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


TOP MANAGEMENT AND PERFORMANCE CHALLENGES IDENTIFIED GOVERNMENT	WIDE BY 
                    THE INSPECTOR GENERAL COMMUNITY

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

                                HEARING

                               BEFORE THE

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 18, 2018

                               __________

                           Serial No. 115-80

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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              Committee on Oversight and Government Reform

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

                     Sheria Clarke, Staff Director
                  Robert Borden, Deputy Staff Director
                    William McKenna, General Counsel
                 Drew Baney, Professional Staff Member
                         Kiley Bidelman, Clerk
                 David Rapallo, Minority Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 18, 2018...................................     1

                               WITNESSES

The Honorable Michael E. Horowitz, Chair, Council of the 
  Inspectors General on Integrity and Efficiency, Inspector 
  General, U.S. Department of Justice
    Oral Statement...............................................     4
The Honorable Allison Lerner, Vice Chair, Council of the 
  Inspectors General on Integrity and Efficiency, Inspector 
  General, National Science Foundation
    Oral Statement...............................................     5
    Joint Written Statement of Mr. Horowitz and Ms. Lerner.......     8
The Honorable Glenn Fine, Principal Deputy Inspector General, 
  U.S. Department of Defense
    Oral Statement...............................................    14
    Written Statement............................................    16

                                APPENDIX

DoD IG report titled, ``The DoD Did Not Comply With the Improper 
  Payment Elimination and Recovery Act in FY 2016,'' submitted by 
  Mr. Palmer.....................................................    58

 
TOP MANAGEMENT AND PERFORMANCE CHALLENGES IDENTIFIED GOVERNMENT-WIDE BY 
                    THE INSPECTOR GENERAL COMMUNITY

                              ----------                              


                       Wednesday, April 18, 2018

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 10:02 a.m., in Room 
2154, Rayburn House Office Building, Hon. Trey Gowdy [chairman 
of the committee] presiding.
    Present: Representatives Gowdy, Duncan, Jordan, Sanford, 
Amash, Massie, Meadows, DeSantis, Ross, Walker, Blum, Russell, 
Grothman, Hurd, Palmer, Cummings, Maloney, Norton, Lynch, 
Connolly, Kelly, Krishnamoorthi, Welch, DeSaulnier, and 
Sarbanes.
    Chairman Gowdy. The Committee on Oversight and Government 
Reform will come to order.
    Without objection, the presiding member is authorized to 
declare a recess at any time.
    I will now yield to the gentleman from Florida, my friend 
Mr. Ross, for an opening statement.
    Mr. Ross. Thank you, Mr. Chairman. And I thank you for 
today's hearing.
    The inspectors general conduct investigations and audits to 
prevent and detect waste, fraud, and mismanagement in their 
agencies' programs. They help Congress shape legislation and to 
target our oversight and investigative activities.
    Since their creation 40 years ago, the IGs have proven to 
be one of Congress' best investments. In the last fiscal year, 
the IG community used its $2.7 billion budget to identify 
potential cost savings to taxpayers totaling over $45 billion. 
That means that for every $1 in the total IG budget they 
identified approximately $17 in savings.
    We have an opportunity today to hear from leaders in the IG 
community about the inefficiencies throughout the Federal 
Government--which inefficiencies cost taxpayers money. 
Specifically, we will discuss findings from a landmark report 
issued by the Council of the Inspectors General on Integrity 
and Efficiency, also known as CIGIE. The report is called ``Top 
Management and Performance Challenges Facing Multiple Federal 
Agencies.''
    CIGIE compiled the Federal Government's top performance and 
management challenges and distilled them down to seven 
categories. When they did that, some interesting trends 
emerged. For instance, CIGIE found misallocation of resources 
and an inability to hire and retain top talent undermined the 
effectiveness of programs throughout the executive branch. 
CIGIE also found that a lack of performance-based metrics makes 
it difficult to assess the effectiveness of government 
programs.
    But the CIGIE report is just a downpayment on what will be 
a larger project to identify the root causes of the challenges 
we will be discussing today. The burden will then fall to us at 
the committee level to explore whether there exists any 
systemic issues that might best be addressed through 
government-wide policies. That is an issue that is squarely 
within our committee's jurisdiction, and, as we will hear 
today, we have our work cut out for us.
    Today's witnesses and the larger IG community they 
represent are the people on the front lines of the effort to 
rout out waste, fraud, and abuse throughout the Federal 
Government. These three widely respected inspector generals 
have spent years examining the programs at the Justice 
Department, the Defense Department, and the National Science 
Foundation.
    They also play key roles at the Council for the Inspectors 
General on Integrity and Efficiency. CIGIE serves a vital role 
in fostering a relationship between this committee, Congress, 
and the IG community. CIGIE is uniquely positioned to 
consolidate findings generated by the individual IGs and 
communicate that information to us, the policymakers.
    I commend Mr. Horowitz and his colleagues at CIGIE for 
taking the initiative to release this compendium of analysis 
for the first time. This report is extremely valuable, and I 
encourage you to continue to be proactive with respect to 
identifying government-wide trends.
    I thank the witnesses for appearing today, and I look 
forward to your testimony.
    I yield back.
    Chairman Gowdy. The gentleman from Florida yields back.
    The chair now recognizes the gentleman from Maryland, the 
ranking member, Mr. Cummings.
    Mr. Cummings. Good morning.
    I want to start by congratulating the inspector general 
community on the 40th anniversary of the Inspector General Act 
and the 10-year anniversary of establishing the Council on the 
Inspectors General for Integrity and Efficiency.
    In 2008, we here on the Oversight Committee passed the 
Inspector General Reform Act, which was sponsored by Oversight 
Committee member Jim Cooper, to establish CIGIE. One of our 
witnesses today, Michael Horowitz, serves as the Chair of CIGIE 
and has overseen significant changes aimed at making CIGIE and 
the Federal Government more accountable and more transparent.
    One example of the report CIGIE released this morning is 
very important. For the first time, this report provides a 
comprehensive review of the top challenges currently being 
faced by Federal agencies. Their report exemplifies CIGIE's 
critical mission of examining systemic issues across the 
Federal Government.
    I know my Republican colleagues want to talk about former 
FBI Deputy Director Andrew McCabe, and that is all well and 
good. But we are now into year 2 of the Trump administration, 
and, at some point, this committee will have to start 
conducting serious, credible oversight of the Trump 
administration.
    For example, CIGIE released a report today finding that one 
of the most serious issues facing CIGIE is a culture at 
agencies that negatively impacts their mission. I've often said 
that we must always be about the business of effectiveness and 
efficiency.
    The CIGIE report includes information from 61 different 
reports issued by IGs in 2017, the first year of the Trump 
administration. CIGIE reported, and I quote, ``Many OIGs report 
that their agencies face challenges related to their agency's 
culture, including ethical lapses, lack of accountability, lack 
of fiscal responsibility, lack of transparency and 
communication, resistance to change, and low morale,'' end of 
quote.
    The IG for the Department of the Interior reported, and I 
quote, ``DOI continues to face challenges holding its 
employees, including senior officials, to the highest standards 
of ethical conduct, ensuring the consequences of wrongdoing are 
clearly understood, taking decisive actions to address 
unacceptable behavior, and providing relevant ethics training 
to all employees,'' end of quote.
    It is Dr. King who said that, so often, silence becomes 
betrayal. Silence becomes betrayal. And apparently there are a 
number of people who do not want to be silent, and so they want 
to come to us as whistleblowers, in many instances, and come to 
CIGIE. And so you do play a very important role.
    These findings are deeply troubling, and they warrant 
rigorous and sustained oversight from our committee. 
Unfortunately, our Republican colleagues have blocked every 
single request we've made to issue subpoenas during the Trump 
administration, more than 30 in all.
    For example, Republicans blocked us from considering a 
subpoena to the Agriculture Department for documents relating 
to a senior adviser to the Secretary's communications with the 
corporate lobbyists. They blocked us from debating and voting 
on a subpoena for documents relating to allegations of sexual 
assault and harassment by Customs and Border Patrol employees. 
They blocked us from considering subpoenas for documents and 
testimony related to Senior Adviser to the President Jared 
Kushner's alleged conflicts of interest and security clearance 
issues.
    So, during the entire Trump administration, this committee 
has not issued a single subpoena, not one, to any Federal 
agency or any Federal official. And that's not because we have 
suddenly had a massive increase in transparency and 
cooperation. Just the opposite. The Trump administration has 
withheld documents on dozens of topics, from the hurricanes in 
Puerto Rico and the United States Virgin Islands, to the first-
class travel of the President's top aides at taxpayers' 
expense, to the lease of President Trump's hotel in Washington, 
D.C., just a few blocks from where we sit this morning.
    The IGs testifying today and staff that support them do 
great work. And let me repeat that. We on this committee 
believe and know that you all do great work. And we really 
appreciate it. And if there were a time that we need you, we 
need you now.
    But they cannot do this work in a vacuum. Congress must 
fulfill its own constitutional duty to conduct oversight of the 
executive branch. The entire system of oversight must work in 
order for the Federal Government to operate effectively and 
efficiently all the time. And so I hope that today's hearing 
can be productive and will be a step in the right direction.
    And, Mr. Chairman, I failed to say it, but I want to thank 
you for holding this hearing. I also want to thank you for your 
courtesy to me, because, as I went through my ailments, you 
were constantly there for me. You switched the schedule so that 
you could accommodate me. You kept me informed of everything. 
You made sure that I was involved in everything that you did. 
And for that, I am truly grateful.
    With that, I yield back.
    Chairman Gowdy. The gentleman from Maryland yields back.
    I want to welcome all of our witnesses. I will introduce 
you as a group and then recognize you individually for your 
opening statements.
    First, we are pleased to have the Honorable Michael 
Horowitz, Chair of the Council of the Inspectors General on 
Integrity and Efficiency and Inspector General of the United 
States Department of Justice; the Honorable Allison Lerner, 
Vice Chair of the Council of the Inspectors General on 
Integrity and Efficiency and Inspector General of the National 
Science Foundation; and the Honorable Glenn Fine, Principal 
Deputy Inspector General at the United States Department of 
Defense.
    Welcome to each of you.
    Pursuit to committee rules, I'm going to administer an 
oath. So, if you would, please rise and lift your right hand.
    Do you solemnly swear or affirm the testimony you are about 
to give shall be the truth, the whole truth, and nothing but 
the truth, so help you God?
    May the record reflect all witnesses answered in the 
affirmative. And they may take their seats.
    I know each of you is an old pro--or, I should say, a pro--
at this, so you know what the time lights mean: green, fire 
away; yellow, get under the light as quick as you can; red, 
hope you don't see blue lights.
    So, against that backdrop, we will recognize you, Inspector 
General Horowitz.

                       WITNESS STATEMENTS

           STATEMENT OF THE HON. MICHAEL E. HOROWITZ

    Mr. Horowitz. Thank you, Mr. Chairman, Ranking Member 
Cummings, members of the committee. Thank you for inviting me 
to testify at today's important hearing.
    This year marks the 40th anniversary of Congress' passage 
of the Inspector General Act. Over those 40 years, the IG 
community has conducted independent oversight of government 
programs to rout out waste, fraud, and abuse and to ensure that 
the organizations we oversee spend tax dollars more effectively 
and efficiently.
    In fiscal year 2016 alone, as Congressman Ross indicated, 
IGs identified about $45 billion in potential savings, or 
roughly a $17 return for every dollar Congress invested in IG 
budgets.
    This year also marks the 10-year anniversary since 
Congress, under this committee's leadership, as Congressman 
Cummings pointed out, created the Council of the Inspectors 
General on Integrity and Efficiency, which brought together all 
73 Federal IGs into one organization.
    One of the Council's mandates is to address integrity, 
economy, and effectiveness issues that transcend individual 
government agencies. The Council is actively pursuing this 
mandate. At the start of the fiscal year, we launched 
oversight.gov, a website where the public can find in one place 
all publically issued IG reports in fully searchable formats.
    And, this morning, the Council issued its first-ever report 
on the most frequently cited management and performance 
challenges facing the Federal Government, as determined by the 
IG community in their individual top management and performance 
challenges reports in 2017.
    The report, which can be found at oversight.gov, identifies 
seven challenges, which IG Lerner will discuss in more detail 
during her testimony. Those seven challenges are: information 
technology security and management, performance management and 
accountability, human capital management, financial management, 
procurement management, facilities management, and grant 
management.
    A number of other extremely important challenges, such as 
national security, public safety, and public health, are not 
included in the list, primarily because only a limited number 
of IGs have oversight responsibility in those areas. Their 
absence certainly does not reflect a qualitative judgment about 
the impact or importance of those challenges.
    Rather, we believe the Council's effort to identify the 
most common government-wide challenges will inform the public 
and policymakers in the executive and legislative branches by 
identifying broad categories of challenges shared by the 
majority of Federal agencies, notwithstanding vast differences 
in their sizes and missions. They will also help the IG 
community as we plan our oversight work going forward.
    The Council and the IG community looks forward to 
undertaking additional important initiatives on behalf of the 
public we serve. As the public's watchdogs, we will not waiver 
from our 40-year commitment to strong and independent oversight 
that helps promote effective and efficient government.
    Thank you again for this committee's strong bipartisan 
support for our community, and I look forward to answering any 
questions the committee may have.
    Chairman Gowdy. Thank you, Mr. Inspector General.
    Inspector General Lerner?

