protection transfer it over to the 
CFPB?
    Mr.  Dodaro. Yeah, let me ask Ms. Williams to respond to 
that.
    Ms.  Williams. So we issued a report last year that looked 
at the regulatory structure. And one of the things we observed 
in the consumer protection space is that there's fragmentation; 
that while the CFPB was created there were certain 
responsibilities that went to CFPB, and there were others that 
were retained by the existing regulators. So this creates a 
potential for unevenness in terms of protecting consumers.
    Mr.  Dodaro. It's part of--if I might, Orice, it's part of 
an overall look that we had of the banking regulators. And we 
still think that there's a lot of overlap and duplication in 
the bank regulation area at large, and then within that 
framework consumer protection issue was raised.
    Ms.  Williams. Yes. We also looked at the regulatory 
structure for depository institutions and also insurance.
    Mrs.  Maloney. Okay. I'd like to ask today about the 
recommendations in your report for the overall financial 
regulatory system. And the report indicates, and I quote, 
``Congress and financial regulators have made progress in 
improving the financial regulatory systems,'' so that's really 
good news.
    And the report indicates that the Financial Stability 
Oversight Council, or FSOC, quote, ``represents advancement in 
addressing systemic risks and threats to the U.S. financial 
system,'' end quote. And even that--and I quote, ``its legal 
authorities may not be broad enough to ensure that it addresses 
all of the threats effectively.''
    Now, can you comment on why you felt that it's not 
addressing everything effectively, it could be broader. Could 
you address that more?
    Mr.  Dodaro. Yeah. I'll ask Orice to give particulars. But 
I'm very concerned about this. You know, one of the issues when 
we put it on the high-risk list, one of the reasons in 2009 was 
there was not a systemic risk focus by any of the regulatory 
areas. And this was one of the major failures that led to the 
global financial crisis, and the crisis we had in our country.
    And so instead of designating a regulator, they gave the 
responsibility to FSOC to do. And we've looked at their work, 
tried to encourage them to be more transparent and thorough and 
also have a better research group, not duplicate what the 
individual regulators were doing.
    And in some of the recommendations we had, if I recall 
correctly, they believed they didn't have the legal authority 
to do it. So we recommended that Congress clarify it.
    Orice can provide the specifics.
    Mrs.  Maloney. Okay. Could you elaborate on that?
    Ms.  Williams. Yes. So the council consists of independent 
regulators. So if a problem is identified by the council, they 
aren't able to bind any of the regulators to take action to 
address any particular risk that may emerge in the system.
    And that's what--the matter that we had spoke to was 
perhaps, if FSOC is going to be the systemic risk entity, then 
it should have responsibilities and authorities commensurate 
with the helping to identify and address systemic risk issues.
    Mrs.  Maloney. That's interesting, because some of my 
colleagues are working to abolish the CFPB, which seems to be 
incredibly successful in helping consumers and I would say the 
financial system, because the overall financial system thrives 
when consumers are also successful. And that the FSOC does not 
have implementation powers as strong as they should.
    I want to thank you for your very helpful insight into this 
and basically your statement that abolishing these new 
safeguards for the financial system would be a mistake and hurt 
the overall economy.
    So my time has expired, so I want to thank you for your 
hard work. I love GAO. I probably ask for too many reports from 
all of you, but they're always insightful and very helpful, and 
I'm very appreciative. It's helped advance our work in a 
bipartisan way. Thank you.
    Mr.  Dodaro. Thank you very much.
    Mr.  Palmer. The chair recognizes the gentleman from North 
Carolina, Mr. Meadows, for 5 minutes.
    Mr.  Meadows. Thank you, Mr. Chairman.
    Mr. Dodaro, thank you so much for your work. And as I look 
out into the audience with a lot of your fellow colleagues, a 
real thank you to all of you as well. I know this is not your 
first rodeo, and we do appreciate your work.
    And it makes a difference. I think I need to stress that, 
that the recommendations that many times--you know, a lot of 
times we can do these recommendations and think that no one is 
listening and no one is hearing, but I can tell you that not 
only do we listen normally, whether it's census or even--Mr. 
Dodaro, I think strategic oil reserves is one of the things 
that you mentioned that we needed to address.
    So it got used as a pay-for at least three or four times 
after your hearing. I think we only had, you know, 25 billion. 
I think we used it four times, $100 billion worth.
    So as we become more accustom to some of the 
recommendations that you make, what I'd like to do is for us to 
look just for our accountability, and it may be for GAO's 
benefit, is the number of recommendations that actually get 
implemented and not just by agency but overall those cost-
saving recommendations. I know that you're doing that as they 
come off the high-risk list, but the more specific where you 
can actually get the feedback to the individual sector that is 
working, so whether it's DOD or the IRS or anything else, if we 
could do that.
    So let me go very specifically to two--if your DOD person 
would come back up real quick on foreign military sales.
    Mr.  Dodaro. Yes.
    Mr.  Meadows. And something that I need to get more 
clarification on, primarily because I've got somebody coming in 
to ask me about something today, as it would happen. They're 
not in my district and so I feel like maybe I can speak out a 
little bit more clearly.
    But with regards to foreign military sales and what I would 
say sole-source procurement, where there is one person that 
ultimately gets the contract and where they get disqualified 
because of not having dealt with the bureaucracy of the United 
States before, is that a common practice, and if that is a 
common practice, does that not present a barrier to entry for 
anyone else wanting to compete for the same type of business?
    Because the reason supposedly was that they don't normally 
deal with the bureaucracy of the Federal Government even though 
they are qualified to sell to the government. But because they 
haven't done it, they got thrown out. Is that common?
    Mr.  Francis. I don't know how common it is, but it 
happens.
    Mr.  Meadows. Have you seen it before?
    Mr.  Francis. Yes. Yes.
    Mr.  Meadows. Okay. So if you've seen it before, and we 
have a barriered entry, and because you haven't done business 
with the Federal Government you can't do business with the 
Federal Government in the future. Does that not have a chilling 
effect on competition?
