[Senate Hearing 116-58]
[From the U.S. Government Publishing Office]
S. Hrg. 116-58
REVIEW OF GAO'S ANNUAL DUPLICATION REPORT
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HEARING
BEFORE THE
SUBCOMMITTEE ON FEDERAL SPENDING
OVERSIGHT AND EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MAY 21, 2019
__________
Available via http://www.govinfo.gov
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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36-697 PDF WASHINGTON : 2019
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
ROB PORTMAN, Ohio GARY C. PETERS, Michigan
RAND PAUL, Kentucky THOMAS R. CARPER, Delaware
JAMES LANKFORD, Oklahoma MAGGIE HASSAN, New Hampshire
MITT ROMNEY, Utah KAMALA D. HARRIS, California
RICK SCOTT, Florida KYRSTEN SINEMA, Arizona
MICHAEL B. ENZI, Wyoming JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri
Gabrielle D'Adamo Singer, Staff Director
David M. Weinberg, Minority Staff Director
Laura W. Kilbride, Chief Clerk
Thomas J. Spino, Hearing Clerk
SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY MANAGEMENT
RAND PAUL, Kentucky, Chairman
RICK SCOTT, Florida MAGGIE HASSAN, New Hampshire
MICHAEL B. ENZI, Wyoming KAMALA D. HARRIS, California
JOSH HAWLEY, Missouri KRYSTEN SINEMA, Arizona
Greg McNeill, Staff Director
Harlan Geer, Minority Staff Director
Kate Kielceski, Chief Clerk
C O N T E N T S
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Opening statement:
Page
Senator Paul................................................. 1
Senator Hassan............................................... 2
Senator Enzi................................................. 8
Senator Lankford............................................. 10
Senator Scott................................................ 13
Senator Sinema............................................... 21
Prepared statement:
Senator Paul................................................. 27
Senator Hassan............................................... 29
WITNESSES
Tuesday, May 21, 2019
Hon. Gene L. Dodaro, Comptroller General of the United States,
U.S. Government Accountability Office; Accompanied by Thomas
Melito, International Affairs and Trade Team, U.S. Government
Accountability Office; and Melissa Emrey-Arras, Workforce and
Income Security Team, U.S. Government Accountability Office
Testimony.................................................... 4
Prepared statement........................................... 30
REVIEW OF GAO'S ANNUAL DUPLICATION REPORT
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TUESDAY, MAY 21, 2019
U.S. Senate,
Subcommittee on Federal Spending,
Oversight and Emergency Management,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:31 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Rand Paul,
Chairman of the Subcommittee, presiding.
Present: Senators Paul, Scott, Enzi, Hawley, Hassan,
Sinema, and Lankford.
OPENING STATEMENT OF SENATOR PAUL\1\
Senator Paul. Good morning. I call this hearing of the
Federal Spending Oversight Subcommittee to order.
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\1\ The prepared statement of Senator Paul appears in the Appendix
on page 27.
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Today we are going to hear from Comptroller General Gene
Dodaro about the Government Accountability Office's (GAO)
annual report on duplication, fragmentation, overlap, and other
areas of savings.
This is GAO's ninth duplication report, each shedding light
on some truly troubling examples of waste. This report is no
exception. For example, it is no secret that I have been
critical of foreign assistance programs. I would encourage
everyone to check out this Subcommittee's report ``World Wide
Waste,'' which notes that the Federal Government continues to
spend money on national parks in Russia, promoting Ultimate
Frisbee in China, and paying for a clown college in Argentina,
among other things.
One of the questions I often get is, How do such things get
approved, and how do they continue to get approved year after
year after year? Part of it is because I think we do not pay
attention to the duplication report that we get.
This report gives us some of those answers. In it, GAO
finds that we have 20 different agencies, pursuing 52 different
foreign assistance strategies. This is a textbook recipe for
waste, too many entities trying to do too much in too many
different ways with too much money.
Another area I have been critical of is federally funded
research. We have done numerous waste reports and even held a
hearing on the subject in October 2017. To my knowledge, we
have never been critical of quantum computing or synthetic
biological research. Nonetheless, GAO found six agencies
funding quantum computing and 10 agencies funding synthetic
biologics, with little coordination among the different
agencies. If these seemingly merited areas of research are
duplicative and uncoordinated, it is no wonder that we find
studies of daydreaming and the optimal taste of tomatoes also
being funded as well.
I have highlighted a few other examples. The Department of
Defense (DOD) has six different human resources (HR) services.
Meanwhile, they rely on over 800 computer-based learning and
training systems. As part of the Supplemental Nutrition
Assistance Program (SNAP) program, the U.S. Department of
Agriculture (USDA) spends $441 million on employment and
training programs administered by States, which are required
for certain recipients, yet these programs in only half the
States are not able to report participation figures at all in
these programs. We pay for these programs. We mandate that they
do them, and then the States are not even really doing what
they say they are supposed to be doing with the money. These
are just a few highlights from this year's report.
I am interested to see the progress we have made in
correcting issues highlighted in earlier duplication reports,
and I hope we act quickly to address the findings of this
report.
I am also very interested in preventing the creation of new
duplication as well. Something I think that would go a long way
in that regard is including in the Congressional Budget Office
(CBO) cost estimates an assessment of the duplicative effects
of the bills we consider. As we begin to consider new bills,
maybe somebody should think, ``Wow. Are we already doing this?
Are we just duplicating?'' because I think people are well-
intended. They just want to do something. There is public
furor; let us do something. Yet nobody looks to see that we are
already doing something about that issue, and we have not
really considered the duplication.
I think that we can go a long way toward getting this done,
and I think it is something we can do in a bipartisan way as
well.
With that, I will recognize the Ranking Member, Senator
Hassan, for her opening statement. Before I do, I just want to
note this is Senator Hassan's first hearing as Ranking Member
of this Subcommittee. I would like to welcome her in that role
and say that I look forward to working with you.
OPENING STATEMENT OF SENATOR HASSAN\1\
Senator Hassan. Thank you very much, Chairman Paul, and
thank you for the welcome. I am looking forward to working with
you as well, and it is really wonderful to welcome our
Comptroller General, Gene Dodaro, here to the Subcommittee
today.
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\1\ The prepared statement of Senator Hassan appears in the
Appendix on page 29,
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Today's hearing is my first as Ranking Member, and I am
glad to work alongside Chairman Paul. I am particularly glad
for this assignment because Granite Staters rightfully expect
that their hard-earned taxpayer dollars will be spent wisely
and effectively, and this Subcommittee's efforts are critical
to helping ensure that happens.
I look forward to working with the Chairman on bipartisan
efforts to help spur innovation in government, ensure fiscal
responsibility, and root out waste, fraud, and abuse.
To that end, I am glad to have Comptroller General Dodaro
here today to discuss the Government Accountability Office's
2019 report on how we can reduce duplication in the Federal
Government and save taxpayers billions of dollars.
While it is not always easy to build consensus on cost-
saving measures, taking aim at Federal programs that are
fragmented, overlapping, and duplicative should be an area of
strong bipartisan agreement.
GAO's report identifies dozens of new actions that Congress
or Executive Branch agencies can take to improve efficiency, as
well as previous recommendations that still need to be
implemented.
Congress and the Executive Branch have made real progress
in acting on the recommendations from GAO's 2011-2018 reports,
and some of those results have been impressive.
According to GAO's estimates, we have seen roughly $262
billion in financial benefits already. Obviously, there is
still far more work to do.
Mr. Dodaro, thank you again for being here. I look forward
to hearing your testimony and continuing to work with you to
strengthen oversight of taxpayer dollars.
Thank you, Chairman Paul.
Senator Paul. Thank you.
Our witness today is U.S. Comptroller General Gene Dodaro
who heads the Government Accountability Office, which produces
this duplication report.