              STATEMENT OF THE HON. ALLISON LERNER

    Ms. Lerner. Chairman Gowdy, Ranking Member Cummings, and 
members of the committee, thank you for inviting me today to 
discuss the top government-wide management and performance 
challenges identified by the IG community. Our report focuses 
on the top 7 challenges most frequently reported by 61 
statutory IGs in 2017. I'll briefly discuss each challenge.
    First, information technology security and management is a 
serious, longstanding challenge. Agencies need reliable and 
secure IT systems to perform their mission-critical functions, 
yet across government we identified problems in key areas, 
including the protection of sensitive data and information 
systems from cyber attacks, modernizing and managing IT 
systems, ensuring continuity of operations, and recruiting and 
retaining a highly skilled cybersecurity workforce. Resource 
constraints and a shortage of cybersecurity professionals 
contribute to these challenges.
    The second most reported challenge was performance 
management and accountability. Although Federal agencies vary 
greatly in size and mission, they face common challenges in 
improving performance in agency programs and operations. The 
key areas of concern we identified included collecting and 
using performance-based metrics; overseeing private-sector 
products or services that could affect human health, safety, or 
the economy; and aligning agency operations to agency-wide 
goals.
    Third, human capital management is a significant challenge 
that affects the ability of Federal agencies to meet their 
performance goals and efficiently carry out their missions. We 
identified key challenges including inadequate funding and 
staffing; problems recruiting, training, and retaining 
qualified staff; agency cultures that negatively affect the 
agency's mission; and a lack of succession planning.
    The fourth most reported challenge was financial 
management, which covers a broad range of functions such as 
program planning, budgeting, accounting, audit, and evaluation. 
Weaknesses in any of these issues limit an agency's ability to 
ensure that taxpayer funds are being used efficiently and 
effectively. To mitigate risks to Federal programs and 
operations, agencies need to improve their financial reporting 
and systems and to prevent and reduce improper payments. 
Estimates of improper payments totaled about $141 billion in 
fiscal year 2017.
    The fifth challenge, procurement management, encompasses 
the entire procurement process, from pre-award planning to 
post-award contract administration. In fiscal year 2017, the 
Federal Government awarded more than $500 billion in contracts. 
Many Federal agencies rely heavily on contractors to perform 
their missions; as a result, weaknesses in procurement 
planning, oversight of contractors' performance, and staff 
training placed potentially billions of taxpayer dollars at 
risk.
    The sixth most reported challenge was facilities 
maintenance. Agencies face challenges ensuring that their 
facilities stay in proper condition and remain capable of 
fulfilling the government's needs. IGs have identified 
insufficient funding as the primary reason why agencies fail to 
maintain and improve their equipment and infrastructure. The 
key areas of concern we identified included the increased 
likelihood of mission failure and the higher overall cost of 
deferred maintenance.
    The seventh and final challenge, grant management, involves 
the process used by Federal agencies to award, monitor, and 
measure the success of grants. Deficiencies in any of these 
areas can lead to misspent funds and ineffective programs. In 
fiscal year 2018, Federal agencies are expected to spend more 
than $700 billion through grants to State and local 
governments, colleges and universities, and community 
organizations, among others. The key areas of concerns we 
identified include ensuring grant investments achieve intended 
results, overseeing the use of grant funds, and obtaining 
timely and accurate financial and performance information from 
grantees.
    While we couldn't make conclusive determinations with 
respect to the underlying causes of these challenges, the 
report notes that many were affected by resource issues, both 
human and budgetary, and by Federal agencies' failure to use to 
use performance-based metrics to assess the success of their 
programs and operations. By consolidating these challenges, we 
hope to help policymakers determine how best to address them in 
the future.
    This concludes my prepared statement. Thank you again for 
the strong support of our community's work. And I'd be pleased 
to answer any questions you have.
    [Prepared joint statement of Mr. Horowitz and Ms. Lerner 
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairman Gowdy. Thank you, Madam Inspector General.
    Inspector General Fine?