    Mr.  Francis. Yes. And it keeps nontraditional firms from 
entering into the DOD market, and we're not able to take 
advantage of some of the commercial innovation. And we're 
taking a look at that right now.
    Mr.  Meadows. All right. Well, will you take the message 
back that there's one member from North Carolina that is not 
going to give up on this particular issue and that he has the 
support of two very senior Senators in the upper chamber that 
would--not necessarily from my State, that are looking at this 
very exact thing.
    And so if you would take to them that if they're going to 
have a chilling effect on competition, we're going to look a 
lot closer at the procurement aspects as it relates. Would you 
do that for me?
    Mr.  Francis. We will do that.
    Mr.  Meadows. All right. Great.
    Mr. Dodaro, in the 49 seconds I have remaining, let's look 
at tax gap and truly at where we are in terms of not collecting 
taxes. I understand the newest one is--$406 billion is the tax 
gap.
    Mr.  Dodaro. Right.
    Mr.  Meadows. Eventually that becomes real money. Doesn't 
it?
    Mr.  Dodaro. In a hurry.
    Mr.  Meadows. Yeah, in a hurry.
    So when we look at EITC, and the earned income tax credit, 
it shows that improper payments average around 25 to 26 
percent. Is that correct?
    Mr.  Dodaro. I believe that's right.
    Mr.  Meadows. And so is that a historical trend which 
typically doesn't change much year to year?
    Mr.  Dodaro. As I recall, it has been pretty much in that 
neighborhood over the time. I'll go back and I'll give the 
exact numbers for the record. There was a slight drop this past 
year, but there's no big changes that I've seen. There's some 
structural issues with that area.
    Mr.  Meadows. Okay. So if there are structural issues, at 
what point do we get serious? Because even just on the improper 
payments there, according to my notes, it's between $13 billion 
and $15 billion.
    Mr.  Dodaro. Right. It's the third largest improper payment 
behind Medicare and Medicaid.
    Mr.  Meadows. So how do we fix it?
    Mr.  Dodaro. There are a couple of things that have to be 
looked at: One is the statutory basis for the earned income tax 
credit. That's a very complicated situation. And I think----
    Mr.  Meadows. So are you suggesting that Members of 
Congress passed something that was very complicated? I'm 
shocked.
    Mr.  Dodaro. In this particular case, I might say that that 
it could be simplified. And it----
    Mr.  Meadows. Okay. You need to run for office. That was 
very political, yeah.
    Mr.  Dodaro. I'm happy with my current job.
    Mr.  Meadows. As you should be. I've run out of time, so I 
will give you some for the record. I want to be sensitive to 
the chair.
    And if we would--I'll yield back, but I'll follow up and 
give your tax experts some--we need some as we look at the 
Affordable Care Act, the repeal replacement. We're about to 
make some more complicated decisions that I don't want to make 
sure--I want to make sure we don't make the same mistake.
    And I'll yield back.
    Mr.  Dodaro. Okay.
    Mr.  Palmer. The chair now recognizes the gentlelady from 
the District of Columbia, Ms. Holmes Norton, for 5 minutes.
    Ms.  Norton. I thank the chairman.
    I have a question about the effect of the elimination of 
regulations that is going full board here now.
    So let's start with one. Mr. Dodaro, the management of 
Federal oil and gas resources by our country has been put on 
the high-risk list since 2011.
    According to your report, some progress has been made on 
implementing the GAO's recommendations in this area. And I note 
that resources from oil and gas amount to $49 billion, at least 
I'm quoting now from fiscal years 2011 through 2015, and 
therefore, one of the governments' largest sources of nontax 
revenue.
    Now, past GAO work had has found that the American people 
or that the country may not be getting a fair return from oil 
and gas produced from Federal leases. The Bureau of Land 
Management revises its--recommended--I'm sorry GAO recommended 
that the Bureau of Land Management revise its regulations to 
charge higher royalty rates to companies producing oil and gas 
on public lands.
    Now, I understand that this recommendation was implemented 
as part of BLM's final rule on methane and waste reduction. 
Now, I like your view on the effect you envision given what you 
know about your recommendations to put it into effect in the 
first place. What would be the likely effect if this rule were 
finally overturned?
    Mr.  Dodaro. I would like to ask Mr. Gaffigan to address 
that. He's our expert in that area.
    Mr.  Gaffigan. Thank you for your question.
    Yeah, our recommendation was in the revenue collection 
area, basically that BLM should provide itself some flexibility 
to change the rates. They hadn't been looked at in a long time, 
and BLM went through a long process to do that and was, as you 
indicated, able to do a proposed rule, which allows for this 
flexibility.
    What happens in the future is very dependent on where the 
resource is, what's at stake. They obviously want to provide a 
competitive rate. They don't want to price themselves out of 
the market by having a rate that's too high, but at least 
they've set the stage for providing the flexibility to collect 
revenues. And as you mentioned----
    Ms.  Norton. They had done that in the rule.
    Mr.  Gaffigan. They've done that in the rule in November of 
2016.
    Ms.  Norton. Uh-huh. So the notion that one of these rules 
may actually deprive us of revenues is almost laughable if it 
weren't so sad.
    GAO has looked intensively at this area, and it's also 
recommended that BLM update other regulations, including--I 
understand this is called onshore order number three to help 
BLM accurately determine how much is due in royalties, and that 
this was implemented.
    With onshore order number three, if we see its elimination, 
how would you characterize the potential effect?
    Mr.  Dodaro. Go ahead.
    Mr.  Gaffigan. I think that there's a lot of things 
happening in that area of revenue collection. We still have it 
in sort of a partially met status in terms of where BLM is in 
this, because I think we need to see how it plays out. One of 
the issues----
    Ms.  Norton. What do you mean by partially?
    Mr.  Gaffigan. The criteria for coming off the high risk. 
We think they have made some progress, but they haven't fully 
met it. And we have it at the partially-met category because we 
think it needs--we need to see it implemented. And I think 
there's still some remains-to-be-seen work that needs to be 
done in this----
    Ms.  Norton. How much of it has been implemented?
    Mr.  Gaffigan. I'm sorry?