Mr. Dodaro has been with the GAO for just a short time,
right? [Laughter.]
It says here 45 years. Congratulations on a career of
serving government and trying to make government more efficient
and better, including 9 years as Chief Operating Officer (COO),
2 years as Acting Director, and the past 9 years as Director.
That means he has overseen the duplication report since its
inception in 2011.
Mr. Dodaro holds a bachelor's degree in accounting from
Lycoming College in Williamsport, Pennsylvania. He is a Fellow
of the National Academy of Public Administration and a member
of the Association of Government Accountants.
Mr. Dodaro, you are recognized for your opening statement.
TESTIMONY OF HON. GENE L. DODARO,\1\ COMPTROLLER GENERAL OF THE
UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE;
ACCOMPANIED BY THOMAS MELITO, INTERNATIONAL AFFAIRS AND TRADE
TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND MELISSA EMREY-
ARRAS, WORKFORCE AND INCOME SECURITY TEAM, U.S. GOVERNMENT
ACCOUNTABILITY OFFICE
Mr. Dodaro. Thank you very much, Mr. Chairman, Ranking
Member Hassan, Senators Enzi, Hawley, and Lankford. Nice to see
everyone this morning. I appreciate the opportunity to talk
about GAO's latest report on overlap, duplication,
fragmentation, and other ways to realize cost savings and
enhance revenues to the Federal Government.
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\1\ The prepared statement of Mr. Dodaro appears in the Appendix on
page 30.
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In our first eight reports, we made over 800
recommendations for Congressional and Executive Branch action.
Fifty-four percent have been implemented fully, another 23
percent partially implemented. As Senator Hassan mentioned,
there have been financial benefits realized of $262 billion
already that either have accrued or will accrue as a result of
implementation of the recommendations.
Importantly, most of those real-dollar savings came from
Congressional action in addition to some action on the part of
the Executive Branch, but there are an additional 98 actions we
are adding this year, recommendations in 28 different areas.
There are still tens of billions of dollars in potential
savings that could accrue from Congressional and Executive
Branch action.
For example, in this past year in the Defense Department
alone, there is savings to be realized by looking at the
functions providing human resources as the Chairman mentioned
in his opening statement. Document services could save millions
of dollars and also in consolidating the Administration of
medical treatment facilities, additional savings are in the
offing.
DOD could make greater use of intergovernmental support
agreements, where they are working with State and local
governments to provide services to installations rather than
using contractors. These have already saved money. Greater use
of such agreements could save more.
Also, right now in foreign military sales, the foreign
purchasers of our military equipment are not paying for the
full cost, the administrative cost of arranging the sale. As a
result, the U.S. Government is paying the cost, but we think
that the cost should be borne by the foreign purchaser.
In the health care area, there are billions of dollars that
could be saved here by having greater oversight over Medicaid
spending and also in Medicare payment policies area, including
preauthorization and place-of-service reimbursement that is
different depending on where you receive the same potential
service.
There are savings that could be accrued at the Department
of Homeland Security (DHS) and the Federal Emergency Management
Agency (FEMA). There could be greater use and better use of
advanced contracting to save money as well as post-contracting
activities that could take place.
The benchmark or litmus test of the Federal Government
getting involved in a disaster has not been revisited since
1986. For 33 years now, we have been using the same indicator.
It has not been indexed fully for inflation, and as a result,
we think the Federal Government may be paying more or getting
involved more when the State and local governments have the
capacity to deal with--obviously, these are not catastrophic
disasters--smaller ones that occur on a more regular basis.
There are many opportunities to have more efficient and
effective government. The Chairman mentioned the alignment of
strategies to provide foreign assistance. This could be done
better.
At DOD, there is not enough coordination in reporting and
dealing with adverse medical events, particularly sentinel
events that have led to unexpected deaths or very serious
physical or mental problems. There are many other activities,
including the one that the Chairman mentioned on better
coordination of research activities in the Federal Government.
Clearly, these research activities are important, but there
needs to be better coordination to be more effective.
Now, I was also asked to comment on what could be done to
make it easier to identify these duplicative services in
overlapping areas. We point out in our report the failure of
the Office of Management and Budget (OMB) to produce a
comprehensive inventory of Federal programs. This was required
by the Congress in 2010, under the Government Performance and
Results Act (GPRA). It still has not been done. Right now, we
do not have a comprehensive Federal inventory, which makes it
very difficult to provide oversight. We have to spend a lot of
time and energy to identify these areas, and then I have other
areas we could talk about more in the question and answer (Q&A)
session.
Thank you very much for the opportunity to talk about our
work, and we look forward to working with this Committee, the
Congress, and the Executive Branch moving forward to have a
more efficient and effective government.
Thank you, Mr. Chairman.
Senator Paul. Thank you.
I think we will start with Senator Hassan.
Senator Hassan. Thank you, Mr. Chair, and again, thank you,
Mr. Dodaro.
There are a number of action items and recommendations GAO
suggests that agencies can take to reduce waste, fraud, and
abuse of taxpayer dollars, but Congress also, as you have just
mentioned, has a role in helping address this issue.
In your opinion, what areas recognized in this year's
report would you prioritize for bipartisan Congressional action
to mitigate waste, fraud, and abuse and promote fiscal
responsibility across government?
Mr. Dodaro. First, there are a handful of areas that
Congress already has introduced legislative proposals that have
bipartisan support.
Senator Hassan. OK.
Mr. Dodaro. For example, in the foreign military sales
area, Representative Speier and other Congressional members
have introduced a bill to deal with that issue. Members of this
Committee have introduced a bill on a bipartisan basis to deal
with implementation of our recommendations for advanced
contracting on the FEMA area.
There is a bill that already has been reported out of this
Committee on improper payments and the payment integrity
legislation that I would encourage Congress to pass that I
think would have great benefit as well. There are a number of
areas that already have bipartisan support.
I find that when Congress really focuses on the
efficiencies here--and a lot of these things are really still
left to the policy judgments of the Congress----
Senator Hassan. Yes.
Mr. Dodaro. Everybody wants a more efficient and effective
government. Nobody wants overlap and waste in the Federal
Government, and that is why you have seen that 77 percent of
our recommendations already have been fully or partially
implemented.
Most of what we are reporting this year, I think could
garner bipartisan support.
Senator Hassan. Great. Thank you.
I want to talk a little bit about improper payments. In
fiscal year (FY) 2018, GAO estimated that the Federal
Government spent at least $151 billion in the form of improper
payments.
When I served as Governor of New Hampshire, our State's
budget was about $11.5 billion. Now, granted, we are a small
State, but the fact that the Federal Government issues improper
payments totaling more than 10 times the entire New Hampshire
State budget is really staggering and obviously unacceptable to
all of us.
To address this issue, I cosponsored the Stopping Improper
Payments to Deceased People Act, and I was happy to see the
bill pass out of this Committee last week.
In this year's report, GAO recommends that the Office of
Management and Budget issue guidance on how to identify and
measure improper payments. It concerns me that Federal agencies
do not even have a grasp of the true magnitude of this problem,
let alone how to fix it.
If such guidance from the Office of Management and Budget
is implemented, how would that ultimately help to reduce the
amount of improper payments the government makes each year?
Mr. Dodaro. There are two things that are not being done,
at a minimum.
Senator Hassan. Right.
Mr. Dodaro. One is identifying the root cause of the
problem. You need to get to the root cause of the problem, so
that you have to try to prevent the payments from being made
improperly in the first place. We are never going to see a
great degree of progress because it is too hard to recoup these
payments after they are identified.
The guidance would help agencies better identify the risk
factors that need to be involved and what are the root causes
of the problem.
Now, the $151 billion in my estimate is still understated.
Senator Hassan. OK.
Mr. Dodaro. There are not audits being done of the managed
care portion of the Medicaid program, which is almost half of
Medicaid spending. I think this is not a good idea.