                STATEMENT OF THE HON. GLENN FINE

    Mr. Fine. Chairman Gowdy, Ranking Member Cummings, and 
members of the committee, thank you for inviting me to appear 
before you today, along with my IG colleagues, to discuss our 
top management challenges. We all appreciate the committee's 
longstanding support for and interest in the important work of 
IGs.
    The DOD OIG's annual report on the DOD's top management 
challenges is a critical tool that we use to perform our 
important oversight mission, which is to detect and deter 
waste, fraud, and abuse in DOD programs and operations; to 
promote the economy, efficiency, and effectiveness of the DOD; 
and to help ensure ethical conduct throughout the DOD. That is 
a significant challenge given the size, complexity, and 
importance of DOD operations.
    Our annual ``Top Management Challenges'' reports help us to 
perform our mission. Preparing our report is a team effort that 
draws upon the expertise and judgment of many individuals 
throughout our organization, some of whom are here today.
    We identify the challenges based on a variety of factors, 
including OIG oversight work, oversight conducted by other DOD 
components, GAO and other IG reports, congressional testimony, 
and other important documents. We also seek input from DOD 
leaders on what they consider to be the top challenges they 
face. But we identify our top challenges independently, based 
on our own judgment.
    We do not simply draft this document as a paper or 
compliance exercise. Rather, we use our report to identify key 
areas of risk in the DOD and to decide where to allocate our 
oversight resources. We also try to ensure that each DOD top 
challenge receives some oversight coverage, and we therefore 
link our annual oversight plan to the top DOD challenges.
    In addition, we provide our report to new leaders when they 
arrive at the DOD. We believe it provides them a useful summary 
on risk areas, and we have received many positive responses 
from them on the report's value.
    I want to now turn to the top DOD challenges that we 
identified for fiscal year 2018: one, countering strategic 
challenges from North Korea, Russia, China, Iran, and 
transnational terrorism; two, addressing challenges in overseas 
contingency operations in Iraq, Syria, and Afghanistan; three, 
enabling effective acquisition and contract management; four, 
increasing cybersecurity and cyber capabilities; five, 
improving DOD financial management; six, maintaining the 
nuclear enterprise; seven, optimally balancing readiness, 
modernization, and force structure; eight, ensuring ethical 
conduct; nine, providing effective, comprehensive, and cost-
effective healthcare; ten, identifying and implementing 
efficiencies in the DOD.
    Some on our list of top DOD challenges overlap with CIGIE's 
list. For example, the CIGIE report identifies financial 
management as a challenge, as do we. The DOD is undergoing a 
full financial statement audit for the first time, this year. 
Inaccurate or incomplete DOD financial statements impairs the 
DOD's ability to provide reliable, timely, and useful financial 
information to support operating, budgeting, and policy 
decisions.
    The CIGIE report also identifies procurement management as 
a crosscutting challenge facing Federal agencies. We do also. 
For the DOD, delivering weapons and technology systems on time 
and within budget continues to pose major management 
challenges.
    Some DOD challenges do not overlap with CIGIE's list. For 
example, addressing challenges in overseas contingency 
operations is a key challenge for the DOD. The DOD IG is 
currently designated as the lead IG for three overseas 
contingency operations: Operation Inherent Resolve, the effort 
to degrade and defeat ISIS in Iraq and Syria; Operation Freedom 
Sentinel, the effort to build partner capacity within the 
Afghan National Defense and Security Forces and to counter 
terrorism in Afghanistan; and Operation Pacific Eagle, the 
effort to support the Philippines' fight against ISIS and other 
extreme groups.
    Another DOD challenge, which is not unique to the DOD, is 
ensuring ethical conduct. Any ethical failures by DOD officials 
can undermine public confidence in the DOD. At its core, 
ethical misconduct violates DOD core values and high standards 
of integrity expected of DOD personnel. Therefore, DOD leaders 
continually strive to deter and prevent ethical lapses in 
misconduct and hold accountable those individuals who violate 
the law or other ethical requirements.
    Finally, we are now in the process of reassessing the DOD's 
top management challenges for fiscal year 2019. We fully expect 
that certain challenges will remain, and we will continue to 
assess emerging challenges to make our report forward-looking.
    In closing, I want to thank the committee again for your 
support, for holding this hearing, and for asking me to discuss 
the DOD's top management challenges. That concludes my 
statement, and I would be glad to answer any questions.
    [Prepared statement of Mr. Fine follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Gowdy. I want to thank all of you. And thank you 
for meeting one of the Congress' benchmarks. You got all of 
your openings in within the 5-minute time period.
    With that, the gentleman from Oklahoma is recognized, Mr. 
Russell.
    Mr. Russell. Thank you, Mr. Chairman.
    And thank all of you just for the great work that you do. I 
guess I'll have questions that any of you can answer, but I 
know some of it will be specific to your particular areas.
    One of the big things that you've identified in your 
reports is the $141 billion over nine agencies in improper 
payments. I mean, this seems like low-hanging fruit, and yet 
that is an enormous dollar amount when we think about it. 
Ofttimes, as we're looking to, you know, not balance the budget 
each year, this is something that would make a significant 
headway in that.
    And so how do we get at? I mean, we identify it, we know 
it. We've identified the dollar amounts. We know the nine 
agency offenders. How do we stop it?
    Mr. Horowitz. Let me tell you some of the challenges we 
have faced at DOJ OIG and I think my colleagues have faced as 
well, which is, in an era of big data, what we're learning as 
many of us are doing data analytics work to try and get at 
those issues is our agencies don't keep good data or no data at 
all.
    As an example, we went to see about healthcare fraud 
questions at the Justice Department. The Justice Department 
spends over a billion dollars a year on inmate healthcare. We 
went to the 121 or so institutions to get their electronic 
medical records to look for anomalies in payment patterns, and 
we learned that about 100 of those 121 actually still have 
paper records.
    And so we issued a report to the Department--it is public--
expressing our concern about that. And they have issued now a 
request to seek to turn all of those into electronic records.
    But those are challenges we're seeing over and over again. 
And the government needs good data. The committee is to be 
recognized for passing the DATA Act, which hopefully moves us 
towards better data.
    Mr. Russell. Hopefully they can pay for it with the recoup 
of who they're not improperly paying, rather than asking for 
additional appropriation.
    Mr. Fine. If I could add, I agree with that. I agree with 
Michael Horowitz's comments.
    I think there are three things that need to be done.
    One, there have to be adequate internal controls so that 
the money doesn't go out the door inappropriately. We've seen 
that in healthcare in DOD, compounding pharmacy money, billions 
of dollars going out because there's not good internal 
controls.
    Two, when we find that, people ought to be held accountable 
for this, or there needs to be some deterrent. It just doesn't 
move on.
    And the third thing is data analytics. We need to do a 
better job and have more capacity to analyze the massive 
amounts of data within the DOD and the entire Federal 
Government to rout out indicators of fraud to provide the leads 
that we can go after.
    Mr. Russell. Yeah.
    Ms. Lerner?
    Ms. Lerner. I would just make one final point. A lot of the 
improper payment work that OIGs is driven by risk assessments 
that agencies are supposed to perform. And I think sometimes 
you need a culture change within the agency for it to be 
acceptable for them to acknowledge that risk exists. Because 
without that, the quality of the risk assessment isn't going to 
be strong, and without a strong risk assessment, your ability 
to identify and fight those improper payments is undermined.
    Mr. Russell. Thank you for that.
    And with my remaining time, I'll just hit the last three 
areas, and whoever wants to comment on it.
    Payment to grantee verification. This is another big thing 
I know all of you are concerned about. With $700 billion of 
grants issued each year, this is an enormous amount of the 
American people's working capital that is sent to Washington, 
and yet ofttimes we have problems of knowing who's identifying 
the grants.
    And then you stood up the Disaster Assistance Working Group 
on your own initiative, which I applaud you for, because we 
appropriated $26.1 billion that went out in disaster 
assistance. Obviously, all the hurricanes, fires, and floods. 
Only the United States could weather something so enormous. But 
I'm glad that you've stood that up for that oversight.
    And then the last item is the overseas contingencies in 
Afghanistan, Syria, and Asia. You know, ofttimes we joke that 
Afghanistan is the biggest black hole of waste in the 
Department of Defense.
    And so those are the three other areas, if any of you care 
to comment.
    Ms. Lerner. In terms of grant expenditures, again, I'll 
repeat what Mr. Fine said: analytics, analytics, analytics. It 
helps us--when grant funds are expended, it would be wonderful 
to be able to, in situations where there are disasters to 
happen, set up so that we can catch things even earlier.
    Mr. Horowitz. Let me just touch on the Disaster Assistance 
Working Group issue. It is something that's very important to 
us.
    One of the things that we're trying to do--and DHS OIG is 
the lead on that--work closely with GAO so that we're 
coordinated with each other, as well as State and local 
oversight entities. There are State auditors, there are State 
IGs involved in some of the hurricane relief locations. We want 
to make sure we're well-coordinated with each other, and we 
want to share information. We don't want to duplicate effort. 
And that's one of the things we've all been doing--CIGIE, IGs 
with GAO--to make sure we're coordinated on our oversight.
    But one of the things we've also done, I just want to 
mention, in connection with oversight.gov, is try to replicate 
what the IG community did with the Recovery Act funds in 2009, 
which is create a page on the oversight.gov website so the 
public can see what we're finding and what we're seeing.
    One of the issues we've come to Congress for in fiscal year 
2018 and we didn't get funding but we are looking for in fiscal 
year 2019 is a very modest amount of money, $1 million to $2 
million, to build out oversight.gov. And that's one of the 
things we'd like to build out further, is that web page. And 
so, while Congress appropriated the $26-billion-plus, what 
we're looking for is some additional funds to allow the 
transparency to occur around that spending.
    Mr. Fine. If I could address the overseas contingency 
operation issue, yes, Afghanistan is a source of a lot of money 
and a lot of waste. And both we and the Special IG for 
Afghanistan Reconstruction have issued reports on that. There 
needs to be better internal controls. There needs to 
consequences for the waste when it's exposed. There are 
bilateral financial commitment letters that are signed, but 
they often don't have any consequences and are often waived.
    I was there recently, and I met with the commanders, the 
diplomatic personnel, as well as Afghan officials, including 
President Ghani. They seem committed to internal controls, but 
it's too early to say whether it will have any impact. There is 
a massive amount of money that goes there, and a lot of it is 
wasted.
    Mr. Russell. Thank you.
    Thank you, Mr. Chairman.
    Chairman Gowdy. The gentleman from Oklahoma yields back.
    The gentleman from Maryland is recognized.
    Mr. Cummings. Thank you, Mr. Chairman.
    Just following up on Mr. Russell's questions, I noticed 
that you all keep saying waste, waste, waste. I mean, do you 
think any of it is fraud, Mr. Fine? I didn't know whether you 
were limiting it to waste.
    Mr. Fine. No, I'm not. Absolutely. Waste, fraud, and abuse.
    Mr. Cummings. Okay.
    Mr. Fine. It's all of that. And there are a lot of cases 
that we make, criminal cases, to hold people accountable for 
fraud.
    Mr. Cummings. Mr. Horowitz, the Whistleblower Protection 
Enhancement Act of 2012 requires all Federal agency 
nondisclosure policies, forms, and agreements to include 
specific language making clear that the policy or the agreement 
does not impact statutory protections that allow Federal 
employees to communicate with Congress and IGs.
    Are you familiar with the requirement?
    Mr. Horowitz. I am.
    Mr. Cummings. On January 29, 2018, Attorney General 
Sessions issued a memorandum to the heads all Department of 
Justice components and all U.S. attorneys, titled 
``Communications with Congress.''
    Are you familiar with that memo?
    Mr. Horowitz. I am.
    Mr. Cummings. The memo directed department employees that 
communications between the Department and Congress must be 
managed through the Office of Legislative Affairs.
    The memo said, and I quote, ``Attorneys, officers, boards, 
divisions, and components should not communicate with Senators, 
Representatives, congressional committees, or congressional 
staff without advance coordination and consultation with OLA,'' 
end of quote.
    Attorney General Sessions did not include in his memo the 
language required by the Whistleblower Protection Enhancement 
Act that says these words: ``These provisions are consistent 
with and do not supersede, conflict with, or otherwise alter 
the employee obligations, rights, or liabilities created by 
existing statute or executive order relating to: classified 
information, communications to Congress, the reporting to an 
inspector general of a violation of any law or rule, 
regulation, or mismanagement, a gross waste of funds, an abuse 
of authority, or a substantial and specific danger to public 
health or safety, or any other whistleblower protection,'' end 
of quote.
    Do you believe that the language was required to be 
included, that language, in the Attorney General's memo?
    Mr. Horowitz. Congressman, I think it's very important that 
all employees understand their rights under the whistleblower 
laws for the reasons you indicated. We've been in touch with 
the Department about the issue, and it's certainly my hope that 
that will be clarified and made clear.
    Mr. Cummings. What was the response so far?
    Mr. Horowitz. Well, I'd rather not get into the back-and-
forth that we might have that--that we've had internally. But 
it's certainly my hope that there will be a clarification of 
that.
    Mr. Cummings. Because what happens, as you can imagine, if 
people feel reluctant to communicate with their 
Representatives, we can't do our job. You can't either, right?
    Mr. Horowitz. That's--you know, whistleblowers play a very 
important role. This committee has seen it over and over again. 
We could go through many of the examples of that. So it's very 
important that employees know, if they see something going 
wrong, they have avenues to go to the IGs and, in appropriate 
circumstances, Congress.
    Mr. Cummings. Now, Senator Grassley wrote to the Attorney 
General on February 5, 2018, raising concerns with the memo's 
failure to comply with the law.
    To your knowledge, has DOJ taken any actions to correct 
this violation and ensure all employees know their rights to 
communicate with the Congress and IGs? I know what you just 
said, but has anything been done?
    Mr. Horowitz. I haven't seen anything further at this 
point. But we're certainly aware of the issue, and, like I 
said, we've been in communication with----
    Mr. Cummings. Now, DOJ is not the only agency that has 
issued a policy on communications with Congress that violates 
the Whistleblower Protection Enhancement Act. The IG for the 
General Services Administration issued a report March 8, 2018, 
and found, and I quote, ``GSA policies regarding communications 
with Congress operate as nondisclosure policies under the WPEA 
but do not include the WPEA's whistleblower protection 
language.''
    Are you concerned that this could be a wider problem?
    Mr. Horowitz. I'm not, as I sit here, familiar with, sort 
of, what the other agencies are doing. But, as I said earlier, 
I think it's very important for IGs to be able to get 
information from whistleblowers. And I completely understand, 
as well, from the WPEA how important it is--and from just 
experience, how important it is for Congress to be an avenue of 
reporting for individuals who want to come forward and report 
waste, fraud, and abuse.
    Mr. Cummings. As I close, do you consider this a top 