    Ms.  Norton. You say it has been partially implemented.
    Mr.  Gaffigan. Right.
    Ms.  Norton. So are we almost there? Are we halfway there?
    Mr.  Gaffigan. I think they set the stage for them to be 
able to do some of these things. To increase----
    Ms.  Norton. So you must have some view then on what would 
happen if that halfway or that were eliminated?
    Mr.  Gaffigan. Well we're going to continue to monitor it 
and continue to monitor this area, as we have for a number of 
years, to see. We think there has been some progress made, but 
there's more work that needs to be done.
    Mr.  Dodaro. If in some of these areas, when we're--we're 
monitoring them all the time. If we see progress has regressed, 
we will state that. We will let the Congress know.
    In fact, in this oil and gas area, we're saying for the 
reorganization area on high risk, they've regressed. They 
haven't fixed--in their safety and environmental management, 
they haven't--they're still using pre-Deep Water Horizon 
Investigation rules. They haven't fixed that. They're having 
problems in planning and documenting and have quality assurance 
over their investigations.
    In the environment area, they're still operating on a 30-
year-old agreement with EPA. They haven't changed that yet. And 
their enforcement mechanisms, they haven't been very clear on 
that area as well. And they've changed, in some of the 
environment area, reversed their reorganizational structure 
plans that they had in place.
    So that's an area where we're saying this year, for that 
aspect of it, they've moved backwards not forward. And we'll 
keep an eye on these other areas as well.
    Ms.  Norton. Thank you very much.
    Mr.  Palmer. The chair now recognizes the gentleman from 
Kentucky, Mr. Massie, for 5 minutes.
    Mr.  Massie. Thank you, Mr. Chairman.
    Mr. Dodaro, I see on here, on the list of 34 at-risk 
programs, is improving Federal oversight of food safety. I 
missed your opening comments, but if you'd like to say 
something about that, I'd love to hear.
    Mr.  Dodaro. Yeah. We've had that on the list for a number 
of years. It's a very fragmented system that we have. You know, 
there's, you know, 30 different laws about 16 different Federal 
agencies that are involved in food safety, and we've 
recommended that there be, you know, comprehensive reform; that 
they have a food safety governmentwide plan that spells out 
what needs to be done. There's metrics on how to do it.
    They used to have a--the executive branch used to have a 
food safety working group. That's fallen by the wayside. We're 
saying Congress, we believe, should at a minimum reestablish 
that group, ask for a governmentwide plan with measures and 
milestones, particularly as we're importing more food as well. 
I mean, the number of imported food now has almost doubled that 
in the past several years. And so I think it's very important 
that they address this issue.
    Mr.  Massie. What are the potential contributors to the 
increase in reported multi-State outbreaks of foodborne 
illness?
    Mr.  Dodaro. Mr. Gaffigan is our expert in that area too.
    Mr.  Massie. Okay. Great.
    Mr.  Gaffigan. I don't quite have the range he has, but 
there's a couple things going on. You know, we have more and 
more of our food that's imported across the world. We have more 
and more of our folks eating raw, unprocessed foods. And we 
also have more vulnerable populations; as people age, they're 
more vulnerable to these things. So those are three factors 
that can contribute to more of the multi-State outbreaks.
    Mr.  Massie. How about the centralization of foods, food 
processing and preparation and production?
    Mr.  Gaffigan. You know, we haven't--that hasn't been cited 
as a contributor one way or the other. I think our main concern 
is having 30 different agencies involved in this. And we're 
just talking about the Federal agencies. There's a lot of 
efforts at the State and local level that are involved in our 
food safety system, and there's really a need, I think, for a 
national strategy to get these stakeholders together. And like 
any crosscutting issue, it starts with leadership, who's in 
charge, defining roles and responsibilities.
    And we have a report that has just come out that reiterates 
some of this. We gathered some experts from the--with the 
assistance of the national academies, brought folks in, former 
FIS folks, former FDA folks, folks from the grocery industry 
and throughout. And it's really a phenomenal group of experts, 
and that was a theme of theirs. You know, a lot of folks doing 
a lot of good work, but we need somebody to kind of take charge 
and assign these roles and responsibilities.
    Mr.  Massie. Well, from the folks that I talk to, they say 
that, you know, our food supply system is actually--the more 
centralized it is, the more brittle it becomes and at risk, 
because if you have an issue in one slaughterhouse or in one 
field, it could show up in twelve different States very 
quickly. And so, you know, we've seen a lot of recalls that are 
nationwide instead of the local grocery store or something.
    So here's--based on what both of you have said, here are a 
couple things that I have noticed that I want to comment on. I 
know a lot of small farmers. I've noticed that they're 
decreasing in number. The number of dairies is decreasing. The 
number of abattoirs, slaughterhouses is decreasing, and it's 
becoming more centralized. And this actually puts us--it's more 
efficient, but it's also a riskier system in terms of the 
magnitude of an outbreak if it happens.
    Here's the ironic thing: What's pushing this trend is the 
fact we have 16 different, you know, administrative facilities 
for enforcing the laws, and the small guys, the small producers 
are being forced out by the regulations that are intended to 
keep us safer. So the regulations are leading to a greater 
centralization, just the overhead of compliance, for instance, 
for a local slaughterhouse puts--you know, they go out of 
business and then it consolidates.
    So I would just say, I'd like to keep that in mind as we 
promulgate more and more regulations, that the little guys 
aren't going to be able to keep up with so you can't buy food 
from your local processer or local farmer. You've got to buy it 
from another State. So keep that in mind.
    Another thing that disappointed me a couple years ago, and 
I think this somewhat puts the consumer more at risk is, here 
in Congress, we got rid of country-of-origin labeling for beef 
and pork, a couple years ago, in the omnibus bill. And we were 
told we had to do this for trade reasons.
    But as you pointed out, we doubled our consumption of food 
overseas, and I think everybody can agree there's not a uniform 
food safety law across the globe. And I think the best thing 
you can do is say, okay, buyer beware, this is the country that 
it's coming from.
