[Senate Hearing 115-178]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 115-178

           DUPLICATION, WASTE, AND FRAUD IN FEDERAL PROGRAMS

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS


                             FIRST SESSION

                               __________

                             APRIL 26, 2017

                               __________

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana                KAMALA D. HARRIS, California

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
       Patrick J. Bailey, Chief Counsel for Governmental Affairs
               Michael J. Lueptow, Investigative Counsel
               Margaret E. Daum, Minority Staff Director
                Sarah R. Garcia, Minority Senior Counsel
               Donald K. Sherman, Minority Senior Counsel
                 Claudine J. Brenner, Minority Counsel
                     Laura W. Kilbride, Chief Clerk
                   Bonni E. Dinerstein, Hearing Clerk

                            
                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Johnson..............................................     1
    Senator McCaskill............................................     3
    Senator Lankford.............................................    17
    Senator Peters...............................................    20
    Senator Heitkamp.............................................    24
    Senator Carper...............................................    26
Prepared statements:
    Senator Johnson..............................................    33

                               WITNESSES
                       Wednesday, April 26, 2017

Hon. Eugene L. Dodaro, Comptroller General of the United States, 
  U.S. Government Accountability Office..........................     4
Hon. J. Russell George, Inspector General for Tax Administration, 
  U.S. Department of the Treasury................................     6
Hon. Rebecca M. Blank, Ph.D., Chancellor, University of 
  Wisconsin-Madison..............................................     8
Keith D. Repko, Medical Center Director, VA St. Louis Health Care 
  System, Veterans Health Administration, U.S. Department of 
  Veterans Affairs...............................................    10

                     Alphabetical List of Witnesses

Blank, Hon. Rebecca M.:
    Testimony....................................................     8
    Prepared statement...........................................    86
Dodaro, Hon. Eugene L.:
    Testimony....................................................     4
    Prepared statement...........................................    34
George, Hon. J. Russell:
    Testimony....................................................     6
    Prepared statement...........................................    72
Repko, Keith D.:
    Testimony....................................................    10
    Prepared statement...........................................    98

                                APPENDIX

Chart referenced by Senator Johnson..............................   103
Chart referenced by Senator Johnson..............................   104
Chart referenced by Senator Johnson..............................   105
Chart referenced by Senator Johnson..............................   106
Responses to post-hearing questions for the Record
    Mr. Dodaro...................................................   108
    Mr. George...................................................   115
    Mr. Repko....................................................   117

 
           DUPLICATION, WASTE, AND FRAUD IN FEDERAL PROGRAMS

                              ----------                              


                       WEDNESDAY, APRIL 26, 2017

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:01 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Ron Johnson, 
Chairman of the Committee, presiding.
    Present: Senators Johnson, Lankford, Daines, McCaskill, 
Carper, Tester, Heitkamp, Peters, Hassan, and Harris.

             OPENING STATEMENT OF CHAIRMAN JOHNSON

    Chairman Johnson. Good morning. This hearing will come to 
order. I want to welcome our witnesses. I appreciate your time 
and your testimonies, and I look forward to your oral 
testimonies and answering what I think will be some pretty 
interesting questions.
    I frequently say, from this podium, that the Government 
Accountability Office (GAO) and the Inspectors General (IGs), 
you are our go-to Agencies in government, doing so much to root 
out and identify and eliminate waste, fraud, abuse (WFA) as 
well as duplicated programs, which is what this hearing is 
about.
    The reports by GAO that really started with a pretty simple 
amendment, offered in 2010 by Senator Coburn, in the debate 
over increasing the debt ceiling--something we all hate to do, 
but, if we are going to do it, it is kind of nice to get some 
measure of control and a pretty simple concept--asking GAO to 
start issuing reports and doing inspections on different 
duplicative programs has resulted in $75 billion worth of 
savings over 7 years, which is pretty remarkable. Based on the 
amount of budget authority that GAO has--$3.8 billion over that 
same timeframe--that is a 20:1 return on investment (ROI), 
which is pretty good. And, I know your overall return on 
investment is what, Mr. Comptroller General?
    Mr. Dodaro. I will put the microphone on for this: 112:1.
    Chairman Johnson. OK. And, I know the Inspectors General 
have a pretty good rate of return as well. So, I do ask 
unanimous consent (UC) that my written statement get entered in 
the record.\1\
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    \1\ The prepared statement of Senator Johnson appears in the 
Appendix on page 33.
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    Senator McCaskill. Without objection.
    Chairman Johnson. I do want to start with a couple of 
charts I have prepared here for the hearing, just to put things 
in context. We got a recent Congressional Budget Office (CBO) 
report on the long-term debt and deficit,\1\ and they always 
report these things as a percent of gross domestic product 
(GDP). And, we go through a fair amount of effort to convert 
those to dollars, because I think it is just a little bit more 
meaningful.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Johnson appears in the Appendix 
on page 103.
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    For the last number of years--because it has been a couple 
of years since they have updated their projection--I have been 
saying that the 30-year projected deficit is $103 trillion. 
Well, we have moved forward in time and we have not solved the 
problem. And, now, unfortunately, the projected deficit, over 
the next 30 years, is $129 trillion. That is about almost $10 
trillion over the next decade, $37 trillion in the second 
decade, and $82 trillion in the third decade. And, to put that 
in perspective, the entire private net asset base of the United 
States--in other words, all of the assets held by businesses 
and households--is equal to $128 trillion.
    This is, by the way, to be tacked on top of our $20 
trillion of debt--$62,500 for every man, woman, and child in 
America.
    What is unfortunate is, it seems like nobody is really 
paying attention to this. We are, certainly, not addressing it 
here in Congress, obviously, from the change from $103 trillion 
to $129 trillion, over the next 30 years.
    So, I wanted to put that in context. And, I have one other 
chart here, which also puts in context the $75 billion.\2\ And, 
Mr. Dodaro, in no way, shape, or form do I want this detracting 
from your efforts here, which I think are laudatory. But, just 
so that everybody understands, in that same 7-year period, 
where GAO with their great work--20:1 return on investment--
saved $75 billion, we spent $25,000 billion. We borrowed $6.6 
trillion of that--about 26 percent. So, in other words, 26 
cents of every dollar we spent, we borrowed. Again, this is 
just kind of showing the magnitude of the problem here.
---------------------------------------------------------------------------
    \2\ The chart referenced by Senator Johnson appears in the Appendix 
on page 104.
---------------------------------------------------------------------------
    Again, I want to thank all of the witnesses. I think we are 
going to have a pretty good discussion with the Inspector 
General for Tax Administration, talking about refundable tax 
credits and the improper payments, fraud, and abuse of that 
program. Obviously, one of our favorite institutions are 
universities. And, one dear to my heart--all three of my kids 
went to the University of Wisconsin (UW) in Madison. We have 
Chancellor Rebecca Blank, and she is going to be talking about 
the duplication of different regulations imposed on research 
universities and just in general the overregulation--the 
difficult time that universities have dealing with Federal 
regulations on their operations. Then, we have Keith Repko from 
the Department of Veterans Affairs (VA) health system to talk 
about the problems in dealing with duplicative regulations in 
constructing health care facilities for the finest among us.
    So, again, I think this is going to be a really good 
discussion--again, this is all laid before us because of a 
pretty simple amendment by Senator Tom Coburn 7 years ago--and 
then, the excellent work of Gene Dodaro and all of his good 
people working at the Government Accountability Office.
    With that, I will turn it over to my Ranking Member, 
Senator McCaskill.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. I want to echo many of the comments of 
the Chairman, and I continue to be frustrated--along with my 
colleague and the former Ranking Member, Senator Carper, who 
has carped on improper payments for as long as I can remember.
    Senator Carper. One of my favorite verbs: to carp.
    Senator McCaskill. There you go. [Laughter.]
    I think that GAO is such an important ally to this 
Committee. And, I want to take this opportunity, as I try to 
every time you are here, to make sure you tell all of the 
people in that big building that their work does matter. Even 
though it is too often ignored or set aside, what you all do is 
really important, and you are tremendous public servants. And, 
I love associating with the auditors at GAO, as a former 
auditor.
    Your annual duplication report sets out some important work 
that you have done in investigating how the Federal Government 
spends tax dollars. You consistently identify concrete steps 
that we can take--and the Executive Branch can take--to 
eliminate a lot of wasteful spending. You all have saved so 
much money for this country, but there is, obviously, a lot 
more work that we have to do.
    I want to welcome the other witnesses to the hearing today 
also. I especially want to welcome Keith Repko, who is here as 
the leader of the VA facilities in St. Louis. And, I do not 
think, probably, any other Members of this Committee can 
appreciate how nice it is to have that roll off my tongue, 
since we struggled in St. Louis, trying to fill this position 
for, literally, years on end. And, I think people need to 
realize some of the management problems in the VA can be borne 
out by the fact that we would open the head of the VA facility 
St. Louis job position and no one would apply.
    Now, that tells you something. That tells you that there is 
a real problem in either the support these managers are getting 
or what we are paying them. But, when you open a job that has 
that kind of responsibility and nobody wants it, it means that 
we still have a lot more work to do in figuring out how can--so 
thank you for filling this position. It has been badly needed--
the stability there has been badly needed, and we are thrilled 
to have you today. The reason you are here, today, is because 
one of the things pointed out in this year's report is the 
problems the VA has in managing construction. And, clearly, we 
have put a lot of capital into the VA. I have been somebody 
banging the table to get that done. I want to make sure our 
facilities are first-rate. I want to make sure they are 
adequate. I want to make sure that it is not a lack of 
facilities that is causing any undue delay or problems with our 
veterans getting health care. But, clearly, this report points 
out that this is not always being managed well, in terms of how 
these projects are being undertaken and how they are being 
executed. And, we want to spend a little bit of time on the 
management of those construction projects.
    I also want to echo the comment about the tax credits. I am 
glad you are here, Dr. Blank, to talk about grants and the 
problems, in terms of administrative burdens on grant 
recipients and also administrative burdens on reporting crime 
statistics, which are difficult for our universities right now. 
But, I am also glad you are here, because I think we need to 
talk about the growth in improper payments and a new form of 
tax credit--refundable tax credit--and that is the amount of 
easily determined overpayments in the American Opportunity Tax 
Credit (AOTC). It may not be as large as the other refundable 
tax credits. It does not mean it will not be if we do not get a 
handle on this--and the notion that it is just as simple as 
double-checking with universities and seeing how many hours 
someone is actually going to college is pretty jaw-dropping--
that we are allowing $1 billion to go out the door every year 
without just the rudimentary checks and balances as to 
determine whether or not those tax credits have actually been 
earned by students attending higher education.
    So, thank you all for being here. Thank you, Chairman, for 
having this hearing. And, I look forward to questions and 
comments as we move forward.
    Chairman Johnson. Thank you, Senator McCaskill.
    It is the tradition of this Committee to swear in 
witnesses, so if you will all rise and raise your right hand. 
Do you swear that the testimony you will give before this 
Committee will be the truth, the whole truth, and nothing but 
the truth, so help you, God?
    Mr. Dodaro. I do.
    Mr. George. I do.
    Ms. Blank. I do.
    Mr. Repko. I do.
    Chairman Johnson. Thank you.
    Our first witness is Eugene Dodaro. Mr. Dodaro has been the 
Comptroller General of the U.S. Government Accountability 
Office since 2010 and has more than 40 years of experience at 
the Agency, including as Acting Comptroller General, Chief 
Operating Officer (COO), and head of the Accounting and 
Information Management Division. Mr. Dodaro.