I have been working with the Centers for Medicare and
Medicaid Studies (CMS) and OMB to try to get State auditors
more involved in auditing the Medicaid program. I think that
would be a very worthwhile investment and pay for itself.
I think you could use auditors to audit the Medicaid
program more, before the payments are made, not after the
payments are made.
Senator Hassan. Yes.
Mr. Dodaro. CMS has been reluctant to ask Congress for that
authority. I think Congress should give them that authority. It
has been proven to be effective and more effective than
auditing the payments in a post-payment status. There is a lot
that could be done.
The three areas that are the largest ones and I am really
worried about are Medicare and Medicaid, which are the fastest-
growing Federal programs. Last year, improper payments were $36
billion in Medicaid, $48 billion Medicare. Finally, the earned
income tax credit (EITC).
We have also recommended that the Congress give the
Internal Revenue Service (IRS) the authority to regulate paid
tax preparers to encourage them to have codes, even on paper
returns, scannable codes to have a better electronic filing,
and to reduce the filing requirement for W-2 information for
employers, so that IRS gets more electronic data to compare
ahead of time.
There has been some legislation in this area, also
bipartisan, that I would encourage the Congress to pass.
Senator Hassan. Great. Thank you.
In addition to this added guidance and the priorities and
actions you just talked about, do you believe that passing our
bill aiming to stop improper payments to deceased people would
be helpful to start reducing the amount of money that the
Federal Government incorrectly spends each year?
Mr. Dodaro. Yes, definitely. It would implement one of our
prior recommendations. So you will help our implementation rate
go up as well.
Senator Hassan. Oh, good. All right. Win-win.
Mr. Dodaro. It just makes sense. The Social Security
Administration (SSA) right now will not give to the Treasury
Department the full Death Master File (DMF) to check against a
``Do Not Pay'' list. It is kind of maddening, to be honest with
you, but I think if Congress clarifies this, I think it would
be extremely helpful.
Senator Hassan. That is great.
I want to touch on a couple other things, but given the
time, why do not I yield back, and then if we have time for a
second round, I will ask more questions. Thank you.
Senator Paul. I think it is important, as Senator Hassan
pointed out, we do have bipartisan support to quit paying dead
people. [Laughter.]
We finally have found something that we have complete
common ground on.
Government is so bad that even when we agree on it, we
still, unfortunately, have been doing this for decades. We have
to get better on it.
I think we will go to Senator Enzi next.
OPENING STATEMENT OF SENATOR ENZI
Senator Enzi. Thank you, Mr. Chairman, Ranking Member, and
thank you, Mr. Dodaro, for the presentations that you do. I am
always impressed with them. I try to be at as many of them as I
possibly can.
You have testified before the Budget Committee several
times and provided us with good information, and you have heard
my frustration over how the President gives us a budget, but it
is a different format than the Senate's budget, which is a
different format than what the appropriators use, which is a
different format than what the authorizers use because they are
shredded into several different appropriations budgets.
There is the Government Performance and Results Act and its
modernization, and I am not sure that that follows the same
format either.
I am trying to figure out ways to make that a little more
effective. That is probably what I heard when I first ran for
office: Why do the government agencies not say what they are
going to do and then show if they did it?
Also, you turn out the reports, and we do not always follow
them, and the agencies do not always follow them. Consequently,
a lot of good advice goes by the wayside.
Can you think of any way that we can provide incentive for
these people to save and do these things? I mean, you get a lot
of incentive if you give money away, but you do not get a lot
of incentive if you take money away. Do you have any
suggestions for us in that?
Mr. Dodaro. Yes. I think it is very important that before
the Congress consider incentives, it must address the lack of
an inventory. Part of the problem is even the agencies cannot
identify these opportunities for savings very efficiently
because there is not this comprehensive program inventory.
For example, Senator, when we first started this work, we
found there were 82 programs on teacher quality spread across
10 different Federal agencies. OMB would really be the only
potential place to identify these things across government in
addition to GAO, and they do not have the tools to be able to
do this because there is no inventory.
We have to go in and actually dig it out and identify them
ourselves. We have found well over 150 Science, Technology,
Engineering and Mathematics (STEM) programs and 43 different
employment training programs spread across the government.
Even the executive agencies, even if you gave them
incentives, it is difficult for them to identify and act on
these areas because they are cross-agency, and most of the big-
dollar savings require multiple agencies to agree. Getting them
to agree is difficult.
You really have to incentivize OMB to be able to lead
within the Executive Branch in reducing these areas of
deficiencies, but they do not have the full capacity to do
these things. That is why the default comes to Congress. Unless
the Congress acts and eliminates these programs, we are
hampered along with everybody else.
There are incentives. For example, in the information
technology (IT) area Congress authorized agencies to set up
working capital fund. If they save money in the information
technology arena, they can reinvest it and have some of those
savings back in the working capital fund.
These things, though, require a fundamental shift in the
culture of government. The culture of government is to spend
money and to make payments as fast as possible, and that
culture needs to change. Agencies need to be more careful in
how they go about these activities.
The only thing I found successful is rigorous congressional
oversight and forcing the agencies to explain why they are not
taking action on some of these recommendations.
I was very pleased last year to see that Congress passed,
for the first time, legislation requiring agencies to identify
what they are doing to address open GAO recommendations in the
budget submissions to Congress. That will start with the budget
submissions next year. I think that is very helpful.
Each year, I write to each agency in the Federal Government
and identify open GAO recommendations. About 77 percent of our
recommendations get implemented, but not all, and so there are
many more things that could be done to save money.
It is hard to incentivize them and then hold them
responsible when they do not have the tools necessary to be
able to do this.
The other frustration I have had concerns the Digital
Accountability and Transparency Act (DATA) that Congress passed
in 2014. This required the creation of standard account
information. We found that the budget information was fairly
accurate in reporting, but for the grants and contracts data,
we found between zero and 1 percent of the information was
fully accurate when we checked it back to the original agency
award records.
It is problematic when you do not have good inventories,
you do not have proper accounting on information that is
accurate, and you do not have good cost information. The other
area that you mentioned is evaluations.
What we find in a lot of these programs is that they have
never been evaluated to know whether they are successful or
not. It is really incumbent on GAO or someone else to say these
programs are not effective before they can be eliminated as
opposed to the agencies having to prove that the program is
effective and should be continued.
That is my best advice. I know it is not an easy answer,
but that has been my experience.
Senator Enzi. You are actually saying that the GPRA
Modernization Act is not working?
Mr. Dodaro. Not the way it should be.
Senator Enzi. I appreciate that, and I appreciate all those
duplication numbers that you put out. I have been talking about
all of the housing duplication that we have spread over 20
agencies who do not coordinate with each other. Nobody sets
goals. Nobody follows up on them, and consequently, the housing
programs are not working, just to mention one of the ones that
you have mentioned before. Every agency has financial literacy
money, but it is not working with us.
I will yield back the balance of my time. Thank you.
Senator Paul. Senator Lankford?
OPENING STATEMENT OF SENATOR LANKFORD
Senator Lankford. Chairman Paul, thank you very much.
Gene, it is always great to see you again. Thanks for the
work of you and your whole team. There are a lot of folks that
are engaged in this research, and we appreciate very much what
you are doing and the way you dig in. We ask questions, and you
are digging it out to be able to find a way to be able to get a
nonpartisan answer. That helps us.
There are several areas that I want to be able to identify
and be able to walk through. Let me start with a statement that
you made. ``No comprehensive Federal inventory,'' I think is a
statement that you made, and it is a major problem. You and I
have talked about this several times, and a bipartisan,
nonpartisan bill, in many ways, the Taxpayers Right-To-Know,
passed unanimously in the House of Representatives now twice, I
believe, and gets stuck here in the Senate for some odd reason
every single time.