    So I think for food safety, let's just keep in mind that 
more regulations doesn't mean always safer food because it gets 
more centralized--leads to more centralized production. And I 
think labels are always a good thing.
    So with that, I'll yield back to the chairman.
    Mr.  Dodaro. Just for the record, we are not calling for 
more regulation.
    Mr.  Massie. Okay. Great. Thank you.
    Mr.  Dodaro. We're calling for a streamlined, simplified, 
more cohesive system, which could lead to a streamlining of the 
regulations.
    Mr.  Massie. And I think that would be great for smaller 
producers and actually make our food supply system less brittle 
if they could deal with one agency instead of 16.
    Mr.  Dodaro. Yeah, and we'll submit our most recent report, 
which I think was just issued this past week, for the record.
    Mr.  Massie. Great. Thank you both. I yield back.
    Mr.  Palmer. The gentleman yields.
    The chair now recognizes the gentleman from California, Mr. 
DeSaulnier for 5 minutes.
    Mr.  DeSaulnier. Thank you, Mr. Chairman. I appreciate your 
leadership skills today.
    So I wanted to talk a little bit about tax law enforcement 
and identity theft, whoever is going to move up to the chair 
for that. While you're doing your well choreographed, I just 
want to----
    Mr.  Dodaro. I can handle some of these.
    Mr.  DeSaulnier. I'm aware. I'm aware. Just the fact that 
you admitted that you didn't want to run for office is a good 
indication of your intellectual capacity.
    And to all of you, seriously, thank you for the work you 
do. This is really incredibly important work. It may seem out 
of the limelight in our political environment, but I wish we 
did more of it. And as others have said on both sides of the 
aisle, this is really the meat and potatoes of what we should 
do in Congress in a bipartisan way.
    So in your 2015 high-risk report, you included tax law 
enforcement and identity theft for the IRS. As much as $14.5 
billion you identified in tax fraud was attempted in 2015; 85 
percent of that we were able to recover.
    So the question is, just the pressures between us not 
investing in the Internal Revenue Service and then whatever 
impact the hiring freeze would have on attracting the best 
quality people, because I just--I assume that the bad guys are 
constantly out there trying to push the envelope, and obviously 
it's in everyone is best interest to make sure that people are 
protected but also that people who pay their taxes on time, 
both their Federal and State and local taxes, realize the 
integrity of the process.
    So if you could comment on the challenges to making sure 
that the personnel and the infrastructure are--we're investing 
properly in it, in regards to both the decrease in our support 
of the IRS overall and the potential impact from the hiring 
freeze.
    Mr.  Dodaro. Right. In the identity theft area--and then 
I'll turn it over to Chris for specifics--they've actually 
allocated more resources to that area, which is one of the 
reasons they made some progress.
    I was also pleased to see the Congress implement our 
recommendation that you accelerate the W-2 information 
reporting from employers from March or April to January. This 
will enable IRS to better match the information, but they'll 
need to have the systems in place to be able to do that to 
effectively take advantage of that congressional flexibility 
that that's being given to them.
    The skill issues, Mr. Mihm, is focused on that, and I'll 
turn it over to him.
    Mr.  Mihm. Yes, sir. Thank you for the question. In 
addition to the additional resources IRS has put on it under 
its own initiative, Congress also provided additional resources 
in this particular area as well as the service side last year 
to make sure that they could augment their capacity to detect 
and respond to identity theft issues.
    The challenge that they face is precisely the one that you 
mentioned, is that we have an adversary that's adaptive. And so 
it's the moment you put in one set of controls or one set of 
ways, detection technologies, they are able to figure that out 
and, you know, are working very aggressively to get, you know, 
around that.
    So the big ongoing challenge that the IRS faces is making 
sure that they have authentication procedures in place; that 
they can really know that when you or I are saying we are you 
or I, we are indeed ourselves and not somebody in a foreign 
country.
    Mr.  DeSaulnier. So on the issue of attracting and 
retaining young people who can make a good deal of money in the 
private sector doing this kind of work, are we able to keep up 
with that challenge to attract and retain the best people?
    Mr.  Dodaro. This is an issue of cross-government----
    Mr.  DeSaulnier. Right.
    Mr.  Dodaro. --not just the IRS. And we put the strategic 
human capital management on a high-risk list in 2001, because 
we were concerned that the government is behind in that area. 
It's something that I am concerned about governmentwide. I'm 
very concerned about the Federal workforce in terms of skill 
gaps, impending retirements. And the complexity has increased 
in terms of some of the issues the Federal Government has to 
deal with; cyber is a classic example of this.
    But acquisitions is another area where acquiring much more 
sophisticated weapons technology, satellite systems, space-
based systems, et cetera. So this is an area that I would, you 
know, really underscore that needs careful attention. I know 
I'm more worried about it. You know, I'm fortunate that I'm 
able to attract and retain talented people in GAO. We're not in 
the executive branch system. You know, we have our own 
personnel authorities, which I attributed largely to the reason 
we're able to operate effectively. But you're right to be 
worried about this, not only at the IRS but across the 
government.
    Mr.  DeSaulnier. In regards to the hiring freeze, how does 
that concern you? I was reading one of your reports from the 
1980s talk about the implications of a hard hiring freeze, but 
particularly when it comes to revenue collection.
    Mr.  Dodaro. Yes. A hiring freeze is not an effective way 
to manage the workforce. So our past work has shown that not to 
be true. In this case, they are doing it temporarily. They are 
going to come up with a plan. I'm anxious to see what the plan 
would be that they come up with in order to do this. They've 
made some exceptions in some areas, which is important to do as 
well.
    But you really need a good workforce plan, and you also 
need to make decisions about what you want the government to 
do. If you still have all the requirements for government to do 
things but you have less people to do it, you're going to have 
problems. There will be breakdowns. There will be unsatisfied 
objectives.
    So if you reduced some of the functions of government, then 
the people that go along with those functions you can reduce it 
that way. So either through budgetary controls or through 
strategic workforce planning would be the most optimal way to 
deal with making sure you have the--not only the size workforce 
you want but the one with the right skills.