  TESTIMONY OF THE HONORABLE EUGENE L. DODARO,\1\ COMPTROLLER 
 GENERAL OF THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY 
                             OFFICE

    Mr. Dodaro. Thank you very much, Mr. Chairman. Good morning 
to you, Ranking Member McCaskill, Senator Lankford, and Senator 
Peters. It is a pleasure to be here. I appreciate very much the 
words that you said, complimenting GAO--and I will make sure to 
pass it along to all of the people in the Agency. We have such 
a dedicated, talented workforce, and they deserve to hear such 
compliments.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Dodaro appears in the Appendix on 
page 34.
---------------------------------------------------------------------------
    I also want to assure this Committee, before I get into 
talking about this year's duplication report, that I am worried 
about the overall fiscal health of the Federal Government. I 
issued a special report this past January, saying that the 
Federal Government is on a long-term unsustainable fiscal path, 
and I called for an action plan by Congress to deal with the 
fiscal policy changes that need to be made.
    Now, while there need to be changes made in fiscal policy, 
both on the spending and the revenue side--particularly, with 
entitlement programs--there are some other things that can be 
done. And, addressing overlap, duplication, improper payments, 
and the tax gap are among those areas.
    This is our seventh annual report on overlap, duplication, 
and fragmentation--we report on what has happened over the last 
6 years with the 645 recommendations that we have made, to 
date, in the first 6 years: 51 percent of those have been 
implemented by Congress and the Executive Branch, 31 percent 
have been partially addressed, and 18 percent have not been 
addressed at all.
    As you pointed out, Mr. Chairman, $75 billion has already 
accrued in savings, but there is another $61 billion in the 
pipeline that will be accrued because of actions that have been 
taken. So, the total amount of savings is $136 billion, so far.
    Now, this year's report adds 79 new actions in 29 different 
areas that range across the Federal Government. For example, 
in--from the Department of Defense (DOD), which could save tens 
of millions of dollars by better managing their virtual 
training programs and integrating them into operational 
training--and simple things, like advertising for recruitment 
purposes, where there are seven different advertising programs 
that could compete in the same market. Hundreds of millions of 
dollars could be saved in implementing our recommendations on 
Medicare and Medicaid--as in providing payments for 
uncompensated care that hospitals give. We think that formula 
is outdated and does not reflect the true amount of 
uncompensated care, particularly, since it is going down with 
the expansion of Medicaid, for example. There are other areas 
where improper payments could be reduced in Medicare and 
Medicaid, and we have a number of recommendations in that 
regard. Most of the improper payments of the $144 billion 
annual total in the Federal Government come from Medicare, 
Medicaid, and the Earned Income Tax Credit (EITC). So, I am 
glad we are addressing that today, and I am glad Russell is 
here to talk about that issue.
    So, with the new areas that we are adding, there are 395 
open recommended suggestions that have not been implemented. I 
recently met with the Office of Management and Budget (OMB) 
Director Mick Mulvaney. And, I mentioned to him that we are 
going to be sending letters to each of the Departments and 
Agencies, outlining our open recommendations. The letters will 
give priority attention to those recommendations that I think 
the head of the Agency needs to pay personal attention to over 
the coming months. I have sent similar letters in each of the 
last 2 years. And, I think, this will be particularly helpful 
as Agency leaders go through their exercise of looking at 
reorganizing, streamlining, and gaining some more efficiencies 
in the Federal Government. Most of our open recommendations are 
addressed to the Executive Branch, but I also have what I call 
the ``Senator Lankford appendix'' to the testimony this year, 
where he asks every year, ``What can the Congress do? Give us a 
list.'' So, we have 61 open matters for Congress to consider.
    I would comment that most of the savings that have 
occurred, to date, have come from Congress taking action, and 
there are tens of billions of additional dollars that are still 
on the table that could be implemented and successfully 
achieved through implementing our open recommendations.
    So, I look forward to continuing to work with Congress, and 
I look forward to continuing to work with the Executive Branch, 
which I am committed to do. I am now in the process of trying 
to meet all new Cabinet officials to talk about our working 
relationship and the recommendations that GAO has to make their 
operations more effective and efficient.
    So, thank you again for the opportunity to be here, today. 
And, I look forward to answering questions at the appropriate 
time.
    Chairman Johnson. Well, thank you very much.
    I actually have a couple of charts. Let us put up the first 
improper payment chart.\1\ Everybody has this in front of them. 
This just lays the groundwork, in terms of improper payments on 
refundable tax credits, just in these three programs: the 
Earned Income Tax Credit--and this is, I believe, 2015, 
correct?--$69.8 billion; the Additional Child Tax Credit (ACTC) 
is $28.5 billion; and the American Opportunity Tax Credit is 
$4.4 billion. Those are the refundable tax credits. Improper 
payments were $25.1 billion, or about 24 percent.
---------------------------------------------------------------------------
    \1\ The chart referenced by Senator Johnson appears in the Appendix 
on page 105.
---------------------------------------------------------------------------
    And, the next chart shows how this has been a problem, 
certainly, for the 7 years of the duplication report,\2\ but, 
as I was talking to the Inspector General ahead of time--this 
has been going on for 20 years. And, in spite of all the good 
efforts, and publicizing this year after year after year, it 
does not look like we are making a whole lot of progress, as 
you can see how much money is being spent on the tax 
expenditure--on the tax credits--and how the improper payment 
rate still is above 20 percent--just stubbornly stuck there.
---------------------------------------------------------------------------
    \2\ The chart referenced by Senator Johnson appears in the Appendix 
on page 106.
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    So, again, that is kind of the backdrop for our next 
witness, J. Russell George. Since being nominated by President 
George W. Bush in 2005, Mr. George has served as the Treasury 
Inspector General for Tax Administration (TIGTA). Prior to 
assuming this role, Mr. George served as the Inspector General 
of the Corporation for National and Community Service (CNCS). 
In addition to his work as an Inspector General, he served as a 
member of the Integrity Committee of the Council of Inspectors 
General for Integrity and Efficiency (CIGIE). Mr. George.

  TESTIMONY OF THE HONORABLE J. RUSSELL GEORGE,\3\ INSPECTOR 
GENERAL FOR TAX ADMINISTRATION, U.S. DEPARTMENT OF THE TREASURY

    Mr. George. Thank you, Chairman Johnson, Ranking Member 
McCaskill, and Members of the Committee. I appreciate the 
opportunity to testify on tax-related improper payments.
---------------------------------------------------------------------------
    \3\ The prepared statement of Mr. George appears in the Appendix on 
page 72.
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    TIGTA has conducted a number of reviews that evaluate 
efforts by the Internal Revenue Service (IRS) to reduce 
erroneous and improper refundable tax credit payments. My 
comments today will highlight our ongoing work.
    Refundable credits are designed to help low-income 
individuals reduce their tax burden or to provide incentives 
for other activities. Because these tax credits are refundable, 
they are vulnerable to unscrupulous individuals who file 
fraudulent claims. To date, the Earned Income Tax Credit 
remains the only refundable credit the IRS has designated as 
high risk for improper payments. However, TIGTA has continued 
to report that the IRS' improper payment risk assessments for 
the Additional Child Tax Credit and the American Opportunity 
Tax Credit, also known as the education credit, substantially 
understate the risk of improper payments for these credits.
    These credits, collectively, accounted for more than $100 
billion claimed during tax year 2015. For fiscal year (FY) 
2016, the IRS issued an estimated $25 billion in potentially 
erroneous payments for these credits. This represents a 
significant loss to the Federal Government.
    In addition, the assessment of the risk related to premium 
tax credit improper payments continues to present challenges 
for the IRS. This credit, created by the Affordable Care Act 
(ACA), assists individuals and families in paying for their 
health insurance. Unlike other refundable credits, the IRS is 
not solely responsible for administering the premium tax 
credit. As a result, the IRS cannot effectively assess the risk 
of improper payments for this credit on its own. The IRS and 
the Department of Health and Human Services (HHS) continue to 
work on a methodology to effectively measure improper payments 
relating to this credit.
    To reduce certain fraudulent and improper payments, 
Congress enacted the Protecting Americans from Tax Hikes (PATH) 
Act of 2015. Among other provisions, the act moves up the 
deadlines for Forms W-2, Wage and Tax Statement, and other 
income information-related documents, as well as provides the 
IRS additional time to verify EITC and additional tax credits 
that are based on the income individuals report on their tax 
returns.
    According to the House Ways and Means Committee, these 
integrity provisions are projected to save roughly $7 billion, 
over 10 years, by reducing fraud, abuse, and improper payments 
in refundable credit programs. To date, our work related to 
this legislation has found that the IRS has properly withheld 
refunds for returns with EITC and additional tax credit claims 
and released those returns that were not identified for 
additional review. IRS management informed us that these claims 
are being verified solely against Form W-2 data to identify 
claims that have unsupported income.
    IRS management indicated that, for the 2017 filing season, 
they do not plan to use other income-reporting documents to 
systematically verify income reported on tax returns with 
refundable credit claims. The IRS has cited a number of 
technical challenges and timing issues that need to be 
addressed in order to use this information to verify income at 
the time tax returns are processed.
    In addition, the IRS was unable to implement processes to 
identify erroneous claims for the 2016 filing season for 
taxpayers filing tax returns for prior years to claim certain 
refundable credits, referred to as ``retroactive claims.'' Our 
review of tax year 2014 tax returns filed and processed during 
the 2016 filing season identified $35 million in refundable 
credits that were erroneously paid to taxpayers filing 
retroactive claims.
    Finally, the IRS still does not have the authority to 
correct tax returns, during processing, in which the 
information provided by the taxpayer does not match information 
available to the IRS. As a result, the IRS must conduct an 
audit to address potentially erroneous refundable claims. 
Without correctable error authority, the IRS' ability to 
address those potentially erroneous refundable credit claims 
that it identifies, remains limited.
    Mr. Chairman and Members of the Committee, we at TIGTA 
remain serious in our mandate to provide independent oversight 
of the IRS and its administration of the Nation's tax system. 
As such, we plan to provide continuing coverage of the IRS' 
efforts to identify and reduce improper refundable tax credit 
payments.
    Thank you for the opportunity to present my views.
    Chairman Johnson. Thank you, Mr. George. I did fail to 
point out the 7-year total on refundable tax credits--just 
those three areas is $441 billion and the improper payments is 
over $100 billion. It just shows the magnitude of the problem 
in just those three refundable tax credits--and with 
Obamacare--with even the House plan, we are looking at more 
refundable tax credits.
    Our next witness is Rebecca Blank. Ms. Blank became the 
Chancellor of the University of Wisconsin-Madison in July 2013. 
Prior to serving as Chancellor, Ms. Blank served as the Obama 
administration's Secretary of Commerce. Under President Bill 
Clinton, she was a member of the Council of Economic Advisers. 
Chancellor Blank.