priority?
    Mr. Horowitz. For me, it's a top priority.
    Mr. Cummings. I mean for your organization. You're the top 
man now, right? You're still----
    Mr. Horowitz. I don't know if I'm the top man, but----
    Mr. Cummings. I mean for your organization.
    I mean, I think this goes to the essence of--the chairman 
talked about it, I've talked about it, you've talked about it--
being effective and efficient. I just want to know--I don't 
want any Member of Congress to be cut off from information, or 
you----
    Mr. Horowitz. Yeah.
    Mr. Cummings. --that you need to do your job. I mean, why 
are we going to waste money, spend money on an agency that 
can't even get the information that they need to do their job?
    So I just want--all I'm asking is--I'm not asking, I'm 
begging you to make this a top priority for your organization. 
I think we need to look and see whether other agencies are 
doing this kind of thing, and we need to address that.
    Mr. Horowitz. Look, it's absolutely--whistleblower 
protection is a top priority for me, for my office. The work 
we've done in that area is very significant.
    In fact, one of the reasons we've asked for an additional 
six positions this year in our budget request to Congress and 
wrote a letter to the Congress about our concern on this issue 
is we're seeing a very significant increase in the FBI 
whistleblower retaliation cases that are coming to us that, as 
you know, by regulation, go to our office, not the Special 
Counsel's Office.
    And that very substantial increase, over the last 7, 8 
years--it's not in the last year; we're talking about a growth 
over time, 6, 7 years--requires us to meet certain timelines 
that are in the law. And if we don't get those additional 
positions, it's going to crowd out some of the other work we're 
doing.
    So we think it's a very important area. We think 
whistleblowers are the lifeblood of IGs, of the work we do. 
We've got to take steps to ensure that they understand they can 
come forward, report to the IGs, to Congress, and not be 
retaliated against, not be subject to threats. Because it takes 
extraordinary courage to step forward and report out on waste, 
fraud, and abuse in your organization.
    Mr. Cummings. Thank you, Mr. Chairman. I yield back.
    Chairman Gowdy. The gentleman from Maryland yields back.
    The gentleman from Alabama is recognized.
    Mr. Palmer. I thank the chairman.
    On the improper payments, they've been identified as a key 
concern, as the gentleman from Oklahoma brought up.
    Mr. Fine, your recent Department of Defense IPERA 
compliance report noted that the Department did not comply with 
five of the six recommendations. When was the last time DOD was 
in full compliance?
    Mr. Fine. I don't think it has been in full compliance.
    Mr. Palmer. That's what I thought.
    Due to noncompliance with IPERA, DOD is required to issue a 
report describing actions the agency will take to come into 
compliance. Have they issued that report?
    Mr. Fine. I'm not aware of that report. We have issued the 
recommendation so far.
    Mr. Palmer. In the fiscal year 2016 report, your office----
    Voice. Mr. Fine, could you turn your microphone on?
    Mr. Fine. Sorry.
    Voice. Thank you.
    Mr. Palmer. I think he answered ``no'' to both questions, 
for the record, that they have not complied and they have not 
issued a report explaining actions that they will take to 
comply.
    In the fiscal year 2016 report, your office made a number 
of recommendations that DOD agreed with. Have any of those 
recommendations been fully implemented and enforced?
    Mr. Fine. I would have to go back and look and see whether 
that's the case. I wouldn't doubt it. But we are--we are in the 
process, and we currently do that. We look to make sure that 
the recommendations that we make and they agree to are actually 
implemented.
    And we have actually issued a report recently, a compendium 
of open recommendations. There's more than 1,200 open 
recommendations.
    Mr. Palmer. Is this the report?
    Mr. Fine. I think so, yeah.
    Mr. Palmer. Mr. Chairman, I'd like to enter this into the 
record.
    Chairman Gowdy. Without objection.
    Mr. Palmer. Okay. The Department of Defense is initiating 
an audit, which is obviously long overdue. Would you agree that 
that will help in identifying improper payments?
    Mr. Fine. Financial statement audit?
    Mr. Palmer. Yes.
    Mr. Fine. Yes, absolutely. It's a very important audit. 
It's critical.
    Mr. Palmer. Okay.
    Let me transition here quickly to Mr. Horowitz.
    In your statement, you said, 2016, the IGs identified 
approximately $45.1 million in savings. How much of that has 
been realized, or do you know?
    Mr. Horowitz. I don't know, as I sit here today, how much 
has been realized. I think one of the things that we'd like to 
see--I know we're doing this within our own organization--is 
try and figure out how we can follow up on those numbers within 
the Justice Department.
    Mr. Palmer. That was what I was going to ask you. Is there 
any way to determine whether or not--I mean, we identify them; 
that makes them potential. If they're actually realized, then 
that makes them, obviously, real savings. And I just wonder if 
there's a way to make sure that, when we identify it, that 
someone follows up on it and we are able to realize those 
savings.
    Mr. Horowitz. And we follow up on all our recommendations, 
and they don't get closed until we decide to close them. What 
we need to do more work on with the agency is to get reports on 
what kind of recoveries there are. We're starting to do that. 
And we've been putting out announcements, releases, to the 
public to let them know when we have had recoveries.
    Mr. Palmer. I want to also stay with you just for a 
moment--and, Ms. Lerner, you can respond as well, if you'd 
like. But when we're talking about the disaster relief funds, I 
believe there's several billion in unspent totals from Sandy. 
There's unaccounted-for funds from Hurricane Matthew. We know 
that, prior to the disaster relief funds being approved for 
Puerto Rico, they paid out $100 million in bonuses.
    You identified $26.1 billion in disaster relief funds. 
Those were Community Development Block Grants. And my concern 
about this is there's no way to really manage these funds to 
determine that the money is actually getting to where it needs 
to go.
    If this were a private contract, you would award money on 
the front end to meet the immediate need, and then everything 
else would be paid to invoice. Does that make sense?
    Mr. Horowitz. It's been a significant concern of, I think, 
all of the IGs that are looking at their agencies which put out 
money through grants, contracts, and others, is the lack of 
performance management and accountability that's going on there 
and understanding at the end of the project what the successes 
were, what the failures were, after-action plans. I mean, you 
do all of that after spending a substantial amount of money.
    And one of the things we've also seen at DOJ OIG and we 
just issued a report on, and we've done in the past, is on 
unspent grant funds and closing out grants in a timely fashion, 
because that money is just sitting there and can be misused. 
And so that's very important.
    Mr. Palmer. Mr. Chairman, I want to further explore the 
grant issue. So I think what I'd like to do is let everyone 
else ask their questions and then come back to this afterwards, 
if that's okay.
    Chairman Gowdy. Sure. I'll consult with my ranking member, 
or else one of your colleagues, including me, may actually 
yield you some time so you can finish that line.
    Mr. Palmer. Right now or afterwards?
    Chairman Gowdy. Well, it's not my turn right now, but when 
it is my turn, I will give you some of my time, assuming 
Inspector General Horowitz answers my questions as quickly as 
he normally does.
    Mr. Palmer. You're a very generous chairman, and I----
    Chairman Gowdy. And you're a very diligent member, and I 
appreciate your interest.
    Mr. Palmer. I yield back.
    Chairman Gowdy. With that, the gentleman from Alabama 
yields back, and the chair will recognize the gentlelady from 
the District of Columbia.
    Ms. Norton. Thank you very much, Mr. Chairman.
    Ms. Lerner, I have a question about the report that CIGIE 
issued this morning.
    This notion of draining the swamp seems to be turned on its 
head, because we have had more--a virtual explosion of scandals 
and ethical lapses during this administration, young as it is. 
In fact, it's the most I can remember. So, in recent memory, 
they seem to outnumber the explosions that come from year to 
year in prior administrations of both parties.
    So I'd like to ask about the culture of agencies that is 
mentioned in the report. And here I'm quoting the report issued 
today, that the ``OIGs reported their agencies faced challenges 
related to their agency's culture.'' I'm trying to find out 
whether the Congress or the IGs can do something about this 
culture.
    And cited were ethical lapses, lack of accountability, lack 
of fiscal responsibility, lack of transparency and 
communication, resistance to change, and low morale. That is as 
comprehensive an indictment of agencies as I can remember 
hearing as a member of this committee.
    So I take it we're talking about a systemic problem 
covering, what is it, two or three agencies? More? Across the 
board? What do we mean by ``the culture that has set in''?
    Ms. Lerner. It's unclear to me the precise number of 
agencies that are experiencing those problems, but it's clear 
that this is--it's not a handful. And it is incumbent, then, on 
us as IGs to have our eyes open, to catch these issues, to 
audit and investigate when necessary----
    Ms. Norton. But one wonders--you know, these are agency 
heads who ultimately have to be held accountable. And so one 
wonders whether anyone is advising them, whether IGs ahead of 
time, whether they ask for information.
    I can tell you that staff members in their 20s, if I ask 
them to do something, they'll say to me, Congresswoman, is 
this--do you want me to check? I mean, they are sensitive to 
this, to try to keep me from--you know, catch me before I 
kill--from getting in trouble.
    Who catches the agency head before the agency head kills? 
Or is this just willful determination, as with Administrator 
Pruitt, who may be in the worst trouble and have had the most 
lapses? The notion of installing a classified phone booth for 
$43,000. Somebody should have tapped him on the shoulders.
    Is there any way, before that phone booth goes up, to catch 
him before he spends $43,000, not to mention all of his other 
lapses, for which he has yet to be held accountable? Or is this 
all after the fact, and taxpayers have to say, well, nobody's 
in charge, nobody's going to jail, and nobody's suggesting 
jail, so what can we do?
    Ms. Lerner. I think we hope that the general counsel's 
office and the ethics officials provide the right advise to 
folks----
    Ms. Norton. Well, who is it--do the agency heads know that 
there is somebody they should ask? Did Mr. Pruitt understand--
who did he ask before installing a soundproof phone booth?
    Ms. Lerner. I can tell you who they should ask. They should 
ask their designated agency ethics official and their 
attorneys----
    Ms. Norton. Have any of you, Mr. Horowitz, Ms. Lerner, have 
any of you issued--seeing how systemic this is, have you issued 
anything to the agency saying, ``We advise that, before you 
undertake any action which has not been taken before in your 
agency, that you inquire of,'' and you name who to inquire?
    Ms. Lerner. I would imagine--and I'll let my colleagues 
answer too. But that's one of the first topics of conversation 
with new agency leadership that come on board.
    Ms. Norton. Have you done it with agency heads of this 
administration?
    Ms. Lerner. We do not have an agency head from this 
administration at my agency.
    Ms. Norton. No, for the--agency heads for this 
administration.
    Mr. Horowitz?
    Mr. Horowitz. We have not had some of those kinds of issues 
in my agency with regard to, you know, the phone booths and 
that sort of thing, so I can't speak to what has gone on there.
    But one of the first things we do is meet with the Attorney 
General. I have now served under three Attorneys General as IG 
and done that in each instance. Sit with them, tell them--
remind them of what we do. In each case, all three Attorneys 
General grew up in the Justice Department, so they understood 
what my office was. But they still needed to hear what we do, 
what kind of reports we expect.
    And I agree with what IG Lerner said. The understanding is 
that they need to go to the agency ethics official; they need 
to go to their counsel. And we need to be, as IGs, diligent in 
overseeing any wrongdoing that occurs and making sure that 
people not only understand the rules but, if there are 
violations of the rules, as my fellow IGs indicated, hold 
people accountable, make sure the public understands and the 
people in the agency understand that even the most senior 
officials are held accountable for misconduct. We do that 
through posting the summaries of our work. And that, I think, 
is very critical to the deterrent message as well.
    Ms. Norton. My----
    Mr. Fine. I----
    Ms. Norton. --time has expired.
    Would you agree to let Mr. Fine respond? He seems to want 
to respond.
    Mr. Fine. I agree with that. That's what we try and do too. 
I, for example, meet with each--with Capstone classes, which 
are new admirals and generals, to talk about what will get them 
in trouble, what they should avoid, what they need to do to 
consult with their lawyer.
    I've met with the heads of the agency as soon as they come 
in to talk about that. The tone gets set at the top, and it's 
very important for us to have that communication with them. 
I've been very fortunate, myself. The Secretary of Defense has 
made clear about the need for ethics and has made clear the 
need for cooperation with the OIG and made clear the need for 
people to be held accountable when they have ethical lapses. So 
that is very important.
    And we need to be out on the front end in terms of 
education, as well as also on the back end when there are 
lapses. And there will be lapses. We need to hold people 
accountable.
    Mr. Horowitz. Mr. Chairman, can I mention just one other 
thing that we do as IGs?
    We also issue advisory memos. We each call them something 
different, but if we see a problem along the way, we issue a 
management advisory memo to alert leadership to a problem we're 
seeing so they can fix it systemically and avoid--and address 
those kind of issues.
    As an example, within the last year, we identified 
substantial issues in a variety of ways through our work about 
sexual harassment policies at the Department. We issued a 
management advisory memo that got some publicity in the press 
about that. But that was an important thing to identify early 
on to leadership what we were seeing so they could take action.
    Ms. Norton. I thank you, Mr. Chairman.
    Could I just ask that, in light of the systemic issues that 
have been identified, that the committee look for ways to be 
more proactive. Even with all that has been testified here, we 
still have this plethora of scandals arising, and perhaps more 
proactive action than has been testified would be called for at 
this time.
    So thank you, Mr. Chairman.
    Chairman Gowdy. The gentlelady from the District of 
Columbia yields back.
    The chair will now recognize the gentleman from Tennessee, 
Judge Duncan.
    Mr. Duncan. Well, thank you very much, Mr. Chairman.
    And, first of all, I want to say how much I appreciate the 
work of the various inspectors general throughout our 
government. I'm now completing my 30th year in the Congress, 
and not all of that time has been on this committee, but 
probably two-thirds of it has. And this committee over those 
years has become really the main investigatory committee in the 
Congress. And we couldn't have done our--we couldn't have been 
nearly as effective in our work on this committee had it not 
been for the information provided to us by the various 
inspectors general.
    Over the years, I've passed four bills--or introduced four 
bills that have gone through this committee and through the 
Congress. Probably the easiest or the less controversial was a 
bill to create an inspector general for the Tennessee Valley 
Authority, which I'm--while I say it was easy, that doesn't 
denigrate--or doesn't mean it wasn't important.
    But I think back over the years about all the different 
investigations that have been brought to light. I remember my 
shock at finding that the FBI had kept a man in Federal prison 
for 30 years for a murder that they knew he did not commit 
because he was going to disclose some vital information about 
the Whitey Bulger case, which is one of the biggest cases in 
the country at one time. And I remember thinking, I still 
think, it's one of the worst things I've ever heard about.
    And I think back about the findings of the EPA where they 
had a man who didn't go to work for a couple years but drew a 
high salary. And all these different things.
    And I looked--I was given here this morning an article from 
