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



 
      AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2018

_______________________________________________________________________

                                 HEARING

                                 BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED FIFTEENTH CONGRESS

                              FIRST SESSION

                               _________

      SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG 
                  ADMINISTRATION, AND RELATED AGENCIES

                  ROBERT B. ADERHOLT, Alabama, Chairman

  KEVIN YODER, Kansas               SANFORD D. BISHOP, Jr., Georgia
  THOMAS J. ROONEY, Florida         ROSA L. DeLAURO, Connecticut
  DAVID G. VALADAO, California      CHELLIE PINGREE, Maine
  ANDY HARRIS, Maryland             MARK POCAN, Wisconsin
  DAVID YOUNG, Iowa
  STEVEN M. PALAZZO, Mississippi

  
  NOTE: Under committee rules, Mr. Frelinghuysen, as chairman of the 
full committee, and Mrs. Lowey, as ranking minority member of the full 
committee, are authorized to sit as members of all subcommittees.

                 Tom O'Brien, Pam Miller, Andrew Cooper,
                    Justin Masucci, and Elizabeth King
                            Subcommittee Staff

                               ________

                                PART 4

                                                            

                   USDA OFFICE OF THE INSPECTOR GENERAL
                   

                                   
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                              ______

          Printed for the use of the Committee on Appropriations
          
          

                    U.S. GOVERNMENT PUBLISHING OFFICE

  28-273                    WASHINGTON : 2018

                            



                      COMMITTEE ON APPROPRIATIONS

                                ----------                              
             RODNEY P. FRELINGHUYSEN, New Jersey, Chairman


  HAROLD ROGERS, Kentucky \1\                NITA M. LOWEY, New York
  ROBERT B. ADERHOLT, Alabama                MARCY KAPTUR, Ohio
  KAY GRANGER, Texas                         PETER J. VISCLOSKY, Indiana
  MICHAEL K. SIMPSON, Idaho                  JOSE E. SERRANO, New York
  JOHN ABNEY CULBERSON, Texas                ROSA L. DeLAURO, Connecticut
  JOHN R. CARTER, Texas                      DAVID E. PRICE, North Carolina
  KEN CALVERT, California                    LUCILLE ROYBAL-ALLARD, California
  TOM COLE, Oklahoma                         SANFORD D. BISHOP, Jr., Georgia
  MARIO DIAZ-BALART, Florida                 BARBARA LEE, California
  CHARLES W. DENT, Pennsylvania              BETTY McCOLLUM, Minnesota
  TOM GRAVES, Georgia                        TIM RYAN, Ohio
  KEVIN YODER, Kansas                        C. A. DUTCH RUPPERSBERGER, Maryland
  STEVE WOMACK, Arkansas                     DEBBIE WASSERMAN SCHULTZ, Florida
  JEFF FORTENBERRY, Nebraska                 HENRY CUELLAR, Texas
  THOMAS J. ROONEY, Florida                  CHELLIE PINGREE, Maine
  CHARLES J. FLEISCHMANN, Tennessee          MIKE QUIGLEY, Illinois
  JAIME HERRERA BEUTLER, Washington          DEREK KILMER, Washington
  DAVID P. JOYCE, Ohio                       MATT CARTWRIGHT, Pennsylvania
  DAVID G. VALADAO, California               GRACE MENG, New York
  ANDY HARRIS, Maryland                      MARK POCAN, Wisconsin
  MARTHA ROBY, Alabama                       KATHERINE M. CLARK, Massachusetts
  MARK E. AMODEI, Nevada                     PETE AGUILAR, California
  CHRIS STEWART, Utah
  DAVID YOUNG, Iowa
  EVAN H. JENKINS, West Virginia
  STEVEN M. PALAZZO, Mississippi
  DAN NEWHOUSE, Washington
  JOHN R. MOOLENAAR, Michigan
  SCOTT TAYLOR, Virginia
  ----------
  \1\}Chairman Emeritus

 
 
 

                   Nancy Fox, Clerk and Staff Director

                                   (ii)
                                   
                                   


   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2018

                              ----------                             

                                      Wednesday, February 15, 2017.

OVERSIGHT HEARING--OFFICE OF THE INSPECTOR GENERAL, U.S. DEPARTMENT OF 
                              AGRICULTURE

                               WITNESSES

PHYLLIS K. FONG, INSPECTOR GENERAL
GIL H. HARDEN, ASSISTANT INSPECTOR GENERAL FOR AUDIT
ANN COFFEY, ASSISTANT INSPECTOR GENERAL FOR INVESTIGATIONS
    Mr. Aderholt. Well, good morning. The subcommittee will 
come to order. We welcome everyone to the Agriculture 
Subcommittee of Appropriations. And this is the first hearing 
of 115th Congress, and today we have the U.S. Department of 
Agriculture Inspector General.
    Welcome. Glad to have you here.
    First and foremost, before we get started, I want to 
congratulate and welcome our new ranking member, Sanford Bishop 
from Georgia. I have had the pleasure of working with 
Congressman Bishop over the last several years, I think since 
you first came on the Appropriations Committee in 2003. Is that 
correct?
    Mr. Bishop. That is correct.
    Mr. Aderholt. And, of course, we both share a passion for 
the great work that the Appropriations Committee does and, in 
particular, what the Agriculture Subcommittee does. We both 
represent a district where agriculture plays a big role, a very 
crucial role in the livelihood of our constituents. And Mr. 
Bishop is well respected as a principal member of this 
committee, and he is not afraid to reach across the aisle--and 
I appreciate that--to solve real issues that everyday people 
have out in America, whether it be in Georgia, Alabama, or 
whatever State it may be. I look forward to working with him.
    And so, Mr. Bishop, welcome, and glad to have you in that 
role in this new Congress.
    I would also like to welcome back all the other members of 
the subcommittee. We are, oddly enough--I say ``oddly enough,'' 
but I think it is ``fortunately''--we are one of two 
subcommittees that membership did not change on the majority 
side. Everybody was happy, wanted to stay where they were, and 
that was great. On the minority side, we did welcome the 
addition of our new member from the Second District of 
Wisconsin, Mr. Pocan, and we look forward to working with you. 
And I view the popularity of this subcommittee to be a very 
positive sign of the interest in this subcommittee in dealing 
with the real world changes, and so we want to welcome you 
today for this first hearing of the 115th Congress.


                    opening statement--mr. aderholt


    Due to the typical delays of any new administration, we may 
not see the fiscal year 2018 budget request for another month 
or so, but I would like to share in some detail some of the 
themes that we would like to set as a guideline for the 
subcommittee's work for fiscal year 2018.
    Our first theme builds off on our oversight activities over 
the past several years. It is about evaluating and accounting 
for taxpayer dollars to ensure efficiency and accountability. 
We will continue to work to eliminate and prevent burdensome 
regulation, to improve agency accountability, eliminate 
duplicative programs and initiatives, ensure proper staffing 
levels, and make investments improving ineffective programs 
with a demonstrated benefit to American families.
    The second theme is investing in rural infrastructure as a 
catalyst for growth. I want us to make smart investments in 
critical utility infrastructure, such as broadband, 
electricity, water systems, and housing for our vulnerable 
populations; assist rural businesses to create unique economic 
opportunities; and provide funding that helps to grow economic 
development and jobs.
    The third theme is about ensuring support for our farmers, 
ranchers, and producers. This includes providing opportunities 
for our constituents through access to domestic and 
international trade; providing credit to producers; ensuring 
free and fair markets; supporting science and research to 
promote productivity and sustainability; and guaranteeing the 
safety net is there for those who need it the most.
    Our fourth and final theme is protecting the health and 
safety of people, plants, and animals. We will work to protect 
our safe and healthy food supply; control or eradicate plants 
and animal pests and disease that threaten agricultural 
industries; ensure safety and effectiveness of human and animal 
drug and medical products; deliver nutrition assistance to 
vulnerable populations; and provide for the efficient use of 
funds for nutritional research and education.
    As for today's hearing, Ms. Fong, we would like to thank 
you for being here today and with your team. I believe this 
marks your 15th straight year, if my information is correct, 
that you have appeared before this subcommittee. That was 
before I came on the subcommittee, but you certainly have had a 
long time being here, and you should feel right at home this 
morning. So, needless to say, we have a deeply experienced team 
at the Office of the Inspector General as this new 
administration fills its leadership positions.
    I look forward to discussing the ongoing challenges that 
are faced by the Department that have arisen over the last 8 
years. I would also like to get your input on future problems 
that may arise in programs, policies, and practices that may be 
of concern to you and, of course, to your organization.
    Based upon your written testimony, it appears that the last 
administration failed to fix problems in a number of high-
priority areas, such as financial management, information 
technology, security, and the integrity of benefits. The work 
you do covers so many different aspects of American lives, from 
housing, to electricity, business development, farm safety net, 
food safety, and making sure people don't go hungry, things 
that most citizens don't really realize that goes on on a day-
to-day basis. Your job is incredibly important to the integrity 
and success of the Department.
    The U.S. taxpayer should also be supportive of your work 
due to the risk exposure of USDA's financial activities. Most 
Americans would be surprised to know that USDA has over $200 
billion in assets, $143 billion in annual spending, and more 
than $100 billion in loans. The outstanding recommendations 
offered by the Office of the Inspector General over the past 8 
years could yield $700 million in savings. These are areas that 
you have identified, and it appears that no final action was 
taken during the previous administration.
    One example of the success of your work is the recent drop 
in improper payments for the crop insurance program. As a 
result of the Office of Inspector General's annual reviews and 
recommendations, this rate is at a record low of 2 percent and 
has dropped for the past 2 consecutive years.
    Among other things, we plan to discuss issues related to 
your audits and investigations that range from the Farm Bill, 
the Supplemental Nutrition Assistance Program, information 
technology, accounting deficiencies, and USDA's 3-year delay in 
setting up the Under Secretary for Trade and Foreign 
Agricultural Affairs. That was mandated in the 2014 Farm Bill.
    The subcommittee would also like to highlight the fact that 
you have once again received the outstanding recognition of 
your excellent work among the IG community. You received five 
awards and recognitions in 2016 from the Council of Inspectors 
General on Integrity and Efficiency, which encompasses the 
entirety of the IG community across the Federal Government. So 
I extend my congratulations for those achievements, as I know 
the subcommittee here does as well.
    Before I recognize our ranking member from Georgia, Mr. 
Sanford Bishop, for his opening statement, I want to remind 
everyone that we will try to abide as closely as possible to 
the 5-minute rule when we go to the Q&A, but make sure you do 
hit the ``talk'' button on your microphone before and after you 
speak. As some of you know, we got a refurbishing of the 
Subcommittee hearing room, and so we have some new buttons and 
gadgets up here.
    So, at this time, I would like to recognize the ranking 
member, Mr. Bishop.


                     opening statement--mr. bishop


    Mr. Bishop. Thank you very much, Mr. Chairman.
    This is my first hearing in my capacity as the new ranking 
member, and I want to just say thank you for your welcome and 
for the friendship and collegiality that we have had over the 
years. I look forward to working with you and the members of 
the committee, as well as both of our staffs. I think we have 
started off on a very good note, and I think we will get a lot 
of things done for the American people.
    Let me just say that I also would like to welcome my new 
member on the minority side, Mr. Pocan. We are all excited 
about the challenges that we are faced with. And I want you to 
know that I think I can speak for all of us that the program 
that you have outlined in terms of oversight activities, 
infrastructure development, health and safety, and looking 
after our communities, particularly the rural development, has 
been well received on our side, and we look forward to working 
together on that.
    With that said, I would like to welcome Ms. Fong, Mr. 
Harden, and Ms. Coffey to the committee once again. It is a 
very distinguished panel. And judging by the many years that 
you have collectively served in the USDA Office of Inspector 
General, you have obviously found your work rewarding. And, of 
course, as the Chairman indicated, the high quality of your 
work has been repeatedly recognized, most recently with your 
award, Ms. Fong, when your IG colleagues gave you an 
outstanding award there for your investigation into food safety 
issues. It led to the recall of 8.7 million pounds of meat, but 
it was ultimately in protection of the consuming public, and 
congratulations on that, and we appreciate your diligence.
    We are sort of in an odd situation budget-wise at the 
moment, as the Chairman alluded to, with the 2017 bills not 
finished and no clear path forward in 2018, but I assure you 
that we always find a way to get the job done, and I hope that 
this year will be no exception. I have an abiding interest in 
your work. We have got to do everything that we can to root out 
fraud, abuse, mismanagement, and, of course, we have got to 
improve efficiency and effectiveness. And, of course, you are 
charged with investigating criminal activity in USDA programs.
    In a number of cases, State and local governments actually 
administer programs on behalf of the Federal Government, but 
like their Federal partners, their budgets are very tight and 
they struggle with staffing and training. And I fear that 
further restraints on our spending will make it harder and 
harder to administer the programs properly, and so I look 
forward to discussing that challenge with you as well as the 
other important issues that we will face.
    So I thank you, Mr. Chairman. We look forward to going 
forward with our responsibilities.
    Mr. Aderholt. Thank you, Mr. Bishop.
    Ms. Fong, again, welcome, and you may proceed with your 
testimony.