    TESTIMONY OF THE HONORABLE REBECCA M. BLANK, PH.D.,\1\ 
          CHANCELLOR, UNIVERSITY OF WISCONSIN-MADISON

    Ms. Blank. Thank you, Chairman Johnson, Ranking Member 
McCaskill, and Members of the Committee. I appreciate having a 
chance to say a few words about the regulation of Federal 
research at our Nation's top universities.
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    \1\ The prepared statement of Ms. Blank appears in the Appendix on 
page 86.
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    I was an economist prior to becoming Chancellor at the 
University of Wisconsin in Madison, and I believe deeply that 
we must do everything we can to help research universities 
thrive. These institutions hold the key to our future economic 
prosperity.
    But, they have also become some of the most regulated 
entities in this Nation. At least 35 Federal Agencies regulate 
our research at the University of Wisconsin, with multiple 
interpretations of the rules and many confusing, duplicative, 
and often unnecessary requests.
    So, my message today is very clear. We have added layer 
upon layer of regulation, and we are at a point where this is 
seriously impeding the productivity of our scientists. There 
are as many as 23 different administrative responsibilities 
associated with every Federal research grant. Each of those 
steps requires time from either the researcher or the support 
staff.
    Ten years ago at UW, we had 50 full-time staff handling the 
regulatory compliance issues on human and animal research 
projects. Today, we have 80. There is not another function on 
campus that has added 30 full-time positions at a moment in 
time when we have actually been working hard to increase 
efficiency and reduce staff.
    Still, much of the burden falls not on staff, but on 
teachers and researchers, taking valuable time away from both 
the classroom and the lab.
    The latest Federal Demonstration Partnership (FDP) survey 
indicates that, nationwide, scientists with Federal funding 
spent 
42 percent of their time on regulatory and administrative 
activities--about 4 hours in a 9-hour day.
    We recently surveyed our scientists at UW who do research 
involving human subjects. And, half of them--48.5 percent--told 
us they had given up--or almost given up--on at least one 
research study because of the red tape involved. We cannot 
afford to sideline potentially lifesaving research.
    The 21st Century Cures Act and the American Innovation and 
Competitiveness Act (AICA) took some big steps in reducing 
these administrative burdens, but, as GAO notes in their 
report, there is more to be done. So, let me give you two 
recommendations.
    First, two key provisions of the 21st Century Cures Act and 
the American Innovation and Competitiveness Act should be 
prioritized for implementation. The new Research Policy Board 
should be set up and streamlined grant application and 
reporting requirements need to be put in place as soon as 
possible. Right now, almost every Agency has different formats 
for submitting a research proposal, reporting on research 
progress, reporting on effort, reporting back on what your 
results are, and demonstrating compliance with the regulations. 
And, the Agencies have very different rules on how results 
should be saved and be made publicly available. That is 
confusing, costly, and inefficient. Recently, there was a 
report by the National Academy of Sciences (NAS) that details 
these problems. I encourage any of you with an interest to read 
through their much more extensive recommendations.
    Second, the implementation of the final rule should be 
prioritized. This allows low-risk projects to be subject to 
different restrictions than high-risk projects. The recently 
adopted final rule, scheduled to take effect in January 2018, 
aims to reduce regulatory burden on human subjects research 
that poses little to no risk to participants. For example, 
survey research should be subject to different rules than 
medical research that may be testing medical procedures on 
human beings. But, without clear guidance to address 
differences in how these regulations are interpreted and 
applied, I promise you that problems will persist. Let me give 
you an example.
    One of our pediatricians wants to create a registry to 
track health information from children across the State of 
Wisconsin, who have a very serious but relatively rare 
condition that can cause heart attacks at a young age. Sharing 
that information can improve medical care and can help keep 
health care costs down. We are actually 6 months into the 
effort to try to get approval for this project. And, we still 
have not been able to do so, because there are multiple sites 
that provide information to this registry. Every site is 
interpreting the regulations differently, and, therefore, every 
site is demanding different information from us and different 
restrictions.
    Let me be clear that I am not arguing that we should do 
away with all of the regulations governing research. Federal 
regulations help us ensure research integrity, they increase 
access to research data and results, and they help protect 
human and animal subjects in research. But, we need to be smart 
about the regulations that we have and how we implement them.
    I have spoken today about the regulations affecting our 
research enterprise. But, let me note that my written testimony 
also gives a number of examples of excessive regulation that 
increases unnecessary costs and interferes with how we serve 
students.
    No Nation on Earth has been as successful as the United 
States in building remarkable institutions that offer an 
outstanding education and conduct the kind of basic research 
that fuels innovation and helps solve immediate problems in the 
real world. That is why the rest of the world wants to send us 
their best and brightest students.
    But, international preeminence does not come with a 
lifetime, forever guarantee. Excessive regulation of research 
universities can only erode their success over time.
    Thank you for your commitment to helping to bring this 
unwieldy system under control. With your help, great research 
institutions, like the University of Wisconsin, the University 
of Missouri (Mizzou), the University of Michigan (UM), and the 
University of Montana, will continue to keep this Nation on the 
cutting edge of innovation.
    Thank you.
    Chairman Johnson. Thank you, Chancellor. Again, I really 
want to thank you for bringing this to my attention a couple of 
years ago, when you came to my office. And, the Small Business 
Administration (SBA) has studies that put the costs of 
complying with Federal regulations at $2 trillion per year, 
which, if you divide that by the number of households, it is 
almost $15,000 per year, per household. So, I appreciate the 
fact that the university is grappling with this problem and 
that you are highlighting it--our entire Nation--our entire 
economy as well. So, again, this is really good testimony. I 
appreciate it.
    Our final witness is Keith Repko. Mr. Repko currently 
serves as Medical Center Director of Veterans Affairs of the 
St. Louis Health Care System where he oversees 3,000 employees. 
Prior to becoming Medical Center Director, Mr. Repko served as 
Deputy Director, where he led efforts to reduce veterans' 
access time to be in the top 25 percent of all VA facilities, 
as well as improved patient advocacy. Mr. Repko.

TESTIMONY OF KEITH D. REPKO,\1\ MEDICAL CENTER DIRECTOR, VA ST. 
LOUIS HEALTH CARE SYSTEM, VETERANS HEALTH ADMINISTRATION, U.S. 
                 DEPARTMENT OF VETERANS AFFAIRS

