    [House Hearing, 117 Congress]
    [From the U.S. Government Publishing Office]

                           EXAMINING THE POLICIES AND
                       PRIORITIES OF THE CORPORATION FOR
                         NATIONAL AND COMMUNITY SERVICE

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

                                    HEARING

                                   BEFORE THE

                        COMMITTEE ON EDUCATION AND LABOR
                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                HEARING HELD IN WASHINGTON, DC, DECEMBER 1, 2021

                                   __________

                               Serial No. 117-36

                                   __________

          Printed for the use of the Committee on Education and Labor

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

              Available via: edlabor.house.gov or www.govinfo.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    46-180 PDF                     WASHINGTON : 2022

    -----------------------------------------------------------------------------------

                        COMMITTEE ON EDUCATION AND LABOR

                 ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman

    RAUL M. GRIJALVA, Arizona            VIRGINIA FOXX, North Carolina,
    JOE COURTNEY, Connecticut              Ranking Member
    GREGORIO KILILI CAMACHO SABLAN,      JOE WILSON, South Carolina
      Northern Mariana Islands           GLENN THOMPSON, Pennsylvania
    FREDERICA S. WILSON, Florida         TIM WALBERG, Michigan
    SUZANNE BONAMICI, Oregon             GLENN GROTHMAN, Wisconsin
    MARK TAKANO, California              ELISE M. STEFANIK, New York
    ALMA S. ADAMS, North Carolina        RICK W. ALLEN, Georgia
    MARK DeSAULNIER, California          JIM BANKS, Indiana
    DONALD NORCROSS, New Jersey          JAMES COMER, Kentucky
    PRAMILA JAYAPAL, Washington          RUSS FULCHER, Idaho
    JOSEPH D. MORELLE, New York          FRED KELLER, Pennsylvania
    SUSAN WILD, Pennsylvania             GREGORY F. MURPHY, North Carolina
    LUCY McBATH, Georgia                 MARIANNETTE MILLER-MEEKS, Iowa
    JAHANA HAYES, Connecticut            BURGESS OWENS, Utah
    ANDY LEVIN, Michigan                 BOB GOOD, Virginia
    ILHAN OMAR, Minnesota                LISA C. McCLAIN, Michigan
    HALEY M. STEVENS, Michigan           DIANA HARSHBARGER, Tennessee
    TERESA LEGER FERNANDEZ, New Mexico   MARY E. MILLER, Illinois
    MONDAIRE JONES, New York             VICTORIA SPARTZ, Indiana
    KATHY E. MANNING, North Carolina     SCOTT FITZGERALD, Wisconsin
    FRANK J. MRVAN, Indiana              MADISON CAWTHORN, North Carolina
    JAMAAL BOWMAN, New York, Vice-Chair  MICHELLE STEEL, California
    MARK POCAN, Wisconsin                JULIA LETLOW, Louisiana
    JOAQUIN CASTRO, Texas                Vacancy
    MIKIE SHERRILL, New Jersey
    JOHN A. YARMUTH, Kentucky
    ADRIANO ESPAILLAT, New York
    KWEISI MFUME, Maryland

                       Veronique Pluviose, Staff Director
                      Cyrus Artz, Minority Staff Director
                                    ------

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing held on December 1, 2021.................................     1

    Statement of Members:
        Scott, Hon. Robert C. ``Bobby'', Chairman, Committee on
          Education and Labor........................................     1
            Prepared statement of....................................     4
        Foxx, Hon. Virginia, Ranking Member, Committee on Education
          and Labor..................................................     5
            Prepared statement of....................................     7

    Statement of Witnesses:
        Coles, Malcolm, Acting Chief Executive Officer, Corporation
          for National and Community Service.........................    19
            Prepared statement of....................................    21
        Jeffrey, Deborah J., Inspector General, Corporation for
          National and Community Service.............................     9
            Prepared statement of....................................    11

    Additional Submissions:
        Questions submitted for the record by:
            Ranking Member Foxx
            Castro, Hon. Joaquin, a Representative in Congress from
              the State of Texas
            Espillat, Hon. Adriano, a Representative in Congress from
              the State of New York..................................    90
        Responses to questions submitted for the record by:
            Ms. Jeffrey..............................................    82
            Mr. Smith (for AmeriCorps)...............................    92

                           EXAMINING THE POLICIES AND
                       PRIORITIES OF THE CORPORATION FOR
                         NATIONAL AND COMMUNITY SERVICE