                      opening statement--ms. fong


    Ms. Fong. Well, thank you, Mr. Chairman, Ranking Member 
Bishop, and members of the subcommittee. We are very happy to 
be here today to talk about our work, and we appreciate the 
very warm welcome from all of you.
    On behalf of all of our staff, our auditors, investigators, 
attorneys, and everyone around the country, we thank you for 
your support and interest and your recognition of the tough job 
that we do every day.
    Today I am hoping that we can build on our ongoing, very 
positive, and constructive dialogue on a number of issues. As 
you mentioned, we have Gil Harden, who is head of our audit 
operation, and Ann Coffey, who is head of our investigations 
operation. They are very experienced and knowledgeable, and I 
know that they will add a lot to the conversation.
    As many of you know, our job within OIG is to help USDA 
deliver its programs as effectively as possible with integrity. 
We do that through audits and investigations, and we make 
recommendations, but ultimately it is up to the Department to 
take the corrective actions that are necessary.
    You have my written statement for the record, which 
summarizes much of our work and our ongoing activities, and I 
am just going to hit very quickly on some of the high points 
here, and we can, after that, get into the question-and-answer 
session.
    Of particular note, I want to thank the chairman and Mr. 
Farr, who was the ranking member at the time, for the request 
that you all made to us with respect to U.S. MARC and the 
research activities that were going on at that center. We 
finished a review of that this year and recommended that USDA 
improve its oversight of animal welfare at that site. Even 
though we found that many of the published media statements 
were without basis, we did feel that ARS could do a better job. 
In the larger context of scientific integrity and research, we 
have some ongoing work, which we will be happy to talk about 
during the question session.
    We also recently issued audits in the SNAP program with 
respect to a number of aspects of the SNAP program. We have 
done work on the administrative costs of managing that program 
and delivering it through the State and local governments. We 
have looked at the Able-Bodied Adults Without Dependents 
provisions, and we have also looked at data analysis of 
potential fraud. So we have got a number of reports there that 
we can talk about, with recommendations for improvement. And, 
as you know, we continue to do investigations in that area. We 
continue to have high-dollar results and convictions.
    In the area of farm programs, we reviewed how USDA agencies 
should be sharing data for program eligibility purposes. We 
have looked at NRCS wetland conservation activities, primarily 
in the Prairie Pothole Region, and we had a number of 
recommendations for improvement in those areas as well.
    Finally, I want to note that financial management continues 
to be a significant challenge for the Department. While USDA 
has made some progress, we believe that much more needs to be 
done, especially to attain an unmodified opinion on its 
financial statements both at the consolidated level as well as 
at the agency level. We also need to provide sustained 
attention to the rising improper payment rates overall at USDA, 
and this will require sustained attention from leadership at 
the Department over the next year and beyond.
    So, in closing, I want to thank the subcommittee for your 
interest in our work, your continuing support over the years, 
our very constructive dialogue with all of your members, and we 
look forward to continuing that relationship. Thank you, and we 
are ready to answer questions.
    [The information follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    
   
                         DEPARTMENTAL OVERSIGHT

    Mr. Aderholt. Thank you, Ms. Fong.
    Thank you for your testimony. This morning we want to 
discuss a wide range of issues that affect USDA and get your 
opinion on what the major challenges are as you move forward 
and as we all move forward.
    As I mentioned in my opening statement, over the last 8 
years, Congress has played a large role in the oversight of the 
Department. A lot of these challenges were never fully 
addressed by the previous administration, and now we have to 
hope you and the new administration fix some critical issues. 
Examples: $700 million in unaddressed savings; $2.2 billion in 
faulty accounting estimates at the Commodity Credit 
Corporation; 5 consecutive years of violating the improper 
payment laws; chronic flaws in IT security; hundreds of 
millions of dollars wasted on farm program systems that have 
failed our farmers and our ranchers; and consistently delayed 
and deficient financial statements.
    In a nutshell, I guess my question is, how can we help you? 
As Chairman of this subcommittee for the past 4 years, many 
times I have grown frustrated, and I know many Members and the 
staff have grown frustrated, with the Department as they roll 
out new initiatives that actually grabbed a lot of headlines at 
the time, but they neglected several basic housekeeping items.
    So can you tell us how you plan to raise the issues you 
have identified with the new Secretary and the others on his 
leadership team, and how you may offer solutions?
    Ms. Fong. Well, that is a very wide-ranging and deep 
question, and----
    Mr. Aderholt. So you can take it the way you want to.
    Ms. Fong. Thank you.
    Well, we are looking forward to working with the new 
administration, the new Secretary, and his subcabinet when they 
are confirmed. And, as you note, leadership at the top is 
critical, tone at the top is critical to bringing a sense of 
urgency and priority to many of the issues that we have 
identified. And so our intent and our plan is to start out 
quickly out of the box with briefing the new team coming in on 
the issues that we are reporting, in particular some of the key 
challenges that you have raised: financial management at the 
Department, unresolved audit recommendations, improper 
payments, the full litany of challenges that we have 
identified.
    Now, in terms of how all of us go forward, you are 
absolutely correct that many of these issues are longstanding 
and have deep roots. Many of the other issues that we see may 
be a little more ephemeral; they may be easier to address. And 
I think we all have our roles to play. It is our job within the 
IG's Office to identify these issues, to report them out to the 
decisionmakers, to bring them to your attention, to track 
resolution, and, if resolution doesn't occur, to point that 
out.
    What we have found very helpful in the past is to have 
leadership at the Department who views management as a critical 
responsibility and who is willing to work with us as we surface 
issues.
    What we have also found very helpful is, in our experience, 
when you at this subcommittee level, or any of the oversight 
committees, have a concern about a particular issue, you have 
been very active in terms of raising it with us and with the 
Secretary through hearings, letters, and questions. And we have 
seen that, when there is that level of interest from the 
oversight bodies, that tends to generate more activity in a 
quicker timeframe. Similarly, if you ask us to do a review, we 
take those requests very seriously. We engage in dialogue with 
all of you to see what we can do to help bring some additional 
information and perspective to the issue. So we stand ready to 
do that.

                           IMPROPER PAYMENTS

    Mr. Aderholt. OK. Let me just briefly, I have just got a 
few seconds here left, but one of the issues that I think 
boggles the mind is the four programs under the Food and 
Nutrition Services that have not complied with the improper 
payment laws for the past 4 years.
    In just a nutshell, are there ways that we can assist you 
in bringing attention, solutions to the mistakes that keep on 
seem to be occurring over and over again?
    Ms. Fong. The improper payment laws have a whole 
architecture of how you approach these issues. And I think 
where we are now with USDA is, with respect to SNAP, there 
needs to be a way for FNS to move forward to identify an 
improper payment rate. They did not report one for fiscal year 
2015, and we can talk about that.
    With respect to other programs, there are--and this is for 
both the farm programs as well as FNS--there are requirements 
that the Department move forward with corrective action plans, 
and they must provide those plans to Congress and OMB. And I 
believe the Department has developed plans and has sent them 
forward. We can work with you to find those and provide them.
    Mr. Aderholt. OK.
    [The information follows:]

    We have the corrective action plans for the 18 USDA 
programs deemed to be high risk for improper payments. We will 
deliver them to you and your staff under separate cover. These 
programs are as follows:
    Farm Service Agency (FSA):
    Loan Deficiency Program (LDP)
    Livestock Forage Disaster Program (LFP)
    Livestock Indemnity Program (LIP)
    Supplemental Revenue Assistance Payments Program (SURE)
    Noninsured Crop Disaster Assistance Program (NAP)
    Hurricane Sandy--Emergency Conservation Program (ECP)
    Hurricane Sandy--Emergency Forest Restoration Program 
(EFRP)
    Food and Nutrition Service (FNS):
    Supplemental Nutrition Assistance Program (SNAP)
    National School Lunch Program (NSLP)
    School Breakfast Program (SBP)
    Special Supplemental Nutrition Program for Women, Infants, 
and Children (WIC)
    Child and Adult Care Food Program (CACFP)
    Forest Service (FS):
    Hurricane Sandy--Emergency Forestry Restoration Program 
(EFRP)
    Hurricane Sandy Capital Improvement and Maintenance (CIM)
    Natural Resources Conservation Service:
    Farm Security and Rural Investment Act Programs (FSRIP)
    Hurricane Sandy--Emergency Watershed Protection Program 
(EWPP)
    Risk Management Agency (RMA):
    Federal Crop Insurance Corporation (FCIC) Program Fund
    Rural House Service (RHS):
    Rental Assistance Program (RAP)

    All right. Mr. Bishop.

                           IG RECOMMENDATIONS

    Mr. Bishop. Thank you very much, Mr. Chairman.
    Let me just sort of look at big-picture issues, resources. 
As we look over your reports, there are recurring 
recommendations regarding the lack of management, oversight, 
and adequate training and so forth. The recommendations are 
critical to running programs properly and to safeguarding our 
taxpayer dollars, but they also cost money. When Secretary 
Vilsack testified before us last year, he said that USDA 
employees had made significant advancement in achieving goals 
and that they have done it essentially with the same 
discretionary funding level in fiscal year 2015 as in fiscal 
year 2009 and with 9,354 fewer total staff years in 2015 than 
in 2009. During that same period, mandatory spending grew from 
$88 billion to $125 billion. So, while the number of people at 
USDA who have to implement and oversee programs has declined 
significantly, discretionary spending is flat, and mandatory 
spending has increased significantly.
    In that environment, can you tell me briefly how agencies 
can take on all the additional actions that you recommend in 
your reports? And, of course, that is rhetorical since we know 
that you don't control the budgets of other agencies or the 
States or local governments, but it is something that we have 
got to think about. So I would welcome your comments on ways in 
which USDA and State and local governments can build capacity 
to properly administer and oversee the programs.
    Ms. Fong. That is a difficult question, and I think all of 
us have seen in the Federal Government over the past 7 or 8 
years the challenge of trying to deliver more programs and more 
spending with fewer resources. Certainly we in the OIG's Office 
have experienced the same challenges. And what I can offer--and 
I will ask Gil to offer some comments as well--is that we are 
very mindful of those challenges. We know that program 
managers' first priority is to deliver the program.
    What we try to do when we make our recommendations is to 
point out that, in many ways, if we can figure out a more 
effective and efficient way to deliver those programs, in the 
end, it helps the program managers as well as the integrity of 
the program. And we are very mindful of the fact that the State 
and local governments do deliver many of the programs for USDA, 
and their budgets are also constrained.
    I think it became very clear to us as we did our work in 
the SNAP program in particular that clarity from FNS at the 
national level in a number of areas as to what the regulations, 
policies, and laws mean would make it much easier for the 
States and counties to do a better job of delivering programs 
if that clarity were there.
    Gil.
    Mr. Harden. Yeah. I would just build on that a little bit. 
It is stressing the oversight of things in going along with 
program delivery and then prioritizing what is really important 
and what people need to focus on.

                          SCIENTIFIC INTEGRITY

    Mr. Bishop. Thank you very much. Let me switch gears 
quickly. You mentioned in your testimony that you are looking 
at the issue of scientific integrity as it affects USDA 
scientists. The issue hits home for me because my State has 
major ARS research locations, Athens, Barron, Dawson, Griffin 
and Tifton, and hundreds of scientists and staff who work 
there. I am kind of troubled by the implication of the topic. 
Open and transparent scientific research investigations are one 
of the hallmarks of a prosperous agricultural society. And 
while I understand the investigation is in its early stages, 
can you share with us what agencies are included; was it an 
Employee Viewpoint Survey that prompted the assessment or the 
result of an anonymous report on compromised scientific 
integrity to USDA Office of the Chief Scientist; and, lastly, 
when you would expect the report to be completed?
    Ms. Fong. Let me just offer some introductory comments. We 
started this review last year in response to a number of 
concerns from the media, from complainants, and from Congress 
that the integrity of scientific research was a significant 
concern. And I think in the wake of the U.S. MARC situation, 
people were very sensitive to these issues. So we have an audit 
ongoing--we are nearing completion on it, actually--that is 
looking at the whole situation of whether researchers feel that 
they can carry out their research independently and surface 
their findings in a way without inappropriate constraints.
    As part of our review, we are conducting a survey of 
scientists themselves to see what their perceptions are as well 
as doing our own independent assessment of the policy and its 
implementation.
    Mr. Harden. And to follow on from that, we are expecting 
that audit to come out later in the spring, probably in the May 
or June timeframe. And the survey that Phyllis referred to, in 
terms of the agencies involved, it is ARS, APHIS, NRCS, and I 
am going to forget the last one off the top of my head----
    Ms. Fong. Forest Service.
    Mr. Harden [continuing]. Forest Service, but we put that 
survey out to all of the scientists, and we had a very good 
response rate. There was something like 60 percent of the 
scientists responded. So we got a lot of good data in terms of 
how they feel about how things are working.
    Mr. Bishop. Thank you very much.
    Mr. Aderholt. Mr. Yoder.