    Mr. Repko. Good morning, Chairman Johnson, Ranking Member 
McCaskill, Senator Lankford, and Senator Peters. Thank you for 
the opportunity to participate in this hearing and to discuss 
the design and construction projects at the Jefferson Barracks 
and John Cochran campuses of the VA St. Louis Health Care 
System.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Repko appears in the Appendix on 
page 98.
---------------------------------------------------------------------------
    The St. Louis Health Care System is a dual affiliated, 
full-service health care system that provides inpatient and 
outpatient care in medicine, surgery, neurology, psychology, 
rehab, and many other subspecialties. It is a two-division 
facility that serves veterans in east-central Missouri and 
southwest Illinois. The John Cochran Division, named after the 
late Missouri Congressman, is located in midtown St. Louis and 
comprises the medical center's surgical capabilities, 
ambulatory care units, intensive care units, outpatient 
specialty clinics, and our emergency department.
    One of the top priorities for the Department has been 
improving access to care. In St. Louis, we have taken that to 
heart. While more work remains to be done, both the VA and St. 
Louis have made real progress. In FY 2016, St. Louis hired 385 
staff members, including 36 physicians, 4 physician assistants 
(PAs), 93 nurses, and 252 other critical occupations. We have 
extended clinic hours at five of our locations and hold 
Saturday clinics at two of them. Additionally, we have 
increased the delivery of care by using telephone consults and 
secure messaging to better use our providers' time, to improve 
access, and to meet veterans' care needs where it is convenient 
for them.
    The Jefferson Barracks Division is a multi-building campus 
overlooking the Mississippi River in south St. Louis County. It 
provides psychiatric treatment, spinal cord injury treatment, 
geriatric care, rehab services, and has a domiciliary program 
for our homeless veterans. The VA is currently pursuing a major 
construction project on this campus that will enable us to 
better serve veterans' health care needs for decades to come.
    The project is a joint Veterans Health Administration (VHA) 
and National Cemetery Administration (NCA) venture and will 
construct a total of five new buildings. The project will 
relocate primary care, mental health, and specialty care 
clinics out of its current 1920s-constructed building into a 
modern environment and allow for expansion of care. It will 
also construct a new patient aquatic and rehab facility, 
replacing an older facility that frequently we have to shut 
down in the heat of the summer due to the lack of adequate air-
conditioning. Lastly, the project will replace an obsolete fire 
alarm system, construct a new support building, provide 800 net 
new parking spaces, and construct a facility to replace our 
obsolete engineering and consolidated warehouses.
    Upon completion, the project will decrease the amount of 
infrastructure maintained and operated by VHA through the 
demolition of energy-inefficient and underutilized buildings. 
It will also provide approximately 30 acres to the NCA for the 
expansion of the Jefferson Barracks National Cemetery. Without 
this land, the cemetery will be closed to burials in several 
years. The total project cost is $366 million. And, it was 
approved as a VA major project in 2004, partially funded in 
2007, designed in 2008, started to be constructed in 2010, and 
is scheduled to be completed in 2020. Currently, the project is 
52 percent complete and has no cost overruns.
    The John Cochran campus also has a major project that was 
funded for design in 2010. The project proposes to construct a 
new inpatient bed tower and allow for the expansion of 
specialty care clinics--with an estimated cost of $433 million. 
In 2015, all of VA's major projects, including the John Cochran 
project, were reevaluated and rescored through the Strategic 
Capital Investment Planning (SCIP) process to ensure the 
project's requirements are still valid and that the project 
remained a high priority for the Department. The St. Louis John 
Cochran project did not score high enough to be included in the 
2015-16 budget cycle, and, therefore, it is currently not 
actively being developed by the Department at this time. 
However, the project is eligible to be reconsidered in SCIP and 
will be reconsidered for funding in a future budget year.
    In closing, each day we move toward our goal of improving 
and streamlining our processes, in order to provide the 
exceptional care that veterans earned and deserve. Mr. 
Chairman, this concludes my statement. Thank you for the 
opportunity to testify before the Committee today. And, I am 
pleased to respond to any questions from you and Members of the 
Committee.
    Chairman Johnson. Thank you, Mr. Repko.
    I will start the questioning with Mr. Dodaro. Quite 
honestly, when you take a look at the number of recommendations 
that have not been addressed at all in government, it is 
actually surprisingly low. The fact that you have over 50 
percent fully implemented, 30-some percent partially 
implemented, and less than 20 percent not implemented is really 
a testament to, I think, what you have been able to accomplish 
in getting your recommendations implemented.
    You said that Congress has actually passed laws that have 
been the primary reason for doing that. And, you have 61 
recommendations now. Can you give us some kind of sense how 
many different laws--just kind of in general--it took to get 
that level of implementation? And, what would you contemplate 
with your recommendations, right now? Would you, maybe, suggest 
this Committee try and put those 61 recommendations into one 
piece of legislation and try to get that out on the floor and 
get it passed? Or, is this more effectively done kind of 
individual bill by individual bill?
    Mr. Dodaro. The approaches that have been taken, in the 
past, have mostly been bill by bill. For example, in 
eliminating the direct payments to farmers, it was handled 
through the Farm Bill. Congress let the ethanol tax credit 
lapse, so they did not actually have to do anything--and it 
went away. But, I think any legislative vehicle that you can 
come up with would be an appropriate vehicle.
    Some of the recommendations to Congress for action have not 
been addressed for a number of years, and I am concerned that 
they could get stuck in the normal legislative process. So, 
perhaps, having a combined omnibus, if you will--or a package--
would help. So, I think, any legislative vehicle would be good.
    Chairman Johnson. I know, in past Congresses--I know 
Senator Ayotte and Senator Manchin tried to propose legislation 
that would have forced the Agencies to do this. But, I would 
love to work with Senator McCaskill and work with GAO.
    Senator McCaskill. Yes.
    Chairman Johnson. And, let us craft something that will 
actually impose that requirement on the Agencies to implement 
these things.
    Mr. Dodaro. I think the past efforts have been focused on 
getting Agencies to implement all of our recommendations. I 
think it would be better if you target the specific 
recommendations that you are comfortable with that we have 
included--particularly, the ones on the list of 61 for Congress 
to take action on. And then, there are other opportunities for 
Congress to put some pressure on the Administration to 
implement some of our other suggestions.
    Chairman Johnson. So, we will work in a bipartisan fashion 
with your staff and different Senators. And, we will figure out 
what that list is. And, we will get a piece of legislation. I 
think Leader McConnell would be very open to--he is looking for 
bipartisan pieces of legislation to move across the goal line. 
So, let us definitely do that.
    Mr. George, I remember--I think it was your 2012 report. 
You listed 10 addresses with--I believe it was the Earned 
Income 
Tax Credit--where there were multiple filings. And, the top 
address--I think there were 24,000 filings requesting and 
obtaining $46 million of refundable tax credits. Was that the 
Earned Income Tax Credit or was that the Additional Child----
    Mr. George. There were so many instances of people taking 
advantage of the tax system using that scheme, sir. So, it may 
have been the Earned Income Tax Credit. It could also have been 
the First Time Homebuyer Tax Credit (FTHBC) or the Additional 
Child Tax Credit.
    Chairman Johnson. So, my question was--I mean, to me, one 
address with 24,000 claims--$46 million. I know we are not 
making a whole lot of progress. Have we at least closed down 
that abuse after all of these years? Or, has the IRS still 
failed on that part?
    Mr. George. I have to give--as I noted in my testimony--the 
IRS some credit, as it relates to the Earned Income Tax Credit. 
As, Senator, you and I spoke about out in the hall--and then as 
you discussed your opening remarks--and my comments--the amount 
of improper payments for the Earned Income Tax Credit was in 
excess of $20 billion a year a few years ago. And, even though 
it is now roughly $16 or $17 billion, it is still moving in the 
right direction. Even though there was a slight uptick in the 
last----
    Chairman Johnson. But, again, my question was: To me, it 
would be pretty simple to take a look at an address and say, 
well, we are not going to allow--if there are more than 10 
refundable tax credits claimed, we are going to take a look at 
that. It is absurd that 24,000 claims went through one address. 
Have they fixed that problem at least?
    Mr. George. They have not fixed it, no. No, they still have 
the problem, sir.
    Chairman Johnson. Yikes. Part of the problem with these is 
the individual taxpayer identification number, correct? Rather 
than the Social Security number?
    Mr. George. That is correct.
    Chairman Johnson. That is just rife with abuse.
    Mr. George. As it relates----
    Chairman Johnson. Can you describe that?
    Mr. George. Yes. Congress passed legislation that now 
requires the use of a Social Security number or, if you are a 
green card holder, the use of that number, for the Earned 
Income Tax Credit. However, for the Additional Child Tax 
Credit, which, again, is a growing problem--while we at the 
IG's office believe that Federal law does require that same 
restriction, the IRS has taken a different position on that 
issue. While we, again, have debated this back and forth with 
the lawyers at the Department, they will not----
    Chairman Johnson. Well, let us tack that onto our GAO piece 
of legislation here.
    Chancellor Blank, I do want to give you an opportunity, 
because I thought your written testimony about other 
overregulation was pretty powerful. As I am hearing your 
testimony too, what you are asking for is not no regulation, 
but some common regulation--some uniformity, so that you are 
not trying to comply with umpteen different reporting 
requirements that could all be grouped together--and provide 
common forms. Can you just talk about some of the other parts 
of your written testimony?
    Ms. Blank. That is absolutely correct. Right now, we have 
different forms for conflict of interest and different forms 
for reporting, submitting, and saving data. And, it becomes 
incredibly complex when a university like Wisconsin--like other 
big research universities that are getting research funding 
from many Federal Agencies--and every one has different 
requirements.
    In my written testimony, I talk, not just about the 
research issues, but about the issues relating to students. One 
of the regulatory issues there that I find most compelling 
relates to the Jeanne Clery Disclosure of Campus Security 
Policy and Campus Crime Act (Clery Act), which regulates how we 
deal with crime statistics on our campus. It is a very 
important Act--very useful and valuable to us for tracking. 
But, certain interpretations of what the Clery Act--what the 
Department has put upon us, include such things as the 
requirement that, for any place where our students spend more 
than two nights, we have to collect local crime statistics and 
report them as if they were on our campus. So, whether our 
students--we had engineering students going off to an Elon Musk 
competition recently. Our athletic teams, obviously, often will 
spend multiple nights over--that takes an enormous amount of 
time and effort, working with local police in those areas. And, 
quite honestly, it results in a reporting of crime statistics 
that has nothing to do with our students and is simply a 
misperception about what type of crime is happening on campus.
    So, that type of interpretation of the law just makes life 
very difficult and increases our expenses in ways that are not 
helpful.
    Chairman Johnson. I will come back to this. Senator 
McCaskill.
    Senator McCaskill. Thank you.
    Let me first do the VA. Mr. Dodaro, your 2017 report talks 
about the management of medical facility construction projects. 
And, basically, what I gather from the report is that you have 
an Agency within the VA that is supposed to be overseeing this 
at each local site, but there is not appropriate coordination 
between the onsite personnel and this part of the VA that is 
supposed to be managing all of these construction projects. Is 
that a fair summary? Or, can you fill in----
    Mr. Dodaro. There is really not good coordination. Now, the 
VA, generally speaking, is a very decentralized organization 
with very little oversight and accountability from the central 
organizations of the VA. I could say that, broadly speaking--
that applies to health care and that applies to disability as 
well.
    In this case, the change orders that were being approved 
were not going through regular, timely process and design 
changes. And, you could see these add to the cost of the 
projects. So, we asked them to put that under a better control 
process, so that the change orders could be approved in time 
and so everybody knew what the consequence of the change orders 
would be, and design processes there as well.
    I think the big change that Congress required is now, going 
forward, any project over $100 million is to be run by someone 
outside of the VA. Most of these projects right now are run by 
the Army Corps of Engineers, so you actually have people that 
are experts in construction projects. The projects under $100 
million are still being run by the VA. And, some of the 
projects that were over $100 million that were not new--some of 
them were transferred, like the Denver project that ran into a 
lot of problem under VA management.
    Now, the responsibility--if the construction is done by the 
Army Corps of Engineers or another organization--is for the VA 
to come up with the costs of activating the facility--actually 
putting the medical equipment in there and preparing it for 
operations. And so, that should help a lot by taking the big 
new construction projects out of the hands of the VA and 
putting them with the Army Corp or another competent 
organization.
    Senator McCaskill. So, going forward, the Army Corps will 
be doing the projects that are as large as Cochran----
    Mr. Dodaro. Anything over $100 million--it will either be 
the Corps or--the legislation requires somebody other than the 
VA. So far, they have gone with the Corps.
    Senator McCaskill. Yes.
    Mr. Dodaro. They could choose someone else, but the Corps 
is the only one so far.
    Senator McCaskill. I am proud that we do not have cost 
overruns with the projects in St. Louis. Mr. Repko, I think 
that is terrific. I know we are a little bit behind schedule, 
but a lot of that has to do with how quickly the VA has decided 
to request the money.
    I think one thing that Americans need to realize is that 
Congress has been very generous to the VA. Since FY 2008, we 
have funded 177 percent of the requests from the VA. In FY 
2009, we funded 183 percent of the requests. In FY 2010, 106 
percent and in FY 2011, 100 percent. FY 2012 was the only time 
since FY 2008 that we funded less than 100 percent of the 
request that was made by the VA. I do not think there is 
anybody else in government that has that kind of track record, 
in terms of securing appropriations--particularly, for capital. 
Even the military does not have that kind of success rate, as 
it relates to capital. So, I am glad there are not overruns.
    I do want to bring to your attention that I have recently 
learned that there have been some concerns regarding the 
quality of the ongoing construction at the facility at 
Jefferson Barracks. And, we have been in contact with the VA IG 
about this, and we have been assured that they are looking into 
it. Are you aware of any of these concerns about the integrity 
and quality of the construction that is ongoing there? I know 
it is not your direct responsibility, but are you aware of any 
problems? Have they been brought to your attention?
    Mr. Repko. Just recently--actually, working with your staff 
in preparing for this--I became aware of some. But, I can tell 
you what--we have had a very good relationship with the 
facility. In fact, we have a team that works for the medical 
center--so works for my office--that interfaces--and that is 
their full job--to interface with the construction folks in the 
central office for the VA. And, our project is managed by the 
VA Office of Construction and Facilities Management (CFM), 
because it was prior to that other regulation.
    I can tell you we have daily conversations--my staff does--
with CFM staff, in managing the project--and myself and my 
Associate Director have weekly and monthly meetings with our 
staff. And, at this point, we have no concern of any serious 
issues with this project, either--moving forward--either in 
quality--I can tell you, I served as Chief Engineer for 12 
years. And, in those years, I managed a lot of projects and had 
staff that managed a lot of projects. I can tell you that there 
is no such thing as a 100-percent perfect contractor or 
project. I would say that contractors would say that there is 
no such thing as a 100-percent perfect customer. But, I can say 
that, in our project, CFM is working through any issues. And, 
like I said before, there is nothing significant, either in 
quality--that I am aware of--or any concern that would 
jeopardize this project.
    Senator McCaskill. OK. Moving on to the tax credits, I 
tried to take a look at the education tax credit. One of the 
things that jumped out at me, Mr. George, was that, of the 3.6 
million returns with questionable education credit claims, 49 
percent of them--almost half of them--were prepared by a tax 
preparer.
    Mr. George. Yes.
    Senator McCaskill. Do we not have something in place that, 
if there are tax preparers that are doing this--I mean, is that 
why one address is responsible for all of those, because that 
is somebody who has put a shingle out in a community saying, 
``Let me prepare your tax returns?''
    Mr. George. There have been examples of that, Senator, but 
the IRS, in response to recommendations that we have made and 
concerns expressed by Congress, has begun outreach to tax 
preparers, who, in all candor, are at the front line, in terms 
of helping to avoid tax fraud.
    Senator McCaskill. So, you think that, for 50 percent of 
these questionable education credit claims, these preparers 
just did not know any better? Or, were they trying to get over?
    Mr. George. Well, I do not want to impugn everyone's 
reputation. There is no question that some of it is ignorance 
and some of it was malfeasance.
    Senator McCaskill. I would be interested, if it is 
possible, to know if these tax preparers were individual 
proprietors or if they were some of the large chains that do 
tax preparation. Obviously, if this is something that is 
endemic, it seems to me that the basics are making sure that a 
refundable tax credit that your agency is preparing for a 
client would follow the rules as to the Form 1098 and as to how 
long they are in school, as well as to the appropriate 
institutions that qualify, which are the three big ones on that 
particular credit that always raise the flag.
    Mr. George. We will endeavor to give you that information, 
but if I may, Senator, I do not want to let the IRS completely 
off of the hook here. The IRS has not used every avenue that it 
could to confirm that someone who applies for that credit is 
entitled to it. So, for example, the Department of Education 
(ED) has a list of databases, which the IRS--for free--or for a 
nominal fee at least--could have access to----
    Senator McCaskill. And, they are not doing that?
    Mr. George. They are not doing it.
    Senator McCaskill. OK. That is ridiculous.
    Mr. George. They are not doing it.
    Senator McCaskill. That is totally ridiculous.
    Mr. George. And, it applies to additional credits, too. I 
have said this many times before at other hearings, but, 
whenever there is third-party reporting of income, it is almost 
a 99-percent compliance rate. But, once the IRS fails to have 
access to that third-party reporting and relies solely on an 
individual, the compliance rates drop dramatically.
    Senator McCaskill. Finally, I know I am out of time, but I 
really would like--and if you want to, I will wait until the 
next round for you to answer it--but I think it is important 
that, when you report to this Committee or any other Committee, 
you at least give us a sense as to whether or not the lack of 
staff--there have been dramatic staff cuts at IRS. No question 
we are leaving money on the table. I am not aware of any 
business that is in the kind of financial trouble we are in 
that decides it is a good idea to cut the receivables 
department. And, for some reason, because of politics, we have 
decided around here that the way that we are going to make 
points with our constituents is by cutting the IRS. Well, that 
is like cutting off our nose to spite our face, because these 
are the people we need to bring in the receivables. And, it 
does not make sense to me. And, I would like for you at some 
point--I know I am 2 minutes over, and the Chairman has been 
indulgent. We can wait until the next round to answer that.
    Chairman Johnson. Very indulgent. [Laughter.]
    Mr. George. Thank you.
    Chairman Johnson. I would point out that we have given the 
IRS a lot more responsibility in these things as well. So, it 
is a real problem.
    Also, I just want to be clear. The address used on a tax 
return is the taxpayer's address, not the preparer's address. 
So, again, 24,000 returns. It implies there are 24,000 people 
living at that address, which is, again, a pretty simple thing 
to check with databases. Senator Lankford.