                                  ----------

                          Wednesday, December 1, 2021

                      House of Representatives,
                              Committee on Education and Labor,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:20 a.m., via
    WebEx, Hon. Robert C. ``Bobby'' Scott (Chairman of the
    Committee) presiding.
        Present: Representatives Scott, Grijalva, Courtney, Wilson
    of Florida, Bonamici, Takano, Adams, DeSaulnier, Norcross,
    Morelle, Wild, Hayes, Levin, Stevens, Manning, Mrvan, Bowman,
    Pocan, Yarmuth, Espaillat, Foxx, Wilson of South Carolina,
    Thompson, Walberg, Grothman, Stefanik, Allen, Banks, Comer,
    Keller, Murphy, Miller-Meeks, Owens, Good, McClain, Miller,
    Spartz, Fitzgerald, Cawthorn, Steel, and Letlow.
        Staff present: Ilana Brunner, General Counsel; Ijeoma
    Egekeze, Professional Staff; Rashage Green, Director of
    Education Policy; Christian Haines, General Counsel; Rasheedah
    Hasan, Chief Clerk; Sheila Havenner, Director of Information
    Technology; Carrie Hughes, Director of Health and Human
    Services; Stephanie Lalle, Deputy Communications Director;
    Katie McClelland, Professional Staff; Richard Miller, Director
    of Labor Policy; Max Moore, Staff Assistant; Mariah Mowbray,
    Clerk/Special Assistant to the Staff Director; Kayla
    Pennebecker, Staff Assistant; Manasi Raveendran, Oversight
    Counsel--Education; Banyon Vassar, Deputy Director of
    Information Technology; Sam Varie, Press Assistant; Cyrus Artz,
    Minority Staff Director; Michael Davis, Minority Operations
    Assistant; Amy Raaf Jones, Minority Director of Education and
    Human Resources Policy; David Maestas, Minority Fellow; Hannah
    Matesic, Minority Director of Member Services and Coalitions;
    Audra McGeorge, Minority Communications Director; Eli Mitchell,
    Minority Legislative Assistant; Chance Russell, Minority
    Professional Staff Member; and Mandy Schaumburg, Minority Chief
    Counsel and Deputy Director of Education Policy.
        Chairman Scott. We're ready to begin. I'll countdown to
    five and then we'll start. Five, four, three, two, one. The
    Committee on Education and Labor will come to order. And
    welcome to everyone. I note that a quorum is present. The
    Committee is meeting today to hear testimony on Examining the
    Policies and Priorities of the Corporation for National and
    Community Service.
        This is entirely a remote hearing. All microphones will be
    kept muted as a general rule to avoid unnecessary background
    noise. Members and witnesses will be responsible for unmuting
    themselves when they are recognized to speak, or when they wish
    to seek recognition.
        I'll also ask that the Members please identify themselves
    before they speak. Members should keep their cameras on while
    in the proceeding. Members shall be considered present in the
    proceeding when they are visible on camera, and they will be
    considered not present when they are not visible on camera.
        The only exception to this is if they are experiencing
    technical difficulties and inform the Committee staff of such
    difficulty. If any Member experiences technical difficulty
    during the hearing you should stay connected on the platform,
    make sure you are muted, and use your phone to immediately call
    the Committee's IT director whose number was provided in
    advance.
        Should the Chair experience technical difficulties and
    needs to step away to vote on the floor Mr. Courtney or another
    Majority Member is hereby authorized to assume the gavel in the
    Chair's absence. This is an entirely remote hearing, and as
    such the Committee's hearing room is officially closed. Members
    who choose to sit with their individual devices in the hearing
    room must wear headphones to avoid background noise, feedback,
    echoes, and distortion resulting for more than one person on
    the software platform sitting in the same room.
        Members are also expected to adhere to social distancing,
    safe healthcare guidelines, including the use of masks, hand
    sanitizer and wiping down their areas before and after their
    presence in the hearing room. In order to ensure the
    Committee's five-minute rule is adhered to, staff will be
    keeping track of time using the Committee's field timer.
        The field timer will appear in its own thumbnail picture
    and will be named 001_timer. There will be no one-minute
    remaining warning. The field timer will show a blinking light
    when time is up. Members and witnesses are asked to wrap up
    promptly when their time is expired.
        Pursuant to Committee Rule 8(c) opening statements are
    limited to the Chair and Ranking Member. This allows us to hear
    from our witnesses sooner and provides all Members with
    adequate time to ask questions. I now recognize myself for the
    purpose of making an opening statement.
        We are meeting to reflect on the important role that the
    corporation for National and Community Service, better known as
    AmeriCorps in supporting communities through service
    opportunities. The hearing today also meets our oversight
    responsibility according to House rules to examine AmeriCorps
    disclaimed financial audit for Fiscal Year 2021.
        Whenever an agency receives such a report the Committee of
    jurisdiction is required to hold an oversight hearing such as
    the one, we are holding today. We're joined by and we welcome
    Deborah Jeffrey, and the Acting CEO Malcom Coles to discuss how
    AmeriCorps can best fulfill its vital mission.
        Since AmeriCorps was founded in 1993 it has empowered one
    million Americans to provide critical support for the young and
    old in neighborhoods across the Nation. After Hurricane Katrina
    AmeriCorps Members helped rebuild homes in neighborhoods.
        During the Flint Water crisis members went door to door to
    deliver water filters. Throughout the COVID-19 pandemic
    AmeriCorps has been essential in our Nation's response and
    recovery by helping students through mentoring and reading
    programs, fighting food insecurity for millions of Americans,
    providing companionship to homebound seniors to ensure that
    food, healthcare, and social services were readily available,
    and helping to coordinate COVID-19 vaccination clinics.
        In just the last year members of my district helped seniors
    live independently and helped our youth develop literacy
    skills, and since its founding over 1,900 members from my
    district have been mobilized serving more than three million
    hours.
        National service programs not only benefit our communities,
    but also create a pathway to higher education for thousands of
    Americans. After serving, members can earn educational awards
    that allow them to pursue a college degree or trade certificate
    or pay off student debt.
        Since 1994, nearly 1.2 million AmeriCorps members have
    earned more than 4 billion dollars in educational awards.
    AmeriCorps is essential for both our communities and our
    workforce. As a result the national service programs have
    consistently received bipartisan support.
        AmeriCorps was founded under a Democratic President,
    received record funding levels under a Republican led Congress,
    and Presidents Bush, Obama and Biden have all expanded
    AmeriCorps capacity and reach. Despite the importance of the
    agency and its record bipartisan support, AmeriCorps is facing
    serious challenges that must be addressed for this agency to
    reach its full potential.
        As we'll hear today from our witnesses AmeriCorps has
    failed to implement a rigorous financial management program
    since 2017, which has left the agency without the tools to
    adequately manage grantees and discover and crackdown on bad
    actors.
        The Inspector General's findings are a clear call to the
    agency to overhaul its accounting and grantee oversight
    processes, and I look forward to hearing today more about how
    AmeriCorps plans to address these issues. Modernizing and
    strengthening AmeriCorps financial infrastructure is critical
    to ensuring the agency is carrying out its mission and
    delivering on behalf of its members, communities, and
    taxpayers.
        This is all the more important in light of the historic
    funding increase for AmeriCorps that Congress is considering as
    part of the Build Back Better Act. This investment does include
    funding for AmeriCorps, what AmeriCorps needs to address the
    management changes identified by the Inspector General.
        Investments we make in AmeriCorps deliver tangible returns
    for the taxpayers. We have found that for every one dollar that
    America invests in AmeriCorps and SeniorCorps programs, more
    than $17.00 is returning to community service members and the
    Federal Government.
        So we look forward to hearing how AmeriCorps plans to work
    with our Committee to make sure that these investments are
    paired with robust improvements to address the agency's ongoing
    management challenges and strong continuing oversight. In a
    time of deep division across the country the AmeriCorps mission
    of bringing Americans together to serve communities is more
    important now than ever.
        So I want to thank Ms. Jeffrey and Mr. Coles for your work
    and the opportunity to discuss how we can improve the agency
    and best leverage AmeriCorps to serve our Nation. I now yield
    to the distinguished Ranking Member from North Carolina Dr.
    Foxx for the purpose of an opening statement.
        [The statement of Chairman Scott follows:]

