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

                            FEDERAL GRANT MANAGEMENT

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                           INTERGOVERNMENTAL AFFAIRS

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JULY 25, 2018

                                   __________

                               Serial No. 115-94

                                   __________

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

                   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Available via the World Wide Web: http://www.fdsys.gov
                           http://oversight.house.gov

                                      ________

                           U.S. GOVERNMENT PUBLISHING OFFICE

    31-371 PDF                     WASHINGTON: 2018

                  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
    Michael Cloud, Texas

                         Sheria Clarke, Staff Director
                        William McKenna, General Counsel
                     Kelsey Wall, Professional Staff Member
                              Kiley Bidelman, Clerk
                     David Rapallo, Minority Staff Director
                                     ------

                   Subcommittee on Intergovernmental Affairs

                         Gary Palmer, Alabama, Chairman
    Glenn Grothman, Wisconsin, Vice      Jamie Raskin, Maryland, Ranking
        Chair                                Minority Member
    John J. Duncan, Jr., Tennessee       Mark DeSaulnier, California
    Virginia Foxx, North Carolina        Matt Cartwright, Pennsylvania
    Thomas Massie, Kentucky              Wm. Lacy Clay, Missouri
    Mark Walker, North Carolina          (Vacancy)
    Mark Sanford, South Carolina

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on July 25, 2018....................................     1

                                   WITNESSES

    Mr. Hudson Hollister, Executive Director, Data Coalition
        Oral Statement...............................................     4
        Written Statement............................................     7
    Ms. Michelle Sager, Director, Strategic Issues, Government
      Accountability Office
        Oral Statement...............................................    10
        Written Statement............................................    12
    Andrea L. Brandon, MPA, Deputy Assistant Secretary, Office of
      Grants and Acquisition Policy and Accountability, OS/ASFR/
      OGAPA, U.S. Department of Health and Human Services
        Oral Statement...............................................    31
        Written Statement............................................    33
    Mr. Peter Tyler, Senior Policy Analyst, Project on Government
      Oversight
        Oral Statement...............................................    38
        Written Statement............................................    40
    Ms. Natalie Keegan, Analyst, American Federalism and Emergency
      Management Policy, Congressional Research Service
        Oral Statement...............................................    45
        Written Statement............................................    47

                            FEDERAL GRANT MANAGEMENT

                                  ----------

                            Wednesday, July 25, 2018

                       House of Representatives
              Subcommittee on Intergovernmental Affairs
                   Committee on Oversight and Government Reform
                                                       Washington, D.C.
        The subcommittee met, pursuant to call, at 2:33 p.m., in
    Room 2247, Rayburn House Office Building, Hon. Gary Palmer
    [chairman of the subcommittee] presiding.
        Present: Representatives Palmer, Foxx, Grothman, Raskin,
    and DeSaulnier.
        Mr. Palmer. The Subcommittee on Intergovernmental Affairs
    will come to order. Without objection, the chair is authorized
    to declare a recess at any time. I will begin with my opening
    statement.
        To determine what the American people value in society, you
    might start by following the money transferred from the Federal
    government to the public. To this end, the subcommittee is
    holding this hearing to examine the management of Federal grant
    awards. Since the earliest days of the republic, the Federal
    government has used grants to advance public policy. From
    veterans assistance in the aftermath of the War of 1812 to land
    grants for railroads after the Civil War, Federal grants have
    been part of our Nation's history for a long time. Today the
    Federal government awards over $700 billion in grants annually.
    Seven hundred billion.
        Federal grants finance essential government programs, like
    infrastructure, by transferring Federal dollars to State and
    local governments, nonprofits, and individuals. However,
    different standards and reporting requirements scattered across
    Federal programs can pose a high cost. Federal grant managers
    spent 40 percent of their time monitoring compliance rather
    than monitoring results. According to a report by the Data
    Foundation, grant recipients are also burdened by the
    complexity of Federal grants. Grantees are required to submit
    duplicative reports and forms to multiple program officers
    spread across multiple agencies.
        Congress and the executive branch have made several
    attempts to improve grant management and transparency. In 2014,
    Congress passed the DATA Act. The DATA Act was intended to
    standardize Federal spending data, improve accuracy and
    usability of the data, and make Federal spending data
    accessible to the public online. Section 5 of the DATA Act
    created a pilot program to explore standardizing recipient
    reporting to reduce burdens on awardees and improve the
    usability of the reported data. The Section 5 pilot wrapped up
    last year.
        The final report offered three recommendations: continue to
    standardize data, leverage technology--excuse me--leverage
    technology to reduce compliance burden by auto populating forms
    with previously-provided data, and leverage open standards to
    rapidly develop new tools. My colleagues, Dr. Virginia Foxx
    from North Carolina and Congressman Jimmy Gomez from
    California, agreed with these recommendations. They introduced
    bipartisan legislation, The Grant Reform Efficiency and
    Agreements Transparency Act, the GREAT Act, to codify the pilot
    report's recommendations. The GREAT act would require HHS and
    OMB to create data standards for grant recipient reporting and
    require Federal grantmaking agencies to use those standards.
    The President's management agenda also calls for an integrated
    datacentric strategy to standardize grant reporting and reduce
    compliance burdens.
        In addition to reducing waste and burdens from unnecessary
    compliance exercises, modernizing grant data will improve
    accountability at grantmaking agencies. Annually, the Federal
    government loses track of millions of dollars due to a failure
    to review and reconcile grantee reports in a timely manner. In
    2016, the GAO found nearly $1 billion in expired grants with
    undisbursed balances and over 8,000 accounts contained in the
    HHS Payment Management System. To address this problem,
    Congress passed the Grants Oversight and New Efficiency, or
    GONE, Act. Among other things, the GONE Act requires agencies
    to report to Congress explaining delays in closing out certain
    grant awards that were past their performance end date.
        The first report was sent to the committee in May.
    According to the report, one of the primary explanations for
    delayed closeout in expired grants cited by Federal agencies
    was disconnected IT systems for managing grants and for paying
    grants. Without a modern technological framework, we cannot
    expect agencies will improve their ability to track the
    administration of Federal grant awards. It is my hope that this
    Congress can continue to help in this effort with continued
    oversight of the grantmaking process. Fortunately, we have with
    us today a panel that can speak to the role Congress can play
    in reforming and modernizing the grant management process. I
    thank the witnesses for being here.
        I now recognize the ranking member of the subcommittee, Mr.
    Raskin, for his opening statement.
        Mr. Raskin. Mr. Chairman, thank you very much, and thanks
    for those thoughtful opening remarks. Thanks also to the
    witnesses for coming to testify today on this important
    subject. Alas, I disagree with a lot of what is taking place
    right now with the Administration, and I want to say that
    President Trump has eliminated or undermined a host of Federal
    programs and grantmaking processes that he disagrees with, and
    this is a complete misunderstanding of his role as President.
    As President, his job is to take care that the laws are
    faithfully executed even if he disagrees with the laws. And if
    he does not like our laws and he does not like our programs, he
    can try to convince Congress to change them. He has got that
    authority and power or he can run for Congress himself, but he
    cannot just unilaterally decide to stop implementing our laws
    and our programs.
        And this is the kind of sabotage he engaged in when his
    agents at the Department of Health and Human Services
    eliminated the Teen Pregnancy Prevention Program, which has
    helped to significantly lower the Nation's teen pregnancy rate,
    bringing it down to its all-time low I believe. This program
    has bipartisan support in Congress. It has trained more than
    7,000 health professionals and supported more than 3,000
    community-based groups that serve millions of young people in
    America. So, the decision to kill the Teen Pregnancy Prevention
    Program was so lawless and so extreme that a Federal judge
    reversed HHS' action, writing, and I quote, ``HHS's failure to
    articulate any explanation for its action, much less a reasoned
    explanation, exemplifies arbitrary and capricious agency action
    meriting reversal.'' And that's what the Court did.
        The Administration has also acted by way of godfather-style
    offers, too. It has illegally threatened to hold hostage
    Federal grant funds for public safety in order to coerce local
    governments into support of its anti-immigrant policies. Judges
    blocked that one, too. In April, a three-judge panel of all
    Republican appointees, I should add, ruled that the
    Administration exceeded its legal authority by imposing
    conditions that Congress simply had never authorized. The
    judges wrote, and I quote, ``The Attorney General in this case
    used the sword of Federal funding to conscript State and local
    authorities to aid in Federal civil immigration enforcement.
    But the power of the purse rests with Congress,'' the court
    wrote, ``which authorized the Federal funds at issue and did
    not impose any immigration enforcement conditions on the
    receipt of such Federal funds.''
        The Trump Administration has also destroyed best
    grantmaking practices employed to ensure that grant recipients
    use Federal funds as Congress intended. In June, OMB disbanded
    the Council on Financial Assistance Reform, an interagency
    group that was created under the Obama Administration
    specifically to improve Federal grantmaking practices. OMB also
    directed agencies to stop reporting key metrics and remove
    mandatory quarterly progress reporting.
        I thought the President promised to run the government like
    a business, but I did not realize he meant businesses like
    Trump University, or Trump Mortgage, or Trump Steaks, where the
    various, now defunct, casinos that used his name. If you are
    going to run the government like a business, let us make it a
    good business, a solvent business, not a bankrupt entity which
    has been looted by its owner.
        I do not see a lot of faithful execution of the laws. I see
    an Administration intent on picking winners and losers in
    Federal grantmaking based on ideology. The American people
    deserve better than this highly-politicized process. The
    American people deserve to know how billions of their dollars
    are being managed and how the Federal government is monitoring
    the effectiveness of grant programs.
        Just 2 days ago, the GAO reported that only 15 percent of
    Federal agencies met their IG standards for completeness,
    timeless, and accuracy under the Digital Accountability
    Transparency Act, the DATA Act, the 2014 law that aims to make
    information on Federal expenditures accessible and transparent.
    Again, that means 85 percent of our agencies failed to meet the
    standards because of the tone that has been set at the top, and
    that has obvious results in terms of transparency and accuracy.
        So, Mr. Chairman, I thank you for calling this hearing
    because there are some really important problems that we need
    to deal with, and I think the Administration has done a
    disservice to Americans with the policies it has engaged in,
    undermining Federal programs and Federal laws. And we should be
    able to work together in a bipartisan way in Congress to get
    back on track and to restore the coherence of legislative
    dictates. Thank you, Mr. Chairman. I yield back.
        Mr. Palmer. I thank the gentleman. I am pleased to
    introduce our witnesses: Mr. Hudson Hollister, executive
    director of Data Coalition; Ms. Michelle Sager, director of
    strategic issues at the U.S. Government Accountability Office;
    Ms. Andrea L. Brandon, deputy assistant secretary of the Office
    of Grants and Acquisition Policy and Accountability at the U.S.
    Department of Health and Human Services; Mr. Peter Tyler,
    senior policy analyst at the Project on Government Oversight;
    and Ms. Natalie Keegan, analyst of American Federalism and
    Emergency Management at the Congressional Research Service.
    Welcome to you all.
        Pursuant to committee rules, all witnesses will be sworn in
    before you testify. Please stand and raise your right hand.
        Do you solemnly swear or affirm the testimony you are about
    to give is the truth, the whole truth, and nothing but the
    truth so help you God?
        [A chorus of ayes.]
        Mr. Palmer. The record will reflect that the witnesses
    answered in the affirmative. Please be seated.
        In order to allow time for discussion, please limit your
    testimony to 5 minutes. Your entire written statement will be
    made part of the record. As a reminder, the clock in front of
    you shows your remaining time. The light will turn yellow when
    you have 30 seconds left and red when your time is up. Please
    also remember to press the button to turn your microphone on
    before speaking.
        I now recognize Mr. Hollister for his testimony.