Is a comprehensive inventory, needed, and what would that
do to help your team be more efficient?
Mr. Dodaro. It is absolutely needed. It would greatly help
us to have that inventory. It would short-circuit our research.
We could turn around things much more quickly if we had this
inventory.
It takes us literally months to identify the number of
these related programs, across government, and then you have it
only for a point in time.
Senator Lankford. Right.
Mr. Dodaro. The information is not available on an ongoing
basis. Every time we have to go in and update it, we have to do
it with very onerous procedures.
Senator Lankford. The comment is made that the DATA Act
already accomplishes all this. Why would we need a
comprehensive inventory of Federal programs?
Mr. Dodaro. Not so.
Senator Lankford. OK.
Mr. Dodaro. Not so. The DATA Act has not been fully
implemented because the information is not accurate yet. We are
looking at it again.
It looks good, and it is nice, but when you go in and you
check the accuracy of it, it is not.
There are now standards. That has been partly successful.
It is not being executed properly.
Senator Lankford. This has been one of my great
frustrations that the Taxpayers Right-To-Know should not be a
partisan issue. It should be just let us get the information
out; we can all see it. You can see it better; we can see it
better.
Right now, we ask your team to be able to go pull out some
of these areas, and months later, after all of your research,
you are able to pull it back. We should be able to do a quick
search on that, and for some reason, there are some in the
Senate who have literally told me they do not want that kind of
information transparency out there. That if there is that level
of transparency, then there is no telling what could happen.
I have said, ``You are right.'' There is no telling what
could happen if we could actually see what is actually
happening and to be able to know what is actually out there.
That would be helpful information to get.
Mr. Dodaro. I have supported that legislation, passage of
it in the past. I continue to remain convinced that it would be
very helpful and successful. I think transparency is absolutely
essential, and I actually think it will lead to better trust in
government----
Senator Lankford. I would say yes.
Mr. Dodaro [continuing]. Because right now, nobody knows
where the money is going. You do not know what you are getting
for it in terms of results and the Taxpayers Right-To-Know Act
would link the results to the spending and provide clear
accountability to the officials.
It would not only help GAO, as I was mentioning to Senator
Enzi, but it would also help the agencies. It would help
Congress, but importantly, it will empower the public and
public interest groups and others to ask relevant questions.
Senator Lankford. Right. I hear from agencies all the time.
They do not want to start a duplicative effort either, but they
do not know about it. They get encouragement to take on this
project, and then they find out 3 years later, after they have
done all the work, they are also working on something another
agency is already working on. They would like the information
as well.
Let me bounce a couple other things. You mentioned an issue
about identity theft, in the refund, theft with the IRS. This
is something they have worked on intentionally on it, but you
identified $1.6 billion that is actually paid out to
fraudsters. Are there specific recommendations that you would
encourage us to take on?
Mr. Dodaro. Yes. One that we have in this year's report
relates to paper IRS filings. There are still about 15 million
or so, paper forms submitted to the IRS. They cannot scan them
very quickly and then use them to be helpful. We recommended
adding a barcode on the form that would be a requirement, that
would be number one.
Number two is to require more W-2s by employers to be filed
electronically. Based on one of our recommendations in the
past, Congress has moved the deadline for employers up earlier
for
W-2 reporting. That is what we found was a big problem earlier,
and the amount of identity theft has come down considerably
since Congress passed that legislation. This would go further
and make more things electronic. It would be faster for IRS if
you do this.
Also, we think that IRS ought to take a little bit more
time before it makes the refund payments to do matching and
checking, and it has been proven by their own studies and by
our studies that that would save hundreds of millions of
dollars too.
Senator Lankford. Right.
One of the challenges that we face is that every time we
step into some of these issues of whatever program that it may
be, as soon as you talk about the program, you are immediately
heartless because you want to talk about the program and
efficiencies or inefficiencies in it.
Let me talk about one of the heartless areas that your team
brought up. You talked about SNAP and finding a way. Clearly,
you do not want people in poverty to have access to food,
clearly, because you are starting to talk about this program.
What are your recommendations on SNAP, and what is it that you
saw that might, could help get a better delivery to systems?
Mr. Dodaro. Just to be clear, we do have a heart at the
GAO. [Laughter.]
Senator Lankford. Well, you know what? Just to be clear,
those of us that want efficiencies also have a heart as well.
Mr. Dodaro. I realize that.
In this case, there are SNAP employment and training
programs that actually help people get training so they can
become self-sufficient, but what we found was slightly over 3.4
percent of people with work requirements participated in the
SNAP employment and training programs.
As the Chairman mentioned, the Federal Government spends
$441 million for training programs, but the requirement is that
the training programs are supposed to be coordinated with
already existing workforce development and training programs in
the State.
Three States decided, ``We are going to have our own,''
SNAP employment and training program, ``We are not going to
rely on these.'' Twenty-four other States that we found in
checking their records did not attest that they are using the
State employment system.
We are saying this is a coordination problem within the
State, and that they should be coordinating properly. The
Agriculture Department ought to make sure that the States are
coordinating properly and the Federal Government is not funding
activities that are not coordinated within the State because
that way the government is not only duplicating at the Federal
level, it is encouraging duplication at the State level. It is
just not efficient.
Senator Lankford. Right. Thank you.
Mr. Dodaro. It is not helpful to help people get off the
programs.
Senator Lankford. No, it is not, and it is not helpful to
be able to discourage people from work or encourage work
without providing some kind of opportunity to be able to get
some equipment.
Mr. Dodaro. One other issue on the refund fraud issue is
that we have encouraged Congress to give IRS the authority to
regulate paid tax preparers.
Our research there shows that paid tax preparers--these are
not the enrolled ones that are already covered--have an error
rate higher than when people prepare their own taxes. I think
this is an area. IRS tried it. They were sued; they lost. They
need congressional support. I think this area would be very
effective in helping stem a lot of the problems in this area.
Senator Lankford. Thank you, and thanks to all your team.
Mr. Dodaro. You are welcome.
Senator Paul. Thank you. Senator Scott.
OPENING STATEMENT OF SENATOR SCOTT
Senator Scott. Good morning. Thanks for what you do.
I just finished 8 years as the Governor of Florida. We had
a lot of disasters, and we had some horrible hurricanes. One of
the things that surprised me was--and, by the way, who I worked
with the most was, of course, FEMA, and they were really hard
workers. The lady that runs the Southeast Grocery Check, I
think, tries really hard and does a great job.
I also worked a lot with the Corps of Engineers, and
everybody tried to be helpful to us. There is nobody in the
Federal Government that I saw that did not try to be helpful.
I will give you a story--and I do not know if you have ever
looked at it--that shocked me. We get hurricanes in Florida.
One of the obligations that our counties have is pre-hurricane,
they go out and contract with a debris pick-up group to get a
contract for after a hurricane. It is a bid contract, and the
price--I did not do those contracts myself, but what I was
told, the price range was $7 to $8.50 a cubic yard.
The first big hurricane that I had was Hurricane Irma,
where we had a lot of debris, which was a year and a half ago.
Right after it happened, I got all these people calling me and
telling me I should turn the debris pick-up over to the Corps
of Engineers.
I never had this issue before, so we started looking into
it. We looked at the pricing. To start out, the State would
have to pay 12.5 percent, the counties paid 12.5 percent, and
the Feds paid 75 percent for debris pick-up until you hit a
certain threshold. For us, it was $2.7 billion of cost.
If we turned it over to the Corps, step one is they told me
that, immediately, the Feds would take care of 90 percent. I
was only obligated for 5 and the counties for 5, so that seemed
odd.
Number two, we looked at the pricing. Do you know what the
Corps' pricing was?
Mr. Dodaro. High.
Senator Scott. $72 a cubic yard, OK, $7 to $8.50 versus
$72. More interesting, same company.