            Statement of Hon. Robert C. ``Bobby'' Scott, Chairman,
                        Committee on Education and Labor

        We are meeting to reflect on the important role of the Corporation
    for National and Community Service--better known as AmeriCorps--in
    supporting communities through service opportunities.
        The hearing today also meets our oversight responsibility,
    according to House Rules, to examine AmeriCorps' disclaimed financial
    audit for Fiscal Year 2021. Whenever an agency receives such a report
    the Committee of jurisdiction is required to hold an oversight hearing
    such as the one we are holding today.
        We are joined by and we welcome AmeriCorps' Inspector General,
    Deborah Jeffery, and the Acting CEO, Malcom Coles, to discuss how
    AmeriCorps can best fulfill its vital mission.
        Since AmeriCorps' was founded in 1993, it has empowered one million
    Americans to provide critical support for the young and old in
    neighborhoods across the Nation.
        After Hurricane Katrina, AmeriCorps members helped rebuild homes
    and neighborhoods. During the Flint Water Crisis, members went door-to-
    door to deliver water filters. And throughout the COVID-19 pandemic,
    AmeriCorps has been essential in our Nation's response and recovery by:

       Helping students through mentoring and reading programs;

       Fighting food insecurity for millions of Americans;

       Providing companionship to homebound seniors to ensure that
            food, health care and social services were readily available;
            and

       Helping to coordinate COVID-19 vaccination clinics.

        In just the last year, members in my district have helped seniors
    live independently and helped our youth develop literacy skills. And
    since its founding, over 1,900 members from my district have been
    mobilized, serving more than 3 million hours.
        National service programs not only benefit our communities, but
    also create a pathway to higher education for thousands of Americans.
        After serving, members can earn educational awards that allow them
    to pursue a college degree or trade certificate, or pay off student
    debt. Since 1994, nearly 1.2 million AmeriCorps members have earned
    more than $4 billion in education awards.
        AmeriCorps is essential for both our communities and our workforce.
    As a result, the national service programs have consistently received
    bipartisan support. AmeriCorps was founded under a Democratic
    president, received record funding levels under a Republican-led
    Congress, and Presidents Bush, Obama and Biden have all expanded
    AmeriCorps' capacity and reach.
        Despite the importance of the agency and its record of bipartisan
    support, AmeriCorps is facing serious challenges that must be addressed
    for this agency to reach its full potential.
        As we'll hear today from our witnesses, AmeriCorps has failed to
    implement a rigorous financial management program since 2017, which has
    left the agency without the tools to adequately manage grantees and
    discover and crackdown on bad actors. The Inspector General's findings
    are a clear call for the agency to overhaul its accounting and grantee
    oversight processes. I look forward to hearing today more about how
    AmeriCorps' plans to address these issues.
        Modernizing and strengthening AmeriCorps' financial infrastructure
    is critical to ensuring the agency is carrying out its mission and
    delivering on behalf of its members, communities, and taxpayers.
        This is all the more important in light of the historic funding
    increase for AmeriCorps that Congress is considering as part of the
    Build Back Better Act. This investment does include funding what
    AmeriCorps needs to address the management changes identified by the
    Inspector General.
        The investments we make in AmeriCorps deliver tangible returns for
    taxpayers. We have found that every $1 that Congress invests in
    AmeriCorps and Senior Corps programs more than $17 is returned to
    communities, service members and the Federal Government.
        We look forward to hearing how AmeriCorps plans to work with our
    Committee to ensure that these investments are paired with robust
    improvements to address the agency's ongoing management challenges and
    strong, continuing oversight. At a time of a deep division across the
    country, the AmeriCorps' mission of bringing Americans together to
    serve communities is more important than ever.
        I want to thank Ms. Jeffery and Mr. Cole for your work and the
    opportunity to discuss how we can improve the agency and best leverage
    AmeriCorps to serve our Nation.
        I now yield to the distinguished Ranking Member from North
    Carolina, Dr. Foxx, for the purpose of an opening statement.
                                     ______