a few days ago about the waste in the Pentagon, or that the 
Pentagon could not justify the spending in Afghanistan. I heard 
Mr. Russell say that it's sort of a joke about how much waste 
there's been on the spending over there. And I don't think--I 
really don't think it's much of a joke. And I'm glad that the 
inspectors general have taken it to heart and have brought 
forth a lot of this information.
    And I was also given an article about this University of 
Pittsburgh professor that got $50 million in the last 20 years 
from the National Science Foundation in 24 different grants and 
how the inspectors--Ms. Lerner's office is starting to uncover 
some scandalous information about some of these grants.
    So I commend you in that regard.
    And, Mr. Fine, I wasn't really clear, do you think--this 
article I've got, it says the Pentagon--the Department of 
Defense Inspector General cannot account for $3.1 billion of 
spending that's been done over in Afghanistan in the latest 
investigation.
    Do you think that we're going to continue to see things 
like that, or are we getting closer to getting things a little 
bit under control? We're spending, this article says, $45 
billion a year over there, and that's an awful lot of money.
    Mr. Fine. It is a lot of money.
    The article you're referring to refers to one of our 
summary reports which talks about all the reports we've had 
over the years to talk about how they could not account for 
fuel and ammunition or payment for soldiers, and they did not 
have adequate internal controls, and they did not enforce 
commitment letters when the Afghans could not account for the 
money.
    So I do think it is a significant amount of money. I think, 
in a deployed environment, it is more difficult than here in 
the United States, but that doesn't mean that we should not 
provide oversight and internal controls and ensure that the 
money is being used for its proper purposes.
    I know the Department of Defense is concerned about it and 
is committed to this. As I mentioned, I was over in 
Afghanistan, and there are, sort of, roadmaps and commitments. 
But commitments are easy to do. It's important to make sure 
that they actually happen. And so I believe that we will 
continue to see problems, but we need to continue to stay on 
top of that.
    Mr. Duncan. Ms. Lerner, you know, there's too many things 
in the Federal Government that are sweetheart insider deals. 
And I do hope that you're looking more closely at people who 
are getting repeated grants, like this University of Pittsburgh 
professor that got $50 million from 24 different grants. Well, 
he apparently had some really good connection there at the 
National Science Foundation.
    So do you look a little closer at some of those who are 
getting the most grants or the most money?
    Ms. Lerner. We have a risk matrix that we're constantly 
updating as we learn and are exposed to new and different ways 
that people try to misuse NSF funding. So I think we have 
gotten pretty darn good at targeting areas of risk, but we know 
we can always get better. And so we take and we add to that 
risk matrix on an ongoing basis.
    Mr. Duncan. Well, we have got so many good scientists in 
this country.
    Ms. Lerner. Exactly.
    Mr. Duncan. That these grants should be spread out. They 
just shouldn't be given to a small, tiny group of favored 
individuals.
    My time is up, but I really do appreciate all the work that 
the inspectors general have done for this committee over the 
years. Thank you.
    Chairman Gowdy. I thank the gentleman from Tennessee yields 
back.
    The gentleman from Massachusetts is recognized.
    Mr. Lynch. Thank you, Mr. Chairman.
    I want to thank the panelists, Mr. Horowitz, Ms. Lerner, 
Mr. Fine, for your wonderful work. I'll just associate myself 
with the glowing remarks of the gentleman from Tennessee with 
regards to our appreciation for the work that you do and the 
work that your people do. It is extremely important, and as 
important now as it has ever been, I think, on behalf of our 
country.
    I do want to acknowledge the return of our ranking member. 
I appreciate it. He has maintained constant contact with the 
committee, so he never has really been out of the seat. But 
good to seeing him physically back in the chair this morning.
    I want to follow up on Mr. Russell's line of questioning, 
especially regarding the situation in Afghanistan. So Special 
Inspector General John Sopkohas been concerned about the new 
practice in the Trump administration of classifying information 
that has been publicly available, let's see, going back to 2003 
at least. He has raised it in his report.
    He has said, among other things, that data that was 
originally reported publicly with regard to the Afghan National 
Defense Force capability assessments, their attrition rates, 
how many people we got within the units that are being paid 
within Afghanistan, casualty counts, operational readiness, 
actual and authorized figures on the number of personnel, he 
talks here about for the first time the reports are now 
classified with respect to information about the specific 
security goals of Afghanistan outlining the Trump 
administration's new South Asia strategy, information about the 
increase in U.S. and coalition air strikes in Afghanistan since 
mid-2017. He goes on and on.
    That's the data, those are the data that we rely on in 
making our decisions, and I know that that's very important to 
you, as well.
    On top of that, on top of classifying information--and I 
can still get it, I can go down to the SCIF and I can request 
access to the information. It just makes it more difficult for 
me to get it. And a lot of Members, because they're so busy, 
they don't get to do all that.
    But what troubles me additionally is that now the 
Department of Defense is denying--they have got blackout dates. 
So Members of Congress cannot go--so, for instance, beginning 
in June and lastly until September, we cannot go into Iraq. 
This is the Oversight Committee, we can't go to Iraq. Beginning 
in June and continuing indefinitely we cannot go to 
Afghanistan. So what the administration is doing is pulling 
down the curtain.
    And this committee has a natural affinity with our 
inspector general community. On my codels it was not unusual 
for me to take Stuart Bowen or his staff, Mr. Fitzgerald, the 
first couple of codels into Sadr City, where we're spending 
billions of dollars on a sewage treatment facility and no one 
is looking to see whether they're actually building it. We had 
some satellite stuff, but you really couldn't see what was 
going on.
    But it wasn't until I actually got the commanding general 
to that battle space to take us all in in an MRAP and we were 
able to look at that to see that the work was actually being 
done.
    So we're spending all this money in Afghanistan and in 
Iraq, but especially Afghanistan, and if there's no oversight 
going on. I know Sopko is being denied--well, it is tough to 
operate in Afghanistan anyway. You have to rely on, you know, 
locals for some of the oversight.
    So I mean this is a shutdown of a lot of information that 
the American public used to have. The totality of what the 
Trump administration is doing here is denying information to 
the American people, denying it to Congress, putting 
obstructions in the way of our special inspector general in 
Afghanistan, on giving that information to the public.
    I just ask you to speak out about this trend. I'm very, 
very concerned about it. And we're relying on each other to 
make sure that the best interests of the American people are 
protected, and especially our military who are in harm's way in 
Afghanistan and Iraq.
    I just ask you to keep doing your jobs and let us know if 
there are additional ways that we can put the pressure on to 
make sure that your folks are protected and are able to perform 
the jobs that we have asked them to do.
    Thank you.
    Chairman Gowdy. The gentleman from Massachusetts yields 
back.
    The gentleman from North Carolina, Mr. Meadows, you're 
recognized.
    Mr. Meadows. Thank you, Mr. Chairman, and thank you for 
your leadership in holding this hearing.
    Thank you all for your work. As most of you know, I'm a big 
fan of the IG and of all of your work. And yet I guess this is, 
what, the 40th anniversary of your authorization, but also the 
40th anniversary of civil service initiatives that, quite 
frankly, sometimes hamper and hurt your ability to get jobs 
done and get things done.
    So I guess what I would love to hear from each one of you 
very briefly is how do we fix this? I mean, the ability to 
hire, fire, and retain continues to be in the headlines each 
and every day.
    And sometimes even when we terminate, as Mr. Horowitz 
probably knows better than most, it creates unbelievable 
headlines when honestly dealing with the whole retention and 
proper--I guess proper remedial actions on behalf of government 
employees would be better if it is done in a different fashion.
    How do we fix this? And I know that's a 1-hour question 
that you have 1 minute to respond to.
    Mr. Horowitz, if you could start.
    Mr. Horowitz. It is a very challenging issue for IGs. It is 
a challenging issue for us ourselves to get our people on 
board. Security clearances, you add in an organization like 
DOJ. If there are misconduct findings, getting people to take 
them seriously, move them forward in a prompt way like we think 
they should so that people are held accountable.
    I think there needs to be a bringing together of the 
stakeholders because I think everybody recognizes there's this 
problem on the front end and the back end and in between, 
frankly, the ratings, the reviews. The strongest performers, we 
need to find a better way of acknowledging strong performance 
and rewarding strong performance.
    I think it largely requires Congress coming together with 
the executive branch in doing that.
    Mr. Meadows. So, Ms. Lerner, let me ask you maybe a 
different version of that. Mr. Horowitz is saying we need to 
talk and we need to get together.
    You know, one thing that we're not short of here in D.C. 
and the Beltway is talk without action. And I guess my question 
to you is, who would be the key players to make sure that we 
don't just talk about it? Because I think all of you, all three 
of you want to actually do something about that.
    So how do we make sure that Congress actually is hand in 
glove with the executive branch on how actually do this?
    Ms. Lerner. I think back on something Earl Devaney said 
when the Recovery Act was going on, when you want to see things 
happen, you know, give people responsibilities and deadlines in 
a statute. You need to give people enough time for good 
thoughts to percolate and be shared and shaped and formed, but 
they can't have forever in which to do that. So a hard and fast 
deadline is vital.
    But I do think making sure that we remember all the things 
that drove the creation of these protections in the first place 
and we don't throw the baby out with the bathwater.
    Because when I hear that we need to protect whistleblowers, 
we want to make sure that career employees have protections so 
that they're able to perform in the nonpartisan fashion that 
they're supposed to do without fearing that they could lose 
their jobs because agency leadership doesn't agree with what 
they're saying.
    Mr. Meadows. All right. Well, you're the one group that 
actually protects whistleblowers and actually supports the IG, 
so maybe this is the key component.
    Inspector General Fine, I'll let you close it out.
    Mr. Fine. If I could add one thing, I do think it is very 
important for people to be held accountable when they have 
committed misconduct and to be cleared when they haven't and 
for that to be done in a timely way. That's what IGs strive to 
do.
    One of the key things for us is to ensure that we have 
adequate budgets and staff to do that because that does affect 
timeliness. And there are some IGs who have not received the 
sufficient budget to deal with the burgeoning caseload so that 
things get elongated and things stagnate, and that is not good 
for anybody. It is not good for the person who has not 
committed the misconduct, and it is not good for the agency if 
someone has committed misconduct.
    So we need to strive for timeliness, but in order to do 
that there need to be sort of significant budgets. It is a 
small amount. The return on investment is huge both in terms of 
recoveries to the Treasury and also in terms of importance of 
holding people accountable. So I ask would that there be focus 
and consistent adequate budgets for the oversight.
    Mr. Meadows. Well, if you could do that then as part of 
your group, if you could actually get to this committee. And I 
would ask you maybe in the next 45 days to get to this 
committee those areas that you feel like are most 
underappropriated as it relates to IGs. Some of those are in 
better shape than others.
    And I thank you all for your testimony.
    And I yield back.
    Chairman Gowdy. The gentleman from North Carolina yields 
back.
    The gentleman from California is recognized.
    Mr. DeSaulnier. Thank you, Mr. Chairman, and thank you to 
the ranking member for this meeting. I always wanted to be on 
``60 Minutes,'' I wanted to be asking questions. So since the 
CBS camera is here let's act like we're on ``60 Minutes.''
    So I really wanted first of all to tell you how important, 
in my view, your jobs are, three of the most important 
positions in the U.S. Government.
    And the integrity part, Mr. Fine, I think is important. So 
I wanted to focus on you.
    In the last year or so ago we had the Defense Business 
Board here who sat where you're sitting. One of the members who 
was a longtime member sat and answered questions where he said, 
he was quite demonstrative about you really can't give the 
Department more money until you get this fixed.
    And this was when they had a report, an audit from McKinsey 
that estimated there was $125 billion worth of waste. And it 
appeared that that report was attempted to be held back from 
somebody in the Department, and then someone gave it to The 
Washington Post.
    So I wanted to ask you about that report. Also, this 
concern I have about President Eisenhower's warning in his 
farewell address about the military-industrial complex, given 
the importance and the size of your jurisdiction and the audit.
    If you could respond to the Defense Business Board, and I 
have had multiple conversations with their members, their 
former chair, Bobby Stein, and their concern about--this is the 
business community that's been looking at the Department of 
Defense since, I believe, the Nixon administration. So if you 
could talk about their report, their role.
    And then, secondarily, the audit. And you've mentioned the 
importance of the audit. And give us a timeline as to the 
expectation, understanding the challenges because the 
Department's never had a full audit, and your role in making 
sure that audit is done in a timely fashion. And I would 
imagine this financial audit will set up hopefully a more 
extensive look at management audits and outcomes.
    And lastly, you mentioned, fifth on your list, financial 
management, eighth, ethical conduct, tenth, efficiencies, and 
then you mentioned weapons development to be on time and on 
budget and the performance management of that.
    So if you could address those sort of three areas.
    Mr. Fine. So I'm familiar with the report there. It is 
clear that there is areas of waste and areas for greater 
efficiencies in the Department of Defense with the enormous 
budget that it has. It has a $700 billion budget. It has $2.4 
trillion in assets. That's a huge amount. And there is areas 
for efficiencies.
    The Department is looking to do that. One of the areas they 
need to do is to have a look at the duplicative efforts they 
have in the various services to do the same thing and whether 
there can be efficiencies garnered from that, and they are in 
the process of doing that, and it is important that they do. Do 
we need all those separate entities doing the same thing?
    A key thing is the financial statement audit that you 
referred to. It is very important. It is important for a 
variety of reasons. It is going to take a lot. It is probably 
the largest financial statement audit in history. There are 
probably over a thousand auditors that are going to do over 25 
separate audits of various parts of the Department of Defense.
    It is the first time the Department of Defense is under 
full audit. It is highly unlikely they are going to get a clean 
or unmodified opinion. The opinion is really not the most 
important thing right now, in my view and also in the 
comptroller's view and also the leaders of the Department. The 
most important thing to identify the deficiencies, have us give 
notices of findings and recommendations, and ensure that there 
is corrective action taken.
    The Department is on board with that. They have visibility 
over all the findings that are coming in. There are different 
independent public accounting firms who have been hired to 
conduct the audit along with us. We provide oversight over 
those independent public accounting firms, and we are the group 
auditor and will roll up the opinions in a separate report into 