Have you ever look at this? Because you would think the
Federal Government would be better at contracting, right, than
a local country, and we have a lot of small counties. How could
the Feds be this much different?
Mr. Dodaro. One of the other things we do is keep a list of
the highest risk areas across the Federal Government for the
Congress. I testified in March on that before this Committee.
There are four contracting areas on the high-risk list: DOD
contracting, which includes the Corps; the Department of Energy
(DOE) contracting, National Aeronautics and Space
Administration (NASA) contracting and a newly added area on
Department of Veteran's Affairs. We have only taken one high-
risk contracting area off the list--Management of Inter-Agency
Contracting in 2013. However, overall contracting continues to
be a problem.
There are problems with competition, and there are problems
with setting the requirements. The Feds also would not do it
based on local conditions necessarily. They would have a
different sort of playing field.
One of our recommendations this year is in the advanced
contracting area, where FEMA's should be working with the
States to have advanced contracts in place. What we found is
they did not give guidance to their people on how to use the
advanced contracts.
In one case, for example, recently, instead of using
advanced contracts for tarps, they did a post-contract award,
which then failed because they did not have opportunities to
check the performance and the capabilities of the contractor.
Senator Scott. Based on the----
Mr. Dodaro. Yes, based on that. They get the tarps in time.
Senator Scott. There are all these rules afterwards.
Mr. Dodaro. Yes, right. A lot of our recommendations, which
includes a bill that the Senate now has taken up to implement
our recommendations, would do this.
Then they were not keeping the advanced contracts up to
date. In 10 cases, when something happened, they had to use a
bridge contract to extend the current contract rather than have
a more competitive contract in place, and FEMA was missing
about 70 contracting people. You do not have enough contracting
workforce at the Federal level, which causes concern in a lot
of areas.
I think FEMA can do a lot better. We have never looked
specifically at these things at the Corps, I would say, but I
am just generally telling you about Federal contracting.
Senator Scott. First off, it is not $10 million. It is a
billion dollars.
Mr. Dodaro. Yes.
Senator Scott. I do not know if others--we are probably the
worst State for this because of all the foliage and the
hurricanes we get. It is a lot of money.
How do we try to fix that? What would be the process?
Mr. Dodaro. First of all, I am not sure the Federal
Government should be involved in all of these activities as
well.
The way it works--and the Federal Government decides to get
involved--is that there was criteria set in 1986 that there is
a per capita income figure. You probably know this. It now is
set at $1.50
Senator Scott. That is how we get to the $2.7 billion.
Mr. Dodaro. Yes, per capita.
Senator Scott. Yes.
Mr. Dodaro. Because of this, the Federal Government is
spread too thin. It should not be involved in a lot of small
events.
We indexed it for inflation, and based on the index for
inflation, there would be about 25 percent of these disasters,
the Federal Government would not have been involved in. If it
was indexed for growth and personal income since 1986, the
Federal Government would not have been involved in.
Senator Scott. Right, because it did not change the entire
eight years as Governor.
Mr. Dodaro. We have had an outstanding recommendation for
years now that FEMA come up with better criteria to judge State
and local capacity. Particularly since there are more frequent
and more intense storms--FEMA is stretched too thin, and that
involves the Corps. That involves a lot of the other actors at
the Federal level at play here.
Number one is sorting out these roles and responsibilities.
Number one would be tremendously helpful in focusing on this,
so the Federal Government is not spread too thin, and as a
result, people hurry. They are not prepared as well as they
could be prepared. That would be my number one recommendation.
Number two would be to make sure they have the right people
in place to carry out these activities. The Federal workforce,
I am very concerned about. There are a lot of skills gaps.
There is a lot of inattention to succession planning. You have
a lot of impending retirements, and I think you are going to
see more things that you would not want to see without
attention to the workforce.
Senator Paul. That is great. You ended up using the Corps,
or you did not use the Corps?
Senator Scott. No. Stop and just think about the numbers
for the State.
Senator Paul. Even at 10 percent, it was still going to be
a bad deal.
Senator Scott. Yes. They had a lot of former politicians
that knew me that called me to get me to do it.
Senator Paul. I think, Mr. Dodaro, part of the answer is
that maybe the Federal Government should not be involved in
every storm. That is one, but two, you got to fix the perverse
incentive.
Senator Scott. Oh, yes.
Senator Paul. If you had not looked into this, you had a
perverse incentive at first to say, well, gosh, only 10
percent, because the Federal Government is free, because the
Federal Government is going to pay 90 percent.
I would make the point that this is the same sort of
situation we had with Medicaid expansion. The Federal
Government taxes you, and then they say, ``Well, do not you
want to help poor people in your State?'' You say, ``Well,
sure, I want to help poor people.'' Well, why do not we help
all of them? Why do not we help everybody in the State? I am
not paying for it. Then, eventually, you had to pay for some of
the Medicaid, but if you paid zero, it was like it was free.
Senator Scott. Right.
Senator Paul. This is the problem, to my mind, of false
federalism. If the Federal Government does the taxes and the
States spend it, that is not federalism. federalism is you want
a health care system, and you 20 percent of your people to be
in Medicaid. Florida should raise the taxes.
Senator Scott. We will figure it out too.
Senator Paul. You will probably be better at it.
This is the debate we had last year, at least among
Republicans. Everybody wanted this, this Graham-Cassidy bill,
to block-grant it back, and they said, ``Well, this is
federalism.'' I said, that is not federalism. Federalism is
each of the States tax the people for their health care system,
and then they spend it. If we tax the people at the Federal
level and then the States spend it, I do not think you have the
same degree of cost, even though States are better than the
Federal Government. You do not have the same incentive because
you are not taxing people.
Senator Scott. In my 8 years as Governor, we saw no per
capita increase in Medicaid cost. Now, we did not do the
expansion, but do you realize that New York per person, I
think, on their basic Medicaid, because they did expansion,
just basic Medicaid gets double what we get?
Senator Paul. Right. That is when you look at the charts.
Senator Scott. Is that true?
Senator Hassan. I would just note--and we could all
probably talk about this for the rest of the day. We did expand
Medicaid in New Hampshire. One of the challenges is when you
expand Medicaid, which I advocated for is really important for
behavioral health and substance use disorder, among other
things, and a lot of working families could not afford health
care, and they could then afford health care.
You have a pent-up demand for health care from people who
have not had insurance for a long time.
Senator Paul. Right.
Senator Hassan. You have people who have underlying
conditions that have not been treated for forever.
Senator Paul. I do not think the argument that we are
having or the discussion we are having is on whether or not
there are people that are deserving of Medicaid. The argument
is whether or not you should tax it at the Federal level and
let the States expand it while the Federal Government pays for
it because you do not have the same incentives to try to watch
your expenses.
I think you do more if--and I think this is true of all
programs, though--is that if we want to fix this particular
program with the Corps or with other programs, you have to get
rid of perverse incentives. You have to have the punishment.
Senator Hassan. Right.
Senator Paul. If you want to expand Medicaid in New
Hampshire, you will watch how much you expand it if you have to
raise taxes on people in New Hampshire to pay for it.
Senator Hassan. There are economies of scale and other
things that a single State cannot achieve that the Federal
Government can. There are arguments back and forth here, but I
agree that there is work we could do in all of these areas.
Senator Scott. To get off of something, Medicare and
Medicaid is all controversial, so get off that for a second.
Senator Hassan. Yes.
Senator Scott. I think we all want people to get health
care.
Senator Hassan. Yes, right.
Senator Scott. It is how do you do it in a manner that our
taxpayers can afford it. Whether the State taxpayers are paying
for it or the Federal taxpayers are paying for it, it is not
free. Somebody is paying for it.
Senator Paul. Right.
Senator Scott. What I watched in the FEMA stuff--and let me
tell you, they work their butts off. I love working with them.