                           WITNESS STATEMENTS

                     STATEMENT OF HUDSON HOLLISTER

        Mr. Hollister. Thank you Mr. Chairman. Chairman Palmer,
    Ranking Member Raskin, thank you for inviting me to testify
    today.
        If the Federal grant system were a business, as Mr. Raskin
    has suggested, it would be the world's largest with almost 50
    percent more revenue than Walmart. The overwhelming majority of
    these funds go to State and local governments both directly and
    through subgrants issued by State agencies. And this whole
    enormous system is managed through a complex array of reporting
    requirements. The reporting requirements are spread across
    thousands of different grant program offices.
        Here's our challenge. Grant reporting is a document-based
    affair. Grantees fill out forms and submit those forms to
    grantor agencies. Some agencies have implemented grant
    management systems that collect these forms through electronic
    uploads, but even in those systems the forms are still PDF
    documents. They are electronic versions of the paper that they
    replaced.
        Document-based reporting presents two basic problems.
    First, it does a very poor job of delivering transparency to
    agencies, to Congress, to taxpayers. There is no central
    repository of all the information that grantees report to
    grantor agencies, nor is there any feasible way to create one.
    Second, grantees sustain unacceptable compliance costs in both
    time and money. Grantees must manually fill out their reporting
    forms, often providing the same information multiple times.
    Document-based reporting prevents both the grantees and the
    grantors from tracking and comparing performance or from making
    data-driven decisions.
        Here's our solution. By replacing document-based forms with
    standardized data, the Federal government can resolve both
    problems. First, standardized data will allow transparency and
    easy comparisons across programs and across government. And
    second, standardized data will allow grantees to compile and
    submit their information automatically and more cheaply.
        Now, this is not the same thing as creating a single
    government-wide system or a single government-wide reporting
    portal. If we were to replace document-based forms with
    standardized data, the agencies and the program offices could
    still operate separate grant management systems if they so
    chose. But by adopting common data structures and formats, we
    can allow information to easily be pulled from all of those
    systems automatically and easily aggregated for agency-wide and
    even government-wide transparency.
        Now, a transformation from document-based reporting to
    datacentric reporting requires three steps. First, the White
    House, working with grantor agencies and grantees, must define
    the data elements that are most commonly used in all these
    forms. Second, the White House must make this list of data
    fields or taxonomy mandatory for all grant programs. Third, all
    the grantor agencies must begin collecting grant reports as
    data instead of as documents.
        In early 2018, this committee and the Administration both
    took major steps toward that transformation. First, on February
    6, 2018, this committee favorably reported the Grant Reporting
    Efficiency and Agreements Transparency Act, or GREAT Act, which
    requires exactly the three steps I mentioned. Dr. Foxx and Mr.
    Gomez deserve credit for championing this critical reform. And
    second, on March 20th, as part of the President's management
    agenda, the White House announced a cross-agency priority goal,
    CAP goal, on results-oriented accountability for grants. Under
    that goal, the White House has committed to creating a taxonomy
    of the data elements that are most commonly used in grant
    reports with a deadline of the end of this Fiscal Year. Now
    that's the first of the necessary three steps. We eagerly await
    the publication of that data taxonomy.
        Now, the Data Coalition represents 46 data companies all
    working together to make our government more efficient and
    transparent. Our companies' solutions can deliver transparency
    and can automate grantee reporting, but only if the Federal
    government undergoes this basic transformation from document-
    based to datacentric. I'm also the president of the Data
    Foundation. Last month the Data Foundation issued our most
    recent report on transforming Federal grant reporting,
    explaining that Federal leaders are ready for this transition.
    Federal leaders are ready for the GREAT act and for the
    realization of the CAP goal.
        Thank you, and I look forward to the subcommittee's
    questions.
        [Prepared statement of Mr. Hollister follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. The chair now recognizes Ms. Sager for her
    testimony.