                         BROADBAND LOAN PROGRAM

    Mr. Yoder. Thank you, Mr. Chairman.
    Ms. Fong and Mr. Harden and Ms. Coffey, thank you. Welcome 
back to the Committee. We appreciate your work to help us be 
better stewards of taxpayer dollars. I think it is great the 
chairman starts with this being our first hearing of the year 
because it allows us get some context and some ideas as we then 
have an opportunity to have hearings with other Cabinet 
officials and administrators that can be responsive to some of 
the concerns you have raised.
    Ms. Fong, in the past, you have raised a number of concerns 
regarding the Rural Utilities Service broadband loan program, 
and I wondered if you might discuss that a little bit again 
today for the Committee in terms of where we are, where we need 
to go, what your recommendations would be. I think, by some 
accounts, during the period after the stimulus, they spent 
roughly $3 billion pledging to bring broadband to 7 million 
homes, and only 240,000 actually got it. Where are we in terms 
of current status? And what are your thoughts on redirecting 
the funds into a grant program that ensures funds go to 
underserved rural communities that are truly unserved?
    Ms. Fong. Well, I think the broadband program has certainly 
been a topic of interest to our office over the last 10 years, 
I would say. We have done a series of audits, as you know, and 
The Recovery Act provided some additional funding, and we 
looked at that at that time.
    We have not been back to that program in the last 2 or 3 
years. So it may be time for us to factor that into our audit 
planning process for fiscal year 2018 to see what the risk is.
    As you point out, the issues that we were finding over the 
last several audits were whether the funds were going to truly 
underserved communities, and we saw some issues with that as 
well as with the definition of ``rural'' and how that was 
applied. I think what I would say to you at this point is that 
we need to go back and factor that into our planning.
    Mr. Yoder. OK. Well, I think the Committee probably shares 
your interest in ensuring that the dollars are used most 
effectively, but we do have, of course, many parts of our 
districts and across the country that are underserved, and I 
think it is a continuing concern that dollars spent did not get 
to those people and may have been wasted in the process. And so 
I think this Committee needs to direct the administration and 
encourage them in the right direction. So we would appreciate 
you taking another look at that and maybe making some 
recommendations.

                                  MARC

    Another topic that we have discussed in previous years that 
I know you had an audit regarding at the end of 2016 were the 
incidents surrounding the January 2015 New York Times article 
regarding the Meat Animal Research Center in Nebraska. And 
there were some pretty salacious allegations in that article. 
And in the world of fake news, now we have to really vet 
everything that is being said because there were some 
allegations there that were pretty shocking to the committee. I 
know you took a number of years, or at least since 2015, to 
identify and investigate 33 statements that were in that 
article that you tried to determine whether they were accurate. 
And I think your report found that 7 were materially accurate, 
26 were inaccurate, lacked sufficient context, or were 
uncorroborated, a 21 percent material accuracy rate.
    This committee is fully supportive of important research 
that is being done at ARS, but we also want to ensure that it 
is being done ethically and appropriately and is consistent 
with our American values.
    In the statements that you tried to corroborate, a number 
of them you noted that we have no observations on the status at 
this time. There were also a number of statements that were 
redacted.
    I guess I would ask, is your work complete on this matter? 
How are we able to complete our oversight in areas in which you 
have no observations on the status of the statements or that 
they were redacted? I think we still would like to get to the 
facts and the truth of this matter, and it has been raised in 
this committee before, and I think we have an obligation to do 
so. And so your report helps us in that direction, but I feel 
like there is some incomplete work and wondered if that is 
something you are going to continue, or does this committee 
need to continue to seek out the facts of that article and what 
is truly happening? And I don't want to repeat the allegations, 
but many on this Committee who have been on here a number of 
years remember some of the disturbing statements that were 
made.
    Ms. Fong. Let me offer a few comments, and Gil might have 
some more.
    We have finished our audit of U.S. MARC. We issued two 
reports. There was an interim report last year and then a final 
report several months later. And so, at this time, we do not 
have any ongoing work planned or in process.
    Now, I think, with respect to the redactions, we had some 
sensitive information in our report that impacted on 
potentially personal privacy issues. They involved some 
allegations, and there was a potential consequence for the 
safety of individuals, which is why the public-facing version 
of that report has some redactions. We would be happy to brief 
you and your staff in a little more detail on that if you would 
like that.
    And, Gil, I will offer----
    Mr. Harden. That was the main point I wanted to add. We 
have come to conclusions on all 33 statements, but because of 
some of the redactions, you can't see it in the public-facing 
report, but we would be happy to set up a time to brief you on 
that.
    Mr. Yoder. OK. Well, I think I would be interested in that, 
and I think maybe the committee might be interested in more 
clarity on some of the statements.
    In the areas in which you were unable to verify or 
corroborate the statements, I think we still have an obligation 
to find the truth. And so I would like to also probably know 
why you couldn't get the information, why you couldn't 
interview people; what was the blockade that allowed us to not 
actually find out what happened in many of these situations?
    I yield back, Mr. Chairman.
    Mr. Harden. A lot of that is explained in the unredacted 
version. So we can get that information to you.
    Mr. Aderholt. OK.
    [The information follows:]

    We would be pleased to set up a time to brief you and your 
staff to provide more clarity on the statements in our audit 
report.

    Ms. DeLauro.

                             ANIMAL WELFARE

    Ms. DeLauro. Thank you very much, Mr. Chairman.
    And welcome. Good to see you again, and I am grateful for 
your longevity and the accolades that you received because of 
your great professional work.
    A couple of quick things before I ask a couple of questions 
and I get into it. I just want to be clear on this last ARS 
animal welfare report. It is not a question of whether or not 
the allegations, if you will, were unfounded; it is that there 
was the inability or whatever the circumstances were around 
corroboration versus whether or not the allegations, et cetera, 
were unfounded.
    Mr. Harden. No. I would say some of the allegations were 
unfounded, based on the work that we were able to do.
    Ms. DeLauro. But was it--and that was--did you--were you 
able to corroborate that they were----
    Mr. Harden. Yes. Some of them we were able to corroborate 
that they were accurate. Others we weren't able to find 
information to corroborate that they were true.
    Ms. DeLauro. When you are dealing with context, what was 
the context? What does ``lacking context mean?
    Mr. Harden. That there was other information available, 
say, in ARS' files at MARC or in discussions with people that 
put different light around what was being said in the article.
    Ms. DeLauro. But what I am just trying to get to, there 
is--that doesn't necessarily make it wrong. It means that there 
was other information. I think the point is, is to try to get 
at the accuracy, to get at the information to let us know what 
happened here and what we need to be mindful of so that it is 
not putting needed to come to light didn't come to light, and 
it may not be that the allegation was wrong. There was a 
different set of circumstances, different information that 
people brought to this issue.
    I just think that this is particularly important, and I 
think we have to be careful with language and how we describe, 
in essence, what this is all about because it is a very 
critically serious issue which we need to address in some way.

                             HIRING FREEZE

    Also just very, very quickly, you talked about improper 
payments. That includes, and I believe the Chairman talked 
about the nutrition programs, but farm programs as well have 
improper payments in terms of reporting. The crop insurance 
program has an improper payment rate, which is about 2.2 
percent. That is high enough for a program to be at high risk. 
Conservation farm programs, as I understand it, have an 
improper payment rate of about 22 percent.
    What I would love to get from you, if I can, I want to see 
all of the improper payment rates, the error rates of all of 
the farm programs that you deal with so that we can have some 
way to take a look at where the high priorities are.
    [The information follows:]

    Not all farm programs are considered high risk for improper 
payments. Only those programs that are designated as being high 
risk for improper payments must report improper payment error 
rates. The following farm programs were considered high risk 
for improper payment rates and reported the following improper 
payment rates in USDA's FY 2016 annual financial report:\1\
---------------------------------------------------------------------------
    \1\ https://www.ocfo.usda.gov/docs/
FY2016Agency_Financial_Report.pdf. See pp. 194-200.
---------------------------------------------------------------------------
    Farm Service Agency (FSA):
    Loan Deficiency Program--3.21%
    Livestock Forage Disaster Program--4.74%
    Livestock Indemnity Program--12.87%
    Supplemental Revenue Assistance Payments Program--11.53%
    Noninsured Crop Disaster Assistance Program--5.47%
    Hurricane Sandy--Emergency Conservation Program--0.18%
    Hurricane Sandy--Emergency Forest Restoration Program--
1.43%
    Natural Resources Conservation Service (NRCS):
    Farm Security and Rural Investment Act Programs--2.38%
    Hurricane Sandy--Emergency Watershed Protection Program--0%
    Risk Management Agency (RMA):
    Federal Crop Insurance Corporation (FCIC) Program Fund--
2.02%

    Let me just get to this, really because this Committee has 
tried to provide all of you with the resources that you need to 
do your job. So I was struck that your testimony mentions that 
you are again at the lowest staffing level since 1978 due to a 
number of staff losses. There has recently been--the 
administration has put a hiring freeze as of the 23rd of 
January. The memorandum regarding the hiring freeze, how will 
that impact the mission of your work, and do you feel that you 
have the adequate resources and the staffing to pursue criminal 
activity beyond just the SNAP program, by which you spend about 
almost 60 percent of your resources?
    Ms. Fong. Yes. The hiring----
    Ms. DeLauro. I mean, 56 percent of your resources. I take 
that back--59 percent. I need to get my numbers right: 59 
percent almost of your resources go to the SNAP effort.
    Ms. Fong. The hiring freeze does impact us, as it does 
every part of the Federal Government.
    Ms. DeLauro. How? What does that mean?
    Ms. Fong. Well, we have about 40 vacancies right now, and 
we need to figure out how we can move forward to identify the 
critical vacancies involved with health and safety, which are 
potentially exempt from the freeze, as well as other priority 
vacancies, which would require approval.
    Ms. DeLauro. What task--because I have 14 seconds left. 
Tell me what you will not be able to do as a result of a hiring 
freeze.
    Ms. Fong. If we were able to fully fund all 40 of those 
jobs, we would be able to do more investigations and more 
audits. And we could provide you some additional concrete 
information.
    [The information follows:]

    OIG provided information to Rep. DeLauro and the 
Subcommittee's leadership on March 10, 2017.

    Ms. DeLauro. Anything further?
    Ms. Fong. Thank you for your support.
    Mr. Aderholt. Mr. Young.

                        WETLANDS DETERMINATIONS

    Mr. Young. Thank you, Mr. Chairman, Ranking Member, my 
colleagues.
    Welcome, Inspector General, Mr. Harden and Ms. Coffey. I 
want to reflect on something my counterpart here, Mr. Yoder, 
said about the USDA's Rural Utilities Service broadband 
program. Good intentions can really make a difference, but it 
has been fraught with some real trouble. It sounds like the 
last time you did an audit on the program was in 2013. It has 
been a few years, and we may need to relook at this issue 
because we want to make sure that taxpayer dollars are used 
appropriately and they are not being used to compete against 
services that already exist, that is, where people really had 
skin in the game and are risking their own capital. We want to 
make sure the priority is for unserved areas. So we may be back 
asking further questions throughout this process.
    You mentioned in your testimony about the Prairie Pothole 
Region, and Iowa is one of those States in the Prairie Pothole 
Region. The NRCS administers the wetlands provisions in the 
Prairie Pothole Region. The NRCS has discretion and 
responsibility in making those determinations, but recently, 
they have changed their ways in making those determinations. 
How did you find out that they were changing their ways? Was it 
a whistleblower?
    Mr. Harden, do you have an answer for that?
    Mr. Harden. Yeah. We did receive a couple whistleblower 
complaints----
    Mr. Young. OK.
    Mr. Harden [continuing]. That made the allegations, and 
then we followed up from that and learned as we went through 
the process basically how they were making determinations in 
that region of the country contradicted how they have made 
determinations for the last 20 years.
    Mr. Young. So what were the pre-1996 determinations? How 
were they different from before?
    Mr. Harden. They weren't accepting them being wetland 
determinations unless additional work was done with regard to 
the pre-1996 determinations. They weren't accepting them on 
their face.
    Mr. Young. OK. So they totally changed their playbook on 
this?
    Mr. Harden. That was the way we understood it.
    Mr. Young. When they did this, did they provide any written 
guidance or notice to folks?
    Mr. Harden. No. And that was also a part of our problem or 
our concerns with it.
    Mr. Young. Since then you have done your due diligence and 
investigated this. Are you confident that the NRCS has heard 
the message and the intent of the original law and rules? Are 
they back to square one and being consistent? Are they 
providing certainty?
    Mr. Harden. I would have to wait and see how they actually 
implement the recommendations. They agreed to the 
recommendations we made in terms of providing additional 
clarity as to how you were supposed to be using those pre-1996 
determinations.
    Mr. Young. How long should we wait for them to let us know 
that?
    Mr. Harden. I think that I would have to go back and get 
the exact date of when they were going to have that 
implemented. I think it is going to be later this spring. So, 
maybe, you know, in the fall. You know, somewhere in the fall, 
they should be able to explain what they are doing.
    Mr. Young. OK. Will you relook at this issue to make sure 
it is being done in a satisfactory manner?
    Mr. Harden. We can take that on, yes.
    Mr. Young. OK. I may be contacting you folks and asking you 
for some help because we want to make sure that there is 
consistency, there is transparency, and farmers know what the 
rules are each and every year as we go along with this.

                         AUDIT RECOMMENDATIONS

    I sit next to Mr. Palazzo here, an auditor, and he was 
peeking at one of my questions, and he said, ``Hey, I am the 
accountant; you stick to the wetlands questions.'' But I think 
it may be something that is always on our minds about what you 
do. You audit, and you have investigations, and you make 
recommendations on corrective actions. How much monitoring do 
you do to see if they carry out these recommendations? And is 
it your job, or is that something we should all be looking at? 
I know that is partly why we are here, but how much do you do 
to make sure that they are following up on recommendations, or 
at least reminding them of them.
    Mr. Harden. We try to do a fair amount of it because 
following up on audit recommendations is--to do that, you have 
to follow audit standards, you have to follow up on prior work 
that you have done and recommendations that you have made. So 
it is just a standard course for a lot of it. Sometimes we do 
specific areas, like conservation stewardship, to see that they 
implemented what they said they were going to do; Prairie 
Pothole, we do things like that; with food safety, we have had 
stuff. This year, we also undertook an audit to look at what 
the CFO's office does in terms of tracking final action.
    Mr. Young. So you look at it, but you need some better 
partners here--and that is Congress--in doing oversight and 
ensuring that some of these recommendations are followed 
through. How much enforcement do you have? What boundaries or 
leeway do you really have? Or do you have any at all, aside 
from the public shaming through your reports and working with 
us to bring these things to light?
    Ms. Fong. We don't have any operational authority.
    Mr. Young. OK. I just wanted to verify that.
    Ms. Fong. We have a soapbox to make recommendations.
    Mr. Young. OK. Thank you for being here. Thanks for your 
testimony.
    Mr. Chairman.
    Mr. Aderholt. Ms. Pingree.