To a certain extent, it felt like it is ``let us make a
deal.'' It would make it easier for them and for the States if
they said this is exactly--I agree with what you said as far as
you ought to look at what they ought to be involved in because
it was surprising to me as a Governor what the Feds would be
involved in. If it was real set, I think it would be easier.
I will give you another story. Look, I am sure all these
programs----
Senator Hassan. You did not know you were getting into a
debate on a number of things, did you? [Laughter.]
Senator Scott. I am sure that all these programs are
important programs, but after a disaster, different agencies
give us money. Then we have to go propose a plan for it. Does
somebody ever go back and say did we ever do what we said we
were going to do?
Senator Hassan. That is an excellent point, and that is
something we tried to change.
Senator Paul. Does anyone ever go back and say, if it was
private insurance, would it have covered this disaster relief,
and all of a sudden, FEMA came in and supplanted private
insurance, who ends up making more profit because they did not
actually have to pay out?
Senator Hassan. Right.
Senator Paul. Let us go back to the hearing. [Laughter.]
One of the questions we mentioned in our opening was
whether or not--when we have something, a new program, we have
to get a CBO estimate on what it is going to cost--whether or
not we could ask for a CBO estimate and a duplication estimate,
and I guess the question is whether your agency could provide
that because you have 9 years' worth of reports. I propose a
bill to help mothers with one eye and 10 children to have
something, and you say, ``Well, we already have 14 programs.''
Would there be a way that the GAO could actually score a piece
of legislation to say whether it is a duplication or not?
Mr. Dodaro. That would really have to be CBO rather than
GAO.
Senator Paul. It would come out of CBO. You could
coordinate--right.
Mr. Dodaro. Yes. Because they do all the scoring up front,
and they are the official scorekeeper for the Congress on both
revenues and the deficit, but also proposed legislation.
Now, sometimes we will get asked about management issues
and proposed legislation and things like that, but we do not
actually score what the cost would be of implementing that
legislation or whether there is duplication.
What I would say is that you could have that conversation
with CBO. They might be able to do something, but I suspect
they are going to be hampered, just like we are, because there
is no comprehensive Federal inventory. A lot of these programs,
when you are getting into smaller programs, are within
budgetary accounts. They are not very visible.
Senator Paul. Our thinking was, yes, CBO would do it, but
we would dictate to CBO that there is going to be a cost score
and there is going to be an evaluation of duplication. CBO
would then ask you, maybe it is not looking throughout all
government but at least looking through 10 years of duplication
reports to find what is most readily accessible and you say
this is what we have from our duplication search because you
have done--that is 10 years' worth of research that you have.
Mr. Dodaro. Yes.
Senator Paul. You have a big body of knowledge. Do you
think that would be feasible, though, if we dictated CBO to say
you have to give a duplication score, and then you would
probably provide the information to them?
Mr. Dodaro. Yes. Without speaking for CBO, because every
year I testify with them before the Senate Appropriations
Committee, and so I know their workload is a big issue. They
have to turn things around really fast. I do not know what
their view would be of that.
What I would say for GAO, Mr. Chairman, we would be happy
to help in any way we can to avoid the creation of programs
that would be duplicative.
The other thing I would say, it is very hard to prove exact
duplication. That is why we cover overlap and fragmentation
because they are harbingers of duplication.
I think it is a worthy objective to try to stop adding to
the duplication that we already have and overlap and
fragmentation. I would be happy to have conversations with CBO
to see if there is something that we could work with them on to
support them.
Senator Paul. You mentioned the earned income tax credit.
There have been reports of as high as 25 percent fraud in the
earned income tax credit and the child tax credit. From your
looking at it, what would be the biggest reform to the
different tax credits? I think you mentioned it, but go ahead
and mention it again.
Mr. Dodaro. Yes. The one thing I would say is that a lot of
those people use paid tax preparers.
We did and it is dated now a little bit, but----
Senator Paul. Yours is more organized fraud, in a sense?
Mr. Dodaro. It could be.
I think they use them; there are more errors. We sent
undercover teams into 19 tax preparer offices for tax advice
and only 2 of the 19 gave us the right information.
I think this is very important, and we found error rates
based on looking at IRS data, about 60 percent error rate, with
paid tax preparers versus people to do it themselves, only 50
percent.
Senator Paul. How is the fraud being committed? By
overestimating your income or overstating your income?
Mr. Dodaro. Or claiming more dependents than you have.
Senator Paul. Right.
Mr. Dodaro. It is very hard. The law itself is very
complicated, and you have people with dependents who live with
them portions of the year and live elsewhere other portions of
the year. It is very complicated.
Senator Paul. With the child tax credit, there were reports
from a year ago--and I think we tried to fix this. I do not
know if we did, but they were able to use generic taxpayer
numbers and not Social Security numbers. People were claiming
six kids that did not exist. The government would nicely
generate a number for you, and you put it on the form. Do you
know if we have fixed that problem?
Mr. Dodaro. I do not know if we have looked at that. I will
go back and check it.\1\
---------------------------------------------------------------------------
\1\ Supplemental information GAO provided for the record. Yes,
Public Law 115-97, commonly referred to as the Tax Cuts and Jobs Act
(TCJA) contained a temporary fix. Prior to passage of TCJA, the Child
Tax Credit (CTC) and the Additional Child Tax Credit (ACTC), could be
claimed if a child was a U.S. citizen, national, or resident, and the
taxpayer could file using either a Social Security Number (SSN) or an
individual taxpayer identification number (ITIN) for the child. TCJA
added subsection (h) to section 24 of the Tax Code governing the Child
Tax Credit. Subsection (h) applies to tax years 2018 through 2025, and,
in part disallows the credit for any taxpayer with a qualifying child
unless the taxpayer includes the social security number of the child on
the tax return. For purposes of this section, the SSN must be issued by
SSA to a U.S. citizen and before the due date of the return.
---------------------------------------------------------------------------
Senator Paul. That was more in the child tax credit. I
think we had legislation on that. The legislation passed,
right? Yes.
One other issue, I was intrigued by the foreign military
sales. Do you have an idea or does any of your team have an
idea if it is a $500 million sale, like how big is the sales
cost that you are talking about that we are eating percentage-
wise?
Mr. Dodaro. Yes. They do not track the amount of cost, but
what happens is the salaries of the military personnel that
work on this and certain retirement benefits of the civilians
that work on this are not charged at all.
The last estimate we had was about $120 million that the
United States was essentially subsidizing for these sales that
could be recovered.
I would say our best estimate at this point was tens of
millions of dollars a year as being lost because the Federal
Government is not fully charging the purchaser of this
equipment, and this was done years ago by legislation because
DOD was concerned that there was not enough sales activities,
and people would be discouraged from purchasing the equipment--
U.S. allies and others.
Senator Paul. When we make a foreign military sale, it is
actually coming from the U.S. Government. There is a private
contractor that makes the equipment, but they are actually not
selling it to Saudi Arabia or another country? It actually goes
from the Pentagon to Saudi Arabia?
Mr. Dodaro. I believe so.
I have my expert here in foreign military sales. Let me
call him to the table. This is Tom Melito.
Senator Paul. Thank you.
Mr. Melito. There are direct commercial sales, which can go
from the contractor directly to the overseas ally, but this is
a program where the ally is asking for the United States'
support in basically training and also preparing the equipment
to transport and all that. They pay the United States for these
services.
In this case, as the Comptroller General was saying, we are
providing some services for free, even though the law says it
should be no cost to the U.S. Government.
Senator Paul. These are not on sales that are going
directly from the contractor to the country. These are on sales
that are going from the Pentagon to the foreign country?
Mr. Melito. Exactly.
Senator Paul. There is a cost involved, and then there is
profit being taken out, because still there is a contractor
somewhere in the middle on these things?