    Mr.  DeSaulnier. Thank you. Thank you, all.
    Thank you, Mr. Chairman.
    Mr.  Palmer. The gentleman yields.
    The chair now recognizes the gentleman from California, Mr. 
Issa, for 5 minutes.
    Mr.  Issa. Thank you, Mr. Chairman.
    Good to see you again.
    Mr.  Dodaro. Good to see you.
    Mr.  Issa. Just to put it in perspective, because I think 
the gentleman from California did tee it up pretty well, but 
today, the Federal Government in its--all of its programs, 
including Medicare, Social Security, and so on, consumes a 
greater portion of our gross domestic product than ever before. 
Isn't that correct?
    Mr.  Dodaro. That's correct.
    Mr.  Issa. So government has grown in the size and amount 
of money that it takes in. So in a nutshell, is it fair to say 
that if we're getting more money as a percentage of the total 
wealth of the country, we have no one to blame if we don't have 
enough money for vital programs than ourselves?
    Mr.  Dodaro. That's true.
    Mr.  Issa. But I'm going to go back to something you said. 
I'm not trying to hold you accountable, but I know a little bit 
about what you try to do. How many slots do you have today, and 
how many of them have you been able to fill because of limited 
resources?
    Mr.  Dodaro. We have--we don't have a set number of slots--
--
    Mr.  Issa. But you used to have a lot more full-time 
equivalents?
    Mr.  Dodaro. Oh, yes, yes, we did. Most recently we had 
about 3,250 before the sequester. We've been under 3,000 people 
most recently. So----
    Mr.  Issa. So the IRS isn't the only group that's being 
told to do more with less and leverage technology. Are they?
    Mr.  Dodaro. That's correct. And we think, just for the 
record, in the IRS that they could do more with the resources 
they have. We don't think they've measured good return on 
investment about different enforcement strategies and allocated 
the resources.
    Mr.  Issa. And isn't it true, if you know, that the IRS has 
done very little to deal with the kind of fraud that has become 
rampant where people, through identity theft, basically file 
your tax return quickly and get a return from the government. 
That's a growing industry. Isn't it?
    Mr.  Dodaro. It's a growing industry, but they have taken 
some measures. We give them credit for it in this report and 
also the Congress for giving them additional legislation to get 
the W-2 information from employers earlier, which will help 
them match. Previously, people could file their returns and 
they didn't have the W-2s.
    Mr.  Issa. Right. In The old days a quick filer comes in 
early January and just defrauds and gets away with it. It's a 
little harder now.
    Mr.  Dodaro. Yeah.
    Mr.  Issa. I want to go to one of the areas that you note. 
It's a new area. You have a fairly broad group of problems for 
Native Americans.
    Mr.  Dodaro. Yes.
    Mr.  Issa. And this is new. Education is failing. We, the 
Federal Government, are failing in our responsibility to bring 
education to the tribal areas. Correct?
    Mr.  Dodaro. That's correct, and particularly the condition 
of the schools.
    Mr.  Issa. Indian Healthcare Service is not meeting its 
responsibilities. Is that true?
    Mr.  Dodaro. That's correct.
    Mr.  Issa. And when Native American tribes try to do energy 
programs, energy development programs, you noted that they're 
finding extreme burdens in trying to do their own programs on 
Native American land?
    Mr.  Dodaro. Yes.
    Mr.  Issa. So first time, but it looks like there's an 
attack on Native Americans on three fronts: Their education, 
their opportunity to have energy and employment, and, of 
course, their health. How are we going to fix this?
    Mr.  Dodaro. I think you need better leadership over at the 
Bureau of Indian Affairs and Indian Health Services. It has to 
be a higher priority. When I meet with the new Secretary of 
Interior, once there is one, I'm going to raise this issue to 
them. This is a serious problem.
    Staffing isn't up to where it needs to be at a lot of these 
locations. There are no healthcare standards and metrics that 
they're supposed to have. They're still allocating the money 
for contract care for health care using a formula they used in 
the 1930s. I mean, it just--I mean, lack of attention would be 
the underlying theme, Congressman Issa, that I would----
    Mr.  Issa. So this is----
    Mr.  Dodaro. We put it on the list to elevate attention it 
to it. It needs a leadership commitment.
    Mr.  Issa. And that leadership failure is, in fact, at the 
Department of the Interior. They've gotten to where you now see 
three separate parts of our dealing with our obligation for 
these tribal lands in a way in which it has got to be almost 
job one of the Secretary of Interior to find himself some key 
lieutenants and put them to work.
    Mr.  Dodaro. Exactly. And there's--Department of Health and 
Human Services has a role here too.
    Mr.  Issa. Well, they do have a Secretary now. So that's--
--
    Mr.  Dodaro. I plan to meet with Secretary Price.
    Mr.  Issa. Well, I plan to meet with him on this issue too 
because California, as you know, has a fairly extensive amount 
of Native American assets.
    You've been doing this for a long time, and I did note that 
you're doing more with less. But in the remaining seconds, just 
tell me, if you could have one thing from this committee, one 
thing to make your job easier and more successful, what would 
it be? We'll leave money aside.
    Mr.  Dodaro. Attention and more hearings on the high-risk 
areas.
    Mr.  Issa. Well, I look forward to that. I might add one 
that I hoped you would say, but I didn't prep you, and that is 
the type of interference that you have had from previous 
executive branch where they found you a nuisance, they argued 
over what your statutory authority was, and denied you access. 
Would that also be something you'd put high on the list?
    Mr.  Dodaro. Oh, definitely. I'll be on your doorstep right 
away if there's a problem.
    Mr.  Issa. Well, Mr. Chairman, it is--I ask that question 
for a reason. I know Will is going to be next, but the last 
administration, I think, failed, and it is our obligation to 
hold this administration to a much higher standard to cooperate 
with the GAO because without them our oversight is not 
meaningful. Thank you.
    I yield back.
    Mr.  Palmer. The gentleman yields.
    The chair recognizes the gentleman from Texas, Mr. Hurd, 
for 5 minutes.
