[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




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         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:]
    
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    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:]
    
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    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:]
    
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    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:]
    
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    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:]
    
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    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.]