        Ms. Foxx. Thank you, Mr. Chairman. We are here today
    because AmeriCorps, formerly known as the Corporation for
    National Community Service, CNCS has failed yet another audit.
    After holding numerous oversight hearings on the fiscal State
    of AmeriCorps it's time to admit that this is a failed
    experiment.
        AmeriCorps has been given years to get its act together but
    has failed to fix the systemic failures. How long are we going
    to ask taxpayers to prop up this broken agency? AmeriCorps
    oversees the community service activities for more than eight
    different Federal programs and initiatives, primarily by
    managing the distribution of grants, yet AmeriCorps has proven
    repeatedly it does not have the ability or the systems in place
    to do this effectively.
        This agency is entrusted with nearly a billion dollars of
    taxpayer funds every year. One of the most important duties of
    this Committee is to provide oversight over Federal agencies
    like AmeriCorps. This work is even more critical when the
    agency proves it cannot police itself.
        At every turn, and under multiple administrations,
    AmeriCorps has failed in its attempts at oversight transparency
    and reform. AmeriCorps own office of Inspector General has
    issued numerous reports detailing the agency's failure to
    fulfill its mission to safeguard the taxpayer funds entrusted
    to it.
        These reports have noted patterns of fraud, mismanagement,
    non-compliance, and safety hazards within AmeriCorps grantees.
    AmeriCorps has been plagued by poor management and weak
    financial oversight since it began in 1993. Despite repeated
    demands from Congress to improve its management and get its
    fiscal house in order, AmeriCorps has failed to deliver.
        We know AmeriCorps has failed at following the law for a
    long time. For example, through 2013 to 2015 members of
    AmeriCorps Youth Workforce Development Program provided support
    services for three abortion clinics in New York City, contrary
    to Federal law.
        Since this occurred AmeriCorps has done little to increase
    confidence in its transparency and integrity. We also know that
    AmeriCorps participants have been caught doctoring hours
    worked. Program administrators have failed to do background
    checks on some participants, and there have been data security
    issues.
        This record of failures cannot be swept under the rug or
    dismissed as insignificant. Further, AmeriCorps has not
    provided complete financial records to independent auditors and
    the office of Inspector General since 2017. Congress cannot
    fulfill its Constitutional oversight function without accurate
    and up to date information.
        In its most recent audit the independent auditor found nine
    material weaknesses and one significant deficiency in
    AmeriCorps internal control over financial reporting of which
    the vast majority were identified, and previous audits remain
    unaddressed. In fact, following its 2019 audit only 10 of the
    75 recommendations made to AmeriCorps had been implemented.
        This kind of habitual mismanagement is outrageous and at
    some juncture we need to point the finger at Congress for
    refusing to fix what is clearly broken. There must be
    accountability for AmeriCorps pattern of fraud, mismanagement,
    non-compliance, and overall inefficient use of taxpayer
    dollars. Until AmeriCorps makes fixing its financial management
    a priority which it should not be entrusted with tax dollars
    from the American people.
        AmeriCorps is expensive, unnecessary and has a strong habit
    of draining taxpayers wallets. Ever year it presents the
    American people with fewer and fewer reasons to show it is
    worth the cost. Our country is known for its robust civil
    institutions. The U.S. is often ranked as the most generous
    country in the world when it comes to money donated and time
    given to charity.
        Americans don't need Federal bureaucrats telling them to do
    what they already naturally do. We also don't need a Federal
    program to do what the private sector can accomplish at half
    the price. Despite AmeriCorps long-standing history of
    financial failure and mismanagement, House Democrats voted to
    hand this agency 15 billion more in taxpayer funds through the
    so-called Build Back Better Act.
        If AmeriCorps can't handle the responsibility of 1 billion
    a year, how do you expect it to take care of 15 billion dollars
    responsibly? It's clear Democrats are going to continue to turn
    a blind eye to the fraud and mismanagement happening right
    under their noses, and taxpayers will continue to be the ones
    forced to shoulder the burden.
        The last time AmeriCorps programs were reauthorized was in
    2009 with the passage of the Edward M. Kennedy Serve America
    Act which was named in honor of the late Senator who was the
    author of the legislation that governs many of AmeriCorps
    programs.
        Yet despite the support for national service, Senator
    Kennedy was not shy about his views regarding programs or
    agencies that failed to meet their intended goals. In debating
    the establishment of the corporation on the Senate floor in
    1993 he noted that, ``Congress will not and should not fund a
    program if it is unsuccessful.''
        Three decades later the results could not be clearer.
    AmeriCorps has proven completely unable or unwilling to govern
    itself or the programs under its purview. We're reassured every
    time AmeriCorps representatives come before this Committee that
    they will implement reforms, but AmeriCorps has proven it is
    all talk and no action.
        During Senator Kennedy's 1993 floor speech he stressed that
    he did not believe AmeriCorps would become unsuccessful, but he
    noted that if it did, he would favor ``cutting the program.'' I
    agree with him. This is a failed agency that needs to be
    overhauled completely or just eliminated. I yield back.
        [The statement of Ranking Member Foxx follows:]