             OPENING STATEMENT OF SENATOR LANKFORD

    Senator Lankford. That is a very crowded house, is what 
that is. [Laughter.]
    Thank you all for being here and for the work that you are 
doing to be able to bring some of these issues to light. We 
appreciate that very much.
    Mr. Dodaro, we have talked often about a bill that Senator 
McCaskill and I have worked on and tried to get done in the 
last session of Congress called the Taxpayers Right-to-Know 
Act. What you have done in the duplication work is phenomenal. 
What we tried to get accomplished in the last session, and what 
we can hopefully get accomplished very soon, is to be able to 
get some of these evaluation tools that are out there. We are 
missing a tool and you are missing a tool. We wait for this 
report yearly. When it comes out, it is something we should be 
able to pull immediately just with the Agencies making that 
information available.
    Mr. Dodaro. Right.
    Senator Lankford. Every taxpayer should be able to pull 
this information. We should be able to see how things are 
evaluated. We should be able to see the basic spin patterns. It 
should not be a ``rocket science request'' of our Agencies--
they already have that information--just to be able to make it 
available.
    So, are there any other comments you want to make, as we 
have talked about before, on the Taxpayers Right-to-Know Act 
and that particular bill?
    Mr. Dodaro. I would urge Congress to complete passage of 
that bill and send it to the President for signature. I think 
it would make a huge difference in identifying overlap, 
duplication, and fragmentation in the Federal Government as 
well as provide a better accountability tool to Congress and 
the Agencies.
    One of the biggest difficulties we have had in executing 
our responsibility under this requirement to produce this 
report is the lack of information that is available on the 
costs of programs. Have they ever been evaluated? What has the 
evaluation shown? This would have that information 
automatically available and be a much more efficient way to 
address this issue. So, I would encourage its passage.
    Senator Lankford. Well, we look forward to that. It has 
passed unanimously in the House. And, it seems to get caught up 
in the Senate. And so, we will try to work toward final passage 
on that, to be able to get that done.
    You mentioned in your report this year the uncompensated 
care issue in hospitals, which is an incredibly difficult issue 
to wrap your head around. I would like for you to be able to 
talk through anything you can about it. This balances out 
whether the Federal Government--as they pay hospitals for 
uncompensated care that comes in--or they pay it under the 
Medicare or the Medicaid portion. Talk us through that, because 
that is a $1 billion savings, but that is also a very big issue 
to hospitals.
    Mr. Dodaro. Yes. And, it has been a big issue for years. 
The problem that we identified is that, right now, in order to 
determine how to pay uncompensated care, the Center for 
Medicare & Medicaid Services (CMS), uses the Medicaid workload 
of that particular hospital. They do not have actual numbers on 
what the uncompensated care has been, so they use a proxy. That 
proxy is not a good proxy. And, of course, with the expansion 
of Medicaid under the Affordable Care Act, there are more 
people insured, so there should be less uncompensated care, in 
theory and in practice. And, right now, payments do not reflect 
that change.
    The second part of this that is a problem is, when CMS pays 
hospitals under the Medicare program for uncompensated care, it 
does not take into consideration what it has already paid under 
the Medicaid program. So, there is a possibility that CMS could 
be compensating hospitals more than once for the same costs.
    So, we have recommended to CMS that it collect the actual 
cost figures for uncompensated care and reimburse the hospital 
based on the actual uncompensated care costs. CMS has agreed 
with that, but does not plan to implement it until 2021. They 
want to give the hospitals time to adjust. I would encourage 
Congress to encourage CMS to act more quickly. Given the 
unsustainable nature of these two programs and the need to 
reduce their costs, CMS should do it quicker.
    Senator Lankford. You brought to CMS an issue that you 
identified before with the Affordable Care Act and the way the 
subsidies are done in areas where there is fraud potential 
there and areas you all tested.
    Mr. Dodaro. Right.
    Senator Lankford. You brought to them eight recommendations 
about what to do. CMS said they were going to do it, and then 
did not implement any of those.
    Mr. Dodaro. CMS told us they are still trying to work 
through doing the fraud risk assessment. We understand it is 
almost complete. We are looking now at the premium tax credit, 
and its implementation by both CMS and the IRS. And, we should 
have a report available this summer for Congress. That will be 
our first complete look at that whole process. As Mr. George 
mentioned, both the IRS and CMS have responsibilities under 
that credit, so we are looking at both.
    Senator Lankford. Thank you.
    Russell, we have talked before about this as well--and that 
is the EITC and all of the refundable tax credits. Often, the 
IRS will come back and say this falls on preparers. As has been 
mentioned, about half of them actually have a preparer. IRS has 
said that, if we get a certification on these preparers, then 
we will get fewer mistakes. But, they attempted to do that 
about 6 years ago and failed. And then, they are trying to come 
back at it again.
    The recommendation has been made to IRS before--instead of 
having a requirement that is a mandatory requirement for all of 
your preparers to go through a certification, you just say to 
preparers, ``If you are going to get faster returns, you then 
have to go through this certification. If you are going to be a 
preparer, your return, if you are not certified, may take 3 
months to come back. If you are certified, it may take 21 
days.'' And, to be able to just tell them, ``If you want to be 
a certified IRS tax preparer and get faster returns to your 
clients, you have to do this.'' That way they get training in 
the EITC. Why would that not work?
    Mr. George. Senator, before responding--and I neglected to 
do this at the outset of my comments to questions--since 
President Reagan, every President has issued a directive 
indicating that tax policy is within the sole discretion of the 
Assistant Secretary for Tax Policy. And so, the answers that I 
am giving you are not on behalf of the entire Department or the 
Administration.
    Senator Lankford. Fine.
    Mr. George. But, there is no question that that is an idea 
that is worthy of consideration. But, as you pointed out, there 

was a sensible proposal to have certification. And, for some 
reason--again, whether it was the industry or others--it was 
not accepted.
    Senator Lankford. Mr. Dodaro.
    Mr. Dodaro. Certainly, I could add on to this point. We 
recommended to the IRS several years ago that they should 
regulate the unenrolled tax preparers. They went ahead with a 
proposal. It got taken to court. The court found that the IRS 
did not have the statutory authority. So, I think Congress 
could give some authority in this area. It could be a good 
program. I think Congressional support would be important. We 
have an outstanding recommendation to do this. It is one of the 
things that we mentioned in our ``High-Risk List Report.''
    Senator McCaskill mentioned that there is a high error rate 
associated with paid preparers. We sent an undercover team in 
to 19 tax preparers to try to see if they would give us the 
right answer. Only 2 of the 19 gave us the right answer.
    Senator Lankford. That is not surprising in some ways, but 
it is stunning. And, one quick comment on this, Mr. Chairman, 
for the VA as well. Thank you for stepping up and taking the 
lead in the St. Louis VA and other areas. We have a brand new 
Director in the Oklahoma City VA, Mr. Vlosich, who is doing a 
fantastic job in trying to help with a turnaround. We are the 
poster child for what GAO has mentioned on construction issues. 
Currently, our seventh floor is not usable. Our third floor is 
not usable. We cannot get a parking lot finished outside. And, 
it has been a chain--the elevator does not work in the middle 
of the building. It has been just a chain of issues with 
contractors that Director Vlosich is 
trying to help us unpack and to be able to fix. But, this issue 
has been an ongoing issue. It is not new. But, I appreciate 
everyone stepping up to be able to take the lead and to be able 
to help us in that--as our Oklahoma City Director has done--as 
others have done as well. So, thank you.
    Mr. Repko. I know Wade, and it is my privilege and honor to 
serve in this capacity. Thank you.
    Chairman Johnson. Senator Peters.