                                ORGANICS

    Ms. Pingree. Thank you, Mr. Chair. Thank you very much to 
all of you for being with us today and for your many years of 
service and dedication to helping us with this, supporting this 
Department, and making sure it works efficiently.
    First, I just want to thank the Ranking Member for asking 
some of the questions around scientific integrity. I appreciate 
the fact that your report is coming out soon. Thank you for 
digging into that. There have been recent questions around 
scientific integrity and if any information is being shut down 
at executive branch departments. So it is very timely. But, as 
you know, I also sent a letter in 2015 about allegations that 
researchers at the USDA doing research around neonicotinoids 
were being suppressed, and so I have had an interest in this, 
and certainly my constituents and others have, for a while. So 
we will really be looking forward to that report and will 
probably have some questions when it comes out, but thank you 
for doing that.
    I just want to ask about a different topic. I think you 
know there has been a huge growth in the organic market. 
According to the USDA's 2014 survey, certified and exempt 
organic farms in the United States sold a total of $5.5 billion 
in organic products back in 2014. That is about a 72-percent 
increase since 2008. So, from my perspective, that is a huge 
opportunity for farmers in my district, but virtually every 
district represented here has had farmers who have benefited 
from being able to sell into this market, often with higher 
prices and less competition. So it is a great area for economic 
growth for our farmers. And it is not just specialty crops. It 
is commodity crops. It is really in every area. There is no 
question: we haven't been able to keep up with demand. From the 
most giant of the food processors in this country to the 
smallest farmers markets, the demand is bigger than we can 
handle, especially for organic grains. So there is a lot of 
product being imported into the United States. According to the 
USDA, in 2013, the value of U.S. organic imports that are 
tracked was $1.4 billion. That is 2013. There has been enormous 
growth, and we are already in 2017. So that is a lot of money.
    And consumers more than anything else want to know that the 
products that they buy are everything that they are paying for. 
And they want to know that imported products are grown to the 
same high standards that we require here in the United States.
    So I am wondering if you have looked into organic products 
at all, but specifically this idea of organic imports, and are 
there things you are doing to assure customers that all of the 
organic products coming in from other countries are produced 
with the same organic certification?
    Ms. Fong. Let me just quickly offer a comment. We do have 
some ongoing audit work on precisely that issue, which I will 
ask Gil to comment on.
    I also want to note that, on our investigation side, we 
have had a few cases over the past few years alleging that 
certificates or statements of organics have not been true, and 
we have had some very successful convictions and prosecutions 
there involving grains and fertilizers as well. So Ann might 
want to comment on those.
    Ms. Pingree. That is great.
    Mr. Harden. Currently, we are finishing work on AMS' 
oversight of international trade arrangements and agreements. 
And the basic objective of that work is to understand how AMS 
evaluates the equivalency of foreign countries' organic 
processes so that we know what is being imported into the U.S. 
meets our standards as well. We expect that report to be out 
later this spring as well.
    Ms. Coffey. Well, I was going to mention that we just 
completed an investigation involving a fraud scheme where a 
producer basically was claiming that his product, which was 
alfalfa, was organic, but, in fact, it was not. It was grown 
conventionally. And the profit margin that he obtained by being 
able to claim that his product was organic was over $2 million. 
So he was sentenced and convicted recently, and we got 
restitution of $3 million. So we do pursue those investigations 
when we become aware of them. Although we haven't had any 
related to the import, but I anticipate probably that will be 
something we will be looking at in the future.
    Ms. Pingree. Well, I do appreciate that, and am aware of 
some of the investigations you have done in the United States. 
And I think those are critically important, because, as we 
know, inputs, and the techniques that are used for organic 
processing, can be much more expensive. It is devastating to 
those farmers who play by the rules, and it is devastating to 
consumers because this has been a very protected brand. 
Anything that happens to lose that credibility of the brand, I 
think, is a real loss to those farmers. Again, it is a great 
market for the farmers who are able to participate in it. There 
is still a lot of competition there. The prices are better.
    So it has been my contention that the USDA--and this isn't 
your side of it--but that the USDA should be doing more to 
assist farmers with organic research, with organic transition, 
making it easier for farmers to get into what is sometimes a 
challenge to change to.
    I think one of the critically important facts to have is, 
because so much is being brought in from foreign markets, an 
understanding of how much of that is actually fraudulent, how 
much is being purchased today that really isn't up to the same 
standards. It is something consumers want to know, but I think 
it is also a fact that could help push the USDA to assist more 
farmers in moving to the organic markets.
    So I am way out of time, but thank you very much for the 
work you are doing. And I will look forward to following up on 
what you are seeing in foreign imports.
    Thank you, Mr. Chair.
    Mr. Aderholt. Thank you.
    Mr. Palazzo.

                        CCC FINANCIAL STATEMENTS

    Mr. Palazzo. Well, thank you, Mr. Chairman.
    Ms. Fong and company, thank you all for being here today.
    Last year, we discussed the Commodity Credit Corporation's 
delayed financial statement. This year, you mentioned in your 
testimony the CCC's weakness and deficiencies in its financial 
statements for fiscal year 2016. Several deficiencies were 
identified with the CCC's balance sheets and internal processes 
that resulted in significant issues with the CCC's accounting 
systems. This year is one of the highest funding levels for the 
CCC on record at $21 billion, yet the Congressional Budget 
Office is estimating the CCC alone will save $14 billion more 
than it did compared to its original 2014 Farm Bill estimate. 
Additionally, the difference between the estimates provided to 
the Committee for the CCC in August of 2016 and the actual net 
realized losses was about $3 billion.
    With the upcoming Farm Bill negotiations, it is important 
that we have accurate accounting estimates. For example, the 
discrepancy of $3 billion provided to the Committee earlier 
this year could have resulted in a $30 billion difference over 
the 10-year window which the Congressional Budget Office uses 
to score.
    So I guess my question would be, can you tell me a little 
bit how you see accounting estimates, how important it is to 
try to make that amount--we know it is an estimate, but how 
important it is to provide us with the best estimates possible 
and that we get this right? And this is a huge concern of ours.
    Mr. Harden. I mean, I would agree with you that we want 
them to be as best as they can be. Some of the things that we 
saw and that you have seen in their financial statements for 
2016 was they had a significant problem getting the estimates 
together, or they came late in the year. So I think some of 
those will be better going forward because they have gotten a 
better process down. One of them with ARC/PLC, they didn't 
include all the crops that they were supposed to to begin with, 
and so they had to go back and redo the estimate toward the end 
of the year. So that amount was understated for financial 
reporting purposes, but we continue to work with KPMG, who is 
the main auditor for them, but also knowing how they are going 
about developing those estimates and having them grounded in 
the right accounting theories and things of that nature.
    Mr. Palazzo. Was this the first time they audited the 
financial statements?
    Mr. Harden. No.
    Mr. Palazzo. OK. So it is not a new auditor coming onboard?
    Mr. Harden. No. This is the second year for KPMG, but KPMG 
has also done it on a prior cycle as well.
    Mr. Palazzo. Now, is our understanding that this review of 
the CCC was one-time, like taking a snapshot of the financials? 
Do you believe that we should do a deeper review? And if so, is 
there something that is restricting you all from doing that, 
such as funding or personnel?
    Mr. Harden. I don't think there is something that is 
keeping us from doing a deeper dive. They have had annual 
financial statements for a number of years because they are 
required to do so. In 2015, they got the disclaimer, and so 
coming back off of that--and that also drove the disclaimer for 
the Department. So, starting in 2016, they started with a 
balance-sheet-only approach to get to final balances, and what 
they are hoping to do is to go to full statements this year, 
all five statements.
    We are in discussions with them and KPMG right now as to 
understanding their readiness to withstand an audit in going 
forward, and we will be--I would like to probably get back with 
you after we have had some other discussions as part of that 
planning to have a more detailed answer.
    Mr. Palazzo. Can you tell me what actions are being taken 
to correct the deficiencies and the findings from the audit 
report?
    Mr. Harden. I would have to pull the corrective action 
plans, but they have things they are doing to address the 
weaknesses.
    [The information follows:]

    In CCC's FY 2016 Balance Sheet audit, KPMG made six 
recommendations related to maintenance of accounting records 
and accounting estimates. CCC has agreed to take corrective 
actions on these six recommendations as follows:
    Implement processes, procedures, and controls to ensure 
data used in its accounting estimates are complete and 
accurate.
    Ensure that accounting estimates are prepared by qualified 
personnel with a full understanding of the underlying 
accounting requirements.
    Document the review and approval process for accounting 
estimates including the concurrence with the relevant factors, 
assumptions, and reasonableness of the resulting estimates.
    Implement independent review and reconciliations of Fund 
Balance with Treasury for USAID, and monitor internal controls 
regarding FBWT reconciliations in accordance with guidelines in 
the ``Treasury Financial Manual.'' Management will have 
sufficient documentation to support the balances reported by 
the child and thoroughly document their evidence of review. In 
addition, CCC will document their review and reconciliation 
process in the form of a Standard Operating Procedure (SOP) or 
White Paper.
    Reconcile accounts to ensure transactions are timely and 
accurately recorded in the general ledger system and research 
and resolve all existing differences.
    Migrate database servers out of WebFarm.
    For FY 2017, CCC's entire financial statements (which are 
comprised of the balance sheet and statements of net cost, 
changes in net position, and budgetary resources) will be 
audited. However, the FY 2017 financial statements will not be 
comparative to FY 2016 as only the balance sheet of CCC's 
financial statements in FY 2016 was audited.

    Mr. Palazzo. And how often do you all monitor that to see 
that they are clearing the deficiencies and findings?
    Mr. Harden. That is part of the standard audit process for 
the financial statement auditors. And as the overseers of the 
ones doing it for KPMG, we are on the calls with them weekly 
and all the discussions that they have with CCC.
    Mr. Palazzo. Are they clearing any of these deficiencies 
and findings from year to year? So, I mean, are they improving 
their internal controls? What would be your thoughts?
    Mr. Harden. From 2015 to 2016, the wording of them changed, 
but some of the same issues were there, and in 2016, because 
they only did the balance sheet audit, we didn't look at the 
ones that impacted the Statement of Budgetary Resources. So we 
will have to be--as part of this year's review, that will get 
to be part of what is looked at and what they have done.
    Mr. Palazzo. Thank you.
    Ms. Fong.
    Ms. Fong. I would just like to offer some higher level 
comment in response to your questions. As we have seen at USDA, 
CCC had a disclaimer last year, and NRCS has had a disclaimer 
for 6 or 7 years, and as a result, last year, the consolidated 
for the whole Department was disclaimed.
    This part year, the most recent year, because we moved to a 
balance-sheet-only approach for NRCS and CCC and the 
Department, they were able to make some forward progress. But 
in order to really bring the whole Department to a full, clean 
opinion, it is going to take some concerted effort. What we 
have seen in the past with NRCS, and before that with Forest 
Service, was when those agencies received their initial 
disclaimed opinion, it took them, with NRCS and Forest Service 
5, 6, 7 years of intense effort, high management priority, 
resources at the agency level, and a commitment to really fix 
the underlying issues in order to move those agencies to the 
clean stage, and we are still working with NRCS on that.
    So, with respect to CCC, we are cautiously optimistic. We 
know that they want to get to the finish line. We will be 
keeping a very close eye on this, and we will have to just keep 
you all apprised of that progress.
    Mr. Palazzo. OK. Well, thank you. And, of course, senior 
leaders need to buy in to the importance of financial 
statements and audits because the end users who use this 
information, I mean, they make decisions, as well as Congress 
does, on what is provided to us, and so it needs to be 
accurate, and it needs to be complete. So thank you for your 
testimony.
    I yield back.
    Mr. Aderholt. Mr. Pocan.