               Statement of Hon. Virginia Foxx, Ranking Member,
                        Committee on Education and Labor

        We are here today because AmeriCorps, formerly known as the
    Corporation for National and Community Service, has failed yet another
    audit. After holding numerous oversight hearings on the fiscal State of
    AmeriCorps, it is time to admit that this is a failed experiment.
    AmeriCorps has been given years to get its act together but has failed
    to fix its systemic failures. How long are we going to ask taxpayers to
    prop up this broken agency?
        AmeriCorps oversees the community service activities of more than
    eight different Federal programs and initiatives, primarily by managing
    the distribution of grants. Yet AmeriCorps has proven repeatedly that
    it does not have the ability or the systems in place to do this
    effectively.
        This agency is entrusted with nearly a billion dollars of taxpayer
    funds every year. One of the most important duties of this Committee is
    to provide oversight over Federal agencies like AmeriCorps. This work
    is even more critical when the agency proves it cannot police itself.
        At every turn, and under multiple administrations, AmeriCorps has
    failed at its attempts at oversight, transparency, and reform.
    AmeriCorps' own Office of Inspector General has issued numerous reports
    detailing the agency's failure to fulfill its mission to safeguard the
    taxpayer funds entrusted to it. These reports have noted patterns of
    fraud, mismanagement, noncompliance, and safety hazards within
    AmeriCorps grantees.
        AmeriCorps has been plagued by poor management and weak financial
    oversight since it began in 1993. Despite repeated demands from
    Congress to improve its management and get its fiscal house in order,
    AmeriCorps has failed to deliver.
        We know AmeriCorps has failed at following the law for a long time.
    For example, from 2013 to 2015 members of an AmeriCorps youth workforce
    development program provided support services for three abortion
    clinics in New York City-contrary to
        Federal law. Since this occurred, AmeriCorps has done little to
    increase confidence in its transparency and integrity.
        We also know that AmeriCorps participants have been caught
    doctoring hours worked, program administrators have failed to do
    background checks on some participants, and there have been data
    security issues. This record of failures cannot be swept under the rug
    or dismissed as insignificant.
        Further, AmeriCorps has not provided complete financial records to
    independent auditors and the Office of the Inspector General (OIG)
    since 2017. Congress cannot fulfill its Constitutional oversight
    function without accurate and up-to-date information.
        In its most recent audit, the independent auditor found nine
    material weaknesses and one significant deficiency in AmeriCorps'
    internal control over financial reporting, of which the vast majority
    were identified in previous audits and remain unaddressed. In fact,
    following its 2019 audit, only ten of the 75 recommendations made to
    AmeriCorps have been implemented.
        This kind of habitual mismanagement is outrageous and at some
    juncture we need to point the finger at Congress for refusing to fix
    what is clearly broken. There must be accountability for AmeriCorps'
    pattern of fraud, mismanagement, noncompliance, and overall inefficient
    use of taxpayer dollars. Until AmeriCorps makes fixing its financial
    management a priority, it should not be entrusted with tax dollars from
    the American people.
        AmeriCorps is expensive, unnecessary, and has a strong habit of
    draining taxpayers' wallets. Every year, it presents the American
    people with fewer and fewer reasons to show it is worth the cost.
        Our country is known for its robust civil institutions. The U.S. is
    often ranked as the most generous country in the world when it comes to
    money donated and time given to
        charity. Americans don't need Federal bureaucrats telling them to
    do what they already naturally do. We also don't need a Federal program
    to do what the private sector can accomplish at half the price.
        Despite AmeriCorps' long-standing history of financial failure and
    mismanagement, House Democrats voted to hand this agency $15 billion
    more in taxpayer funds through the so-called Build Back Better Act. If
    AmeriCorps can't handle the responsibility of $1 billion a year, how do
    we expect it to take care of $15 billion responsibly? It is clear
    Democrats are going to continue to turn a blind eye to the fraud and
    mismanagement happening right under their noses and taxpayers will
    continue to be the ones forced to shoulder the burden.
        The last time AmeriCorps' programs were reauthorized was in 2009
    with the passage of the Edward M. Kennedy Serve America Act, which was
    named in honor of the late Senator who was the author of the
    legislation that governs many of AmeriCorps' programs. Yet, despite his
    support for national service, Senator Kennedy was not shy about his
    views regarding programs or agencies that fail to meet their intended
    goals. In debating the establishment of the Corporation on the Senate
    floor in 1993, he noted that `Congress will not, and should not, fund a
    program if it is unsuccessful.'
        Three decades later, the results could not be clearer. AmeriCorps
    has proven completely unable or unwilling to govern itself or the
    programs under its purview. We are reassured every time AmeriCorps
    representatives come before this Committee that they will implement
    reforms, but AmeriCorps has proven it is all talk and no action.
        During Senator Kennedy's 1993 floor speech he stressed that he did
    not believe AmeriCorps would become unsuccessful, but he noted that if
    it did, he would `favor cutting the program.' I agree with him. This is
    a failed agency that needs to be overhauled completely or just
    eliminated.
                                     ______