an overall opinion. And the opinion will be issued November 15.
    Now it may be a disclaimer of opinion. I would be surprised 
if it was an unmodified opinion. They'll get what they deserve.
    But it is very important that they keep doing this and that 
there is sustained effort. Because why is it important? Because 
it helps the Department manage its money, number one. It gives 
Congress and the American taxpayer more accurate information 
about how their money is spent. It benchmarks things so you can 
look and see whether there are cost overruns. And it is useful 
in determining where there is waste, fraud, and abuse.
    It is useful in determining where the financial systems are 
insecure and there are IT issues with them.
    It is very important in determining where the property is 
of the Department--by property I mean, for example, equipment, 
spare parts, munitions--so they don't order too much and just 
have it wasting in a warehouse or they don't have enough of 
what they really need somewhere else.
    So they need to know what they have and where they have it, 
and the financial statement audit will help with that.
    Mr. DeSaulnier. I'm going to interrupt you because I only 
have 20 seconds, and I hoped to give time back to my friend 
from Alabama, but that's not going to happen.
    Just on the procurement, your quote about the procurement, 
making sure that all these very sophisticated investments and 
new technology is done in a way that's above board and ethical 
and gets the best cost-benefit for the American taxpayer.
    Mr. Fine. It is important. Procurement is a challenge. 
There are numerous weapon systems. It is important that the 
Department modernize and ensure that they are doing it in an 
effective way to get the systems on board in a timely way so 
they can be used, but not to do it in a wasteful way. It is an 
enormous challenge. I think the Department is focused on that, 
and it needs to continue to do so.
    Mr. DeSaulnier. Thank you. I yield back, Mr. Chairman.
    Chairman Gowdy. The gentleman from California yields back.
    The gentleman from North Carolina is recognized, Mr. 
Walker.
    Mr. Walker. Thank you, Mr. Chairman.
    I appreciate the inspector general community and all the 
different work that you do. You recommended the savings of 
potentially up to $98 billion, almost $99 billion. And we join 
your community in calling for accountable and effective 
government.
    Recently, I introduced the Good Accounting Obligation in 
Government Act. Now, this legislation would save taxpayer money 
and bring needed accountability to the Federal agencies by 
requiring them to report on the status of the GAO and IG 
recommendations in their annual budget justification. The GAO-
IG is a House companion to Senator Young of Indiana and Senator 
Warren of Massachusetts' efforts in the Senate. We want to 
continue to move that.
    To Ms. Lerner, does your office currently work with 
agencies to ensure recommendations are implemented and closed 
within a reasonable timeframe?
    Ms. Lerner. Yes, we do.
    Mr. Walker. Thank you.
    What is the average time period it takes an agency to close 
new recommendations once they are issued?
    Ms. Lerner. I don't know that we have that information. It 
probably varies from agency to agency fairly substantially.
    Mr. Walker. Okay. Can you unpack that a little bit for us? 
Why it would it vary from agency to agency?
    Ms. Lerner. Because of the complexity of the cases, the 
complexity of the agency, the type of audit that you're talking 
about. All of those contributes to it.
    Mr. Horowitz. One of the things we have been doing for 
about 3 or 4 years now is posting every 6 months the status of 
the open recommendations chronologically so the taxpayers, the 
public can see, and Congress can see the oldest 
recommendations, the newer recommendations.
    From our standpoint we would expect an agency to, depending 
on complexity, close the recommendation within certainly 2 to 3 
years.
    Mr. Walker. And last question on this, do you think the 
GAO-IG Act possibly, I don't know how familiar you are with it, 
could help ensure timely implementation of new and old 
unimplemented recommendations?
    Mr. Fine. Congressman, I believe it is important to focus 
attention on open recommendations. We do the same thing, issue 
a compendium of open recommendations. There's 1,200 of them in 
the last 10 years. Some of them are very old.
    I think anything that provides transparency and sunshine is 
important. I believe in what Justice Brandeis said, ``Sunshine 
is the best disinfectant.'' And that is important in terms of 
follow-up of recommendations, as well.
    Mr. Walker. Thank you very much.
    Mr. Chairman, I would like to yield the balance of my time 
to the gentleman from Alabama.
    Mr. Palmer. I thank the gentleman.
    Going back to the contract issue, Ms. Lerner, in your 
testimony you cite $500 billion in fiscal year 2017 and $700 
billion in fiscal year 2018. Is that the sum of contract values 
or does that include change orders?
    Ms. Lerner. I think the $700 billion----
    Mr. Palmer. Would you turn on your microphone?
    Ms. Lerner. I'll get this eventually.
    I think the $700 billion figure in my testimony was on 
grants. The $500 billion figure was on contracts.
    Mr. Palmer. Contracts.
    Ms. Lerner. So they're usually relatively close to each 
other with grants, you know, tipping a bit on an annual basis.
    Mr. Palmer. What I'm trying to get to is this committee has 
looked into issues where we have had substantial overruns in 
contracts, particularly with embassies. And one of the problems 
I think we're having through the Department of Defense is how 
we appropriate money for certain projects. And there's pressure 
felt by the various agencies, including the Department of 
Defense, to start something before the contract design is ready 
and consequently we run into major overruns. It's something 
that I'm trying to develop a remedy for that I would like to 
talk to you later.
    In the final minute or 20 seconds that the gentleman has 
yielded to me, you have all testified that there are agencies 
that do not comply with directives or recommendations, nor do 
they produce the requested progress or action reports. And this 
is for all three of you. What needs to be done to motivate 
agencies to comply?
    Mr. Horowitz.
    Mr. Horowitz. From my standpoint, I think being 
transparent, letting the Congress, the public know.
    One of the things, as I mentioned I implemented, was 
posting them publicly. The first time we did that drill we had 
800-plus open recommendations. I told the Attorney General, the 
Deputy Attorney General, I was going to do that. They 
immediately sent out all the open recommendations to all the 
components, and our phones were ringing off the hook from the 
component heads who wanted to close their recommendations 
before they went public.
    I agree completely with IG Fine, the sunlight here is the 
key to that and holding people accountable to make sure these 
get done. We have to do that. That's one of the tools in our 
toolkit.
    Mr. Fine. I agree with that, and when we issued our 
compendium it got the attention of the Department leaders. They 
have taken it very seriously. The Secretary of Defense has 
asked people, where are you on these recommendations? The tone 
gets set at the shop.
    Sunshine is, I believe, the best disinfectant. One thing 
you could consider is having a hearing on open recommendations. 
These hearings matter, and people focus attention on it when 
they have to.
    Mr. Palmer. My concern is, is that some of the stuff is 
carried over so long, particularly on improper payments, the 
amount keeps going up. And my staff and I are looking for ways 
to motivate, encourage, figure out some way to reduce those 
payments and encourage more compliance, particularly with the 
IGs' recommendations.
    Mr. Horowitz. And if I could add on your point on 
contracts, I think one of the things that struck us as we did 
this report, and we talk about this in the report, is on 
contract management and oversight within the agencies.
    Our staffs, we get--our budgets generally are 0.3 percent 
of the agency's budget. They're a very small number. The real 
effective day-to-day oversight has to happen by management. It 
has to happen in the agency.
    And what I think we have talked about that surprised many 
of us is the same problem we were seeing over and over again in 
contract management, which is not enough people to do it. It is 
viewed as a collateral duty often. We have had examples, we 
have put out reports where the Department's components are 
buying fuel and they're paying the invoice before knowing 
whether the fuel is there.
    Now, we have checked, and actually the goods were there. 
But that's so basic you would expect that to be understood. And 
the problem that we hear is, and we're not really in a position 
to know if it is true or not, is: Well, I'm managing dozens and 
dozens of contracts, I can't get out to look at the contract 
prison regularly or the other facility that we're using.
    And that's something I think we all need to think about, 
whether we're doing all these contracts and contracting and 
grants without getting the infrastructure to manage the 
additional moneys that are going out the door, to your point.
    Ms. Lerner. The same thing happens at my agency with 
grants. You know, there are far too many grants and one person 
has to see, and they just can't add the value that the American 
taxpaying public needs.
    Mr. Palmer. I thank the gentleman from North Carolina and 
the chairman for their indulgence. I yield back.
    Chairman Gowdy. The gentleman yields back.
    The gentleman from Maryland is recognized.
    Mr. Sarbanes. Thank you, Mr. Chairman.
    I know you were asked some questions about the ethics, 
compliance, and integrity within the agencies before. I wanted 
to just come back to that a little bit because we're really 
putting a focus on what kind of reforms might be appropriate, 
what kinds of things that may be operated as guidelines or 
norms, but not actually put into statute or regulation where it 
might be appropriate to take that next step.
    So maybe you could speak a little bit more, I'm 
interested--I know there's been some attention drawn to some of 
the ethical lapses of senior officials within some of these 
agencies. And, obviously, that's a major concern for us here 
because that kind of--the culture of integrity and adherence to 
ethical norms and standards, obviously, begins at the top.
    But I was curious if you could speak a little bit more to 
how you see the ethical blindness or some of these issues, how 
that actually does flow down through an agency, and, also, how 
that information comes to you.
    Are there surveys that surface the employees' concerns 
about this? Is it more anecdotal? Is it your perception that 
when there's ethical lapses it forces employees into a very 
difficult position because they are having to in a sense defend 
or protect supervisors or officials up the chain even though 
they don't necessarily agree with that and it puts them in a 
kind of untenable position?
    What are some of the elements by which the culture is 
damaged in an agency based on ethical lapses and morale 
suffers? I'm interested in getting a little more granular on 
that. And I invite anybody on the panel to respond.
    Mr. Fine. So I'll try and unpack that question because 
there's a lot in there. But I do agree that the tone gets sets 
from the top, and it is very important for the ethical culture 
to be set from the top and to make clear what is acceptable and 
what is not, and then, when it is not, to hold people 
accountable in a timely way.
    I'm fortunate that in the Department of Defense the 
Secretary of Defense takes that very seriously and has done 
that regularly and publicly, and that's important to the 
conduct.
    We also look at trends, and the trends are actually pretty 
good in the Department of Defense in terms of substantiated 
misconduct. It has gone down. That doesn't mean any misconduct 
is acceptable, but it is going in the right direction.
    There does need to be education, and we need to have a role 
in providing proactive education to people about what they 
can't do, what they shouldn't do, how they should deal with 
things, and what's going to happen if they do it. So that's 
very important.
    It is also very important to operate effective hotlines. We 
have hotlines where we get anonymous complaints that people can 
take, get exposed to us in an anonymous way or saying their 
names. And either way we need to take it seriously.
    We get a lot of them. We get about 13,000 a year. Many of 
them are just frivolous or just can be dismissed immediately, 
they are the wrong agency. But some of them are serious, and 
that is an important way.
    And ultimately it is important that people be clear that 
there will be consequences for misconduct, and we play an 
important role in that, as does the agency taking action on our 
reports in a timely way.
    Mr. Horowitz. I think one of the things that has changed 
and has been an important change is the IGs posting public 
summaries of misconduct findings by employees at the GS-15 and 
above level. Some of us were doing that were before Congress 
passed the IG Empowerment Act, but we're now all required to do 
that.
    I can tell you from our standpoint, when we started posting 
those summaries, back to the point of sunlight being the best 
disinfectant, we started seeing much quicker action, much 
quicker responses by the Department in responding to those 
findings, whereas before it could take months or years.
    The Department quickly understood that they would be 
getting inquiries, whether it was from Members of Congress, 
whether it was from the public, whether it was from the press, 
about our findings and whether they had taken action. And so 
that has been important.
    But I think that is one of the consistent frustrations 
among the IG community, what IG Fine said, is there needs to be 
timely response to misconduct, certainly at the highest levels, 
but, frankly, at all levels.
    If you talk to folks about culture, a lot of people will 
say midlevel management is equally important if not more 
important at some level, because those are the people who touch 
everybody. Very important for tone to be set at the top, but 
midlevel managers need to walk the walk on those issues.
    And we are seeing improvement in the timeliness of taking 
action, but that's something that I think the committee could 
consider, how we make sure that people are held accountable in 
a prompt and timely way. Justice delayed is justice denied at 
all levels.
    Mr. Sarbanes. Thanks very much. I yield back.
    Chairman Gowdy. The gentleman from Maryland yields back.
    The gentleman from South Carolina is recognized.
    Mr. Sanford. Thank you, Mr. Chairman.
    I want to follow up on the question that's just being 
asked, because if you cut to the chase fairly uniformly and 
fairly consistently your recommendations are ignored.
    What can be done to change that? I mean, part of it is what 
you were just getting at. Are there other things that can be 
done so that your findings are not ignored as they are?
    I mean, I think it is amazing to think there are in essence 
$100 billion worth of savings that are floating around out 
there and that there are indeed 39,000 recommendations on your 
site, and yet, you don't see all that much action relative to 
the amount of data that you have out there suggesting change is 
needed.
    Mr. Horowitz. A couple things I'll pick up on that have 
been mentioned that I think are important and others I think it 
is important that we as IGs make known to the public and 
they're transparent.
    I think it is very important for Congress to do follow-up 
as well as the IG. We consistently do follow-up, but we're not 
management. And we can't, other than continuing to issue 
reports, continuing to make public what we're finding, we're 
not management, we're not ultimately the ones who are going to 
implement it.
    The other thing we did, and I met with Director Mulvaney 
when he first came on board, he asked us to put together a list 
of some of the bigger outstanding recommendations. We have done 
that. And I think OMB can also play a role through the budget 
process.
    Mr. Sanford. If you were to pick the single, each one of 
you were to pick the single most glaring example of waste in 
your view, it would be what? Waste or inefficiency or something 
that should be changed.
    Mr. Horowitz. I can speak to the DOJ recommendations. Give 
you an example, a couple years ago we issued a report where we 
found that----
    Mr. Sanford. Just shorter because I have only got 3 
minutes.
    Mr. Horowitz. The Bureau of Prisons was making multiples of 
the Medicare rate for healthcare, and it is not capped like the 
Department of Defense and others.
    Mr. Sanford. So you would say Bureau of Prisons.
    Mr. Horowitz. Hundred million dollars.
    Mr. Sanford. Okay.
    Ms. Lerner, you would say what? Just one.
    Ms. Lerner. We have issued many recommendations related to 
large facility construction at NSF, and they have actually 
finally taken significant action to put policies and procedures 