                           SNAP IN WISCONSIN

    Mr. Pocan. Thank you, Mr. Chairman.
    I appreciate it. And thank you for being here today.
    I have to say that I am really heartened to hear the 
chairman and the ranking member, Mr. Yoder and Mr. Young, all 
bring up rural broadband because, in my district, it is one of 
the biggest issues. And I can get a little obsessive on it. My 
office is probably glad I am talking to someone else about it 
rather than them right now. I live in a rural town of 800 
people. My district, with Madison, about a third of it, I would 
argue 40, 50 percent, is very rural, and this is a huge issue. 
So, when it comes to Rural Utilities Service loans, while they 
are very important, we also would love to see you look at some 
of the best practices and what States are doing effectively 
with the dollars. Wisconsin gets some of the lowest speeds in 
the country.
    [The information follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
      
    
    And as you know, 1 mbps, there is a lot of 1-mbps out 
there, but 8 is about what is the minimum for satisfactory 
level. So what we don't have is speed. We actually have a lot 
of people who have lines, but they don't have any speed. And 
the neighbors down my street, the kids can't do homework.
    So I guess it is not so much a question, as I want to echo 
that. And I hope that this arbitrary hiring freeze doesn't 
affect the ability to do an important audit on something that 
you are getting this bipartisan kind of chorus on, but you will 
hear me talk about rural broadband a lot, and this is something 
that I would like to encourage as well whatever we can do in 
that area.
    Two other areas I would like to get to on SNAP and 
specifically in Wisconsin. So, when you look at programs, 
Wisconsin, we have some problems with how we do it: one, how we 
count job placements. If the first part of a month you have a 
job and the second part of the month you have a different job, 
they count that as two separate job placements, and some of the 
numbers are kind of arbitrary. There have been complaints filed 
with the Department of Labor on the companies that people are 
told they have to work at in order to get the benefits are 
actually putting people in jeopardy who are just trying to get 
simple food assistance in the State. And we have had very 
uneven results across the State in how it has been. So I guess 
the question is, as we have a lot of resources going in to 
ensure that SNAP works as intended, can you look at or have you 
looked at States like Wisconsin to investigate how they are 
potentially mismanaging these Federal resources and putting 
people in jeopardy through the program.
    Ms. Fong. Yeah. Let me just comment on that. We did an 
audit this year of the Able-Bodied Adults Without Dependents 
provisions, which I think discussed some of the very complex 
issues with respect to work requirements and waivers and 
eligibility. And our main conclusion from that audit was that 
it is a very complex area. The States are administering it many 
different ways. FNS could do a much better job of providing 
some clarity and some consistency on interpretation from the 
national level to enable the States to really get to providing 
the assistance where it is deserved.
    Gil, do you want to----
    Mr. Harden. Just adding to that, as we learned doing that 
work, that those provisions are some of the most complicated 
ones that States have to deal with, and they really didn't have 
the guidance they needed from FNS to do what they needed to do. 
So a lot of them were just without direction and knowing what 
to do. The recommendations we made are aimed at getting more 
clarity to them, more communications, what are best practices, 
what some States do that others don't that could be spread.
    Mr. Pocan. And a quick followup on that report. I think, 
you know, you talked about 55 percent or so of the research is 
devoted to ensuring SNAP works as intended. Some of that is on 
fraud, and some of it simply on payment arrears. Can you just 
talk a--drop on that because I want to get to another subject 
in my minute and a half, if I can?
    Mr. Harden. A couple years ago, we did a report on the QC 
error rate, and, yes, we found that, you know, States were, I 
don't want to say gaming the system, but there were many ways 
that they were going out and determining their rates and 
working to make their rates lower as opposed to knowing what 
the actual rate was, but it wasn't necessarily fraud. It was 
overpayments and underpayments.

                          POULTRY INSPECTIONS

    Mr. Pocan. And then I guess the last area I can get into is 
on meat inspectors. There has been a new chemical, PAA, I 
think, that has been used pretty widely, sprayed on people in 
poultry packing processing plants. And it is a highly corrosive 
agent, and the workers are being exposed to it. And I think 
there are some questions about how this got approved and 
whether or not it is impacting workers. A number of us did a 
letter to a couple Secretaries on this issue, but I was just 
kind of wondering, you know, no one seems to really exactly 
understand the process and how this was approved, and if you 
have looked at that, if there is a way to look at that so we 
can get more clarity on something that people are concerned for 
the health of the workers in these facilities.
    Mr. Harden. We haven't done specific work, but I can go 
back and ask some questions to find out.
    [The information follows:]

    Peracetic acid (PAA) is approved by the Food and Drug 
Administration (FDA) and regulated by the Food Safety and 
Inspection Service (FSIS).
    Although we have not done any work regarding PAA, we are 
aware that the Government Accountability Office (GAO) is 
currently conducting an audit of Meat and Poultry Worker 
Safety. As part of its work, we understand that GAO has 
examined FSIS' coordination with OSHA as it relates to control 
and use of PAA. Per our discussion with GAO, their work is 
still ongoing. Further, we have initiated an audit to review 
FSIS' implementation of New Poultry Inspection System (NPIS). 
Through a phased approach, we plan to examine the policies and 
procedures HIS used to implement and guide the program and 
review FSIS' oversight to determine whether improvements can be 
made. Also, we plan to examine NPIS implementation at the 
plant-level to determine whether FSIS could make further 
improvements to NPIS. To avoid duplication of our audit effort 
with GAO, we will not look at PAA in our NPIS work.

    Mr. Pocan. If you could, it would be much appreciated. And, 
again, anything on rural broadband would be awesome because we 
formed a Rural Broadband Caucus, bipartisan caucus. We have a 
lot of Members. There are six of us, three Democrats and six 
Republicans, who are co-chairing it. Just a real, real big 
priority for businesses and for education in my district.
    And I will yield back. Thank you, Mr. Chairman.
    Mr. Aderholt. Mr. Valadao.

                      MULTI-FAMILY HOUSING PROGRAM

    Mr. Valadao. Thank you, Chairman.
    Good morning. In prior reports, USDA's Office of Inspector 
General has identified cases of fraud, waste, and abuse in 
Multifamily Housing Program. In some instances, applicants had 
not provided accurate household income information and 
therefore were not eligible for all or part of the financial 
assistance they received. OIG found the primary cause for 
payment errors is tenants not accurately reporting incomes and 
household circumstances on their certifications, and property 
owners do not have the independent source, any wage-matching 
mechanism to verify this information.
    The report went on to recommend that USDA Rural Development 
seek the same authorities that the Department of Housing and 
Urban Development, HUD, has for family property managers to 
access Federal income and benefits database and implement wage 
matching of the tenants applying for rental subsidies.
    This committee provided the legislative authority that 
would enable USDA's Rural Housing Service access to databases 
managed by the Department of Health and Human Services, Social 
Security Administration, and the Internal Revenue Service, 
similar to what HUD uses for income verification, in the fiscal 
year 2016 funding law. The authority we provided should have 
enabled USDA to access the data through the HUD systems.
    The question is: HHS has stated the legislative authority 
we provided does not enable USDA to access databases through 
HUD systems. We agreed with your prior recommendation to 
provide access to these databases, but continue to look for a 
way to implement a means to access that does not require 
reworking the Tax Code or other statutory authorities.
    Could you provide any insight into making this 
recommendation a reality?
    Ms. Fong. I think this information is very interesting and 
useful to us. We were not aware of that development. And we can 
certainly go back and see what we can find out, see if we can 
come up with any thoughts on that.
    Mr. Valadao. All right.
    [The information follows:]

    The prior recommendation referenced above relates to audit 
report 04099-339-AT, Rural Housing Service (RHS) Subsidy 
Payment Accuracy in Multi-Family Housing Program, issued in 
March 2005. (https://www.usda.gov/oig/webdocs/04099-339-
AT.pdf).
    We recommended RHS request legislative authority to, 
similar to HUD, access Federal and State income information 
data files and provide the information to apartment managers to 
assist them in certifying tenant households. As stated by 
Representative Valadao above, the Committee granted this 
authority in the FY 2016 funding bill, but Department of Health 
and Human Services (HHS) explained to Congress that the 
authority granted to RHS did not allow them to access HUD 
systems for income information.
    We discussed with RHS what actions are needed by Congress 
to assist with fully implementing our recommendation and 
gaining access to HUD's systems. RHS stated that, in 2016, an 
attempt was made to do this indirectly as a general provision 
and HHS told RHS that it was not sufficient. RHS stated that 
HHS would only accept an amendment to the Social Security Act 
that would allow RHS access to the New Hires Data Base 
information for Rental Assistance. According to RHS, the Office 
of Management and Budget put forward a government-wide proposal 
in the 2017 President's budget to request the amendment. If 
Congress approves the amendment to the Social Security Act, RHS 
officials have stated that USDA would have the appropriate 
access to fully implement OIG's recommendation.

    Ms. Fong. Yeah. Thank you.

                           IMPROPER PAYMENTS

    Mr. Valadao. I will go to my other question. In the 
September audit report on reducing improper payments, OIG 
states that in fiscal year 2015 USDA had a decrease of more 
than 92 percent in high dollar overpayments from the previous 
year. That sounds pretty impressive, but then the report notes 
that OMB issued new higher overpayment thresholds from 5,000 to 
25,000 for individuals, and from 25,000 to 100,000 for entities 
for fiscal year 2015.
    When these thresholds are raised, naturally, the number and 
sum of overpayments is going to decrease. USDA had a total of 
1,301 high dollar overpayments reported in fiscal year 2014, 
and that dropped to 99 in fiscal year 2015 under the OMB's new 
threshold.
    When the previous administration raised these thresholds, 
seems like they swept a lot of improper payments under the rug. 
Do you believe having a higher threshold is a disservice to 
taxpayers and serves to cover up the amount of improper 
payments?
    Ms. Fong. Well, I think we need to look at that development 
in the overall context of all the improper payment rules, 
regulations, and work that goes on. It is true that the high 
dollar thresholds were raised, and so that had an impact, and 
we give the Department credit for making progress, but I think 
perhaps more important is looking at the work we are doing on 
the overall improper payment rate for the Department, which we 
found in fiscal year 2016 actually went up significantly from 
fiscal year 2015. The fiscal year 2015 overall improper payment 
rate for the high-risk programs was 5.7 percent. In fiscal year 
2016, it went up to 8.86 percent, and that to me is perhaps a 
more meaningful number for us to focus on in terms of what can 
be done to address the overall portfolio of improper payments.
    Mr. Valadao. All right. I understand that some States are 
interested in doing more to combat fraud. This requires States 
to have access to the same information FNS, OIG, and others use 
at the Federal level. I believe your report says that the two 
systems containing retailer information and transactions, STARS 
and ALERT, are used by FNS program personnel, FNS 
investigators, and OIG investigators.
    Do States have access to this information? And if not, do 
you see any harm in the States having access to this 
information as well, if they want to detect and stop fraudulent 
activities?
    Ms. Fong. Yeah. We don't know if the States have access to 
ALERT and STARS. I think there are other tools that the States 
have that they can use to address potential fraud; eDRS, I 
think, is one of the systems. They certainly can deal with 
Social Security numbers and some other tools. So I think there 
are opportunities out there for the States to do data matching 
and address indicators of fraud, and those tools are available.
    We are right now assessing how well the States are looking 
at eligibility questions. We should have a number of reports 
coming out this year on how well they are doing.
    Mr. Valadao. All right. Well it would make sense: more 
information for some of these States and some of my other 
questions to help remove the waste, fraud, and abuse. So I 
appreciate your time. Thank you.
    Chairman, I yield back.
    Mr. Aderholt. Dr. Harris.

                             AUDIT REPORTS

    Dr. Harris. Thank you very much.
    I am going to just ask a couple questions about the two 
reports here, the audit reports. The first one, the FNS 
controls over SNAP benefits for Able-Bodied Adults Without 
Dependents, you know, it is kind of striking. The report 
indicates that it is a very difficult program to implement in 
States and that States game the difficulty a little bit. You 
know, I will quote from page 5. You know, the report says: 
``Due to the burden of implementing the ABAWD provisions, 
officials in three States told us they specifically requested 
time-limit waivers in as many parts of the State as possible to 
minimize the areas where they needed to track the time 
limits''.
    I guess the conclusion is that it is difficult to tell what 
is what, and actually your conclusion in that paragraph on page 
5 is: ``Therefore, the ABADWs may or may not be required to 
work depending on the State they live in''.
    I don't think that is the intent of Congress, that actually 
this is implemented differently in different States depending 
on whether they want to collect data or not.
    Do the management recommendations you make, do you think 
they can end this practice of this heterogeneity of how this 
program is administered or managed?
    Mr. Harden. I would say that we would hope that it should. 
I mean, we will have to go back and look and see how they put 
forth those best practices. You know, this is another time when 
we didn't feel like FNS was playing the right oversight role 
with the States in communicating with folks and really knowing 
what is going on. This hopefully brings back to the table; they 
can have some discussions and decide how they are going to move 
forward. But then we would have to go back in and do followup 
work to find out how well it took.
    Dr. Harris. How many, if I might ask, because I didn't dig 
through this, how many States did you investigate for this 
audit report, for that audit report? Do you know?
    Mr. Harden. Off the top of my head, I think it was three or 
four. We went to three or four States.
    Dr. Harris. Three or four.
    Mr. Harden. I can get you the names if need be.
    Dr. Harris. OK. And I guess, based on that, it was so 
consistent in this--the heterogeneity was so consistent that I 
guess you extrapolate that this existed across the country?
    Mr. Harden. No, no. Let me back up. I had a better memory 
as you were saying that. Because I think we contact--we went to 
a handful of States, but then we also talked to a lot of other 
States. So it wasn't just a handful that we would be 
extrapolating from, but talking to them about their 
difficulties with the program and how they operated it.
    Dr. Harris. Thank you very much for doing that because, as 
you know, a lot of us feel that people fall on tough times, but 
able-bodied adults without dependents, you know, should be out 
getting a job if they can and working and not necessarily 
depending upon, you know, the Federal government.
    Now, the other report, the SNAP administrative costs 
report, I think what is striking to me is that--in this report, 
my understanding is you did only look at three States, is that 
right, for this.
    Mr. Harden. [Nonverbal response.]
    Dr. Harris. But in looking at those three States--one of 
the States was California. I guess because it was an outlier in 
what the administrative costs were, but the conclusion was that 
there was a, I will call it a clawback, I guess, of $111 
million where the obligation should be clawed back. Is that 
right?
    Ms. Fong. [Nonverbal response.]
    Dr. Harris. Wow, that is a lot of money, you know, which I 
think points to one of the problems with this program in and of 
itself, that the States don't have a lot of skin in the game. 
It is not their $111 million unless we go after it and claw it 
back.
    Given that you only looked at three States, do you think 
the problem that you saw in California exists in other States 
and that, in fact, we are not looking at only $111 million in 
clawbacks but, in fact, that the number nationwide would be 
quite larger if we looked at all the States?
    Mr. Harden. I think it could if you looked at more States. 
Now, the ones that have county-administered programs, there are 
only 10 States that do it county-administered, but the reason 
we focused on those is they have half of the administrative 
costs, like $1.8 billion of the $3.6 billion for 2014, which is 
the number we started with.
    And what we also found was that FNS wasn't consistent in 
how they were doing their reviews. Using the California example 
as a way of explaining it--they were a big State for the 
western region. The western region only looked at California 
itself once every 5 years. The western regional office for FNS 
didn't even go down to the counties where they administer them. 
Compare that to the northeast region--looking at New York and 
New York City; they go to New York City every year and New York 
every year because of the size. So different regions approach 
it differently, and part of our message to FNS was there needs 
to be some consistency, and if you have lots of money in the 
game, you really probably ought to be out there more often.
    Dr. Harris. And was your finding that they used estimates 
instead of actual expenditures, that was one of the major 
findings, do you think that is true whether or not it is 
county-administered? I mean, was this done in the State-level-
administered programs as well, or hard to say?
    Mr. Harden. That, I don't know, but, yeah, the western 
region was very lax with California. And what it did was it fed 
misinformation back to what you could look at the national 
level in terms of what your actual costs were.
    Dr. Harris. OK. Thank you very much.
    I yield back.