                      STATEMENT OF MICHELLE SAGER

        Ms. Sager. Chairman Palmer, Ranking Member Raskin, and Dr.
    Foxx, thank you so much for inviting me to participate in this
    very important hearing on Federal grants management.
        As we have all heard, Federal grants are an important tool
    of government, representing hundreds of billions of dollars in
    Federal expenditures every year. They also vary in many ways,
    including how Federal agencies implement them, their size, the
    nature of their recipients, and the types of programs that they
    fund, everything from transportation, to disaster assistance,
    to child nutrition, and the list goes on and on. This diversity
    and complexity contributes to the challenge of any efforts to
    make crosscutting grants management reform across the
    government.
        GAO has done a number of reports on Federal grants
    management spanning several decades. My oral statement today
    will focus on two key points: first, observations on
    longstanding grants management challenges, and, second,
    opportunities to address these challenges through some of the
    current grant modernization initiatives.
        First, GAO's body of work on Federal grants has identified
    a number of crosscutting challenges, including streamlining,
    transparency, collaboration and consultation, overlap and
    duplication, and oversight. A couple of key examples illustrate
    these challenges. These examples are highlighted in my written
    statement, and, of course, the underlying GAO reports provide
    additional detail.
        First, as we've heard about in terms of transparency, the
    DATA Act required agencies to increase the type of information
    that is available in a public way. Agencies have made great
    progress in providing standardized information and making that
    publicly available. But as GAO has reported a couple of times
    now, there is still additional progress that needs to continue,
    particularly with regard to data quality. Second, with regard
    to duplication and overlap, we have made a number of
    recommendations to agencies aimed at refining their grant
    management practices to check for duplication before they
    actually make grant awards. In response to these
    recommendations, agencies have taken action, and they are now
    checking for duplication.
        GAO has also identified weaknesses related to grants
    oversight and internal controls in a number of areas. For
    example, as we've already heard, we've identified opportunities
    for agencies to more consistently close out grants when the
    grantee period of performance has ended. The GONE Act passed
    Congress, and we are grateful for that act, and we now are
    looking forward to following what agencies are doing in
    response to the GONE Act as they are taking action to close out
    their expired grant accounts.
        As we go forward, the current grant management initiatives
    present opportunities to address these challenges. As the
    current Administration looks at the CAP goal that we just heard
    about, results-oriented accountability for grants, this goal
    needs to be integrated with other ongoing government-wide
    initiatives, for example, with DATA Act implementation, as well
    as with other initiatives related to evidence-based policy.
        We have made a number of recommendations about crosscutting
    government-wide initiatives and have focused on a couple of key
    features that those initiatives need to represent. So, for
    example, in any government-wide crosscutting initiative, you
    need to have a clear sense of what your goals are, and then
    follow up to make sure that those goals are in progress. You
    also need to have clear roles and responsibilities and have a
    sense of who's doing what. And finally you also need to have
    clear communication that is two way with the stakeholders
    involved in any of these initiatives.
        As the CAP goal for grant goes forward, it's very important
    that it relates to these other government-wide initiatives and
    that it is an integrated approach to make sure that these
    initiatives work together. Otherwise, you run the risk of these
    initiatives operating in silos or even working at cross
    purposes. We have ongoing work related to the implementation of
    the CAP goals as well as implementation of the DATA Act and the
    infusion of evidence-based policy across the Federal
    government, including in Federal grants.
        In conclusion, as we move forward, part of the challenge of
    any government-wide initiative is designing and implementing
    grants management policy that maintains accountability on the
    one hand, but at the same time is attuned to the potential
    administrative burden for grantors, agencies, and grantees.
    Meeting this challenge requires intergovernmental collaboration
    across the Federal government, intergovernmental collaboration
    with State and local governments and other partners, as well as
    the integration that I made reference to with other ongoing
    initiatives.
        This concludes my prepared remarks, and I look forward to
    any questions that you may have. Thank you.
        [Prepared statement of Ms. Sager follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. Thank you.
        The chair recognizes Ms. Brandon for her testimony.

                 STATEMENT OF ANDREA L. BRANDON, M.P.A.

        Ms. Brandon. Chairman Palmer, Ranking Member Raskin, and
    Dr. Foxx, thank you for the opportunity to appear before you to
    discuss the Department of Health and Human Services' grants
    policies and practices, in particular the standardization and
    transparency of grant reporting, HHS' role in the President's
    management agenda across agency priorities, CAP Goal 8, and HHS
    results of grant closeouts and undisbursed balances as required
    by the Grants Oversight and New Efficiency Act, also known as
    the GONE Act.
        As the deputy assistant secretary for HHS' Grants and
    Acquisition Policy and Accountability Office, I serve as the
    Department's lead executive responsible for the management,
    administration, and oversight of HHS' grants and acquisition
    programs. HHS is the Federal government's largest grantmaking
    organization, awarding approximately $500 billion in
    discretionary grants annually.
        Last year, HHS kicked off the ReImagine HHS Transformation,
    which was prompted by OMB Memorandum M-17-22. HHS has taken
    this as an opportunity to re-examine and improve how we deliver
    on our mission. Grants management was identified as one of 10
    priority initiatives under ReImagine HHS, and ReInvent Grants
    Management was formed to identify and implement improvements to
    the grants management processes.
        HHS plans to improve, or reinvent, the grant notice of
    award, the Federal financial report, grants management training
    and certification, and the grants management information
    technology business systems. Further, HHS plans to standardize
    data elements, eliminate forms while creating structured data
    sets, and provide a single sign-on capability for our public-
    facing systems. HHS is also looking at the newest technology in
    artificial intelligence, process robotics, and block chain for
    reinventing how we do grant business at HHS.
        The Digital Accountability and Transparency Act of 2014
    expanded the Federal Funding Accountability and Transparency
    Act of 2006 to increase accountability and transparency in
    Federal spending, making Federal expenditure information more
    accessible to the public. HHS was pleased to have led the
    grants work done under Section 5 of the DATA Act, and HHS
    believes strongly in furthering DATA Act Section 5 grants'
    pilot efforts under its ReImagine initiative.
        The PMA CAP Goal 8 challenges Federal agencies to maximize
    the value of grant funding by applying a risk-based, data-
    driven framework that balances compliance with current
    requirements with demonstrating successful results. The
    strategy is three pronged: number one, standardize the grant
    data; number two, leverage existing data sources and processes;
    and three, develop a risk-based framework for performance
    management.
        OMB has initiated three government-wide working groups in
    order to formalize the development and implementation of this
    CAP goal. HHS is vested in providing guidance and leadership
    for the CAP 8 Goal as our deputy CFO is designated Colle leader
    of the goal, and several HHS staff are currently leading
    several of those work groups. HHS will coordinate our internal
    efforts via ReInvent Grants Management to coordinate with the
    PMA CAP Goal 8.
        The GONE Act was signed into law on January 28, 2016 with
    the aim to facilitate the closing of expired grants. HHS, via
    all GONE Act compliance activities, found two primary
    challenges leading to delays in closing out grants and
    cooperative agreements in the HHS Payment Management System.
    Number one was policy and number two was system issues. Under
    policy, reconciliation issues led to a large number of expired
    grants with small undisbursed balances remaining open. Under
    system issues, management pooled accounts in PMS also affected
    the timeliness of grant closeouts.
        HHS has implemented several measures to reduce the number
    of open, but expired, awards. Operation Clean Sweep resulted in
    the closure of over 30,000 Federal awards across HHS, and the
    GONE Act monthly reporting initiative resulted in an additional
    17,000 grants being closed. The resolution of the remaining
    award balances involve a number of business functions, such as
    grants policy, financial policy, and IT systems. Therefore, we
    have convened a multidisciplinary work group to develop and
    implement strategies for closing these accounts and preventing
    future issues.
        In conclusion, HHS strongly agrees with the need to protect
    taxpayers' dollars and is committed to using its ReInvent
    Grants Management initiative to standardize and/or eliminate
    duplicative processes in order to serve as careful stewards of
    these funds. Thank you for the opportunity to testify, and I am
    glad to answer any questions.
        [Prepared statement of Ms. Brandon follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. I thank the witness.
        The chair now recognizes Mr. Tyler for his testimony.