in place to make that better as a result of our work.
    Mr. Sanford. Something more concrete.
    And while you're thinking on it, Mr. Fine.
    Mr. Fine. There's so much in the Department of Defense, but 
you're asking for one, and I would just say duplicative lines 
of effort. They're all doing similar things.
    Mr. Sanford. I know, but that's nebulous.
    Mr. Fine. Healthcare. Why do we have separate healthcare 
systems? Why do we have separate PXs for different services? 
Why do we have separate, I don't even know, suspension and 
debarment offers? Why can't we have more centralized services 
in the Department of Defense, rather than have each one of them 
have their own PX, MX, healthcare clinic, things like that.
    Mr. Sanford. Ms. Lerner, you were about to say?
    Ms. Lerner. We have made so much progress with the agency, 
I don't really have a glaring problem right now. I have some 
minor issues, but we are in a pretty decent place.
    Mr. Sanford. So the National Science Foundation is 
government nirvana when it comes to waste, fraud, or abuse?
    Ms. Lerner. I would not say that. But if you had asked me 
this question 2 years ago I would have had an entirely 
different answer for you.
    Mr. Sanford. Okay. Quick question. Given the charges of 
Russians, given Facebook, it just seems that the internet, 
social media and data, is in the news. In reading through some 
of your stuff there have been any number of different threats 
in terms of data. You look at some of the big breaches over the 
years.
    Is there anything that jumps out at you from the standpoint 
of making the data systems that we have at the government level 
within your respective areas tighter and more secure?
    Mr. Fine. Absolutely. We have issued reports on that. For 
example, in the NSA, which has had data breaches, particularly 
from insiders, that they do not have adequate controls on that 
in terms of the privileged users, in terms of enclaves, in 
terms of all sorts of things, that they need to tighten up 
their systems.
    Mr. Sanford. Do you think culture is right there? It's a 
systems question or a culture question?
    Mr. Fine. I think it's both. I think it's a combination of 
both.
    Mr. Sanford. Okay. I have got one more question I just 
wanted to get to, which was I noticed deferred maintenance as 
showing up, something in a couple of different reports. You 
know, borrowing from Peter to pay for Paul seems to be the way 
of government. Is there something that you think systematically 
might address that, whether that is a capital account versus an 
operating account? Is there something that could be more 
concrete so that you don't see the level of deferred 
maintenance that you all's reports seem to suggest exist?
    Mr. Horowitz. Let me say I think from our standpoint we 
have seen it in the prison system, aging prisons. And what 
happens is there's such a focus on finding either new bed space 
or other places and thinking new as opposed to fixing what's 
old.
    I think it's a priority and a management issue at a certain 
level, a culture issue, that people aren't focused on 
maintaining what they have. They're getting funding and they're 
thinking about building new.
    Mr. Sanford. Mr. Chairman, I see I've burned through my 
time. Thank you, sir.
    Chairman Gowdy. The gentleman from South Carolina yields 
back.
    The chair will now recognize the gentlelady from New York.
    Mrs. Maloney. I thank Chairman Gowdy for yielding.
    And it is such a great pleasure to see our ranking member 
strongly here fighting for the people. We welcome you back to 
your good post and office for the people.
    And I want to really thank very much the IGs for the role 
that you are not only playing today, but that you play every 
day in trying to maintain the trust of the public and the 
integrity of our government.
    And if our government doesn't have trust, and that's a big 
part of your job, then the people won't follow it. So I think 
your role is one of the most important in government and I want 
to thank you for it.
    And I think working together, if we work together, we're 
going to be stronger in our oversight. And I welcome the 
opportunity when more comes out from your reports to try to 
implement them into positive action for change to make 
government work better for the taxpayers and for everybody.
    I want to compliment the chairman for having a hearing on 
the Census. I believe it is May 6 coming up, right, May 6, and 
I'm looking forward to it.
    But I would like to place in the record several letters 
that I've written to Secretary Ross requesting information 
about controversial items in it for which I have received no 
response. And I'm hoping that at the May 6 hearing--excuse me, 
May 8 hearing--that the information will be provided so we can 
discuss it.
    At issue is something that is critical. The Census is the 
only document that is required of the executive branch in the 
Constitution. It is the largest peacetime undertaking that this 
country does, and it becomes the focus of all of the research 
for what we do as a country. It is critical.
    The private sector cares just as much about it as the 
public sector for our planning, and it is the basis of the 
distribution of over 700 billion yearly in Federal funding for 
healthcare, transportation, everything else.
    And also the basis of representation. Our representation 
numbers on the city, State, and Federal level are based on 
Census, and they ask for everyone to be counted.
    And at issue is this question that they added at the last 
minute asking about citizenship when the studies of the Census 
had showed, and by outside groups, that it decreases 
participation, so therefore, it would lead to an inaccurate 
Census and possibly more moneys that have to be spent on it.
    So I just wanted to ask if the questions could be answered 
for the hearing.
    And also, along with the ranking member, I have put in a 
bill called the IDEA Act, that you wouldn't do last minute 
changes without studying what the impact would be on public 
policy.
    So I just wanted to put that in as a request for the May 8 
hearing coming up that our oversight will be stronger.
    I am interested, a lot of you have talked about 
inefficiencies, and we need to get IT into all of our agencies, 
and we need to coordinate it, and we need to make it work, and 
it is not working. And if we can put a man on the moon, we can 
figure out how to get good IT into all of our agencies.
    That's one of the areas that you called and talked about as 
being an important area we need to look at. And I think one of 
your reports said, and I quote, that our IT is outdated, 
obsolete. You're pretty damning about our IT.
    In your testimony, Mr. Fine, you stated that DOD is, quote, 
operating with many decentralized and noncompliant information 
technology systems.
    Why are we putting money into things that are 
decentralized? We should try to centralize for our procurement, 
for our sharing of information, and everything else. And yet, I 
read that we have a big budget for this. We have a bigger 
budget than most countries in the world.
    So why can't we get there? Why can't we get our act 
together, basically? And what can we do to conduct more 
rigorous oversight, working together?
    Congress would like to be a partner with you on seeing if 
we can get our IT systems working in a better way. I mean, I 
think we have an example of where technology has far outpaced 
our ability to keep up with it.
    Mr. Fine.
    Mr. Fine. Yes, that comment had to do with the multitude of 
financial feeder systems that feed into the main system, and 
many of them are obsolete, they are old. It is part of the 
problem, is each entity, each defense agency, each service 
wants its own system, wants to customize its system, is wedded 
to that system, and resists going to a centralized system.
    The Department is moving towards that, to their credit. 
It's going to take a while. IT systems are very difficult, very 
challenging. You need adequate staff to do that. And even 
hiring and retaining and growing adequate IT staff within the 
agency, certainly in the Department of Defense and others, is a 
challenge, particularly given the salaries the government pays 
versus what they can get elsewhere.
    So that is tremendous challenge. And if you're not moving 
forward every day you're going to move backward. You're going 
to be way behind. IT changes so quickly that this does have to 
be a focus. I know the Department of Defense is focused on 
that, but they need to move forward with it, and they are 
trying to do that.
    Mrs. Maloney. I wish you would--my time has expired--but if 
you can get to the chairman some ideas in writing of how we 
could maybe work.
    It seems silly to build an IT system that's not centralized 
in payment and everything else and information sharing. You 
know, we have all these lists about bad contractors, don't hire 
this contractor, but how do people access them?
    Any ideas that you have to make that system work better, I 
think that's something that we in a bipartisan way would 
welcome.
    My time has expired, way, way over. Thank you.
    Mr. Connolly. Mr. Chairman, if I could just add one thing.
    Chairman Gowdy. Sure.
    Mr. Connolly. I would say to my friend from New York, Mr. 
Fine's testimony notwithstanding, it is important to note this 
committee has the scorecard on FITARA and the Pentagon got an 
F.
    So in terms of progress this committee has yet to see it as 
measured by metrics set by the GAO and this committee in terms 
of implementation of the information technology modernization.
    Thank you.
    Chairman Gowdy. The gentlelady yields back.
    I prefer to go last. We have got a great issue today, which 
is we have had wonderful member participation on both sides. So 
I'm going get the gentleman from Alabama to close out the 
hearing, but I'm going ask my questions now, with apologies to 
my friend from Wisconsin and Iowa.
    Mr. Connolly. Mr. Chairman?
    Chairman Gowdy. Yes?
    Mr. Connolly. I have not yet had a chance to ask questions.
    Chairman Gowdy. I was not going to exclude you either. 
You'll go right in between the two R's.
    Mr. Connolly. I'll try to be brief. Thank you.
    Chairman Gowdy. Inspector General Horowitz, the 2008 
reform, why was it necessary? And what progress has been made 
as a result of the 2008 reforms?
    Mr. Horowitz. Well, the importance of the 2008 reforms was 
creating the Council of the Inspectors General to bring 
together the 73 IGs, to look at issues that transcend the 
Federal Government, so that we're not just only running in our 
own lanes but we're thinking across IGs.
    And it in the 10 years we have been in existence has 
helped, I think, immeasurably IGs think broader than just our 
own agencies and our own oversight, whether it is the cross-
cutting reviews we have done about IT issues, we're working now 
on a Native American review, a lot of agencies touched that.
    And we have put together oversight.gov to put in one place 
all the reports so that the public, Members of Congress, the 
executive branch can see our work across the 73 IGs.
    Chairman Gowdy. I want to ask you a two-part question. 
Assuming no additional funding, what reform could be 
implemented with respect to your jurisdiction that would show 
progress?
    So I'm not going to give you any money, but I'm going to 
give you free rein to make any reform that you want with 
respect to your oversight of the Department.
    Mr. Horowitz. Well, I think the biggest ask we have had for 
several years now during the IG Empowerment Act was the ability 
to issue testimonial subpoenas, which obviously is a no-cost 
issue, an important issue we have identified, we have worked 
with this committee on. You have reported out a bill. I would 
note that Mr. Fine and DOD IG has that authority, and that's 
what we're looking for.
    Chairman Gowdy. All right. Now I'm going to give you 
whatever amount of money you want. What reform would you 
implement that would help you provide oversight if costs were 
not a consideration?
    Mr. Horowitz. I think there are a couple of things we have 
looked for on the IT side. We have looked to modernize our own 
systems and create more systems that will demonstrate 
transparency and give us and the public and the Congress 
greater oversight on disaster assistance. Multibillion dollars 
being sent out.
    We want to build a web page that shows the oversight work 
we have done, as we have talked about today in this hearing. 
Putting forward our findings, particularly where there are 
failures, is much more likely to trigger reform than just 
keeping them in-house and the public not seeing them.
    So what we would like to do is improve, build upon 
oversight.gov, and build a platform that would show open 
recommendations and allow those kind of issues to be seen more 
by the public and Congress.
    Chairman Gowdy. From time to time I'm a slow learner, and I 
know you have explained this to me before, but I want to give 
you a chance to do it again: The interplay between your agency 
and the Office of Professional Responsibility within the 
Department of Justice.
    Mr. Horowitz. So we are the only IG office of the 73 
Federal inspectors general that does not have the authority to 
investigate misconduct by all employees in our agency. The 
exclusion that Congress put in place in the IG Act is for 
misconduct by lawyers in the Department, including prosecutors 
when they engage in misconduct, ethical violations in the 
courtroom.
    We have asked for that authority for the 30 years since we 
were created in 1988. Mr. Fine, when he was IG, spent 11 years 
arguing for that authority. His predecessors did, as well.
    We think independent oversight matters, having a 
statutorily independent IG do that rather than having an 
organization that's overseen by the Department's leadership. 
It's long overdue. It's something that should be done.
    Chairman Gowdy. Well, in my remaining time I am just going 
to make an observation.
    It seems like a tough political environment we find 
ourselves in. It has, frankly, been that way the whole time I 
have been in Congress. So increasingly folks are looking to you 
as kind of that neutral, detached arbiter to kind of separate 
out what facts are relevant, what's not, and what conclusions 
we should draw from those facts.
    But you're only as good as your access to information and 
witnesses. Your experience with the Department the whole time, 
crossing three AGs and two administrations.
    Are you getting access to the physical evidence, the 
documents, and the witnesses that you think you need to be able 
to do your job in a way that is confidence inspiring for the 
public?
    Mr. Horowitz. Thanks to the help of the committee in 
passing the IG Empowerment Act and all the hearings you held we 
are getting access to records, the records that we need, the 
documents we need, and we have the ability to subpoena third 
parties if we need records.
    On testimony, if an employee is in the Department of 
Justice, we have the ability to compel their testimony under 
the IG Act. That's fine.
    The issue remains third parties. And we often get voluntary 
cooperation with us. But if individuals don't speak to us 
voluntarily, if there isn't the ability to work with a 
prosecutor to issue a grand jury subpoena, we have no ability 
to reach those individuals, even if they have highly relevant 
evidence. In a whistleblower case, they might have retired, in 
other misconduct cases, we can't get that evidence.
    Chairman Gowdy. Well, I appreciate the work of all three of 
you and all the inspectors general. I think the public really 
does view you all as the neutral, detached umpires that you 
would want doing this work.
    With that, the gentleman from Virginia is recognized.
    Mr. Connolly. I thank the chair.
    And building a little bit on what the chair was just 
asking, Mr. Horowitz, you know, you want transparency, you want 
cooperation. Surely that would also apply to the IGs 
themselves, would it not?
    Mr. Horowitz. Yes.
    Mr. Connolly. Because in order to have faith in your work, 
and this committee certainly puts great faith in your work 
collectively, you have to be unassailable, you collectively.
    Mr. Horowitz. Correct.
    Mr. Connolly. If there's a taint or a tarnish or questions 
of ethics or methodology, that could damage the entire 
credibility of a report or an investigation undertaken by any 
and all IGs. Is that a fair statement?
    Mr. Horowitz. It is.
    Mr. Connolly. So what is the process for looking at 
yourselves to make sure that those standards are adhered to and 
complaints are judiciously and transparently adjudicated?
    Mr. Horowitz. So one of the reforms that occurred in 2008 
with the amendment to the IG Act was the creating of an 
Integrity Committee. That was at the time chaired by the FBI. 
That had seven members at the time, four of whom were IGs 
appointed by the chair of CIGIE and the FBI appointee chairing 
it, a representative from the Office of Government Ethics and 
the Office of Special Counsel, the special counsel.
    That process was changed with the IG Empowerment Act a year 
and a half ago because of concerns over how it was being run 
and operated and handled. And so Congress changed the process, 