                              RESTITUTION

    Mr. Aderholt. Thank you.
    Ms. Fong, you mentioned in your written testimony that 
there are several different examples of monetary restitution, 
to include almost $100 million under the SNAP program, $7.6 
million in a case involving child nutrition programs, $3.3 
million in a case involving FSA loans, and a total of $30.8 
million in other farm programs.
    Can you tell us how much of this money the Federal 
Government will recoup and will actually go back to the U.S. 
Treasury?
    Ms. Fong. Let me offer some comments and invite Ann to 
comment as well. The restitution orders are the end result of 
the judicial process, and the court will order the restitution 
based on the amount of loss to the government program.
    You raise a very good question as to how much of that will 
actually be recovered, and I think that that could range 
depending on the situation. It may not be 100 percent. And I 
don't believe we track that.
    Ms. Coffey. We don't. Once we complete our judicial 
process, the tracking for whatever restitution gets paid is 
done by the Department of Justice. Any moneys that are ordered 
for restitution should be returned to the U.S. Treasury, but we 
do not track that information. Once the restitution amounts are 
set by the court, the Department of Justice is the entity that 
tracks that information as to what percentage actually goes 
back to the Treasury.
    Ms. Fong. And just to add on, the money goes to the general 
fund, not to USDA.
    Ms. Coffey. That is correct.
    Mr. Aderholt. Yes, right. The U.S. Treasury.
    Is there anything or any advice or suggestions that we 
could do in Congress to help agencies to recover these funds 
that were obtained illegally or fraudulently, or something more 
than what we are doing now?
    Ms. Fong. Well, I think with respect to restitution, actual 
payment of an order of restitution will depend on the 
defendant's assets and whether they have sufficient assets to 
pay it back.
    Now, there are other times when we make recommendations to 
the Department that it go after money that is owed to the 
Department. It may not be in the context of a criminal sentence 
of restitution. It may be in the context of an audit 
recommendation, for example, the one we were just discussing 
with California and SNAP, $111 million, where we recommend to 
FNS that FNS go back and recoup that money. And I think in 
those situations, attention and oversight from the committee 
would be very helpful to make sure that those recommendations 
get implemented and resolved.

                            TRADE AGREEMENT

    Mr. Aderholt. Okay. Let me move on to one other issue that 
I think is pertinent here for us in this Subcommittee. In a 
recent audit report that you did on effectiveness of the 
Foreign Agricultural Services monitoring coordination of trade 
agreements, you identified that there are four areas where USDA 
was lacking, and these areas that were key to trade 
negotiations involved a lack of internal control process, goal 
setting, and overall coordination. Of course, we understand 
that the U.S. Trade Representative is the lead agency for 
negotiating trade agreements, but USDA plays an important role 
in providing support for the agriculture sector in removing 
nontariff trade barriers, such as phytosanitary obstacles. Just 
yesterday, on the Senate side, it was made clear the stakes for 
U.S. agricultural team and new market access were very 
important. That was in the Finance Committee over on the Senate 
side.
    This subcommittee has been one of the main proponents on 
the Hill for completing the farm bill mandate that USDA 
establish an Under Secretary for Trade and Agricultural 
Affairs. At my request, money was included in the fiscal year 
2015 appropriations bill to do a study since the one mandated 
by the farm bill is now almost 3 years late. In fiscal year 
2016, at my request, money was also included to help with 
implementation of this new Under Secretary. That money still 
remains available for use.
    Is it your opinion that having an Under Secretary in place 
that focuses on trade issues would help with the coordination 
and also complete your recommendation with the report?
    Ms. Fong. Well, let me just mention that I recall we 
discussed this issue last year, and at that time, there had not 
been an Under Secretary appointed. And at that time, FAS was in 
the middle of doing its study, at least that was our 
understanding. We have not really been tracking that issue.
    I think it is fair to say that, as with any other issue, 
leadership is critical to making progress on our 
recommendations, and that leadership from the policy level is 
important, whether it is from the Secretary or the subcabinet, 
whoever it may be at the time.
    What we see in the trade arena is the need for FAS to 
really focus on how it measures success? Is that measurement 
objective? Is it based on data? Are there performance measures 
that can be reported to Congress where you can say, `` Yes, 
this is what we did, and this is how we did it,'' and it is 
documented and measurable? That is what the gist of our 
recommendations goes to. And to the extent that leadership from 
the Department can bring focus to that, we would welcome that.
    Mr. Aderholt. So it will be safe to say you have not 
received any request from an active consultant setting up with 
a new Secretary regarding this?
    Ms. Fong. To the best of my knowledge, we have not been 
consulted on this issue.
    Mr. Aderholt. Okay. Well, I think now may be an opportune 
time during this transition to set up this new under Secretary, 
and so we would encourage that any way possible as you move 
forward.
    Mr. Harden. I would add that I was tracking how the last 
administration was handling this, and I noticed when the prior 
Secretary said that they were basically pushing it down the 
road, because I was trying to find out when they were going to 
say what they were going to say so we could figure out how we 
were going to proceed with it to whether it would be a good job 
or not. So it is something that is on our radar screen to look 
at.
    Mr. Aderholt. OK. Thank you.
    Mr. Bishop.

                              BUY AMERICAN

    Mr. Bishop. Thank you very much.
    I want to go back to something Ms. Pingree started, but I 
want to deal with some problems with AMS procurement inspection 
of fruits and vegetables. The Agricultural Marketing Service 
acts as the agent for the Food Nutrition Service and, at their 
request, buys the food for the school nutrition programs and 
other USDA feeding programs. In your audit last year, you found 
a number of serious problems with the agency's work, including 
the failure to properly close out accounts and failure to 
ensure that products met the proper standards.
    I would like to focus on another problem that you found, 
the failure to ensure that all products were 100 percent U.S. 
in origin. In fact, you found that in a sample of 97 purchase 
orders, 29 of them did not have sufficient documentation to 
prove that they were in compliance with the Buy American Act, 
and you found that almost $35 million in purchases were not 
proven to be of U.S. origin.
    I was somewhat shocked at this finding because compliance 
with Buy American is critically important to our farmers. They 
count on the government to abide by this requirement, and so do 
consumers. Would you discuss the problems and what AMS agreed 
to do to remedy them?
    And then I have another question regarding SNAP.
    Mr. Harden. They did agree with our recommendations. And it 
is kind of like I said with other matters, you know. They did 
recognize there was a problem; they shouldn't have done it. We 
will have to do some followup on that to see how it got 
implemented in terms of corrective actions.
    Ms. Fong. We can certainly look at that and get back to you 
and your staff on whether the recommendations have been 
implemented, and if not, what is the time frame for that.
    [The information follows:]

    In February 2016, we issued our report on AMS Procurement 
and Inspection of Fruits and Vegetables.\2\ In our report we 
noted that for FYs 2013 and 2014, AMS could not provide 
assurance that commodities for 29 of 97 sampled purchase orders 
were of domestic origin. This occurred because AMS had not 
obtained sufficient documentation, such as growers' list and 
scale tickets, to verify product origin. As a result, almost 
$35 million of commodities purchased for USDA programs may not 
have been obtained in accordance with the Buy American Act.
---------------------------------------------------------------------------
    \2\ Audit Report 01601-0001-41, AMS Procurement and Inspection of 
Fruits and Vegetables, Feb. 2016.
---------------------------------------------------------------------------
    AMS agreed to strengthen enforcement of the Notice to the 
Trade, Domestic Origin Requirement, dated September 16, 2010, 
by assigning Specialty Crop Inspection (SCI)'s Inspection 
Operations responsibility for ensuring that the contractors 
provide complete documentation. Any incomplete trace-backs will 
be returned to the contractor(s) by SCI for completion. If the 
contractor does not comply, SCI immediately will notify 
Commodity Procurement Staff, which will take action based on 
the guidance outlined in the Federal Acquisition Regulation, 
which could result in rejection of product.
    AMS further agreed to develop and deliver to SCI employees 
a Train-the-Tracer class that will cover: conducting thorough 
trace-backs; ensuring contractor compliance with trace-back 
responsibilities; reviewing trace-backs; and AMS' established 
process for conducting headquarters reviews of field trace-
backs to support effective product traces. This will be 
mandatory training for SCI staff involved with the activities 
associated with commodity procurement. AMS advised that it 
expects corrective action to be completed by August 2017.

    Mr. Bishop. Thank you. I appreciate that very much.

                             SNAP RETAILERS

    Let's talk about data analysis and SNAP retailers. About a 
month ago, you issued a report that looked at SNAP retailer and 
transaction data, and you used special software to check Social 
Security numbers and ages of retailers. I fully support your 
work on this and other government programs, but I wanted you to 
go over your findings related to Social Security numbers and 
birth dates so that we can all view them in the proper 
perspective.
    In looking at both Social Security numbers and ages, you 
found very few discrepancies among the owners of the more than 
200,000 authorized retailers. For each, that was 99 percent 
accuracy. FNS deserves credit for that, I think, for issuing 
guidance to their staff on these issues quite a few years 
before your audit.
    Am I correct that you accepted the FNS management decision 
on all of your recommendations?
    And on the Social Security matching issue, FNS says it does 
not have the legal authority to access Social Security numbers 
for this purpose, so they can't do a match. They need 
legislative authority to do so. Do you agree that FNS doesn't 
have the legal authority to match Social Security numbers?
    Mr. Harden. Sir, I would have to go back and look, because 
I thought we were using some of the Social Security information 
that they already had in doing our analysis, but let me go back 
and take a closer look on that question.
    Mr. Bishop. Thank you.
    [The information follows:]

    OIG's audit report, Detecting Potential SNAP Trafficking 
Using Data Analysis (27901-0002-13), recommended FNS design and 
implement a control to identify SNAP retail owners whose 
information matches that of deceased persons, and correct or 
update this information as needed. In response to our 
recommendation to identify deceased owners, FNS stated that it 
does not currently have the authority to match SSNs on the 
Death Master File (DMF) for this purpose. However, FNS stated 
that it would attempt to perform a match with the other data it 
has available, such as first, middle, and last name, and date 
of birth. Further, FNS' response stated that there is value in 
conducting a SSN match on an on-going basis and if FNS is 
granted future legislative authority to use DMF for matching 
purposes, it will perform matches on an on-going basis.
    We believe that there are potentially different 
interpretations regarding the relevant authorities. USDA's 
Office of the General Counsel would be the appropriate USDA 
office to interpret FNS' related authority.

                              2501 PROGRAM

    I have got about a minute left, so let me ask you about the 
2501 Program update. In keeping with my theme last year of 
increasing diversity access across the Department, I would like 
to inquire about the 2501 Program, which has been critical in 
providing assistance or support to disadvantaged farmers, to 
HBCUs, and to others. In your fiscal year 2017 budget 
justification, OIG cited Section 2501 Program as its first 
example of recent progress within the Department.
    Can you provide us with an update on current operations and 
management of the 2501 Program and whether it is meeting its 
statutory mandate and mission?
    Ms. Fong. OK. We have not done recent work on that issue. 
When we issued our audit report, the agency agreed with our 
recommendations. And I think at this point what we could do is 
go back and find out the status of our recommendations to make 
sure that they have actually implemented them.
    Mr. Bishop. Thank you.
    [The information follows:]

    As of June 2017, the agency reported that they have 
implemented all agreed to corrective actions for audit 91099-
0003-21, Section 2501 Grants Awarded FYs 2010-2011, March 2015.

    Mr. Aderholt. Mr. Young.