                        STATEMENT OF PETER TYLER

        Mr. Tyler. Chairman Palmer, Ranking Member Raskin, and Dr.
    Foxx, I appreciate the opportunity to testify before the
    subcommittee about grant management improvement. This is a
    critical topic of government reform, and successful efforts
    would result in better accountability of Federal grants and a
    more effective use of grant money. I am a senior policy analyst
    for the Project on Government Oversight, or POGO, where I focus
    my efforts on a range of government accountability initiatives.
    Founded in 1981, we are a nonpartisan, independent watchdog
    that champions good government reforms.
        The subcommittee has my written testimony, so I would like
    to highlight just a couple of points at this time. First,
    Congress has an important role in helping the Administration
    and agencies to move forward with the President's management
    agenda goal on Federal grant reform. This laudable initiative
    will need much more specific plans to achieve its goals.
    Second, there are many lessons we learned from the recent
    successes and challenges of the Digital Accountability and
    Transparency Act, the DATA Act, implementation that are
    directly applicable to grant management reform.
        The President's management agenda released earlier this
    year correctly included grants management as a major goal in
    outlining the challenges and strategies for improvement.
    Currently, Federal agencies simply do not perform adequate
    levels of oversight and are too often unable to detect
    problematic or even fraudulent grants. Further, each Federal
    agency or even each Federal program can have its own process
    and standards for awarding and managing grants.
        The President's agenda proposes several solutions, one of
    which is to standardize grant reporting data, especially
    financial data. This could lead to improved grant evaluations
    and increase the understanding of performance. However, success
    will depend on the thoughtful development and implementation of
    specific and well-defined steps. The President's management
    agenda needs further articulation, and all the milestone dates
    must be set.
        Currently, for example, the Administration's public
    document outlining implementation steps has four milestones for
    data standardization. The first milestone was completed in
    2017. The next two are due by the end of the current Fiscal
    Year. Unfortunately, the final and most important data
    standardization goal lacks specificity or even a time frame for
    completion. The Administration must create specific plans for
    data standardization and other key implementation goals. This
    should include more detailed implementation steps, reporting
    procedures for agencies, and quarterly milestones over multiple
    years. Further, these steps should be developed in a
    transparent manner with the input of stakeholder and civil
    society groups.
        Will implementation of the Administration's grant
    management reforms prove successful? Perhaps. The recent
    history of a related Federal data transparency plan offers
    important lessons. The DATA Act, enacted in 2014 with the
    strong support and work of this committee, has the goal of
    significantly improving the quality and scope of government
    spending data made available to the public. Treasury and the
    Office of Management and Budget smartly engage in a
    collaborative and transparent process. They established a
    multiagency working group and involved outside stakeholders,
    which successfully identified potential pitfalls well before
    committing to an approach. POGO recommends that grant
    management follow a similar approach, especially including
    stakeholder and civil society dialogue and input.
        The Federal government spends about $2.5 trillion annually
    through grants, contracts, direct assistance loans, insurance,
    and other financial awards. While each type of spending might
    need specialized requirements, we should ideally move forward
    with improvements in all of these major fiscal vehicles at the
    same time rather than breaking them apart and addressing them
    only one at a time. For example, the Administration and
    Congress should work together to curb improper payments in
    grants and other types of spending. Federal spending through
    government contracts also pose ongoing challenges for accuracy
    and transparency.
        In conclusion, the coming years could see great progress.
    These efforts should include increased specificity in the
    President's Federal grant reform initiative, learn from the
    successes and challenges of DATA Act implementation as well as
    ongoing implementation of the DATA Act, and finally, pursuing
    other Federal spending reform initiatives, such as new improper
    payments legislation and oversight of Federal contracting.
        Thank you once again for the opportunity to provide our
    testimony to the subcommittee, and I look forward to your
    questions.
        [Prepared statement of Mr. Tyler follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. This has been a great panel of witnesses so
    far. Everybody has finished early.
        [Laughter.]
        Mr. Palmer. So, it puts a huge burden on the next witness.
    Ms. Keegan, we look forward to your 5-minute testimony.