              OPENING STATEMENT OF SENATOR PETERS

    Senator Peters. Thank you, Mr. Chairman. And, thank you to 
each of our witnesses for being here today and for your 
testimony. We certainly do appreciate it.
    Dr. Blank, I owe you a special debt of gratitude, not 
solely because of your long track record in public service, 
which, of course, is distinguished, but also because you are 
the former dean of the Gerald R. Ford School of Public Policy 
at the University of Michigan.
    Ms. Blank. It was one of the excellent jobs that I have had 
in the past.
    Senator Peters. Well, that was the right answer to that--
even though it was not a question. [Laughter.]
    Senator McCaskill. She is not Big Blue anymore, though. She 
is all Badger, my friend.
    Chairman Johnson. I was going to say, then she moved to 
God's country.
    Senator Peters. Point well taken, Senator. But, I will tell 
you, actually, I have several of my staff, including some of 
the folks who are in this room today, who appreciate your 
service at the University of Michigan.
    Ms. Blank. Thank you.
    Senator Peters. And, at the Gerald Ford School. So, thank 
you.
    And, Mr. Dodaro, I also want to add to my colleagues' 
comments to thank you and your staff for your tireless work in 
putting this report together, as well as your other report. I 
am encouraged to hear that the $75 billion figure that we have 
been given is soon to grow quite rapidly as well--and it is 
because of the tireless work of everybody there. So, please add 
my thanks to the other thanks that you have received from my 
colleagues.
    Also, before I ask a couple of questions here, Mr. Chairman 
and Ms. Ranking Member, I would like to join in your efforts to 
get greater compliance with these GAO recommendations as well. 
In fact, I am working right now with Senator Gardner. We have a 
bill before this Committee called the Congressional Oversight 
to Start Taxpayer (COST) Savings Resolution, which would 
require hearing from the relevant Committees on these reports 
within a 90-day time period. So, however that may integrate 
with the work that you and Senator McCaskill are doing, I think 
there is a great opportunity for us to come together to make 
sure that what we have seen in performance continues.
    The first question I have relates to what we have been 
talking a fair amount about today, and this is the payments, 
particularly for the Earned Income Tax Credit and other 
credits, as far as compliance. The figures are stunning. The 
fact that you have 20,000 returns going to one address is 
stunning. And, I say that--and the fact that I am really a 
founding member of the Senate Payments Caucus with Senator 
Rounds, looking at modern payments technology. I had a chance, 
recently, to be at one of these payments companies to see the 
work that they are doing in fraud detection. The private sector 
has really figured this out, because fraud is not just a 
problem with the EITC. Any kind of payments you are making as a 
company, if you are in the payments business, there is a lot of 
fraud out there. And, they have made great strides and have 
limited it substantially. And, the new technologies that are 
coming on board are really incredibly impressive.
    To what extent do you think we need to just be looking at 
modern payments technology? It seems as if the IRS is not using 
any of it. This is to both Mr. George and to Mr. Dodaro.
    Mr. George. Well, thank you, sir. I will say this: The IRS 
is not in a position to not disclose mistakes that occur or 
fraud that occurs when it is questioned by Congress, the IG, or 
GAO. I have worked in the private sector, Senator, and I am not 
questioning your point directly. But, a lot of times, banks 
will not disclose when their systems are broached, because they 
do not want to shock stockholders or regulators or what have 
you. Whereas, again, the IRS is not in that position.
    There is no question that the IRS, in theory, could 
implement changes in their processes that could make it more 
difficult for people to engage in unscrupulous behavior. But, 
they are so malleable--``they'' being the ``bad guys,'' as I 
call them--that it is very difficult for the IRS to keep up 
with it. As Senator McCaskill pointed out, it is partially a 
resource issue. As I pointed out before, the IRS sometimes 
simply does not implement changes that we think would be 
simple--and I believe you were in the room when I talked about 
how--if they shared more information with other Departments, 
such as the Department of Education, as it relates to the 
American Opportunity Tax Credit.
    This is a little factoid I wanted to make sure that I 
conveyed to you before the end of this hearing. And, this is an 
opportunity to do so. The IRS did, on its own, make a request 
to Congress for what is called ``correctable error authority,'' 
which would allow them to--if they saw mistakes or different 
types of information that they have, versus what the taxpayer 
provided, they would be able to change the taxpayer's tax 
filing form and give the taxpayer the opportunity to contest 
the information if it hurts the taxpayer, in terms of causing 
more of a tax liability than they think they are entitled to.
    Now, if the IRS were given that authority, we estimate that 
it would cost the IRS approximately $1.50 to implement that 
change. But, without that, the only way the IRS can do it is 
through an audit of the tax return. And, the audit costs 
roughly $300 per taxpayer.
    So, there are changes that could be made, but the IRS needs 
more authority. And, there again, they need to be able to 
cooperate more with other government Agencies.
    Senator Peters. Actually, with the time remaining, just one 
other question that is important--and we can talk further, Mr. 
Dodaro, about this issue offline. But, I want to draw attention 
to the issue in the duplication report about the challenges 
that we face in maintaining some of our satellite weather 
monitoring capabilities. I am the Ranking Member on the 
Committee that oversees the National Oceanic and Atmospheric 
Administration (NOAA). I am also a member of the Senate Armed 
Services Committee (SASC). And, you identify work--or 
duplication--between the Department of Defense and NOAA and 
what we need to do in order to have these essential 
capabilities operating.
    Could you speak, generally, on how the Defense Department 
may need to rely on and collaborate with NOAA and other 
Agencies on this issue moving forward?
    Mr. Dodaro. It is very important to have collaboration 
between the Department of Defense and NOAA. NOAA is the gateway 
to a lot of the international agreements that our government 
has with satellite systems around the world that could be 
available to provide assistance. That is one of the problems 
that we identified in the Defense Department efforts. They did 
some outreach to NOAA, but did not follow up and did not have a 
formal process for doing it. And, as a result, DOD made some 
inaccurate assumptions about the availability of a European 
satellite, which would dictate what kind of coverage they would 
have, both for cloud characterization as well as in defense 
theaters of the imagery of weather situations that they would 
need for military purposes. And, as a result, they had to 
conduct additional analysis and come up with different plans. 
This could have been avoided through a more formal process. We 
have suggested they do that. The Air Force has signed some 
agreements with NOAA, but they do not cover the rest of the 
Department of Defense. And, it does not focus on the actual 
exchange of data that would occur--or should occur--between the 
parties. This has been a longstanding problem.
    Senator Peters. Right.
    Mr. Dodaro. As you know, the next National Polar-orbiting 
Operational Environmental Satellite System (NPOESS) program--
before, there was supposed to be coordination on the whole 
development of polar orbiting satellites. They were supposed to 
have combined programs into one capable of satisfying both 
civilian and military requirements. They never could come 
together. After years of efforts and billions of dollars, they 
could not reach agreement. So, the Obama administration decided 
they could develop their own efforts individually, because NOAA 
is responsible for one polar orbiting satellite for the 
afternoon orbit and the Defense Department is responsible for 
the polar orbiting satellite in the morning orbit. Our view, 
now, is that, even if that is the policy decision, DOD and NOAA 
need to talk to one another and to coordinate. And, they could 
use spare parts. They could exchange between each other. It 
just makes eminent sense. But, for some reason, they just are 
too sluggish in implementing this recommendation.
    We have broader issues and recommendations with the space 
programs at DOD. There are 60 different entities operating it. 
Nobody is in charge, and we have made recommendations that 
there need to be some organizational structure changes.
    So, I would be happy to talk to you or your staff more 
about this issue, along with our experts in the area, but it is 
very frustrating. And, billions of dollars get spent here 
without adequate management coordination.
    Senator Peters. Well, I would like to have further 
conversations with you about that. It certainly makes sense to 
coordinate that. But, I am also concerned about, in the 
President's budget, significant cuts to NOAA and what that 
would mean for weather satellites--and those satellites, as you 
mentioned, are important for the Department of Defense as well. 
And, a cut on that weather forecasting capability has impacts, 
not only with civilian operations, but for defense operations 
as well.
    Mr. Dodaro. Yes.
    Senator Peters. And, we have to think about this in a 
coordinated way. Would you agree?
    Mr. Dodaro. I definitely agree. In fact, I added the 
environmental satellites issue to our ``High-Risk List'' 
several years ago, because of concerns about gaps in 
environmental satellite data coverage that could have 
significant consequences both for DOD and its operations, but 
also to weather forecasting within the United States. These 
could include public safety and economic consequences, if we do 
not get adequate warnings, so that people can take 
precautionary measures. So, I am very concerned about this 
area--and I would be happy to talk to you more about it.
    Senator Peters. I appreciate it. Thank you so much.
    Mr. Dodaro. Sure.
    Chairman Johnson. Thank you, Senator Peters.
    I want to quickly pick up on two comments you made. It 
``makes eminent sense'' and ``for some reason we just cannot 
get this thing done,'' and then go right to Mr. George, the 
error correction authority. As a business guy, if my 
comptroller comes to me and says, ``Well, we can correct this 
for $1.50 or we can keep doing it the way we are doing it right 
now that costs $300''--again, it makes eminent sense that you 
would go the route where it only costs you $1.50. But, for some 
reason--can you describe why we have not done this? Has there 
been an attempt in law? Has somebody tried to block this? Is 
there any rationale for not giving the IRS that error 
correction authority, so we can do it for $1.50?
    Mr. George. I have no idea whether or not there was 
resistance within Congress, but they do need legislative 
authority to do it. And, they currently do not have that.
    Chairman Johnson. Gene?
    Mr. Dodaro. Yes. The IRS has been given this math authority 
for very specific types of tax credits and other issues. They 
have not been given the broader authority that Russell 
suggests--and we have made a similar recommendation. And, I 
think, with proper safeguards, the authority could be designed, 
I think it goes perhaps to mitigate concerns that Congress has 
about giving the IRS too much authority. There is a good case 
for it. With proper safeguards, it should be put in place. 
Nobody wants to disadvantage the taxpayer and the due process 
that they have.
    Chairman Johnson. That would be the resistance--legitimate 
resistance about giving the IRS more power than it already 
has--kind of a suspect Agency. I got that.
    I will go right to Senator Heitkamp, if you are ready.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. I am. Thank you so much. Thank you--and a 
very important topic. And, as we look at narrower and narrower 