        Chairman Scott. Thank you. Without objection all other
    Members who wish to insert written statements into the record
    may do so by submitting them to the Committee Clerk
    electronically in Microsoft Word format by 5 p.m. on December
    15. I will now introduce the witnesses.
        First Hon. Deborah J. Jeffrey, was confirmed by the Senate
    as Inspector General for AmeriCorps in 2012. After 25 years in
    the private practice of law, she practiced white collar
    criminal defense and worked on civil enforcement proceedings as
    well as congressional Inspector General investigations.
        Mr. Malcolm Coles is the current Acting CEO of AmeriCorps.
    Most recently he served as AmeriCorps Executive Advisor to the
    Chief of the Program Operations. He also served as Director of
    the Office of Field Liaison overseeing the administration of
    AmeriCorps Vista and Senior Programs.
        We appreciate the witnesses for participating today and
    look forward to your testimony. Let me remind the witnesses
    that we've read your written statements, and they will appear
    in full in the hearing record. Pursuant to Committee Rule 8(d)
    and Committee practices, each of you is asked to limit your
    oral presentation to a five minute summary of your written
    statement.
        Before you begin your testimony please remember to unmute
    your microphone. During your testimony staff will be keeping
    track of time and a light will blink when time is up. Please be
    attentive to time, wrap up when your time is over and then
    remute your microphone. If any of you experience technical
    difficulties during your testimony, or later in the hearing,
    you should stay connected to the platform, make sure you are
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        We will let both witnesses make their presentations before
    we move to Member questions. When answering a question please
    remember to unmute your microphone. Witnesses are aware of
    their responsibility to provide accurate information to the
    Committee, and therefore we will now proceed with their
    testimony. We'll first recognize Ms. Jeffrey.

       STATEMENT OF HON. DEBORAH J. JEFFREY, INSPECTOR GENERAL,
             CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

        Ms. Jeffrey. Chairman Scott, Dr. Foxx, and Members of the
    Committee. Thank you for the opportunity to testify today about
    the work of the Office of Inspector General to strengthen
    financial management and accountability at CNCS, now known as
    AmeriCorps.
        My testimony today will focus on the unique challenges that
    AmeriCorps faces in supporting its mission, particularly with
    respect to financial management. Many of these difficulties
    stem from inattention and a legacy of underinvestment in agency
    operations and technology.
        A fundamental responsibility of agency management is to
    track and report on their use of public funds in financial
    statements subject to independent OIG audit. For the past 5
    years the financial statements of AmeriCorps and the National
    Service Trust have not been auditable. The independent auditors
    have been required to issue disclaimers of opinion because
    AmeriCorps is unable to demonstrate that its financial
    statements are accurate, complete, and reliable, and fairly
    present its financial condition.
        The auditors have found pervasive weaknesses in AmeriCorps
    financial management and financial reporting. An audit report
    issued 2 weeks ago listed nine material weaknesses, problems so
    severe that they could materially affect the financial
    statements. Five of these weaknesses date back to 2018, and
    three of them to 2017.
        In short, AmeriCorps has not shown much progress in
    resolving serious accountability problems that it has known
    about for years. The problems go to AmeriCorps ability to
    account for its grants and the education awards earned by
    national service members which form the agency's largest single
    liability, recently estimated at 356 million dollars.
        And there are complicating factors. They include an
    outdated grants management IT system that does not interface
    well with the agency's accounting records, among its other
    issues. Difficulties converting AmeriCorps non-compliant
    financial records into the form required by the shared services
    provider to whom AmeriCorps has outsourced its accounting and
    financial reporting, and an information security program that
    has stalled for the last 3 years.
        In most organizations a disclaimer of opinion on the
    financial statements and multiple material weaknesses would
    have been an all hands-on deck emergency requiring immediate
    action. But AmeriCorps has historically considered financial
    management to be divorced from the agency's mission and did not
    treat it as an urgent priority.
        The current leadership team has assured me that they do not
    share that view, and they have expressed a sense of urgency
    about improving financial stewardship. They have told me that
    they will remain engaged to ensure accountability going
    forward. This new tone at the top is an important first step,
    but solving these problems is a heavy lift.
        They did not develop overnight, and they will not be cured
    overnight. Even in a best-case scenario it will be years before
    AmeriCorps has robust financial management plus a new grants
    management system and effective cybersecurity. Translating
    urgency into positive change requires the leadership of a
    strong subject matter expert who can plan and manage a multi-
    part project over years, someone who does not have to be told
    what to do and how to do it.
        That individual must be empowered to make changes and
    provide the resources to get the job done. This is the approach
    that took the Department of Housing and Urban Development from
    a disclaimer to a clean opinion as described in my written
    statement and should serve as an example for AmeriCorps.
        Strong internal controls, accurate financial reporting, and
    sound financial management are must haves. The OIG looks
    forward to supporting AmeriCorps work to achieve those
    objectives, and I would be pleased to answer this Committee's
    questions.
        [The prepared statement of Ms. Jeffrey follows:]

                    Prepared Statement of Deborah J. Jeffrey
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Scott. Thank you. Mr. Coles?