                      STATEMENT OF NATALIE KEEGAN

        Ms. Keegan. Chairman Palmer, Ranking Member Raskin, and
    members of the subcommittee, thank you for the invitation to
    testify.
        As requested, my testimony focuses on a selection of issues
    relating to grant modernization priorities outlined in the
    President's management agenda and standardizing Federal grant
    reporting and transparency. The written statement goes into
    more detail, but I will touch upon the key points.
        First, it may be helpful to provide some context. While
    Congress enacts legislation authorizing grant programs and
    providing funding, grant recipients must apply for the funds,
    and Federal agencies establish policies and procedures to award
    and manage those funds. Congress is, therefore, directing grant
    funding towards policies. The Federal agencies and grant
    recipients play a key role in how Federal grants are
    distributed and managed.
        In constant dollar terms, Federal grant funding has grown
    substantially over the last 75 years from about the equivalent
    of $17 billion in 1942 to over $674 in Fiscal Year 2017. OMB
    provides overall guidance to Federal agencies for grant
    management, and Federal agencies may choose how to promulgate
    that guidance into regulations for individual grant programs,
    which may result in inconsistencies across Federal agencies.
        The President's management agenda discusses IT
    modernization, data accountability and transparency, and the
    workforce. When assessing these topics in terms of Federal
    grant management, one of the emerging themes is how silos in
    grant management have created challenges to effective and
    efficient program management. Generally, Federal agencies
    separate grant management functions into three categories:
    financial management, program management, and grant oversight.
    These functions are usually assigned to different parts of the
    agency with the financial management done by the chief
    financial officer shop, program management by the program shop,
    and grant oversight by the agency's inspector general.
        Financial management includes, among other things,
    reporting award information and dispersing funds. Program
    management involves reviewing and processing grant applications
    and approving changes in the scope of work. And grant oversight
    includes investigating allegations of waste, fraud, and abuse.
    Although some functions are shared, there is often limited
    communication between grant management components, which can
    impede effective grant management and limit oversight.
        There are also silos within each grant management function.
    This is particularly true in the context of IT modernization.
    For example, the financial management function of Federal
    agencies often contains multiple cash management systems within
    a single agency, and these systems may not be interoperable.
    The program management function has separate grant management
    databases, and like cash management systems, there may be
    multiple grant management databases within a single agency.
    Additionally, the cash management systems and the grant
    management systems are not interoperable. Both types of systems
    contain information that informs program evaluation, but
    evaluating a grant program would require drawing from multiple
    databases across multiple Federal agencies.
        Grant data transparency is also hindered by silos due to
    different types of data, such as financial data and performance
    data. These silos exist in part because of the division of
    grant management functions between financial managers and
    program managers. Because of the silos of grant management
    functions, it is difficult to define who comprises the grant
    management workforce, which may explain why there's no
    mandatory training requirements. As a result Federal agencies
    established their own grant management training which may lead
    to variation in job skills of grant management personnel across
    the government.
        Consequently, standardizing Federal grant reporting faces
    challenges. When evaluating options, Congress may wish to
    consider the following questions. Can Federal Acquisition
    Regulation inform the development of government-wide grant
    management regulations? If so, what are the potential
    limitations and benefits of using Federal acquisition
    regulation as a model for grant regulation? What are the
    current limitations on evaluating grant management practices
    across Federal agencies and among Federal grant recipients?
    What challenges are facing Federal agencies and grant
    recipients in implementing current grant management
    standardization and transparency measures such as the DATA Act
    and the GONE Act? How would Federal agencies and grantees
    prioritize standardization and transparency requirements should
    additional standardization measures be enacted? While Federal
    grant management faces challenges on many fronts, greater
    transparency can improve ways to overcome those challenges and
    improve Congress' ability to exercise oversight.
        This concludes my statement. I'd be happy to answer any
    questions.
        [Prepared statement of Ms. Keegan follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Palmer. Thank you. I thank the witnesses for the
    testimony. The chair now recognizes Dr. Foxx for her questions.
        Ms. Foxx. Thank you very much, Mr. Chairman, and I thank
    our witnesses for being here today. You know, there are very
    few people who get excited about this issue. It is talking
    about data, and standardization is not something that is going
    to bring smiles to a lot of people's faces, but it brings a
    smile to my face to hear you all talking about this. And if the
    people involved with applying for grants and reporting on
    grants knew a little bit more about it, they would be smiling
    too. So, thank you all very much for being here. I have
    actually been a grant writer for a long, long time. I go back,
    way back, and I have actually dealt with the kinds of issues
    you are talking about.
        Mr. Hollister, the Federal government tends to impose
    policy on State governments--excuse me--by assigning conditions
    to grants that it awards. As we work to modernize grant
    management, how can we protect State sovereignty?
        Mr. Hollister. Thank you, Dr. Foxx, and thank you for
    championing the GREAT Act. I had the opportunity a few years
    ago to sit with the staff of then Governor Patrick of the
    Commonwealth of Massachusetts, and they told me that Governor
    Patrick, when Congress imposed sequestration, wanted to figure
    out the cumulative impact of sequestration on Massachusetts.
    Could not do it because grants were separately administered
    between each grantor agency and the corresponding grantee
    agency of the State. There was no way to understand the full
    picture of grant funding for Massachusetts.
        In order to try to address that, 11 States and Puerto Rico
    have set up grant offices that seek to get a handle on the
    entire picture of all of the grants that the State is
    receiving. However, this is still almost prohibitively
    difficult because of the multiplicity of the reporting
    requirements. If your GREAT Act were enacted and if we had a
    common data structure for all those forms, it would be simple
    for a governor's office or grants office to understand the full
    picture of all grant funding received by the States. And as
    sovereign governments, the States could elect to comply in some
    places, perhaps refuse in others, while still maintaining all
    the requirements of the grants.
        Ms. Foxx. Right. And, my feeling, again, about this
    legislation, it is a bipartisan piece of legislation. It is
    something that all of us who care about how money is being
    spent in the government should want to get done in a hurry. So,
    you have already talked about how the GREAT Act builds off of
    the DATA Act initiatives. Was there anything else you wanted to
    say in that area that you did not get to say in your testimony
    goes on because time is so short?
        Mr. Hollister. As a matter of fact, there is, Dr. Foxx, and
    I thank you. Some of the other witnesses have pointed out how
    the DATA Act set up a single unified data set of all the
    information that Federal agencies report on their spending. If
    your GREAT Act were enacted and implemented, we would also have
    a single unified data set of all the information that grantees
    are reporting. And because of the requirements in your bill,
    those two data sets would be interoperable. That means it would
    be possible to take a particular grant, see all of the aspects
    of congressional appropriations and individual payments coming
    from the agency, and also see what the grantee is saying about
    that grant. That means 360-degree transparency.
        Ms. Foxx. Wow. Again, having more information can only be
    good, and having information that you can compare can only be
    good in my opinion. Are there some other areas of grant reform
    that Congress should be aware of that are going on or that
    folks are thinking about?
        Mr. Hollister. Dr. Foxx, we do have some interesting
    stories from overseas of how other developed countries have
    gone even farther, have set up a single portal to which all of
    the information flows. There might be some savings there
    because it means the individual agencies no longer have to
    collect information themselves. However, that is not necessary
    to get to the transparency. What is really essential is that
    step of adopting the data standards.
        Ms. Foxx. Great. Thank you. Ms. Brandon, have you had a
    chance to review the GREAT Act, and if you have, how do you
    think it relates to the DATA Act pilot recommendations?
        Ms. Brandon. Thank you, Dr. Foxx, for that question. Yes, I
    have had the opportunity to review the GREAT Act bill. And with
    regard to the way that we implemented the DATA Act, we have 57
    standard data elements that actually tie the financial
    management data elements for the Agency with the acquisition
    and grant data elements and the sub-award data elements. So, we
    standardized all those data elements across the financial
    acquisition and grants.
        With regard to the GREAT Act, I think this is an awesome
    opportunity for us to continue to standardize those data
    elements across the entire lifecycle of the grants management
    process, so everything from pre-award aspects through the
    award, the monitoring, the audit resolution, and the close out.
    And so, definitely we are working currently within the
    President's management agenda CAP 8 Goal on something called
    the Federal Integrated Business Framework data elements that we
    have already started pulling together. We call it FIBF for
    short. And it is 417 at the current point where across the
    Federal government we are working in a collaborative working