Mr. Melito. The country could decide not to pay for these
services. That would be a direct commercial sale. If they
decide to have the capacity to do this themselves, they can
then just buy the equipment. Obviously, the military has to
determine if they are allowed to buy it. Many countries decide
that they want support in a number of ways. Then the United
States charge them fees to provide that support.
Senator Paul. Alright. I have no more questions. Senator
Hassan.
Senator Hassan. Thank you.
I have one additional question, and I think I want to say
for a second, as we think about our work over the next little
while and the issue of FEMA and what that threshold should be,
I would hope that we would think about threshold metrics that
recognize that small States generally have disasters of smaller
dollar value, but they could be a huge percentage of a local or
State budget. I am sure there is a way to adjust metrics with
that in mind, but that is my New Hampshire hat on here.
I wanted to touch on another area in your report concerning
Federal student loan default rates. GAO reports that as of June
2018, borrowers were in default on $163 billion worth of
Federal student loans.
I was disturbed to read how some colleges and universities
avoid accountability for unacceptably high student loan default
rates by taking advantage of a loophole in the law.
Right now, the law measures an institution's eligibility
for Federal loan dollars by what is called the cohort default
rate. Put simply, if more than 30 percent of a graduating class
defaults on their loans within 3 years of graduation, the
institution's eligibility for Federal loan dollars is cutoff.
Instead of working to improve and help students avoid
default, some colleges and universities choose to use their
resources just to avoid accountability. They hire third-party
consultants to convince students to postpone their payments,
which for many means that they are just postponing inevitable
defaults.
For the schools, however, this means they can continue to
receive financial aid dollars and mislead students who enroll,
giving the students the false impression that the school
actually provides quality education and will prepare them
meaningfully for a career.
My understanding is that GAO recommends that Congress
change how the cohort default rate is calculated. Can you
explain a bit more about this recommendation?
Ms. Emrey-Arras. Yes. I would be happy to.
Mr. Dodaro. Excuse me. This is Melissa Emrey-Arras. She is
out expert in higher education.
Senator Hassan. Welcome. Thank you.
Ms. Emrey-Arras. Thank you.
The current metric measures a 3-year time period and counts
whether or not people default within that metric, within that
time period. If they do and if the thresholds are high enough,
a school can lose access to all of its Federal student aid
money.
As you point out, we found that schools were gaming the
system by pushing students to go into a repayment status called
forbearance which gets them out of risk of being in default,
which helps the schools, but does not necessarily help the
borrower or the Federal Government.
Basically, the borrowers are then racking up interest, and
it can accumulate to thousands of dollars in interest over that
time period, and then we found that borrowers were defaulting
after the measurement period in the fourth year when the
schools were no longer held accountable.
What we recommended was that Congress consider
strengthening the metric to hold schools accountable by doing
something to account for this issue of borrowers being put into
forbearance, perhaps adding another metric to bolster the
cohort default rate, perhaps something like a repayment metric
or doing something different. We just thought that schools
should be held accountable.
Senator Hassan. Thank you.
As I understand, your recommendation is that if you change
the definition of the cohort default to take out the students
who were in forbearance, we would save about $2.7 billion. Is
that right?
Ms. Emrey-Arras. We found in our analysis that over 260
additional schools could lose access to Federal student aid if
you took out that population that were in forbearance, and that
that population of schools received $2.7 billion in Federal
student aid during that time period.
Senator Hassan. You just mentioned trying to move us away
from solely using default rates to determine of an institution
were able to receive Federal student aid dollars. Is there
anything else you would like to say about what other kinds of--
because $2.7 billion is good, but we are talking about a huge
amount of student debt and a huge amount of default, $163
billion.
Ms. Emrey-Arras. Right.
One of the metrics that the Department of Education told us
that is less susceptible to manipulation is this repayment rate
metric.
Senator Hassan. OK.
Ms. Emrey-Arras. The repayment rate metric measures the
percentage of borrowers who are not in default, who have also
put at least $1 toward the original loan principal within the
first 3 years. So you know that they are actually chipping away
at that original principal.
Senator Hassan. Thank you. That is very helpful, and that
concludes my questions.
Thank you, Mr. Chair.
Senator Paul. Senator Sinema.
OPENING STATEMENT OF SENATOR SINEMA
Senator Sinema. Thank you, Mr. Chairman, and thank you, Mr.
Dodaro, for being here today.
Arizonans expect and demand a government that is efficient,
effective, responsive, and transparent, and the GAO report
helps Congress identify areas to improve efficiencies and
eliminate redundancies within the Federal Government, and it
helps us understand the progress or lack of progress in areas
that the GAO has previously identified.
GAO's work on the duplication report are important for
everyone in Arizona who wants a better Federal Government.
I am interested in some of the recommendations for the
Departments of Defense and Veterans Affairs (VA). Men and women
who serve in uniform made a commitment to protect our country,
and in return, we promised to provide them with the best care
and support. I intend to honor that promise.
The report recommends that the Defense Health Agency
improve how it tracks instances where patients are or could
have been harmed. Understanding these events is very important
to improving medical services and patient safety.
Did GAO look at how other Federal health care providers
like the VA or Indian Health Service track instances where
patients are put at risk or harmed?
Mr. Dodaro. No. We were focused on DOD at that time.
Senator Sinema. There is no way, then to understand how
DOD's tracking protocols compare to other Federal health care
providers?
Mr. Dodaro. There is a way to do it. We would be happy to
take a look at doing that in the future, but for this
particular engagement, we did not look at that. We were focused
on DOD solely since it is such a large operation but what we
found is that it is a pretty well-established practice when you
have these sentinel events, which could cause an unexpected
death or very serious or psychological problem that there be a
root-cause analysis done of what the problem is and that it be
coordinated.
What we found is that they were doing the root-cause
analysis, but within each service, and so it was a very
stovepiped activity. Nobody had to look across the board to
see, ``Are we having a systemic problem here? Is there
something that we need to change?'' It is a fundamental, kind
of analytical approach that is well established and used.
What we found was about 9 percent of instances of harm were
not even being entered in a system. They did not have a system.
They would send this through emails and other things. It really
was not organized properly.
Senator Sinema. Thank you.
What processes are in place to share information about
these events and lessons that are learned across the health
care provider agencies?
Mr. Dodaro. Right now, each service keeps their own
information, and then they try to share it. They are in a
transition now where the Defense Health Agency is supposed to
take over administration of a lot of the central management of
DOD medical treatment facilities, but right now, they do not
have a system that takes all the information from the services
and then analyzes it. That is what we recommended that they do.
Senator Sinema. My next question is about VA medical
facility construction. Managing budgets for VA medical facility
construction continues to be a real area of concern for
Congress, and your report recognizes the need for improvement.
Based on your analysis, does VA have the ability to
identify construction needs prior to entering into a
construction contract for medical facilities?
Mr. Dodaro. Yes. That is a real interesting question, and I
think with the implementation next month of the MISSION Act,
which would allow for greater access to community care, it will
be real interesting to see what the implications would be for
VA facilities in the future. In other words, how many veterans
are going to continue to use VA facilities as opposed to using
community care facilities?
There is a commission that will be created in order to
identify long-term needs of the veterans, and from a facilities
standpoint, that is just being organized right now, and it will
be under way. We are going to look at how that is implemented
over time.
I am glad that the Congress required that, and that will
help provide a focus to make sure these things are evaluated
properly.
We found that in a lot of cases in the past that the
guidance that was coming from the central office, the people at
the local level felt it was not really helpful to them. They
were inventing their own guidance. As a result, you really do
not have confidence in your ability to prioritize across the
entire VA system, which you would need to do because you have
limited budgetary resources.
Those are our recommendations.
Senator Sinema. Thank you.
Has GAO's research identified whether other Federal health
care provider agencies have more effective ways to identify
their needs prior to entering into these construction
contracts?
Mr. Dodaro. No, we have not. We would be happy to take a
look at that, though.