      STATEMENT OF MALCOLM COLES, ACTING CHIEF EXECUTIVE OFFICER,
             CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

        Mr. Coles. Chairman Scott, Ranking Member Foxx, and Members
    of this Committee, thank you for the opportunity to testify
    today on the policies and priorities of the Corporation for
    National and Community Service, also known as AmeriCorps. I am
    grateful to have served for the past year as Acting CEO of the
    Federal Agency for Volunteers in the National Service that
    provides opportunities for Americans to serve their country
    domestically, address the Nation's most pressing challenges,
    improve lives in communities and strengthen civil engagement.
        Each year the agency invests in the local non-profit
    community, tribal, State organizations, places more than
    250,000 AmeriCorps members and AmeriCorps senior volunteers in
    intensive service in 40,000 communities across the country and
    empowers millions more to serve as long-term, short-term, and
    one-time volunteers.
        I want to thank the Members of the Committee and your staff
    who helped secure additional funding for AmeriCorps as part of
    the American Rescue Plan. Funding created new service positions
    for members and volunteers, assisted organizations hardest hit
    by the pandemic, and increased the living allowance for members
    among many other things.
        We are here because AmeriCorps has received disclaimers of
    opinion on the agency's financial statement audits since 2017.
    While the agency has had significant challenges over the years,
    AmeriCorps continues to take corrective actions working in
    close consultation with our Inspector General.
        Since I began this role I've seen first-hand our current
    agency's leadership is committed to achieving greater progress.
    We are methodically implementing and updating our plan. We will
    continue to develop clear milestones and hold our senior
    management accountable.
        The path forward is clear--AmeriCorps must strengthen
    leadership engagement and accountability, must continue to
    bolster the national service trust fund, must prioritize
    mission support functions, invest in technology, and improve
    grant monitoring. We've begun taking strong remedial steps as
    our Inspector General noted in her opening statement.
        We will continue to act going forward. A few examples
    include our transition to shared services, hiring for key
    operational roles and a robust audit resolution strategy. The
    cornerstone of our action is to strengthen the agency's
    financial management transition to shared services through the
    administrative resource center of the Department of Treasury
    Bureau of Financial Services which began in November 2020.
        Fiscal year 2021 marked the first full year of the agency's
    shared service agreements, so the agency is now supported by
    expert technical resources and has improved reporting
    capabilities. Having the right people in the right seats is
    paramount to our records.
        During 2021 we have hired a Chief Operating Officer, a
    Chief Risk Officer, a Chief of Program Operations, a Director
    of Data Management, and other talent to build our senior
    management structure. Based on the Committee's feedback
    AmeriCorps created an office in monitoring in 2019 with staff
    solely dedicated to performing grant monitoring activities.
        Fully staffed in 2020, this unit has already
    operationalized risk-based approach to monitoring grants of all
    sizes and continues to tailor its approach so that highest risk
    grantees are prioritized and monitored. Our updated risk-based
    monitoring framework established in July of this year place
    particular emphasis on compliance, financial, organizational,
    and broad criteria.
        Developing a robust audit strategy is another lynchpin of
    our strategy going forward, and our senior staff leadership has
    pulled together a robust approach to implement corrective
    action plans. We are prioritizing resources and staff capacity
    to address the most important recommendations first.
        With our current leadership and the support of the
    administration, Congress, and this Committee in particular,
    AmeriCorps has greatly increased our commitment to operational
    improvements and enforcing accountability. This is a moment of
    unprecedented opportunity for AmeriCorps and our Nation.
    President Biden made a bold call to service and unity and
    Americans are responding.
        Since the outbreak of COVID-19, AmeriCorps members and
    AmeriCorps senior volunteers have stepped up to the plate to
    help their neighbors. They have aided more than 12.2 million
    Americans including assisting in administering vaccinations,
    conducting wellness checks, and distributing food.
        In conclusion, I share your commitment to accountability
    and good stewardship of the taxpayer dollars. AmeriCorps takes
    our mission seriously, and we know that we must meet this
    moment with urgency in order to tackle our country's most
    pressing issues. Thank you again, we appreciate the responsible
    oversight of this Committee. I look forward to taking your
    questions.
        [The prepared statement of Mr. Coles follows:]