    group to look at those data elements across the entire grants
    management lifecycle.
        So, I think that that will actually tie in very nicely with
    the DATA Act data elements that were created, and we are
    looking forward to implementing it.
        Ms. Foxx. Thank you. Thank you, Mr. Chairman. I yield back.
        Mr. Palmer. The chair now recognizes the gentleman from
    Wisconsin, Mr. Grothman, for his questions.
        Mr. Grothman. We will start with Ms. Sager. We are talking
    about grants that should be closed out. What are some of the
    reasons the grants are not closed out in a timely manner at the
    end of the performance period?
        Ms. Sager. Thank you for the question. There are a number
    of reasons why grants may not be closed down in a timely
    manner, and we are delighted to see that they are now being
    tracked.
        So, to just give you a couple of examples that appeared
    repeatedly in some of GAO's work, we did three reports on grant
    close out, and some of the reasons that we heard at one end of
    the spectrum, a grantee may no longer exist, thus making it
    very difficult to follow up and close out a grant. In other
    cases, you may have a grant system and a financial management
    system within an agency that need to be reconciled before the
    grant can be closed out. In other cases, you may have final
    deliverables that still need to come in before the final
    agreement can be closed out. And still another example could be
    when you have multiple entities within an agency that are all
    contributing to the grant, all of them need to contribute to
    the final close out.
        So, all of those kinds of things are now being tracked, and
    we certainly would welcome additional requests to see where we
    are at this point in time now that the GONE Act has passed.
        Mr. Grothman. Okay. How are we going to recapture the
    expired grants?
        Ms. Sager. So, agencies, depending on the nature of their
    authorizing legislation, they may be able to redirect those
    funds. In other cases, those funds may be returned to the
    Treasury.
        Mr. Grothman. Okay. Would GAO consider another review of
    grant close-out issues?
        Ms. Sager. We absolutely would. We know that agency
    financial reports for 2017 are now in hand, and we soon will
    have another year in hand. That would then provide us with an
    opportunity to look at those 2 years and see the progress that
    we have made. And if there are opportunities to make additional
    recommendations, certainly look forward to working with this
    committee to do so.
        Mr. Grothman. Okay. We will move over to Ms. Brandon. You
    are familiar with the DATA Act?
        Ms. Brandon. Is that for me? Did you say ``Ms. Brandon?''
        Mr. Grothman. Yes.
        Ms. Brandon. Thank you so much, sir. Yes, I am familiar
    with the DATA Act.
        Mr. Grothman. What lessons have been learned so far
    regarding standardized recipient reporting?
        Ms. Brandon. With regard to the DATA Act and standardized
    recipient reporting, we actually had to take a look at the
    actual business management data elements from the Federal
    Financial Report that come in, and actually work across our
    Department to look at standardization of how we implement those
    particular data elements and how we report out on those
    particular DATA Act data elements with regard to the DATA Act.
        In addition to that, we actually had to look at the
    reconciliation across the Department with the financial data
    that came in from our financial systems, and we had to actually
    massage the data, if you will, to look at those anomalies,
    those types of data anomalies that fell out as we coagulated
    all the data together in order to report out on the DATA Act.
    So, we were able to look across our 11 operating divisions and
    staff divisions and make sure that we had better quality data.
    And so, it enabled us to help report in a more timely way and
    with the better data quality for the DATA Act.
        Mr. Grothman. Thanks. Does the huge number of data elements
    raise any concerns for HHS and other agencies?
        Ms. Brandon. With regard to the data elements, the concerns
    actually had to do with what we were using as standard data
    elements that were taken out of SAM.gov versus other data
    elements that were required through the DATA Act portal,
    USAspending.gov that were not in SAM.gov. And we were not
    prepared for that actually, so we had to make some very quick
    adjustments and some data mapping to ensure that we could meet
    the new requirements and that we still would retain the quality
    of data necessary to report accurately.
        Mr. Grothman. Okay. Once HHS identifies duplicative data
    elements, is there an effort to standardize or consolidate the
    forms?
        Ms. Brandon. Actually, we are trying to get rid of the
    forms. We would like to come up with a specific set of
    structured data elements across our entire department and
    actually have them reported in the system, and not necessarily
    articulated or attached to a form per se. In addition to that,
    we are looking at having the recipients submit the information
    in a structured data way and not have to be tied to actual
    forms. As we look at all the forms that are currently in use,
    we are looking at the duplicative data elements, and we are
    snapping them down to address only those data elements that are
    required and only necessary for reporting, because we also did
    an analysis that reflected we were collecting data elements
    that we actually never use. And so, we are going to strip those
    away. But definitely, we want to use our systems more and
    actually get away from forms.
        Mr. Grothman. Okay. You finished that right on the button,
    so thank you.
        Mr. Palmer. The chair recognizes my friend, the ranking
    member, Mr. Raskin, for his questions.
        Mr. Raskin. Thank you very much, Chairman Palmer. Mr.
    Tyler, what was the Council on Financial Assistance Reform?
        Mr. Tyler. Thank you, Congressman. That is an important
    question about this issue. There may be some people here at the
    table who could answer the question better. But, in effect,
    COFAR was established to make sure that the then grant
    initiatives under the last Administration would go forward in
    an effective way.
        Mr. Raskin. Okay. But is there anybody else who wants to
    provide any insight on that?
        [No response.]
        Mr. Raskin. I understand that the new director of the
    Office for Management and Budget disbanded the council, which
    was charged with trying to streamline and improve the policies.
    Can anybody tell me what was behind that decision?
        [No response.]
        Mr. Raskin. Does anybody know? Ms. Brandon, do you not
    know?
        Ms. Brandon. I ----
        Mr. Raskin. Okay. But, you know, and I understand, hey, I
    am a politician. I understand politicians like to create their
    own councils and commissions and get rid of the last person's,
    but was this replaced with something new that was tasked with
    trying to improve the practices generally? Mr. Tyler, do you
    know?
        Mr. Tyler. Congressman, that is a great question, and I
    actually have the same question. We definitely want to see
    movement forward on good reforms for the grant process. What I
    am asking is the same question. I am not 100 percent sure who
    is in charge. Recognizing the importance of Health and Human
    Services' work, they are correctly taking a leadership role,
    but this is an interagency process. HHS, in effect, cannot tell
    the Department of Commerce what to do with their grant program,
    and that is why a council approach where people are brought to
    the table effectively and regularly is so important. I simply
    do not know who is convening those meetings.
        Mr. Raskin. Okay. Is that interagency process taking place
    to the knowledge of anybody on the panel? Does anyone know
    whether this Council on Financial Assistance Reform has been
    replaced with another interagency coordinating group?
        Ms. Brandon. I can actually tell you that the work that was
    done under the Council on Financial Assistance Reform has now
    been moved under the Chief Financial Officers Council at Office
    of Management and Budget. And while there is not a new
    committee that has been formed, the work is actually being
    addressed through that council. And that council actually has
    the co-lead on the new cross-agency of priority CAP Goal 8 in
    the President's management agenda. So, all the grant's work and
    activity has been moved under the CFOC Council.
        Mr. Raskin. Okay, great. Are you involved in that process?
        Ms. Brandon. I am a sub-leader, if you will, under our
    deputy CFO.
        Mr. Raskin. Were you involved in the COFAR, the Council on
    Financial ----
        Ms. Brandon. In prior years, yes.
        Mr. Raskin. You were?
        Ms. Brandon. Yes.
        Mr. Raskin. Okay. So, well, what has been the effect of
    dissolving that council?
        Ms. Brandon. Basically, we actually submit information to
    our chief financial officer council member, so that is our
    deputy CFO at HHS. And we submit any type of grant reform
    considerations and initiatives that we would like to see from
    the grants perspective, and she ensures that it is put on the
    agenda at the CFOC Council. And in addition to that, there is
    another committee that does not fall under the Chief Financial
    Officers Council. It's called the Financial Assistance
    Committee on e-Gov, and it actually falls under the Acquisition
    Committee for e-Gov and the integrated acquisition environment.
    And that committee is made up of the 26 Federal grantmaking
    agencies, and we do look at the standardization of the grant
    data elements and the business processes, and et cetera.
        Mr. Raskin. Okay. Let me stick with you then for a second.
    Can you tell me about USAspending.gov, the website?
    USAspending.gov.
        Ms. Brandon. In particular?
        Mr. Raskin. Well, it was created to try to build
    transparency, I think, into the process.
        Ms. Brandon. Yeah.
        Mr. Raskin. But it was plagued with a whole host of
    problems when it first started. Is that right?
        Ms. Brandon. It was actually created in results of the
    Federal Financial Assistance Transparency Act, the
    ``Transparency Act'' for short, and I think that was in 2010.
    And basically, it was to produce the transparency, and grant
    obligation and acquisition obligation data elements, and the
    sub-award data elements. And while I think it did initially
    have issues, we actually were able to, I believe, overcome that
    and get probably about 90 percent of the data accurate across
    the Federal government. Prior to ----
        Mr. Raskin. But has there not been an attempt by this
    Administration to upgrade it and change it that failed?