Senator Sinema. I appreciate that.
The GAO recommended that the Department of Health and Human
Services (HHS) coordinate with other Federal agencies,
including the VA, to improve the effectiveness of oversight for
fragmented Federal funding for physician graduate medical
education (GME).
As you might know, Arizona suffers from physician shortages
in nearly all of our counties, which leaves too many Arizonans
without access to primary care doctors, mental health
specialists, and it causes these unconscionable delays for our
veterans.
How will comprehensive reporting across programs help us
better understand how many primary care physicians we need in
Arizona versus how many pediatric specialists we need? Are
there other areas within GME funding that you would recommend
that coordination efforts be focused?
Mr. Dodaro. First, I think the last estimate we had or
number on this is that the Federal Government spends about
$14.5 billion a year to support graduate medical education
training, and it is really not clear what the result of that
spending is. It is clear that better coordination is needed
across different Federal agencies.
Right now, like a lot of things in Federal Government, it
is very decentralized. People are doing their own thing, and
there is really not a lot of lessons learned out of it yet.
That is what we are suggesting is that the agencies evaluate
how well it is working and how well it is meeting the needs
that they anticipate in the future.
Right now, it is not very systematic, and we are concerned
that the Federal Government is continuing to provide billions
of dollars and not knowing if it is really accomplishing what
it need it to accomplish.
Senator Sinema. Thank you.
Mr. Dodaro. Yes.
Senator Sinema. Mr. Chairman, I yield back. Thank you.
Senator Paul. Thank you. Senator Lankford.
Senator Lankford. Thank you.
I want to follow up on a couple of things that you had
already mentioned before, and I have a new question and a new
issue. I want to talk first about the student loan program, and
if I could have your highly skilled professional step back in
again.
I am on the same stream of heartlessness here, so not only
for SNAP issues, but also student loan issues you are taking a
look at. I need to clarify a statement that you made earlier.
Did you say 260 schools could face default because they are
currently using this forbearance program now, that if we
evaluate it, they may be at risk?
Ms. Emrey-Arras. Over 260 additional schools could be at
risk of losing access to Federal student aid because of the
level of their default rates if you take out the forbearance.
Senator Lankford. How many schools do you think are using
this program? They are hiring people to get their students into
forbearance, not for the benefit of their former students, but
for the benefit of the school to kind of cover up what is
happening.
Ms. Emrey-Arras. We found about 800 schools were using
consultants that encouraged forbearance (5 of the 9 consultants
we examined).
Senator Lankford. Specifically for this forbearance-type
program?
Ms. Emrey-Arras. Some of them were providing accurate
information, but others were not. In some cases, the
consultants were lying to borrowers and telling them that they
could lose access to SNAP benefits if they defaulted on their
student loans as a way to pressure them into choosing
forbearance.
In other cases, there was pressure. There was not outright
lying, but definite pressure to go into forbearance. For
example, some consultants only gave borrowers forbearance
applications in the mail unsolicited, ``Here you go,'' so that
they could avoid default and help the schools out.
Senator Lankford. Were they doing that past 3 years or only
for those folks that are in the 3-year time period?
Ms. Emrey-Arras. We found that eight of the nine
consultants that we looked at were only paid for this service
during the 3-year period.
Senator Lankford. OK. Once it got past that 3 years, ``You
are on your own. We are not going to help you even with a
forbearance request?'' This is really to the benefit of the
school?
Ms. Emrey-Arras. That was our understanding.
Senator Lankford. Did you see a type of school, for-profit,
nonprofit, 4-year? Did you see any kind of direction or
consistency in type of school?
Ms. Emrey-Arras. We did not do that kind of sub-level
analysis in our report, but I can tell you that it was in more
than one sector.
Senator Lankford. OK. Obviously, it is an area that needs
to be addressed. We have a higher education bill that we are
hoping to be able to do later on this year. The goal was to be
able to help students actually land on a job, not to be able to
protect schools and to hide debt costs. If this is actually
implemented, then you are talking 1.4-or $1.5 trillion in total
student debt that is out there. What do you think the effect
is, best guess, on what happens on student debt and default
rates?
Ms. Emrey-Arras. Our hope would be that it would lower
default rates and that it would also hold schools, accountable
and that schools that should not be receiving Federal student
aid would not be in the future.
Senator Lankford. Other ideas that came out of this that
you saw that may or may not be listed in the recommendations?
Ms. Emrey-Arras. We did have a separate matter. It is
pretty basic, basically to require that any school or
consultant that chooses to contact borrowers to talk about
repayment options provide them accurate and complete
information, in other words that they not lie and provide only
one option.
Senator Lankford. Right. We have other areas for anyone who
does financial advice, fiduciary responsibilities to that
individual. They have to make it clear who they are working for
and to be able to make sure they are working for the benefit of
that individual they are contacting.
I appreciate very much your work and your insight on that.
Can I shift subjects to talk about inland waterways? You
had some recommendations specifically dealing with inland
waterways and the way the Corps of Engineers does contracting.
They do an incremental approach, a little bit at a time, that
may stretch out for years and year and years and years, rather
than fully funding and then putting the contract out and
finishing it out. What did you find?
Mr. Dodaro. What we found is it would add years, in some
cases, up to 10 years or more for these projects to be
completed over time. In other words, they were putting more
things in the pipeline than they could fund in a reasonable
period of time and at a good cost over time. It was costing
more money, and it was taking much longer. We said either you
need to put fewer projects in there, or you need to come up
with other ways to enhance revenues.
Not everybody pays the fee, the tax to use the waterway.
That is one option they should look at.
What the fee is itself is another option, and what are the
needs over a period of time, and what is a reasonable way to
get there?
Right now, it is not reasonable to do this. It frustrates
people because it takes too long, but what it does, it sort of
allows them to say we are doing more projects right now to
satisfy more people. It is only a temporary situation, and the
projects are not finished.
Senator Lankford. I have had this conversation with some of
the Corps leadership before for years because they seem to say
we are doing projects in every congressional district in
America, just so they can say they are doing a project in some
place.
Mr. Dodaro. Right.
Senator Lankford. If that project takes two decades to
complete, it is actually increasing frustration. I would rather
be able to see that project is scheduled to start at this time
and stop construction at this time and be complete rather than
we are making, ``progress.'' Is there any way to be able to
ballpark what the wasted dollars are by doing this little
incremental approach saying we are doing a little bit
everywhere, but hardly completing anything anywhere?
Mr. Dodaro. There are millions of dollars that could be
saved on this. I do not have an estimate. I will go back and
take a look at it, but it is not a good way to do business.\1\
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\1\ Supplemental information GAO provided for the record. The Army
Corps has done some analysis related to inefficient contracting. For
example, in 2017, presentations given by the Corps of Engineers to
members of the Inland Waterways User Board stated that the Corps
expected that the Kentucky Lock Addition project would require at least
$229 million more (about 19 percent above the original estimated cost)
as a direct result of inefficient contracting and be completed 17 years
later than planned. Similarly, the Corps estimated that Chickamauga
Lock project will need at least $170 million more (about 24 percent
above the original estimated costs) due to inefficient contracting and
be completed at least 13 years later than planned. These estimates,
developed by the Corp, provide some sense of the overall costs
associated with inefficient contracting. While each project is highly
unique, these analyses suggest that cost overruns on these and other
projects could be tens of millions of dollars each year. We would be
happy to work with your staff to the extent you would like to request a
more comprehensive review of the Army Corps' management of inland
waterway projects and contracts.
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Senator Lankford. No, it is not.
Mr. Chairman, thank you for having this hearing and for
bringing this backup again.
Senator Paul. Thank you.
Thank you to the panel. Thank you to GAO and Mr. Dodaro for
testifying today.
The hearing is adjourned.
[Whereupon, at 10:41 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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