spending opportunities and more and more cuts, obviously 
eliminating duplication and making this work right is critical.
    An area that Senator Lankford and I have been focused on 
has been Federal hiring. Last Congress, I introduced the 
Flexible Hiring and Improving Recruitment, Retention, and 
Education (HIRE) Act of 2016 to help the Federal Government 
hire and retain vibrant and effective Federal workers. I think 
that is absolutely critically important to supporting the work 
that the government does.
    This idea came out of the challenges that we had during the 
Bakken explosion, and then taking a look at the challenges that 
we have in hiring U.S. Border Patrol and U.S. Customs and 
Border Protection (CBP) folks on the Northern border. So, my 
bill would give Federal Agencies a toolkit, I think, of 
resources to make hiring and human resources (HR) more 
flexible, improving recruitment and retention.
    I think, Gene, my question is for you. Ensuring that 
Agencies have the resources they need, I think, is absolutely 
critical to addressing the Federal hiring challenges. And, it 
was really great to hear OPM's launching of the Hiring 
Excellence Campaign (HEC). How do we maintain efforts like 
that? What do you see, in terms of Federal hiring duplication 
improvements that we can make in the hiring structure that will 
get us people who actually pay attention to duplication and 
come to us with great ideas on how we can save the taxpayers 
money?
    Mr. Dodaro. One of the things that we suggest and recommend 
in our report is that these be a broadview of hiring efforts. 
We looked at hiring by Agencies in 2014, and we found there 
were 105 different hiring authorities Agencies used. But, 
Agencies used only 20 authorities to hire 91 percent of the 
people hired during that year.
    And so, our recommendation to OPM is to determine whether 
the less used authorities are helpful. And, if not, maybe, we 
should eliminate them--refine them. Which ones are effective? 
Have they effectively communicated that across the Departments 
and Agencies?
    In some cases, there may be a need to give additional 
authority, but we found that there is plenty of authority 
available--and Agencies are not using it fully. The question 
is: Why not? That is what we have recommended that OPM do. But, 
so far, they have only looked at and evaluated a handful of the 
105 hiring authorities that we suggested they review.
    Senator Heitkamp. When you look at the aging of the Federal 
workforce and you look at how many people, theoretically, will 
need to be hired to replace people who are going to retire--I 
think it is like a third of the people in the next 5 years.
    Mr. Dodaro. Yes, right.
    Senator Heitkamp. How do we improve that process? And, how 
do we encourage some autonomy on the part of the Agencies, but 
still maintain an overall systematic approach? And, how do we 
avoid duplication and slowdowns in Federal hiring?
    Mr. Dodaro. Well, one of the first things would be to go 
back to regularly appropriating the money on time before the 
fiscal year----
    Senator Heitkamp. Really?
    Mr. Dodaro. Yes.
    Senator Heitkamp. So, we have to do our job in order for 
them to do theirs?
    Mr. Dodaro. I hate to bring this up. [Laughter.]
    But, operating under a continuing resolution (CR) that is 
less than last year's money effectively limits----
    Senator Heitkamp. The most amazing thing, Gene, is that we 
all agree with you, but somehow it does not happen.
    Mr. Dodaro. I know. But, I would start there.
    Senator Heitkamp. OK.
    Mr. Dodaro. And then, I think you need to have OPM look at 
the hiring authorities. I do not think it is a problem of 
hiring authorities, to be honest with you. I think it is just a 
matter of execution on the part of the Agencies to use the 
hiring authorities. I think there is a cultural problem here 
that most of the personnel departments in Departments and 
Agencies are rule-based. And, they view their responsibility to 
make sure nobody does anything wrong, as opposed to making sure 
that they are proactive and helping the managers bring in the 
people that they need as soon as possible.
    So, I think that Congress needs to push OPM and the Chief 
Human Capital Officers Council (CHCOC) to change that approach 
and make them much more proactive and supportive of the clients 
in their Agencies. I have no problem at the GAO in hiring good 
people. If we have the money and the authority, we can bring 
them in. But, I see other Departments and Agencies struggling 
with that process. OPM is not providing enough leadership in 
this area. I think you should look for more leadership out of 
OPM and the Chief Human Capital Officers Council, and put more 
pressure on them to be more aggressive and helpful.
    Senator Heitkamp. I know that you know that this is a major 
focus of our Subcommittee this year. And so, I just want to 
close by thanking you and all of you for your service--but 
especially you and your team, Gene. You guys--if only we would 
listen to you, I think we would be better at what we do. So, 
thank you so much for the great work that GAO does, and that 
you do, personally.
    Mr. Dodaro. Thank you.
    Chairman Johnson. Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Mr. Chairman. Good morning, 
everybody. Good morning again. I apologize for being in and 
out. We have a hearing in the Senate Environment and Public 
Works (EPW) Committee that I serve on as well, so I have been 
trying to do justice to both. We are working on cloning here in 
Congress to take care of more than one assignment at the same 
time. [Laughter.]
    I do not think they have done it yet, but I understand the 
Administration is going to put out a tax proposal--tax reform 
proposal today. And, we will wait to see what the details look 
like. But, I understand that it has some steep rate reductions, 
maybe, in corporate taxes and some other taxes. And, the 
Congressional Budget Office would suggest that it is going to 
make the deficit a lot bigger by, maybe, trillions of dollars. 
And, the Administration says that the way to offset that would 
be growth. And, I hope they are right, because it is a lot of 
increase in the deficit. But, what it does--it makes more 
important what you are talking to us about--that we find other 
ways to do our work more cost-effectively going forward.
    I never understood why we are so intent on reducing the 
amount of resources we provide to the IRS to do their job. We 
provide constituent service. All of us have constituent 
services operations in our offices back in our home States. We 
have three counties in Delaware. We have offices in all three 
counties. And, we get a lot of inquiries that are tax-related 
and that pertain to the IRS.
    The IRS used to provide reasonably good responses. Over 
time, it has degraded. And, one of the reasons why is because, 
when we make changes in the Tax Code, we usually make them late 
in the calendar year--and they become effective beginning in 
the following calendar year. We do not make the Tax Code 
simpler and easy to understand and comply with. And then, to 
add insult to injury, we reduce the amount of resources that 
the IRS has to--either through technology or through people--
help explain and work through all of this. It is mind-boggling 
to me.
    I am told that, for every dollar that we might increase for 
the resources of the IRS, we actually increase revenues by a 
substantial amount. Mr. Dodaro, do you know anything about 
that? Have you heard anything along those lines?
    Mr. Dodaro. Yes. They do have a good return on the dollar 
investment for every dollar that they are given. What we have 
noted, though, is that the IRS cannot, generally, tell you 
which specific enforcement activities would lead to a greater 
marginal return on the investment. And so, we think that they 
ought to collect and use better information to determine what 
is the most effective way to get the additional ``bang for the 
buck'' and have better ROI information, in order to do that. 
So, with that, they could use whatever resources Congress gives 
them in a better way.
    Senator Carper. Good. Thank you. Commissioner Koskinen was 
before the Senate Finance Committee not too long ago. And, I 
asked him about this, and he said, ``We believe, for every 
extra dollar that we would be provided in resources, we could 
pay back $4.'' I have heard other estimates that are even 
higher than that, but it sounds like real money to me.
    This might be a question for Russell George. Mr. George, it 
is nice to see you. One of the other things that the IRS has 
asked for is something called ``streamlined critical pay 
authority,'' which is something that you know a little bit 
about. Would you just take a minute to explain what it is and 
why you think it might be important, and the right thing for us 
to give them?
    Mr. George. Yes. Because of the technical nature of many of 
the responsibilities that they have, they have to compete with 
private sector entities in order to gain the expertise needed 
to fill those positions. And, because of the disparity between 
what the private sector pays and what the public sector pays, 
that authority allows, not a huge pay differential, but enough 
so that you can attract--and they have attracted--key and very 
effective officials--government workers. And, that authority 
expired recently. And, they lost every single one of the people 
who were hired under that authority. So, we highly support--
and, actually, TIGTA recommended that that authority be 
provided once again to the IRS.
    Senator Carper. Are you familiar also with the issue of 
folks who are preparing taxes and getting paid for it--and they 
are not certified public accountants (CPAs)--they are not 
necessarily 
accountants, but they are people who routinely prepare 
millions--maybe tens of millions of tax returns--and the work 
that they do is not always very accurate?
    Mr. George. Oh, most definitely. Earlier, Gene spoke about 
this, but we, too, at TIGTA have, in the past, conducted tests 
where we would send in people who were acting the role of 
people who needed tax returns completed. And, at the outset of 
that endeavor, the response rates were terrible. I mean, it was 
less than 50 percent accuracy, in terms of tax----
    Senator Carper. What would you suggest that we do about 
that--Congress?
    Mr. George. Well, because of limited resources, as was 
pointed out, the IRS is relying on Volunteer Income Tax 
Assistance (VITA) centers, more so. They still have their own 
tax assistance centers, but they are not fully staffed because 
of resource limitations. The IRS directs people to their 
website, which is helpful if you are computer literate. And, 
unfortunately, many people who are senior citizens or who are 
not financially able to gain access to computers are not able 
to take advantage of that. But, there are ways in which to 
address this.
    Senator Carper. Thank you. Mr. Dodaro.
    Mr. Dodaro. We have an outstanding recommendation that 
Congress give the IRS the authority to require some 
certification of these tax preparers--not an onerous thing, but 
some minimal educational certification requirements, because 
there are so many tax returns prepared by these preparers. A 
couple of other things Congress could do to help the IRS----
    Senator Carper. Good. Please.
    Mr. Dodaro. One is to lower the threshold for the 
requirement to electronically file form W-2, for example. Right 
now, if you file 250 or more information returns annually, then 
you have to file electronically. If you lowered that to 5 to 10 
returns, then you would be OK. As of February 2017, The Social 
Security Administration (SSA) had received about 17 million 
paper returns. And so, they are still somewhat drowning in 
paper, even though more returns come in electronically. So, 
that would be a big help.
    Senator Carper. OK.
    Mr. Dodaro. You would need fewer people, because the paper 
returns have to be handled, they have to be coded, and they 
have to be converted.
    Also, it would be helpful to expand the mandate for 
partnerships and corporations, including S Corporations, to 
file tax returns electronically as well. These are very 
complicated entities, and having more information in an 
electronic format would be helpful. So, those are the things we 
would recommend. And, we talked earlier about giving IRS 