        Ms. Brandon. It was upgraded during the DATA Act
    implementation.
        Mr. Raskin. I see. Okay.
        Mr. Hollister. Mr. Raskin, I can speak to that if you wish
    ----
        Mr. Raskin. Please.
        Mr. Hollister.--because I know when I was an Oversight
    Committee staffer here.
        Mr. Raskin. That is great.
        Mr. Hollister. The DATA Act of 2014 dramatically expanded
    the website. Previously, the website only carried information
    about award spending. That is about one-third of all Federal
    spending, the stuff that goes out in grants or in contracts,
    but there was no bigger picture. In 2014, Congress unanimously
    passed the DATA Act, which required Treasury and OMB to get
    together to set these data standards for all the information
    and then publish one unified data set of everything, not just
    what goes out in grants and contracts, but all spending by the
    executive branch. The reporting for that spanned
    Administrations. They did not finish the project under the law
    until May of 2017, and that is when the reporting began. We now
    have that unified data set.
        Mr. Raskin. Got you. All right. Thank you, Mr. Chairman.
    Thank you for your patience, and I yield back to you.
        Mr. Palmer. Thank you. I now recognize myself for a few
    questions. Mr. Tyler, in your testimony, in your written
    testimony, you said one example from the Department of
    Agriculture grant program is the School Breakfast Program. It
    should have records for approximately $4.5 billion in Fiscal
    Year 2017, but searches for this program return no records. And
    then you go on to point out that the Department of
    Transportation oversees the Federal Transit Capital Investment
    Grants Program, which spent approximately $4.6 billion in 2017,
    but USAspending records only show $1.6 billion of that, and
    that is less than half, as you pointed out.
        Did you or your organization attempt to research this
    further? And what I am trying to find out is has there been
    any--two things. Has there been any effort to try to determine
    why we do not have complete records, and then after that, what
    happened to the money?
        Mr. Tyler. Mr. Chairman, your question goes to one of the
    key issues we are facing now with this website and the
    implementation of the DATA Act, and it also refers back to the
    question that Mr. Raskin asked. There is a lot of data missing
    and a lot of inaccurate data on the website, and this is a
    problem. The fact that ----
        Mr. Palmer. And this is on USAspending records or just
    across the board?
        Mr. Tyler. USAspending records I am referring to, sir, that
    is correct, and we want to see more data. We want see more
    complete data. We want to see more accurate data. The examples
    we gave in my testimony showed some rather serious lags there.
    The Government Accountability Office is also doing some very
    good work detailing this and, in fact, looking at a lot of
    reports of the various inspectors general. Without complete
    data, we simply do not have a complete picture. Progress is
    being made.
        One other aspect is making sure the data is accessible to
    the public and to Congress. We as POGO put together a letter, a
    very long one, pointing out many ways of improving not only the
    data, but access to the data, and we think that is an important
    thing to move forward. Its relevance to grants is twofold.
    First off, we want to make sure the grant data on USAspending
    is correct and complete, but secondly, as we move forward on
    grants reform, we should learn from some of the history of how
    to implement the DATA Act.
        Mr. Palmer. Mr. Hollister, you, in response to the question
    raised by the ranking member, Mr. Raskin, seemed to know a
    great deal about USAspending. What expectations should we have
    that the data that they have now is up to date and accurate and
    could answer the question about the $4.5 billion in the
    Breakfast Program and the $3 billion that is unaccounted for in
    the Transportation?
        Mr. Hollister. Yes, sir. The law currently requires every
    agency to report all of its spending using this common format
    to the USAspending.gov system, which is maintained by the
    Treasury Department. The responsibility belongs to the
    agencies, not to the Treasury.
        Of course there are challenges in taking the world's
    largest and most complex organization, the United States
    Federal government, all of disparate means of accounting that
    all those agencies use, all of the hundreds, thousands of
    different financial systems, putting all that information into
    one view, so there are some technical problems. However, if I
    could offer a suggestion, the fastest way for Congress to fix
    the quality of that data that is up there on that website for
    taxpayers is to appropriate based on it. Tell the agencies that
    if they do not report the spending to the USAspending.gov, you
    will assume that is all that they got, and you will only
    appropriate that much more. I think you will find a great deal
    of improvement in the quality if Congress appropriates based on
    what is there.
        Mr. Palmer. Well, that brings me back, gets me to a point
    that I have been trying to make here for 3 years, 7 months, and
    22 days. That is how long I have been in Congress. And that is
    you generally get what you expect to find and hold people
    accountable for, and that would apply to grantmaking. I think
    it is incumbent on the Federal government to make it very clear
    the expectations on performance and cost, but at the same time
    for people who apply for grants that we do a good job of
    evaluating their grant request that should have clearly defined
    objectives that are measurable, and that we should be
    exercising oversight over it to make sure that when we spend
    that money, we get what we paid for. I do not think we did
    that, and that is a problem across the board.
        I hope what we are doing now, and particularly with the
    legislation that has been introduced by Dr. Foxx and Mr. Gomez,
    that we are much, much closer to that kind of accountability
    and oversight. Ms. Sager, also in regard to the Breakfast
    Program, and the Department of Agriculture, and Department of
    Transportation, is this something that GAO would be able to
    answer, you know, where that money is?
        Ms. Sager. We certainly would be happy to assist. In
    addition to broad grant management reform engagements, we also
    do a number of specific projects looking at individual grant
    programs or individual aspects of grant programs. So, we
    certainly would be happy to assist. And, of course,
    ``accountability'' is our middle name at GAO, so we would be
    happy to help the committee.
        Mr. Palmer. Well, GAO is one of my favorite agencies in the
    Federal government. I joke with people back home that a lot of
    people anticipate the latest novel from their favorite author.
    I anticipate the latest publication from GAO.
        [Laughter.]
        Mr. Palmer. I am going to go a little over. We are going to
    do another round, so I am going to exercise a little
    flexibility here as chairman. I want to stay on this line about
    this USAspending and GAO. Is there a working relationship
    between you and USAspending so there is an exchange of
    information and ability to cross reference?
        Ms. Sager. Absolutely. We are required under the DATA Act
    to produce reports looking at the implementation of the act.
    So, we just recently did a report that compiled some of the
    findings from the inspectors general, the CIGI community, that
    came out earlier this week. We had done our own report looking
    at the first quarter of data submitted last year in 2017. And
    although, as we have heard, there has been great progress,
    there are still opportunities to for continuous improvement.
        It is to be expected given the size and breadth of the
    Federal government that this would be incremental, but
    particularly in terms of completeness, accuracy, and data
    quality, there are still great strides that remain. And so, we
    remain in touch on a couple of ways with OMB and Treasury
    looking at data governance following up on the Section 5 pilot
    that we heard about.
        Mr. Palmer. Well, it was also mentioned by Mr. Hollister
    about what the law requires, and the law requires that all
    agencies report on their improper payments, and that includes
    Federal programs. And there were 18 programs that did not
    report, including Managed Care for Medicaid, which I think
    could be a significant addition to the--to the improper
    payments from last year, $141 billion, $36.3 of which was the
    non-managed care part of Medicaid. In regard to grants
    programs, I think Mr. Raskin mentioned 15 percent.
    Historically, what has that that rate been, and how well are we
    monitoring the improper payments on that end? And then, you
    know, that includes fraudulent grants.
        Ms. Sager. Right. Improper payments is something I know you
    have heard from our comptroller general. He cares deeply about
    it and for good reason. We spend billions of dollars on Federal
    programs, and you have appropriated them for a reason, to serve
    something you consider a public good. And so, it is something
    that we continue to plan to follow. It is, in many cases,
    waste, fraud, or abuse, and so we, of course, look forward to
    continuing that work for this committee. If there are
    particular areas that we have not already looked at but you are
    interested in, we would certainly be happy to talk with you and
    your staff and determine how we could do that going forward.
        Mr. Palmer. Well, it is an area that I am very focused on
    right now. But, again, the thing that I want to try to get to
    is to figure out a way not only to reduce improper payments,
    but to get the Federal agencies and Federal programs to comply
    with Federal law in their reporting. With that, I will yield
    and recognize again the ranking member, Mr. Raskin, for
    additional questions.
        Mr. Raskin. I have no additional questions, Mr. Chairman,
    and I just want to thank all the witnesses for their very
    insightful testimony today.
        Mr. Palmer. I believe Dr. Foxx would like to ask some
    additional questions, and so I am happy to recognize her.
        Ms. Foxx. Well, thank you very much, Mr. Chairman. I will,
    as you have, follow up a little bit on the issues you were
    talking about. And I will say to Ms. Sager, I am a big fan of
    the GAO also, and my middle initial is ``A,'' and I have got
    you one better, Mr. Chairman. I tell everybody stands for
    ``accountability.'' It used to stand for ``Ann,'' but ----
        [Laughter.]
        Ms. Foxx.--since I came to Washington, it stands for
    ``accountability'' because I think that is all I talk about.
        [Laughter.]
        Ms. Foxx. We all know that trying to change any
    organization is difficult. I do not care if it is a big