so now there is an IG chair of the committee.
    Mr. Connolly. Instead of the FBI?
    Mr. Horowitz. Instead of the FBI. The FBI is still a 
member, but it is now a six-member committee. The special 
counsel is no longer a member of the committee because of 
potential conflicts that arose when there were whistleblower 
issues that were within the special counsel's jurisdiction. 
They wanted to make sure that that didn't occur.
    And over the last year we have been transitioning control 
over records from the FBI to the Council of IGs, the challenge 
being because CIGIE has no appropriation and had no systems or 
systems of records in place to control, collect those records. 
We had to go forward and follow for public comments, 
regulations, we have to create a data system.
    So we have been doing that over the last year. It has taken 
us some time. But, frankly, we have asked for funding to help 
do that. We still don't have funding, so we're doing it through 
the volunteer contributions of the membership.
    Mr. Connolly. Something Congress obviously has to look at.
    Ms. Lerner, you have the title of vice chair of CIGIE. Is 
that correct?
    Ms. Lerner. Yes, sir.
    Mr. Connolly. And let me see, in fiscal year 2017 your 
committee, the Integrity Committee, received 59 allegations of 
IG misconduct. Is that correct? Take it on faith.
    Ms. Lerner. If you have read that from reporting from 
CIGIE, I'm assuming that's correct.
    Mr. Connolly. All right. Of those 59, 50 closed with no 
referral for investigation. Sound familiar?
    Ms. Lerner. It does.
    Mr. Connolly. Six were referred to another agency. And 2, 
only 2, were referred to the Integrity Committee for further 
investigation, 2 out of 59.
    Now, without knowing the particulars, and maybe some of 
them are frivolous and maybe some of them are just, you know, 
payback, anyone can file a complaint, but just the raw numbers 
and my own experience, frankly, with CIGIE would suggest that 
the robustness of the willingness to investigate one's own is 
lacking.
    Ms. Lerner. I'm sorry that it appears that way. I can say 
as someone who served on the Integrity Committee that we looked 
at the allegations that came in really seriously. I was on it 
several years ago. But we took our responsibilities very 
seriously.
    Mr. Connolly. Well, Ms. Lerner, I happen to be somebody who 
filed a complaint along with a colleague on this committee. Two 
of us from this committee filed a complaint against a specific 
IG.
    And I can tell you the process was most unsatisfying. It 
wasn't rigorous. There wasn't accountability. There was no 
explanation for the decision taken. There was no point-by-point 
response to a fairly carefully worded complaint that was rather 
lengthy. That's a pretty unsatisfying process for somebody 
concerned about integrity.
    Ms. Lerner. And I believe that that's one of the reasons 
that we have seen some of the changes that we are seeing now, 
that the frustrations that you felt and that some of us as 
members on the committee felt at that time led to the shift 
from the committee from the FBI's responsibility to CIGIE.
    And I know that there are other changes that have been made 
to try to respond to the type of frustration that you felt and 
that some of us that served on the committee felt to make it 
better.
    Mr. Connolly. Well, I invite you and your colleagues, and 
Mr. Horowitz and I have talked about this, but I am determined 
that we're going to codify the process.
    This committee on a bipartisan basis has to be assured as 
to the integrity of IGs as they do their work. They can't be 
compromised on partisan politics, they can't be compromised on 
any grounds. Because we want you to work. We want you to be 
successful. We want people automatically to assume that what 
you are saying is a truthful rendition, unbiased, of where the 
truth took you.
    So look for legislation, and we could do it cooperatively 
or not. But we are not satisfied with the process based on our 
own experience. And I believe we are going to have to engage in 
some codification.
    I know my time is up, Mr. Chairman, but if you would allow 
Mr. Horowitz to comment, he seems eager to comment on this 
matter, and I will then yield back. I thank the chair.
    Mr. Horowitz. Can I just briefly?
    I certainly appreciate your concerns. We met shortly after 
you became chair in 2015. And I think we have seen--we worked 
with Congress on reforms that were needed and put in place in 
the IG Empowerment Act.
    I'm certainly happy to work with you and other members of 
this committee on further reforms because we agree completely 
that you, the public, in particular, at large needs to 
understand, and people in our own agencies, that we're being 
watched as well if there's something we did that was improper 
or incorrect.
    And, in fact, one of the things we did, and the report is 
up here with the Congress as required by statute, we have put 
in place twice revisions to the procedures and policies of the 
Integrity Committee to address some of the concerns that we 
spoke about.
    And so I certainly take them seriously. I know IG Lerner 
takes them seriously from her service on the committee. I have 
never been on the committee. And I think it is very important 
that we do the right thing by that and look forward to working 
with you on it.
    Mr. Palmer. [Presiding.] The gentleman yields back.
    The chair recognizes the gentleman from Wisconsin, Mr. 
Grothman, for 5 minutes.
    Mr. Grothman. Sure, I have a couple of questions.
    First of all, the report in general identifies procurement 
planning as a challenge. Give us an example about how the lack 
of enterprise-level procurement planning has impacted your 
agencies.
    Mr. Fine. I think, for example, in the Department of 
Defense there are many issues with procurement, including 
moving forward without having a requirement set. Often we have 
requirements from different parts of the Department of Defense, 
and it is hard to adjustment to them.
    The F-35 fighters are, for example, a big one, and that has 
created challenges and cost overruns because of the differing 
requirements. So there's a massive amount of money in it, and 
we need to make sure it's effectively moved forward.
    Mr. Grothman. Okay.
    General question. We talked before about waste, fraud, and 
abuse. You know, that's a famous saying that's been around here 
probably when I was a child. I guess I'll deal with each one 
separately.
    With regard to fraud, if there is genuine fraud, do you see 
a follow-up or consequences for the employees involved in that 
fraud?
    Mr. Horowitz. I would say it depends, frankly. It varies 
among the components in the Department. And one of the things 
we have worked hard to do in our OIG is not only alert 
management of the components, law enforcement going into other 
components when we have had other concerns, but, frankly, 
report to the Deputy Attorney General and the Attorney General 
so that action is taken to reform the process.
    Mr. Grothman. Now, I'm just going to say reform the 
process. Fraud means criminal, right?
    Mr. Horowitz. Oh, I'm sorry. I thought you were talking 
about the misconduct side of it.
    I agree. We bring it to prosecutors because we don't have 
the authority to prosecute. And I will say from my standpoint 
one of our frustrations has been some of what I'll call the 
smaller dollar frauds that may not meet threshold levels in 
U.S. Attorney's Offices because they're busy with so many other 
matters, making sure those get attention.
    That can be a challenge because I don't have, frankly, like 
at DOD perhaps, frauds that involve tens of millions of 
dollars. Nevertheless these are government officials engaging 
in wrongdoing, theft, fraud. Those people need to be held 
accountable criminally if they have engaged in a crime.
    Mr. Grothman. Okay. And kind of a follow-up. Accountable 
could be two things. Accountable could be at a minimum fired 
and then appropriately criminal. What do you think usually 
happens, criminally, fired, or nothing at all?
    Mr. Horowitz. Again, I would say it depends. It is a 
challenge for us to get the kind of cases we want taken 
criminally at times.
    If there's outright fraud and criminal conduct we do see 
the agencies taking action ultimately. Our concern is 
timeliness, particularly for someone who is engaged in criminal 
activity, we think.
    Mr. Grothman. Okay. Oh, I'm sorry, Ms. Lerner. You were 
going to say something.
    Ms. Lerner. If I might add on that point, we've had some 
success. We have some of the same situations that Mr. Horowitz 
does with some of our cases being--the dollar amounts being not 
sufficient to interest Federal prosecutors, but we've had great 
luck with some State and local prosecutions. And the agency, 
you know, has usually removed the person, you know, even before 
those move forward.
    But we try, if we can't get it at the State--you know, 
we'll talk to any prosecutor that has an appropriate violation 
that can work with us.
    Mr. Grothman. And, Mr. Fine, obviously, we have--I mean, we 
are again and again told we have to spend more money on 
defense. And this budget, I think, contains a 10.5 percent 
spending increase. Maybe a little more than I would have 
preferred. But you read about stories about waste in the 
Department of Defense, and some of that's not criminal, but 
some is just amazing.
    Are there any consequences for people who come up with 
these amazing stories you talk about in the Department of 
Defense, or do they just keep on with their same position or 
rank or whatever?
    Mr. Fine. It depends. It varies. Sometimes there are 
consequences both in terms of not getting promoted, moved out, 
not being viewed as effective. Sometimes there are not 
consequences and people continue on. It really does depend on 
the circumstances and often depends on the leader.
    Any time there is that amount of money, there is going to 
be inefficiencies, waste and fraud, and it varies across the 
board. And there ought to be consequences for that.
    Mr. Grothman. Right. I guess the question is, you know, 
when you hear about massive cost overruns or things that 
shouldn't happen, does anybody pay a price for that or they 
just hang around with, perhaps, the ability to do it again and 
again?
    Mr. Fine. Like I say, it depends on the circumstances. It 
depends at what level it is. It depends who was responsible for 
it and why it happened. And sometimes it's judgments, you know, 
where mistakes were made, but sometimes things that are 
avoidable.
    And so I can't say there are never any consequences. But 
are there always consequences? No.
    Mr. Grothman. Okay. Well, I'd like to thank you all for 
being here today. It always makes a great day when I look at my 
committee schedule and I get to see the IGs here. So thanks.
    Mr. Palmer. The gentleman yields.
    The chair now recognizes the gentleman from Iowa, Mr. Blum, 
for 5 minutes.
    Mr. Blum. Thank you, Chairman Palmer.
    And thank you to the panelists for being here today. And 
thank for what you do in the IG community. It's very much 
appreciated.
    I think I'm the last questioner, so that's good news.
    I'm from the private sector, and seldom does a day go by in 
the Federal Government that I don't shake my head. I view 
Congress as the board of directors of a very large enterprise 
doing trillions of dollars of business, and I see the IG 
community as our auditors.
    So I want your opinions on some of these questions. I want 
to go to the 60,000-foot level, if we could.
    First of all, is there accountability, in your opinion, in 
our agencies in the Federal Government?
    Mr. Horowitz. From my perspective, in our agency, 
sometimes. It varies.
    Mr. Blum. Thank you for your honesty.
    Is there accountability?
    Ms. Lerner. I think I would have to agree with my 
colleague, Mr. Horowitz. Sometimes.
    Mr. Blum. Department of Defense, accountability?
    Mr. Fine. That's the exact words I wrote down here. It 
varies. Sometimes there is and sometimes there's not.
    Mr. Blum. And the second part, coming from the private 
sector, of that question, I always would say, in my companies, 
as evidenced by what? So if there is accountability, as 
evidenced by what?
    Where I'm heading here is what percentage of Federal 
employees are terminated every year? What percentage of 
management is terminated every year?
    Because I have sat here and asked witnesses about $370 
million of an IT project that was scrapped after 4 years, $370 
million of taxpayers' money. And I asked, did anyone lose their 
job? And the answer was no.
    You got to be kidding me.
    So, I mean, what percent of our workforce in the Federal 
Government is terminated?
    Mr. Horowitz. I wouldn't know what percent of the Federal 
workforce. Again, we could speak anecdotally to what we've seen 
as IGs in our own agencies.
    Mr. Blum. Okay, give me that answer. Is it enough?
    Mr. Horowitz. People are not held accountable in a timely 
fashion sufficiently, from my standpoint. And, again, it 
varies. I've been here a few times for hearings about some of 
the issues with DEA, other parts of the Department, giving 
bonuses to people who engaged in wrongdoing. As you recall, a 
couple of years ago----
    Mr. Blum. Or the IRS rehiring people that on their job 
thing says, ``Do not rehire.''
    Mr. Horowitz. What message does that send, where you not 
only not take action against people, but you give them a 
reward, a bonus, an acknowledgment for the work they've done?
    Mr. Blum. Only here. Only here in the Federal Government.
    Ms. Lerner, Mr. Fine, anything as far as termination 
percentages? If you don't know the exact number, I mean, should 
it be more? How do you hold people accountable?
    Mr. Fine. I don't know the exact number.
    In the Department of Defense what often happens, though, is 
if you're not promoted, you're out. And so sometimes this does 
have consequences, bad evaluation reports, and they do have to 
leave.
    But it does vary. It depends on the circumstances. So I 
think you can't just have one general comment about that.
    Mr. Blum. Because I only have 2 minutes left, let's look at 
the positive side of this. And I often talk about incentives. 
And there's incentives in the private sector to save money, for 
example, in a corporation.
    Are there incentives in the Federal Government to save 
taxpayer money? Are there incentives to report--what's the 
incentive to report fraud? What's the incentive to report 
abuse, waste, fraud, and abuse? What are the incentives, 
though?
    I think they're upside down in the Federal Government 
compared to the private sector. Maybe we need more incentives. 
Maybe there need to be monetary incentives for people to save 
the taxpayers' money. I'd like to have your thoughts on that.
    Mr. Fine. Here's one incentive that is different in the 
Federal Government that I'd ask you to consider. If an agency 
does its work and doesn't spend all its money, then the next 
year the money gets taken away and their budget is cut and 
they're not praised for performing their mission effectively 
with a lower budget. It is, oh, you really didn't need the 
money.
    And so there's an incentive to spend it all at the end of 
the year. That's a disincentive. That's a perverse incentive, 
in my view.
    And that's an issue I think is important, that does differ 
a little bit from the private sector where, if you do the job 
without spending all the money, there's more praise than in the 
Federal Government.
    Mr. Blum. Can you imagine if our Federal employees got a 
small percentage as a bonus of the money they saved the 
American taxpayer? Can you imagine unleashing that across our 
Federal agencies, how much waste we could reduce? Does that 
have merit? Does that idea have merit in the Federal 
Government, in your opinion? Anyone.
    Mr. Horowitz. Look, I think one of the challenges we face 
is an inability to reward our strongest performers, other than 
we, obviously, have honor awards. We give other recognition 
out. We are able to give some recognition each year in terms of 
bonuses.
    But our bonus pools, just as an example, are about 1.5 
percent or less of salaries, and compared to from my time in 
the law firm world, that's a pretty small comparable number in 
terms of bonus.
    Mr. Blum. My time is up. But I think we need to do a better 
job of holding people accountable and/or terminating them. And 
we also need to do a better job of rewarding performers with 
incentives.
    My time is up. But thank you so much for what the IG 
community does.
    I yield back.
    Mr. Palmer. I thank the gentleman for that excellent line 
of questions.
    I thank the witnesses for appearing before us today. I 
think this has been a constructive hearing. I think I can speak 
for my colleagues that this is an area and these are issues 
that you will have bipartisan support in trying to address. 
It's a very important effort that needs to be undertaken.
    The hearing record will remain open for 2 weeks for any 
member to submit an opening statement or for questions for the 
record.
    If there's no further business, without objection, the 
committee stands adjourned.
    [Whereupon, at 12:09 p.m., the committee was adjourned.]


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