broader authority, so they could correct errors with proper 
safeguards to have taxpayers appeal if they think they have not 
been treated fairly. Expanded authority--as Russell pointed out 
before and as Senator Johnson mentioned--would also allow 
correction of tax returns without a costly audit. It just makes 
sense to give them that authority. And, between GAO and the IG, 
we could check to make sure they are using those authorities 
properly and not disadvantaging taxpayers.
    Senator Carper. Mr. Chairman, the words of my father are 
ringing in my ears: ``Just use some common sense.'' And, I 
think we have heard about six good ideas here, today. And, I am 
interested in pursuing them, and I hope my colleagues will want 
to join me. Thank you.
    Chairman Johnson. I think we are.
    I know we are going to have a vote called here at 11:30, so 
we have a few more minutes left. But, I do want to go back to 
Chancellor Blank really quickly, because this is a duplication 
hearing. In your testimony--remind me again--how many different 
Agencies does your university report to in some way, shape, or 
form?
    Ms. Blank. Forty-three.
    Chairman Johnson. Forty-three. Again, you are not opposed 
to regulation, but what you would like is some cooperation and 
coordination--uniform, common types of standards, correct?
    Ms. Blank. Absolutely.
    Chairman Johnson. Is part of the problem not that you are 
reporting very similar things, but that each Agency has their 
own process for developing their little questionnaire? How much 
do you think you could reduce it? Just really talk--if you can 
give one example of what we are talking about here.
    Ms. Blank. It is hard to come up with dollar figures on 
something like this, and I think the real issue is the time of 
researchers actually going into teaching and research, as 
opposed to paperwork. So, let me give an example of a 
particular project where there was a great deal of interest in 
trying to use a variety of samples that another research 
project had collected. These are medical tissue samples. And, 
it took over a year for the researchers to work their way 
through a variety of approval processes. They finally simply 
gave up on the project entirely. It was very closely related to 
some of the issues around Alzheimer's--had a real potential for 
expanding our research in that area. And, they essentially 
wasted a year of their time trying to get approvals on 
something that they simply could not get approvals for, because 
enough different Agencies and approval processes had to be gone 
through. All of them required different things. So, they just 
said, ``This is not worth our time.'' They gave up on it.
    Chairman Johnson. Kind of off of the top of your head, can 
you just name some of the Agencies? Not to point a finger at 
them, but, I mean, just going through--the U.S. Department of 
Agriculture (USDA), HHS, the Food and Drug Administration 
(FDA)----
    Ms. Blank. It is all of the major Agencies--the National 
Science Foundation (NSF), the National Institutes of Health 
(NIH), USDA, and the U.S. Department of Energy (DOE). Those are 
some of the big funders.
    I might also say that the IG's office--while it does very 
good work--is also often a problem here. And, they often 
disagree with the Agencies on what certain standards should be. 
And so, they come in and audit us and hold us accountable for 
doing things the way the Agencies told us to do them and say 
that that is wrong, and then ding us in various ways for that. 
Without better coordination between the IG and the Agency, it 
means that there are two groups in each Agency coming at us--
often with different standards and different beliefs. And, that 
type of coordination just has to start occurring.
    Chairman Johnson. In your testimony, you use the exact same 
language that I talk about--layer upon layer upon layer. I mean 
procurement policy.
    Ms. Blank. Yes.
    Chairman Johnson. We have layer upon layer upon layer of 
different controls designed to prevent us from wasting a 
dollar. And, we probably spend billions trying to comply with 
all of the layers of regulation. So, we have to, in some way, 
shape, or form, figure out how to cut through that--provide 
some uniform standards on similar types of approvals, where you 
are not having to do--some of these things conflict, right? You 
have one over here. If you comply with this one, you are 
probably out of compliance with something over on the other----
    Ms. Blank. That is part of the problem, yes.
    Chairman Johnson. OK. Senator McCaskill, do you have 
anything?
    Senator McCaskill. Yes. First, on the Do Not Pay (DNP) 
Working System, is it true that we are going to have to do 
something, in order to let the IRS get the full Death Master 
File (DMF)?
    Mr. Dodaro. Yes. The Social Security Administration 
believes there needs to be an amendment to the Social Security 
Act for Treasury to get the full DMF. And, this includes about 
10 percent more records. We think this is important and 
encourage Congress to do----
    Senator McCaskill. That should definitely go in our 
legislation. The notion that we cannot figure out who has died 
before we pay them--I mean, we have talked about this in this 
Committee many times.
    Mr. Dodaro. Right.
    Senator McCaskill. We pay and then chase, and that never 
has a good ending. We have to figure out how not to pay up 
front, instead of paying and chasing. It is just something 
basic, like knowing who is dead. It seems to me----
    Mr. Dodaro. Right.
    Senator McCaskill. If the Federal Government cannot figure 
that out, then there is no hope. [Laughter.]
    There is no hope.
    I wanted to briefly talk to you, Dr. Blank, because I care 
very much about the Clery Act--and I am painfully aware of how 
laborious that particular requirement is. And, I would not mind 
it being laborious if we were getting data that allowed us to 
actually get a handle on an apples-to-apples comparison--
campus-to-campus--apples-to-apples comparison between 
communities and campuses. But, because the Clery Act does not 
mirror the Uniform Crime Reporting (UCR) at the Federal Bureau 
of Investigation (FBI), we--in fact, your report talked about, 
Gene, we do not even--there are like 16 different ways sexual 
assault is defined against 4 different Agencies that are 
collecting data. We have no hope of understanding this problem 
if the data that we are collecting is not done in a way that it 
can support good public policy--and there is no question that 
this is a problem here.
    Would your police department at the University of Wisconsin 
be willing, if we could do it, to do the same standards for 
Clery that they have for UCR?
    Ms. Blank. We would be delighted to have that type of 
coordination. I might say that it is a further problem on our 
campus that the University of Wisconsin system requires us to 
report in a different format and in a different way as well. 
So, we have three different reporting standards on----
    Senator McCaskill. You have Clery, you have UCR, and you 
have State.
    Ms. Blank. Yes.
    Senator McCaskill. Yes. Well, it would be good if we could 
figure out a way just to make everybody do UCR.
    Ms. Blank. I agree.
    Senator McCaskill. And then, you are doing the same 
definitions for each crime. You can compare community to 
campus--all of those things. And, I made the mistake in a 
public forum of saying that I thought Clery--I was not, 
frankly, as articulate as you were, talking about how important 
Clery is and that you want that data. I just said that Clery is 
messed up--and, of course, everybody came down on my head like, 
``oh, my gosh, you cannot quit making campuses report this 
data,'' which, of course, is not what I intended. I want the 
data to be good, and I want police departments to spend most of 
their time catching people who are doing bad things to people, 
rather than trying to figure out three different reporting 
standards.
    Ms. Blank. I agree completely.
    Senator McCaskill. All right. Maybe we can put that in 
also.
    I want to also say that I think if we cannot get NIH and--
especially, if we could just get NIH and the NSF to agree on 
one standard for reporting and have it be interchangeable--I 
mean, that would do a lot for all of the medical research 
facilities in this country.
    Ms. Blank. Both the issue of putting in reports--reporting 
on effort and on conflicts of interest and on steady progress--
as well as what happens after something is completed--where it 
gets filed. As you may know, there is a recent requirement that 
is going to be going into effect, asking us to file the data 
for all research that is federally funded. Every Agency is 
doing this differently, right? And, you get many projects that 
are funded by multiple Agencies. That creates just an 
enormous----
    Senator McCaskill. And, by the way, the data is not very 
useful then.
    Ms. Blank. Absolutely not. You cannot find it.
    Senator McCaskill. Because somebody comes along, and they 
have to go to four or five different databases. And, 
invariably, what happens is, we end up paying a contractor to 
make the databases talk to each other, when it would be much 
simpler if we would just require they do one set of data across 
Agencies.
    Chairman Johnson. We add another layer.
    Senator McCaskill. We add another layer.
    And, finally, I want to give you a chance, Mr. George, to 
talk about the problem at the IRS, because we are trying to 
starve them and make sure that they do not have adequate 
resources. I mean, right now, a taxpayer that has a serious 
problem that they need addressed--they are the customer of the 
IRS--they are sitting on the phone to talk to a real person--
they are sitting on the phone for 10 hours--the customer. I 
mean, this is all under the idea of ``let us make sure the 
IRS--let us cut it and cut it and cut it, because we all hate 
the IRS.'' OK. We all hate the IRS. Let us have enough people 
there, so they can do their job and serve the taxpayers that 
deserve to have their questions answered--and, particularly, 
deserve to catch the people that are trying to get tax credits 
that they do not deserve.
    Mr. George. Senator, the IRS is a revenue-generating arm of 
the Federal Government. It needs the resources necessary to 
help people comply with their tax obligations. There are 
studies that show that, the easier you make it to comply with 
your taxes, the more likely people are to do so.
    But, Senator, if I may just take one quick minute, because 
I--in response to a statement by the Chairman and by Senator 
Peters about multiple refunds going to tens of thousands of 
addresses--in response to our identifying this, the IRS has 
instituted some changes. And, they just reported to us that, in 
April of this year, they were able to stop over 92,000 of these 
ill-gotten gains--almost half a billion dollars. So, some 
progress is being made there.
    Chairman Johnson. OK. I appreciate that.
    Senator McCaskill. That is good.
    Mr. George. I just wanted to give them credit.
    Chairman Johnson. And, by the way, I have been making this 
point for quite some time. The real solution here is 
simplifying the Tax Code. We can talk about tax reform. I would 
much rather be talking about tax simplification--tax 
rationalization. And then, I think, you actually could have an 
IRS that does its job--responds to the customers--the American 
taxpayer--and can actually do it with less money. But, it is 
about tax simplification. That is really the solution. So, 
hopefully, we can work together on that in a bipartisan 
fashion.
    I want to thank all of you. Again, this hearing, I think, 
has pointed us in a direction. You will see that this Committee 
has a tradition of working in a bipartisan fashion. You hear it 
from a number of Senators right here. We are going to hop on 
this, work with the Agencies, and work with all of you, quite 
honestly, to try and address the problems that you have so ably 
highlighted here. So, this is very valuable. This will result, 
I think, in very positive, bipartisan action. So, thank you 
very much.
    With that, the hearing record will remain open for 15 days, 
until May 11th at 5 p.m., for the submission of statements and 
questions for the record.
    This hearing is adjourned.
    [Whereupon, at 11:39 a.m., the Committee was adjourned.]

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