                              IT SECURITY

    Mr. Young. Thank you, Mr. Chairman.
    Looking over your testimony and some of the programs that 
you have been investigating and auditing, I am stuck on IT 
security. And you have a relationship with the Office of Chief 
Information Officer, probably a closer relationship because of 
the Federal Information Security Modernization Act, which 
became law in 2014. It says, ``in fiscal years 2009 through 
2015, the OIG made 61 recommendations for improving the overall 
security of the USDA systems, 18 of which are overdue for 
completion.'' That was in 2015.
    Do you know if those 18 overdue recommendations have been 
addressed since 2015 when you did that last audit or 
investigation?
    Mr. Harden. We will have to--that will be something that we 
will also follow up in this year's cycle. As we finished last 
year's cycle last November, they were overdue. Some of them may 
have gotten completed since then, but, you know, we are just 
starting up this year's review.
    Mr. Young. OK. And then it says: ``Moreover, our testing 
identified that security weaknesses still exist in three of the 
39 closed recommendations.''
    With information technology security weaknesses and holes 
that are--and it is through private industry; it is through our 
personal computers; it is through public systems--at the USDA, 
what is at risk? What information is at risk?
    Ms. Fong. Well, I think, as you know, all of the Federal 
agencies are dependent on IT to deliver their programs. And so, 
at USDA, you are looking at a broad array of databases in the 
farm program agencies, certainly the----
    Mr. Young. So we are looking at data, but we are also 
looking at the names of producers who receive payments, 
individuals and families receiving benefits, whether it is 
SNAP, WIC, and loan and grant recipient information. Could 
their identifying information be subject to hacking and being 
stolen because of some information that is attached to these 
names, like Social Security numbers, USDA account information, 
or bank information?
    The reason I ask this is because I lead a bipartisan task 
force with Kyrsten Sinema, a Democrat from Arizona, and it is a 
Congressional task force to prevent identity theft and fraud. 
There are a lot of frauds and scams out there. But we also need 
to make sure that, if we are being a caretaker of the taxpayers 
and their personal information, we need to be doing a better 
job.
    Do you think the Social Security information, bank account 
information, names, and addresses are subject to risk with the 
holes that you found in the IT systems at the USDA?
    Ms. Fong. I think you have really put your finger on the 
risk to the Department. The risk to the Department is 
significant. We believe it is a material risk, that the data 
systems currently are not sufficiently secured at the 
Department level and as they roll down through the agencies. 
And, of course, there is all kinds of data in the Department 
systems. And, you know, you mentioned the outstanding 
recommendations that we have with respect to IT security. We 
have seen the Department make some progress, but there is a 
long way to go. And we all are very aware of some of the 
breaches around the Federal government and other departments 
and agencies, we are aware that that risk exists for USDA as 
well.
    Mr. Young. Would you know how many times the USDA tests its 
systems, or would that be a question for the Office of the 
Chief Information Officer?
    Mr. Harden. OCIO would have a probably more ready answer, 
but we will go back and look and see what we can find out.
     [The information follows:]

    The Department's Risk Management Framework Guide states 
that the Department is to annually test its systems based upon 
the National Institute of Standards and Technology (NIST) 
Special Publication 800-53, Security and Privacy Controls for 
Federal Information Systems and Organizations (April 2013). Key 
controls are tested annually, while other controls are tested 
on a cyclical basis; one third per year until all have been 
tested at the end of the 3-year cycle. The extent of the 
testing depends on the risk categorization (Low, Moderate, or 
High). Low categorized systems have fewer controls to test 
while High systems have more. The Office of Chief Information 
Officer can better answer what other testing is done. Due to 
the decentralized nature of USDA, additional testing may be 
done at each individual agency. OIG's FY 2016 Federal 
Information Security Modernization Act audit found that the 
Department had implemented this framework and it was operating 
as intended.\3\
---------------------------------------------------------------------------
    \3\ Audit Report 50501-0012-12, U.S. Department of Agriculture, 
Office of the Chief Information Officer, Fiscal Year 2016 Federal 
Information Security Modernization Act, Nov. 2016.

    Mr. Young. We will be in touch. Thank you for being here 
today.
    I yield back.
    Mr. Aderholt. Ms. DeLauro.

                         ETHICS INVESTIGATIONS

    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Ms. Fong, I am just going to ask, but I will put it in 
writing as well, I want to ask you to put in writing for this 
Committee what the effect of the hiring freeze will mean for 
your department. I want to know what the 40 slots are and what 
areas that they cover.
    [The information follows:]

    OIG provided information to Rep. DeLauro and Subcommittee 
leadership on March 10, 2017.

    As I listened to my colleagues this morning, we have talked 
about RUS, ARS, organics, housing, trade, recently IT security, 
all areas of great interest to this Committee, and 58.5 percent 
of your current resources are spent on the SNAP program. We 
have an interest in the SNAP program. It has a big claim on 
what we do. But there are a lot of issues here that truly are 
going begging, and you now have a hiring freeze. So I want it 
detailed, and I also want to know what those error reports, 
error numbers, are on improper payments for all of the farm 
programs under your jurisdiction.
    Let me get to an ethics question. Everyone here is aware of 
the issue involving the promotion of Ivanka Trump's clothing 
line by the White House staffer, Kellyanne Conway. Chairman 
Chaffetz, and in a bipartisan way, sent a letter which said 
that the remarks were clearly over the line. He and Ranking 
Member Cummings asked the Office of Government Ethics to 
investigate, recommend appropriate disciplinary action. There 
are other examples as well. Press Secretary Spicer talked about 
``go to the Trump International Hotel; it is stunning,'' et 
cetera.
    Now, the White House does not have an inspector general. 
There is no inspector general there. So the only option may be 
to go to the Office of Government Ethics. Consistent with 
legislation that passed the House by a landslide in the 104th 
Congress, I have introduced a bill to provide for an IG at the 
White House.
    I am wondering, though, about your role at USDA on ethics 
matters. First, I understand that many agencies have standard 
penalties for employee misconduct, like what happened with Ms. 
Conway. Example, employees at Customs and Border Protection 
reportedly are subject to a 14-day suspension for a first 
offense and removal from their position for a second offense.
    Do you have at USDA standard penalties like what CBP has 
for such misconduct? Can you tell us what they are? Can you 
tell us approximately how many ethics issues you take up 
annually?
    Ms. Fong. Let me offer some comments, and then Ann will 
have some additional comments. We do have jurisdiction over 
allegations that the ethics rules, regulations and statutes 
have been violated, and the Department requires in its 
regulations that any concern or allegations about violations be 
brought to our attention so that we can evaluate them and 
handle them.
    With respect to potential violations, if it is a violation 
of a criminal ethics statute, which sometimes those violations 
can exist, primarily conflict-of-interest or post-employment 
issues, there are statutory penalties that could involve 
imprisonment or monetary fines, and that would go through the 
justice process.
    Ms. DeLauro. But you, then, have established there are 
fines and penalties that----
    Ms. Fong. For potential criminal violations.
    Ms. DeLauro. For--well, I am talking about civil issues as 
well.
    Ms. Fong. Right. And on the administrative or civil side, 
if it doesn't rise to the level of a criminal violation but it 
is an administrative violation, the Department has tables of 
penalties, I believe we call them, which we can provide.
    [The information follows:]

    Please see link to the USDA Guide for Disciplinary 
Penalties which includes various sections on ethics violations: 
https://www.dm.usda.gov/employ/docs/
DisciplinaryPenaltyGuide.pdf.

    Ms. DeLauro. OK. I would like to see that. Do you take up 
these issues at all, the civil ethics issues?
    Ms. Fong. It would depend on the situation. We would 
evaluate any incoming allegation and determine whether it is 
appropriate for us to move forward on that. We take these very 
seriously.
    Ms. DeLauro. How many do you do a year?
    Ms. Coffey. Within fiscal year 2015 and fiscal year 2016, 
we have about 10 cases that have come in relative to ethics 
violations.
    Ms. DeLauro. But you have a system in place to deal with 
this?
    Ms. Coffey. We do.
    Ms. DeLauro. And all--most of the agencies have that system 
in place, as I understand it. The only place that does not have 
an IG is the White House. They don't have an inspector general?
    You don't have to answer that question. I know the answer 
to that question. They don't. There is no inspector general 
there to deal with these civil kinds of efforts.

                                  MARC

    Let me get back on the ARS piece, if I can, for a moment. 
My understanding is that, and this is the animal welfare issue, 
that these were not unannounced inspections. They were 
essentially designed to see how the facility stood in terms of 
overall compliance so that, while ARS' policy for many years 
has been that its facilities must comply with the AWA, it is 
obvious that the policy was not enforced.
    APHIS inspectors found more than 150 AWA issues at the 20 
facilities. Almost half of the issues related to the 
facilities' institutional review committees. That was just a 
key issue that was raised in that New York Times story. Many 
others related to basic care of animals.
    The facility that was the subject of the New York Times 
story had by far the most problems. Inspectors identified a 
total of 33 AWA issues, problems, and MARC had to have three 
inspections, as I understand it, before it came up, quote, 
``clean.'' So, in essence, the Times was on target.
    But can you give us your thoughts on how agencies fall 
again and again into the trap of not making sure that their own 
policies, that their own policies, are not effectively 
implemented? Now, it was, I think, my colleague, our colleague, 
Congressman Farr, who said, none of this would have happened 
had it not been for The New York Times story.
    How do agencies continue to fall into this trap? And let me 
get your thoughts on that.
    Mr. Harden. That is interesting. We had a very good 
conversation with the agency administrator as we were closing 
this one out. And what really caused----
    Ms. DeLauro. It has been closed out?
    Mr. Harden. In closing out the audit and coming to what was 
being reported on and talking to them about what the cause was. 
And from all of our work, we could tell that they had not made 
a priority of following those policies or making sure that they 
were followed. She was concerned that we worded it that way, 
but in the end, she said, ``You know, you are right. We didn't 
place the right priority on overseeing and implementing those 
policies as we should, and we need to do better.'' So it was a 
lack of priority.
    Ms. DeLauro. But this continues to happen. So what is it 
that we should do, if you have thoughts about what we should 
do, in terms of addressing this issue, which continues to 
happen? And, again, if there had not been a New York Times 
story, this would never have reached the public; it would have 
never gotten anyone's attention on this subcommittee.
    So what is it that--and we need to think about what we 
should do in order to prevent these kinds of efforts from 
occurring again. It was 150 animal welfare issues at these 20 
facilities. Can you give us your advice on what kind of 
legislation would assist you in what you have to do?
    Ms. Fong. Well, I think you are putting your finger on the 
very basic challenge that faces program managers, and Mr. 
Chairman identified that in his initial question as well: What 
can Congress do? What role do we play in the IG's office in 
terms of bringing some urgency to these issues?
    And in our experience and our observation, what we have 
found has been really effective is when you all, in the case of 
U.S. MARC, the Chairman and the Ranking Member both asked us to 
do a review of it based on The New York Times article, and that 
was very effective. We were able to go in there and shine some 
light on it. I think that is the role that Congress plays.
    We have made some recommendations. Now it is time to 
oversee the implementation.
    Ms. DeLauro. And, Mr. Chairman, thank you for your 
thoughtfulness in the time.
    Final question, which goes back to my first question. You 
don't have the resources today to dig into the corners that we 
need to dig into in order to protect the public safety in terms 
of food, in order to deal with broadband, in order to look at 
international organics coming into this effort, in order to 
deal with the housing issues that have been talked about here, 
IT security, the whole 9 yards. You don't have the resources, 
as far as I can tell, with 40 open slots, to be able to dig 
into what you are charged with doing. And we keep asking you 
questions about this, but at some point, just say flat out: we 
don't have the resources and the staff to be able to go in the 
direction that the Members of Congress would like us to go in 
and----
    Mr. Aderholt. Your time is up. Let me say, in closing, 
regarding The New York Times article, approximately how many, 
what percentage, of that article was either inaccurate, lacked 
context, or uncorroborated?
    Mr. Harden. I can't put a percentage on the article. We----
    Mr. Aderholt. Over 50 percent?
    Mr. Harden. I can't put a percentage on the whole article. 
We had to look at statements in that article that we felt we 
could objectively analyze and see if we could find evidence to 
support it or not, and that is where we came up with the 33 
statements that we picked. Those were judgmentally picked to 
look at to see if we could corroborate what was being said.
    Mr. Aderholt. Were those 33 statements a big portion of the 
article, or was that just a very small portion of the article?
    Mr. Harden. Let me go back and get a better percentage of 
the article. I am trying to remember how many pages the article 
was. I remember reading a multipage article. And so I will get 
you an answer for that.
    [The information follows:

    After reviewing The New York Times article, we non-
statistically selected 33 specific statements from the article 
to evaluate in an attempt to determine the accuracy of the 
expressed concerns. These statements were selected based on 
references to specified dates or timeframes, specific facts or 
figures (for example, a specific number of animal deaths), and/
or sufficient details the audit team could examine.

    Mr. Aderholt. OK. All right.
    Ms. Fong. Let me also observe that, during the course of 
our audit, we tried numerous times to interview and speak with 
the writer, the author of the article, to gain his perspectives 
on it. And we told him where we were going to end up with our 
conclusions, and they did not want to engage.
    Mr. Harden. Right.
    Mr. Aderholt. The reporter didn't want to engage.
    Ms. Fong. The reporter or the editor--or his editor. Yeah. 
Both.
    Mr. Aderholt. OK. Mr. Palazzo.