    Mr.  Hurd. Thank you, Chairman Palmer for saving the best 
for last.
    Mr.  Palmer. Well, I'm actually last.
    Mr.  Hurd. Oh, there you go.
    Mr.  Palmer. But I accept the compliment.
    Mr.  Hurd. Mr. Dodaro, great to see you. When I was elected 
to Congress, what, three Novembers ago, I never would have 
expected that GAO would be my new favorite department. And what 
you and your team do is integral to our role as oversight and 
to helping make sure that our Federal Government is lean, mean, 
and responsive to the citizens that they serve. And so thank 
you to you and your team for all that work. And I don't start 
any project off without saying, hey, what does GAO say about 
that and not try to recreate the wheel.
    What I'd like to talk to you about is the VA. Your recent 
report indicates there are significant gaps between the VA's 
stated plans and its actual progress. You flag improving access 
to timely medical appointments as requiring immediate action. 
This is after the VA has already spent $127 million over 9 
years to modernize outpatient scheduling.
    What's the current status of the VA's scheduling system? 
What actual progress has there been in improving the scheduling 
of veterans' medical appointments, and why is this such a 
problem?
    Mr.  Dodaro. Yeah. The current scheduling system they have 
is 30 years old. It has been a problem because it hasn't been 
properly managed. Their IT structures, we just issued a 
report--Dave Powner, who I'm sure you're very familiar with.
    Mr.  Hurd. Yeah, he's fantastic. I see him over there.
    Mr.  Dodaro. He's here, and he can explain their IT 
problems in more detail. I'm very concerned about this area. I 
raised the high-risk list last update because I knew it 
wouldn't be fixed right away, but I'm disappointed in a lack of 
progress.
    Mr.  Hurd. And to both of you, General and Mr. Powner, it's 
always good to see you, and thanks for your work that you and 
your team are doing on the scorecards that we offer--provide 
to--on the agencies.
    I had a veteran come up to me recently, had heart problems, 
had high blood pressure, and he lived in Texas. He was in 
Florida visiting his kids. He goes into the Florida VA because 
he was having real problems, didn't have his medicine. Took 9 
hours to get him--to get entered into the system. It's 2017, 
for God's sake. This is--you know, you should be able to pull 
him up.
    Is the enterprise so big that it requires years to 
implement a scheduling system, in your expert opinion?
    Mr.  Dodaro. No, no, absolutely not. I mean, they should go 
to a commercial solution. There are commercial solutions, so 
obviously scheduling medical appointments is not unique to the 
Veterans Affairs Department. They will tell you that as well.
    I'm also concerned that they're not measuring wait times 
for patients. You know, they don't start measuring wait times 
until some--a veteran can call for an appointment, then they 
have to check eligibility, then eventually a scheduler will get 
back to the person, and then they'll ask them when they're 
first available to have an appointment, and then they'll say, 
well, I'd like to come in on the 17th, let's say, for example. 
And they say, we don't have anything on the 17th.
    So they'll start only from that time, counting wait time, 
when it could've been many days before this even transpires. 
But Dave can talk about the IT. They spend over $4 billion a 
year, and we're getting very limited return on that investment.
    Mr.  Hurd. I'm glad this table is attached to the floor 
because I'd flip it over on the next topic, and that's DOD and 
VA electronic healthcare interoperability.
    Mr.  Dodaro. I'll come and help you.
    Mr.  Hurd. How long is it going to take us to achieve true 
interoperability?
    Mr.  Dodaro. You know, we flagged this issue probably 15, 
20 years ago.
    Mr.  Hurd. Yeah.
    Mr.  Dodaro. You have the two most bureaucratic government 
entities trying to work together in this area. They haven't 
done it. They still haven't provided us a good rationale for 
why they decided not to have an integrated system and they're 
going off on their own way. DOD has a system that they bought 
now, a commercial system. Maybe VA ought to consider, you know, 
that as an option as well.
    You know, I don't want to limit competition and 
procurement; I'm not saying that. But studies that were done 
show that 90-plus percent of the requirements are the same for 
the two systems.
    Mr.  Hurd. Mr. Powner, you can have the remaining time I 
have or do not have.
    Mr.  Powner. Well, I think the key here with both 
scheduling and electronic health record, they can hand in hand. 
So you could modify the current systems or you can go 
commercial. With commercial electronic health records, there's 
typically scheduling modules.
    VA is piloting those initiatives right now. They're leaning 
towards the commercial decision. Now that the Secretary is in 
place, they're waiting for a decision to be made. The decision 
should be go commercial. That will go a long ways towards 
interoperability with DOD.
    Mr.  Hurd. Buy, not build.
    Mr.  Powner. Correct.
    Mr.  Hurd. Excellent.
    I yield back, Mr. Chairman.
    Mr.  Palmer. The gentleman yields.
    I now recognize myself for 5 minutes. And these will be 
rapid fire, if I may. I mean, if you need to go into an 
extended explanation, then do so.
    On the enforcement of tax laws, the information that I 
have, you show a $385 billion tax gap in 2006. Do you know what 
it was in 2016?
    Mr.  Dodaro. It's the equivalent number. The net tax gap's 
about $406 billion.
    Mr.  Palmer. Okay. And how about 2015?
    Mr.  Dodaro. Well, they only measure it every once in a 
while.
    Mr.  Palmer. Every once in a while?
    Mr.  Dodaro. Yes. So they don't measure it every year. The 
latest estimate is a net tax gap of over $400 billion.
    Mr.  Palmer. I saw a number yesterday. Well, the net. Now, 
I'm glad you clarified, because the total tax gap was like 456.
    Mr.  Dodaro. That is correct. Then they expect to collect 
so much. I gave you the number that compared to the 385.
    Mr.  Palmer. Thank you. And I appreciate the clarification.
    On the improper payments, that's a big deal with me. I 
think we've had this conversation before. The improper payments 
doesn't account for all the improper payments on Medicaid. You 
said it's $36 billion.
    Mr.  Dodaro. Right.
    Mr.  Palmer. And then approximately another $60 billion on 
Medicare.