    organization or a small organization. But do you guys, and Ms.
    Sager in particular, do you have any particular insights into
    why this grant reform that we are attempting to do has
    presented such a longstanding challenge? Any insights into
    that?
        Ms. Sager. A couple of things that I would mention, and it
    was interesting preparing for this hearing to look back at some
    of GAO's work literally spanning decades. The challenges that I
    mentioned, streamlining, transparency, et cetera, they are
    truly longstanding challenges. We have had a number of these
    reform initiatives that we have heard about today, and in spite
    of that, across Administrations, across people implementing
    these programs, these challenges remain for a lot of the
    reasons that you have already cited.
        The Federal government is a huge entity spending hundreds
    of billions of dollars, and we are the nature of a democracy.
    We do have transitions from one Administration to the next, so
    you do have constant churn. At the same time, one of the things
    certainly that we have seen is this incremental progress. So,
    as these reform initiatives have occurred, we have been able to
    see progress.
        In addition, certainly we are in an age where we have
    technological capabilities that we certainly did not have a
    decade ago or 2 decades ago. So, now we have this tremendous
    opportunity to take these reform initiatives in a new
    direction, not just for some of the standard grants management
    issues that we have talked about, but then also to tie it to
    some of the other initiatives that are happening that I
    mentioned in my statement. So, we are really looking at value
    for money and looking at outcomes as we have some of the
    evidence base, that we understand whether or not we are
    actually achieving the goals that are in the legislation and
    the purpose statements, to tie that with the budget and
    performance information so that we can look more holistically,
    and you can then be better positioned to have decision making
    that is based on facts.
        Mr. Hollister. Dr. Foxx, if I may ----
        Ms. Foxx. Sure.
        Mr. Hollister.--it is also true, Ms. Sager points out
    technological capabilities. Nobody has ever tried to do what
    you are trying to do, and that is separate the data itself from
    the forms and the filings that right now contain it.
        Mr. Tyler. And to add one thing, Dr Foxx, the other aspect
    of this is the great opportunity here forcing bipartisan
    efforts by this committee and this Congress to move forward.
    Every example of reform that we have talked about has been
    bipartisan, and I think that is one of the powers we can see.
        Ms. Foxx. Well, as I have said before, this should be
    totally bipartisan. I mean, we may disagree on policy, but once
    legislation is passed, it is going to be implemented. And the
    thing we all ought to care about is making sure that the money
    is being spent the way people said it was going to be spent,
    and that you get results.
        I mean, again, there are a lot of programs around here I
    would love to get rid of. I know I am not going to be able to
    do that, so the best thing to do is to put in systems so
    everybody can see is that money being spent the way it should.
    Are you getting results? Are we helping people in the way that
    we said we were going to help people? That is my motivation
    right now, and I think everybody should want to do that and say
    money is scarce. I mean, there is never enough of it here. And
    so, everybody should want to know how to get the best out of
    it.
        We just had an Innovation Forum in the Education Committee
    a few minutes ago, this morning, and amazing kinds of things
    going on to share about what is happening, how much better
    things are going in some places in terms of education and
    workforce development. And the whole idea, again, was to get
    this information out to people so other people could replicate
    it, and that is, again, the whole idea. But I am encouraged. I
    am very encouraged by a lot of the things that have been said
    today. So, I thank you, and I thank the chairman for his
    indulgence in allowing me to ask additional questions.
        Mr. Palmer. Okay. I have just a couple other things that I
    want to bring up. Mr. Tyler, in your testimony you also talked
    about what the Administration is trying to do and that the
    final and most important data standardization goal lacks
    specificity, and this is for any of you. Have any of you taken
    a look at what the Administration tried to do and offered any
    recommendations to close that gap or to get the specificity
    that we need? And I will start with you, Mr. Tyler.
        Mr. Tyler. Sure, and this is very straightforward. It may
    sound like common sense, but because that plan, and this is the
    only public climate we have access to, simply had ``to be
    determined'' in many, many locations, especially in the
    outyears, we really have no understanding at all, so very
    straightforward. I think I would be a good question for the
    Administration when we have more specificity, when we have
    milestones.
        Mr. Palmer. Does the GREAT Act help provide some of that?
        Mr. Tyler. I think one of the key things the GREAT Act, and
    I say this in respect for the legislation, probably the
    Administration and the agencies have the full authority to do
    that if they wanted to. What I think the GREAT Act does, like a
    lot of legislation, including the GONE Act, is put the stamp of
    importance from Congress to say let us get this done, as well
    as making sure that there are timelines in reporting back to
    Congress on a regular basis. That is key.
        Mr. Palmer. Ms. Keegan, you were talking about the
    divisions between the Federal grant departments and databases
    contribute to issues for reporting and compliance, and I just
    had this thought, and you respond to it. But you mentioned
    grant management, and I wrote a note, ``define grant
    management,'' because what I am thinking--``grant management
    workforce'' I think is what you said--is if you are talking
    about grant management workforce, it seems to me, and, again, I
    ran a think tank for 24 years. Prior to that, I worked for two
    engineering companies.
        It seems to me that those who approve the grants, who do
    the evaluations and approve them, should also be the ones who
    evaluate them, and we were talking about a single portal,
    eliminating the various silos. I would like for you to give me
    an explanation of what you meant by ``a great management
    workforce.''
        Ms. Keegan. So, one of the challenges with having siloed
    grant management functions is that each function has different
    training needs. So, if you are dealing with financial
    information and disbursing grant awards, you are going to train
    that CFO program people differently than you would if you are
    dealing with grant program experts who are running, say, a FEMA
    hazard mitigation grant program who need much more training on
    specific regulations for those programs.
        You mentioned the question about whether or not the folks
    that approve the grants would also be the folks that would
    evaluate the grants. The short answer is it depends on what you
    mean by ``evaluate.'' The program workforce, the grant program
    specialists are the ones that run the review panels to review
    applications and to make awards. Those people are also the ones
    that manage the grants. So, theoretically, it would be the same
    workforce that would approve a grant that would then evaluate
    whether or not the grantee had met any kind of performance
    matrix that was required, or whether the grantee was in
    compliance with the regulations for the grant program.
        Now, you might have the other shops, like the financial
    shop, review things like was the audit completed correctly, was
    the audit submitted to the Federal Audit Clearinghouse, et
    cetera, and the IG might get involved if there was some
    allegation of waste, fraud, and abuse by the grantee. But the
    grant program people do definitely have a key role in approving
    and then also evaluating that. So, if you were to look at
    developing training requirements, you could theoretically break
    it up where here is the training requirements for financial
    grant management, here are training requirements for program
    grant management.
        Mr. Palmer. Here is the thing. We have the Federal
    acquisition regulations for procuring goods and services. And,
    you know, we will put out specifications for what we need to
    buy, and then supposedly we buy what we specified. And maybe
    this is a little simplistic, but I would think that we should
    be doing something similar to that on grants, that if someone
    submitted a grant request and they define the objective and the
    timeline, then they ought to be. And I tend to think it should
    be the same people that then follow up on that to make sure
    that the objective was achieved and within the time frame.
        I would literally go so far on some of the really big
    grants that we send out the money similar to what you would do
    on an engineering contract. If we had a $500 million facility
    we were going to build, we would get so much on the design
    phase, so much, you know, on breaking ground, and, you know,
    the construction phase, and, you know, 50 percent, 75 percent
    complete, and then after final inspection you get the balance
    of the payment. What I have found is we do not do that a lot,
    and, consequently, we have created a huge problem on the
    spending side.
        And I guess the thing, and, again, going back with my
    meetings with GAO and Inspector General Dodaro, is that every
    dollar that we spend right now on this stuff that goes out
    improperly or is mismanaged is a dollar we have to borrow. We
    are projecting deficits next year of a trillion dollars. So,
    every grant dollar, if it is $700 billion, every grant dollar
    is a borrowed dollar that we are paying interest on. I think we
    owe it to the taxpayers, we owe it to the American public, and
    we owe it to our own future to make sure that that we maximize
    whatever spending that we approve, and we get what we are
    paying for, and that we eliminate as much as possible as we are
    trying to do on the improper payments so that we can get better
    control of this.
        I think I am going to conclude with that. I do not want to
    weary the witnesses. You have given excellent testimony. I
    appreciate you being here. It is insightful and helpful.
        The hearing record will remain open for 2 weeks for any
    members to submit a written opening statement or questions for
    the record.
        Mr. Palmer. If there is no further business, without
    objection, the subcommittee stands adjourned.
        [Whereupon, at 3:48 p.m., the subcommittee was adjourned.]