[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.]