    Mr.  Dodaro. Right.
    Mr.  Palmer. On the Medicaid, you said it didn't account 
for all of it. Do you have a ballpark on----
    Mr.  Dodaro. No, I don't. Unfortunately, I don't.
    Mr.  Palmer. How about on Medicare, do you think that 
represents all the improper payments there?
    Mr.  Dodaro. That estimate is pretty good on Medicare, now 
that they're measuring all parts of Medicare.
    Mr.  Palmer. So we're right at $100 million a year. And 
this has been going up.
    Mr.  Dodaro. Yes, that is correct. It's been going up.
    Mr.  Palmer. So it hasn't improved. I was informed a few 
days ago that there may be some indication that not all Federal 
agencies are reporting improper payments.
    Mr.  Dodaro. That is correct. I am very concerned about 
that. I pointed that out. There were at least a dozen programs 
that did not report this past year. One was the Supplemental 
Nutrition Assistance Program, SNAP, or the old food stamp 
program.
    The Temporary Assistance for Needy Families has never 
reported. They don't believe that they can do it. I've 
encouraged Congress to pass legislation to require them to make 
that effort. And a number of agencies just haven't done it.
    So the estimates, governmentwide estimate of $144 billion 
for 2016 is not a complete estimate. And we've flagged this for 
a number of years on our governmentwide audit is that the 
Federal Government doesn't have reasonable assurance that it 
knows the full extent of improper payments and can address 
those issues.
    Ninety percent of the improper payments over the last few 
years are overpayments. Some are underpayments. That's a 
problem, too, because somebody that should be getting a benefit 
isn't. But most of it are overpayments.
    Mr.  Palmer. Well, here's the thing that concerns me. I'm 
also on the Budget Committee, and I made this point that there 
are days I feel like my head will explode. We're expending 
money improperly and not properly funding other programs where 
we're now obviously deficit spending.
    So we're literally borrowing money and paying interest on 
it as a result of improper payments and the failure to fully 
collect all the taxes.
    Mr.  Dodaro. That's exactly right.
    Mr.  Palmer. When you add these two together--and, again, 
to your point that we don't know that this is all that's being 
expended improperly--we're talking almost $600 billion. And in 
our 10-year window, that's $6 trillion, and it's going up.
    Mr.  Dodaro. Right.
    Mr.  Palmer. And we're laying that on future generations 
plus interest.
    Mr.  Dodaro. Right, right.
    Mr.  Palmer. That's maddening.
    Mr.  Dodaro. Yes. Yes, it is. I testified before the Senate 
Finance Committee on this very issue. I'd like to submit my 
statement for the record, both on the tax gap and improper 
payments.
    I think--I mean, it won't solve our long-term sustainable 
fiscal path, but it will make a huge contribution if we could 
get these two areas under control.
    Mr.  Palmer. I thank you for that and, without objection.
    Mr.  Palmer. I want to go back to something Ms. Holmes 
Norton brought up about the revenues from the Bureau of Land 
Management. And how much is reported that we collected in 
royalties and revenues?
    Mr.  Dodaro. Yes. I'll have to--here, I have an answer 
quick for you. We're rapid fire.
    Mr.  Palmer. Well, I have the gavel, so we'll be a little 
flexible.
    Mr.  Gaffigan. About $10 billion a year for oil and gas.
    Mr.  Palmer. Okay. There's a number of reports that 
indicate that the revenues over a 15-year period as a result of 
repealing the ban on exporting crude oil should increase.
    But one of the things that I found out--and I want to 
clarify this, make sure I heard it right--the last that I 
heard, we hadn't increased the royalty rate since the 1920s. Is 
that correct or did that change?
    Mr.  Gaffigan. There have been changes since the 1920s. 
There's the major law. One of the major laws is from the 1920s. 
But there hasn't been a huge change in recent years on the 
royalty rates, both onshore and offshore, but there has been 
some tweaking.
    Mr.  Palmer. What is the royalty rate?
    Mr.  Gaffigan. It ranges from about 12 to 18 percent, 
depending if it's onshore or offshore.
    Mr.  Palmer. What's the royalty rate that the private 
sector, private landowners get?
    Mr.  Gaffigan. That can range, and we could give you some 
estimates of that. Obviously, we are only familiar with the 
Federal rules.
    Mr.  Palmer. On the high end, though, I think it's less--
it's more than what the Federal Government gets.
    Mr.  Dodaro. Yes. There's a study that compared the Federal 
Government to the State governments and what they receive as 
well as the private sector. We can get you a summary of that 
study.
    Mr.  Palmer. I'd appreciate that.
    Continuing on our rapid-fire deal on the improper payments, 
and I think you may have addressed this, but on the Social 
Security Disability programs, I know we're expending money 
improperly there as a result of the failure to do the 3-year 
reviews. If we could, I'd like to--if you've got a number on 
that, you can submit that to us later.
    Mr.  Palmer. I want to ask you something about Federal real 
property. Has there been any estimate for how much could be 
sold and how much revenue would be generated from that?
    Mr.  Dodaro. There's not an estimate I'm aware of. I'll 
double-check and, if so, I'll submit it.
    Mr.  Palmer. If you do that, could you also include 
estimated savings on maintenance and upkeep?
    Mr.  Dodaro. Okay.
    Mr.  Palmer. Because that is an annual expenditure that we 
want to address.
    I want to ask you another one, and this has to do with--
you've made progress in getting these agencies to meet the 
criteria and you showed that the benefits, approximately $240 
billion over that 10-year period, about $24 billion a year. Do 
you have any idea what that financial benefit would be to the 
Federal Government if all of the agencies met the criteria?
    Mr.  Dodaro. No, I don't have an estimate on that. But most 
of that money comes from DOD weapon systems that we've been 
able to curtail. A lot of it's Medicare or Medicaid and the tax 
revenue side. So it's all big areas. If we could continue to--I 
think those areas have huge potential. I know it's tens of 
billions. I just don't have a complete estimate.
    Mr.  Palmer. All right. And Mr. DesJarlais--no, it was Mr. 