                           U.N. ORGANIZATIONS

    Mr. Palazzo. Thank you, Mr. Chairman.
    The Inspector General performs a number of audits and 
investigations of third-party organizations receiving taxpayer 
money each year. In a recent draft executive order leaked to 
the press, the Trump Administration called for the audit of 
funding to groups associated with the United Nations. One of 
the largest U.N. organizations that this subcommittee gives 
funding to is the World Food Programme. The U.S. Government has 
given almost $8 billion to this organization over the past 5 
years.
    The World Food Programme uses an external auditor that 
rotates amongst various nations serving 6-year terms. 
Currently, it is under the responsibility of the French 
Government's auditing body.
    In your experience as Inspector General, have you ever 
performed an audit of the World Food Programme or another 
international body?
    Mr. Harden. No. And, actually, in researching this 
question, the money that goes through CCC for the World Food 
Programme actually is passed through USAID for delivery to the 
World Food Programme. So it is kind of overseen by the IG's 
Office at USAID. I would need to go back and talk to them about 
what oversight they have done of that piece of the program.
    Mr. Palazzo. So USAID is maybe doing their audit for----
    Mr. Harden. Right. I would just have to see if they have 
done any work on it.
    Mr. Palazzo. OK. And that would have been good to know 
before I asked the question. I have a whole bunch of followup 
questions that really don't pertain to you all right now. So 
that would be great if you could get that information to me.
    [The information follows:]

    See OIG response to Questions 55-64 in submitted questions 
for the record.

    Mr. Harden. We have looked at the USDA side of it, which is 
the Food for Progress Program, on several occasions and found 
weaknesses in how those programs are run as well.
    Mr. Palazzo. Would you all like to audit the World Food 
Programme?
    Mr. Harden. I would have to look and see if we would have 
jurisdiction and get----
    Mr. Palazzo. You need more staff, right? All right.
    Well, Mr. Chairman, I yield back.
    Mr. Aderholt. Ms. Pingree.

                        ANIMAL WELFARE DOCUMENTS

    Ms. Pingree. Great. Thank you very much, Mr. Chair.
    Thank you again for your time with us today and your work. 
I just want to reemphasize a few things that my colleagues have 
said. Certainly I think there is a great understanding that 
through the kind of audit and oversight facilities that you 
provide, it really gives us the opportunity to understand where 
money is well spent, where it isn't, where programs are 
performing. I just want to emphasize the concerns that my 
colleagues have brought up about making sure you have adequate 
funding and making sure you let us know when some of these 
things can't be performed because of that funding as we are 
making those critical decisions.
    I want to just reemphasize again on Buy American, organic. 
I see two really critical roles that are performed by the USDA, 
which the Chair mentioned earlier in his remarks. It is just 
critically important to farmers that we are supporting them in 
the markets that are available to them. To have 30 percent, 
potentially, of the Buy American products not be procured from 
the United States or not, that is just a huge lost opportunity 
when we want to see growth in our farming sector and our 
agriculture sector and strengthening those markets. The same 
with organic, with increasing imports that are going on. So I 
just can't say enough about following that.
    Of course, I am very supportive of broadband. I think I 
come from the most rural State in the Nation. I don't even want 
to tell you the low rates of broadband in many communities in 
my State and the challenges that we face not having the 
resources. I think there will be just huge bipartisan interest 
in that as we go forward, and we will really look forward to 
the insights you can give us into that.
    And a more recent issue that I am sure you haven't had time 
to investigate, but I just want to throw it on your radar 
screen. I know there was just a letter sent to the new 
administration about some of the issues at APHIS around 
scrubbing the website of animal welfare documents. You have 
probably read about it if you are not aware of it, but 
certainly that is a concern. It had 101 signatures on that 
letter, very bipartisan in a time when it is not always easy to 
get bipartisan concerns about this. Republicans and Democrats 
alike have shown concerns about the importance of the public 
having access to that information. As my colleague from 
Connecticut was just mentioning we shouldn't have to turn to 
the newspaper all the time to figure out where the problems 
are. Some of the ways that the public can have access to this 
kind of information is by being able to see it on the website.
    So, understanding that information has been scrubbed and 
the importance of putting it back and this bipartisan concern 
about it and the importance of just being able to continue to 
use sunshine as a disinfectant, as my Republican colleagues 
have said in their comments around this letter. I hope that you 
will make one of your priorities going forward to look into 
that lack of access to information and I think, in the future, 
any removal of useful information to consumers and to lawmakers 
about what is going on. And, in this case, we can see that 
there are high levels of concern about animal welfare. If you 
have any comments about that, I would be interested to hear. I 
just really think it fits into the theme of many things that we 
are talking about today, and I think a lot of us were shocked 
to see that information removed.
    Any comments or--I doubt that you have already done the 
thorough investigation yet, but----
    Ms. Fong. We are very much aware of the situation. As you 
mentioned, it has been in the news, the Congressional interest. 
We have been watching as it unfolds. We understand it is a 
complex issue. The Department is working with the Department of 
Justice. There is some litigation involved, which adds another 
layer of complexity, but we will be watching it. And if anyone 
on the Committee has a particular aspect of it that you would 
want to bring to our attention, we would appreciate that.
    Ms. Pingree. Great. Well, we will send a followup letter 
about that. And then we would be happy to hear back from you 
about ways that we could work moving forward on it and other 
insights you could bring to us.
    So, again, thanks for your work.
    And thank you, Mr. Chair. I yield back the balance of my 
time.
    Mr. Aderholt. Mr. Pocan.

                           FOOD AID PROGRAMS

    Mr. Pocan. Thank you, Mr. Chairman. On my previous 
Committees, we usually don't get a second round, so I was 
trying to rush everything in the first round with three, but I 
do just have one additional question.
    In the OIG 2017 annual plan that outlines the goals for 
improvement initiatives for the FSA commodity purchases for the 
international food assistance programs, can you elaborate on 
some of those initiatives? We had a question from a 
constituent.
    Mr. Harden. Let me go back and look at that. That is 
something that is in the plan that we haven't started yet, and 
so I would need to go back and do a little research on what the 
initiatives are.
    [The information follows:]

    We are currently conducting fieldwork for our Audit report 
on FSA Commodity Purchases for International Food Assistance 
Programs. We expect to issue the final report in Spring 2018. 
OIG categorizes its audit work into one of three goals: safety 
and security, integrity of benefits, and management improvement 
initiatives. This report is categorized under ``management 
improvement initiatives'' since the audit will focus on 
strengthening management through more efficient program 
operations and improving financial management. The objectives 
of this audit are to evaluate whether FSA's commodity 
procurement process for international food assistance programs 
is: (1) conducting outreach to prospective vendors to meet its 
goals of promoting competition, (2) adhering to applicable 
Federal Acquisition Regulation vendor qualification 
requirements and ensuring only qualified vendors are able to 
submit bids, (3) performing contract closeout procedures 
timely, and (4) monitoring unliquidated obligations from 
commodity contracts to ensure these funds are de-obligated.

    Mr. Pocan. All right. I appreciate it. Thank you.
    I yield back.
    Mr. Aderholt. Well, thank you. Mr. Young, just one comment, 
I understand?
    Mr. Young. I just have a comment, and echoing some of the 
remarks of my colleague Ms. Pingree about transparency and the 
information that has been taken down, whether it is this 
administration, the last administration, or a future 
administration, the more transparency the better. Whether you 
agree with an issue or not, having that information out there 
is important. As you said, sunshine is the best disinfectant. 
It is up to putting that information out there and allowing the 
public to see these things and make up their minds for 
themselves. But I think it is our obligation to make sure that 
we have transparency, not only within Congress, but across the 
board of the Federal government in doing our oversight. And so 
I thank you for bringing that up.

                          THIRD-PARTY REVIEWS

    Mr. Aderholt. Let me just say, in closing, Congress has the 
ability to ask for a third-party entity review of Federal 
programs and actions to obtain an objective assessment of how a 
process or program is being implemented. For example, under the 
fiscal year 2016 Omnibus Appropriations Act, Congress directed 
the National Academy of Medicine to review the process used to 
establish Dietary Guidelines for Americans and ensure the 
guidelines better address the health concerns facing Americans. 
The concern is, and we have heard from constituents also 
concerned, that this review is not being conducted according to 
statute and report language.
    Would it be in the OIG's purview to review how this study 
is being conducted and to look into USDA's involvement with NAM 
process to ensure that the statute is being followed?
    Ms. Fong. I think we would want to give some thought to 
that. Generally, our jurisdiction extends to any expenditure of 
USDA funds or any USDA activity. If there is a contract 
involved between a USDA agency and the National Academy, that 
would give us a basis to think about work. So let's get in 
touch with your staff on this and get some additional 
information.
    Mr. Aderholt. OK. We will follow up with you, but we will 
be happy to try to discuss more and get your thoughts, then, on 
the process.
    Have you got one more question you want to ask?
    Ms. DeLauro. Just a quick question.
    Mr. Aderholt. We will do that. That will be fine if anybody 
has got any burning questions. We want to try to----
    Mr. Bishop. Mine is very short, but if you want to----
    Ms. DeLauro. Why don't you go ahead, Ranking Member.

                               DIVERSITY

    Mr. Bishop. Last year, I raised the issue of diversity 
within USDA. And not to sound like a broken record, but I asked 
for an update on OIG's overall accomplishments and related 
activities in the area of diversity in USDA last year and your 
goals for fiscal year 2017. And I recognize that you are 
operating under a CR and now the hiring freeze was just 
instituted, but I would like to know where we are now 1 year 
later on diversity.
    Ms. Fong. OK. Last year, we had an audit started to look at 
the Office of the Assistant Secretary for Civil Rights and 
their operations in terms of processing complaints of 
discrimination. During the course of that audit, we had some 
investigative work that we needed to accomplish. And during the 
investigative work, we found answers to the objectives that our 
audit was looking at, and so we closed out the audit.
    Now, that being said, we are very much aware of what is 
going on within civil rights programs at USDA. We are keeping 
an eye on all of the litigation in terms of Keepseagle, BFDL, 
Garcia, Love to just make sure that things are rolling out and 
to address any concerns that might happen.
    If you have a specific issue you would like us to look at, 
we would be very happy to talk to you about that.
    Mr. Bishop. Well, and I appreciate that, and I have a 
followup, but I would like to know statistically what the 
breakdown is of the workforce within the respective agencies 
and the level broken down by the demographics.
    Ms. Fong. OK.
    Mr. Bishop. And you can submit that for the record.
    [The information follows:]

    See OIG response to Question 70 in submitted questions for 
the record.

    Mr. Bishop. I think it is important that we be able to 
monitor that progress, and hopefully there is progress.
    Ms. Fong. We will do what we can to find that information 
for you.
    Mr. Bishop. Thank you.
    Mr. Aderholt. Ms. DeLauro.

                                HOG HIMP

    Ms. DeLauro. Thank you. I will move quickly. This is about 
the Hog HACCP-based Inspection Model Project, HIMP program. In 
May 2013, you issued a report, an audit, of the Food Safety and 
Inspection Service, ``Inspection and Enforcement Activities at 
Swine Slaughter Plants.'' Your report pointed out that, even 
though the HIMP pilot had been in operation for nearly 15 
years, the agency had never performed an evaluation of the 
pilot to determine whether the pilot was achieving food safety 
objectives.
    In the last regulatory agenda published by the Obama 
Administration, FSIS planned on publishing a proposed rule in 
March of this year, 2017, to expand HIMP to all swine slaughter 
facilities.
    Has the OIG performed any followup with FSIS on the 
inspection program in swine slaughter facilities since 2013? Do 
you believe FSIS is ready to move ahead with expanding HIMP to 
all swine slaughter facilities at this time, given that they 
have yet to determine whether expanding HIMP will jeopardize 
food safety?
    Mr. Harden. We haven't done any followup work since 2013 
because of our other food safety issues we have been tracking. 
I would need to go and find out how they implemented this and 
what they were planning to do to put in a reg to know, to be 
able to come to some conclusion as to whether they are ready or 
not.
    Ms. DeLauro. OK. Then does that mean that this March 2017 
date on a proposed rule, is that going to be held up?
    Mr. Harden. That, I don't know. I would have to go to back 
and ask FSIS.
    Ms. DeLauro. Well, we need to know whether or not that is 
going to be held up. OK. Thank you.
    [The information follows:]

    In May 2013, we issued our report on FSIS' inspection and 
enforcement activities at swine slaughter plants. In our 
report, we noted that the swine HIMP program has shown no 
measurable improvement to the inspection process since the 
program's inception. Overall, we issued a number of 
recommendations for FSIS to determine what measurable 
improvements the HIMP program achieved and its suit-ability as 
a permanent program and to develop criteria to terminate plants 
from HIMP that have a pattern of serious violations. FSIS has 
since reached closure for each of the recommendations issued.
    While we do not have any work planned in this area for the 
near future, we are closely tracking the status of FSIS' 
issuance of the proposed rule for hog HIMP. On June 10, 2017, 
FSIS submitted a copy of the proposed rule to the Office of 
Management and Budget (OMB) for review.

    Mr. Aderholt. All right.
    Ms. DeLauro. Thank you Mr. Chairman.
    Mr. Aderholt. Thank you.
    Well, thank you all for being here, Ms. Coffey, Ms. Fong, 
and Mr. Harden. Thank you for your testimony here this morning. 
We have had a good hearing, some issues that I think you will 
follow up with us on and we will follow up with you on. We will 
look forward to working on those issues, but, again, we 
congratulate your team and everybody over there at the Office 
of Inspector General for all your hard work and the good work 
that you all do and your accolades that you have been awarded 
over the years. So, again, all the best to you and as you go 
through this new transition, and we look forward to being in 
touch.
    The hearing is adjourned.
    
    
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