Cartwright--I apologize, another mistaken identity here--
brought up the issue of climate change.
    Has the GAO looked into the Federal Government and the 
national, the Nation's exposure to an EMP event, 
electromagnetic pulse event?
    Mr.  Dodaro. Actually, we have. And I'll submit those 
reports for the record.
    Mr.  Palmer. Without objection.
    Mr.  Palmer. And then the last thing, and this is a 
clarification. When someone was asking about the Fannie Mae and 
Freddie Mac and indicated that they have guarantees backing 
them up that are $ 200 billion, maybe a little bit more, there 
was an article in the Washington Post last October that 
indicated that that guarantee was only about $83 billion. Could 
someone just check into that and clarify that?
    Mr.  Dodaro. Yes. We'll clarify for the record, but I'm 
pretty confident on our number.
    Mr.  Palmer. Yes. Well, I just saw that. And I'm not 
questioning your number. I just want to make sure that we're 
all on the same page on that.
    Mr.  Dodaro. Okay. Well, we'll check what the Post was 
talking about and we'll check our number and then I'll give it 
for the record.
    Mr.  Palmer. The chair now recognizes the gentleman from 
Wisconsin, Mr. Grothman, for 5 minutes.
    Mr.  Grothman. Thank you.
    GAO removed the personnel security clearance as a high-risk 
area a few years back, 5 years ago now. Since then, the 
security clearance system has seen a lot of changes, reform 
initiatives. You guys are not listing it as high-risk now, but 
your report discusses ongoing reviews of the overall reform 
effort.
    What do you think is going right in the reform effort, and 
what concerns does GAO have as you move forward?
    Mr.  Dodaro. Yes. Well, I think--they're implementing a 
number of the recommendation that they had from the reviews 
that were done after the Washington Navy Yard incidents and the 
incidents with the OPM breach. But I'm still concerned about 
several areas.
    One, you have this new entity, the National Background 
Investigations service that's just been stood up in October. 
There's also a move to transfer the IT systems to DOD to manage 
those systems. The National Defense Authorization Act is 
requiring DOD to consider taking over the background 
investigations again for DOD. So there's a lot of moving parts 
right now.
    And I'm also concerned about whether or not adequate 
changes have been made to properly protect the security of 
these very important systems.
    So we're looking at all those areas right now. And the work 
we are going to do should be finished by this fall, and if, you 
know, I'm concerned about it at that point, I'll add it to the 
high-risk list out of cycle. I've done that before if 
circumstances warrant it.
    Mr.  Grothman. Okay. The National Background Investigations 
Bureau was supposed to be responsible for conducting security 
clearance investigations. There's a feeling that things are 
moving a little bit slowly there. Do you have any 
recommendations for Congress?
    Mr.  Dodaro. Yes. Cathy Berrick is our expert in that area.
    Mr.  Grothman. Oh, good. Well, we get somebody different. 
Ask the right question.
    Ms.  Berrick. There is currently a significant backlog at 
NBIB. They came into existence, became operational in October 
of 2016. There's already a 569,000 backlog of personnel 
security clearance investigations that need to be conducted.
    So I think one of the first things they need to do is 
develop a plan for how they're going to work through that 
backlog. They are hiring an additional couple hundred people. 
They also doubled their number of contractors from two to four. 
But I think actually having a concrete plan on how they're 
going to work through that is going to be important.
    I also think it's important for them to work with the DNI, 
the Security Executive Agent for security clearances, to 
develop governmentwide quality metrics for personnel security 
clearances. So they're not just focused on the backlog, but 
they're also focused on the quality of investigations. I think 
those are probably the two most important things they should 
do.
    And now I'll throw a third in as well, which is oversight 
over their contractors, since contractors conduct the bulk of 
background investigations for both initial and reevaluations. 
So oversight is important, and that's something we're also 
currently looking at.
    Mr.  Grothman. At the current path, are they going to work 
their way through the backlog?
    Ms.  Berrick. They have no specific plan or timeframe on 
when they'll work through it. They've just said it's going to 
take time.
    Mr.  Grothman. Do you know is the backlog getting greater 
or lesser?
    Ms.  Berrick. It's gotten greater over recent years, in 
part due to the OPM data breach, in part due to new 
investigative standards.
    Mr.  Grothman. Okay. According to the most recent reporting 
by the Performance Accountability Council, the time it takes to 
conduct an investigation has been the highest it's been in 
years. Do you think that's a problem?
    Mr.  Dodaro. Well, timeliness was the reason we put it on 
the high-risk list in the first place, so--and that was after 
9/11 occurred. So more things became classified and secret 
sensitive and things, so more people needed background 
investigations.
    So timeliness is something we'll look at, but quality and 
quality standards is also important. So we'll be looking at 
both of those issues.
    Mr.  Grothman. Both of them. Can you give me a timeframe 
right now?
    Mr.  Dodaro. Yes. We'll issue our reports in the fall. 
Right.
    Ms.  Berrick. Right.
    Mr.  Grothman. I mean not your timeframe, but their 
timeframe. What is the standard wait?
    Mr.  Dodaro. Oh, oh, oh.
    Ms.  Berrick. It varies within the intelligence community. 
Outside of, you know, sometimes it could be over 200 days. It 
just varies, depending on the agency.
    Mr.  Grothman. Okay. Like what agency would be 200 days?
    Ms.  Berrick. I'll have to get that information for you, 
and we could submit it for the record.
    Mr.  Grothman. Okay. Thanks.
    I'll yield the remainder of my time.
    Mr.  Palmer. The gentleman yields.
    I would like to thank our witness, Mr. Dodaro, I always 
enjoy our time together, and all the folks from GAO who 
accompanied him for taking time to appear before us today.
    Several members asked for additional information for the 
record, so we would appreciate your provision of the 
information requested.
    I ask unanimous consent that members have 5 legislative 
days to submit questions for the record. Without objection, so 
ordered.
    If there is no further business, without objection, the 
committee stands adjourned.
    [whereupon, at 12:16 p.m., the committee was adjourned.]


                                APPENDIX

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