                      Prepared Statement of Malcolm Coles
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Scott. Thank you. Under Committee Rule 9(a) we'll
    now have questions for the witnesses under the five-minute
    rule. I'll be recognizing Committee Members in seniority order.
    And again, to ensure that the Members five-minute rule is
    adhered to staff will be keeping track of time. A blinking
    light will show when time is expired.
        Please be attentive, I advise all Committee Members to be
    attentive to time and wrap up when your time is over and remute
    your microphones. I'll now recognize myself first for five
    minutes, and first ask Ms. Jeffrey. Ms. Jeffrey you've
    indicated that AmeriCorps has had problems with their audits
    since 2017.
        I guess the point of this hearing is to get some confidence
    that we will not have these problems in the future. And you
    indicated several serious and material problems. Can you tell
    me whether or not AmeriCorps has a corrective action plan for
    the recommendations that the auditors have made?
        Ms. Jeffrey. To the best of my knowledge AmeriCorps does
    not yet have a corrective action plan. They've advised us that
    they are developing one, and we look forward to seeing it to
    ensure that it will fairly meet the recommendations.
        Chairman Scott. Thank you. Mr. Coles the auditors in 2019
    made 75 recommendations, 10 have been fulfilled, but since then
    eight new recommendations have been made. Do you not have a
    corrective action plan for each of those recommendations?
        Mr. Coles. Mr. Chairman we are taking under consideration
    addressing all of the audit recommendations and have closed 10
    as has been noted before. We have indeed prioritized those
    important issues that are centered around our national service
    trust integrity system, our grant accrual system, our internal
    financial management, and indeed requirements to strengthen our
    grants auditing system so that it is truly risk based and fraud
    protected.
        We have empowered our senior leadership, and we expect this
    to be a whole agency commitment. We recognize it starts at the
    top and we have empowered our Risk Management Council, which is
    senior management, to take the lead in coming up with
    corrective action plans. They've already provided a template
    for achievement. We've conducted training for our staff, and we
    have a data base to be able to track the improvements going
    forward, and we look forward to working on this in conjunction
    with our Inspector General.
        Chairman Scott. Well, the reason I asked the question the
    way I did is the corrective action plans have discrete plans
    that can be broken down into small sections so you can get an
    idea of what you're doing, what progress is being made and
    quantify that progress so you can see that progress is being
    made.
        Do you intend to have corrective action plans for all of
    the 73 remaining recommendations?
        Mr. Coles. We do, Mr. Chairman. We definitely do. We plan
    to capitalize on our successful approach to corrective action
    planning on our risk-based monitoring system which I believe
    was addressed by the Inspector General earlier, to consider
    that to be one of our major successes. It's allowed us, GAO
    just last month, to close successfully five of the
    recommendations that were stemming from grants of management.
        Chairman Scott. So we can expect corrective action plans
    pretty soon on all 73 of the recommendations?
        Mr. Coles. Yes, you can.
        Chairman Scott. Now in previous bills we had funding, we
    helped get this job done. Is that funding sufficient for staff
    and equipment that you need to get things straight?
        Mr. Coles. Quite candidly Mr. Chairman we have a dedicated
    staff that works diligently and has achieved great results.
    Nevertheless we still lack capacity. We were an agency to be
    zeroed out in the previous administration, and that has series
    constraints.
        I will say that we are very grateful for regular order
    appropriation in the funds that have been made available
    through ARP that are going to allow us to bring on the talent
    in the capacity necessary to address these grave financial
    issues.
        Chairman Scott. Thank you. And Ms. Jeffrey the funding in
    the ARP, the one billion dollars, can you tell me how that has
    been administered? Is that being administered any better than
    the rest of the funds?
        Ms. Jeffrey. So it's very hard for me to answer that
    question because that money has only recently started to go out
    the door. We haven't had an opportunity to examine it, and
    there really isn't a track record to look at. I will say that I
    think that the field staff that engages with grantees is
    overworked, and stressed, and I am concerned about the level of
    support that our grantees can get.
        Chairman Scott. Thank you. My time has expired. On this
    side the first person we recognize I believe is the gentleman
    from South Carolina, Mr. Wilson.
        Mr. Wilson. Thank you very much Chairman Bobby Scott and
    thank you for our witnesses today. Mr. Coles the findings so
    clearly exposed from the Office of Inspector General report are
    extremely concerning, especially where it notes, ``Little
    progress as correcting the pervasive problems.'' While we sit
    here discussing the corporation's inability to manage
    taxpayer's dollars, Democrats are irresponsibility forcing a
    bill that would provide an incredible, unmanageable 15 billion
    dollar increase to the agency if it were to become law.
        The Democrat's bill would increase AmeriCorps budget by a
    bizarre 1,500 percent. This is in the midst of fiscal
    unaccountability. It's in the midst of unintelligible
    accounting of taxpayer's dollars. Mr. Coles how in the world in
    the beginning of what you have already identified as corrective
    actions, can the corporation be capable of managing an
    additional 15 billion dollars?
        Chairman Scott. Mr. Coles you're on mute.
        Mr. Coles. Thank you for your question Congressman. I would
    say that we do have our successes and we have done well in
    corrective actions around our monitoring systems and shared
    services for the greater efficiency there, and our work with
    criminal history checks have been noted as well as a major
    accomplishment.
        With regard to the BBB it is important to note that in the
    House version of the legislation as passed there is a line for
    over 1 billion dollars to be dedicated to being used by
    AmeriCorps to address financial management issues, particularly
    those associated with risk-based monitoring, with a heavy
    emphasis on fraud detection.
        So the House has recognized the importance of not only
    providing money for the operation of the CCC itself, but also
    providing the funding to allow us to accelerate our efforts to
    resolve our management challenges.
        Mr. Wilson. Well, even that to me is alarming. A billion
    dollars just for accounting purposes in the district I
    represent we have wonderful programs that actually Chairman
    Scott have been in place, but to divert the current budget--
    almost the entire budget to accounting and then bring in
    another 14 billion, that's just unimaginable, and with that Ms.
    Jeffrey I want to thank you for your clarity and courage to
    expose the fiscal shortcoming.
        Chairman Scott. Mr. Wilson will you yield for just a
    second. I think you suggested that the billion dollars was for
    accounting. You might want to ask if there were services and
    programs as part of that.
        Mr. Wilson. Mr. Chairman he said there would be a billion
    dollars set aside of the 15 billion for the accounting
    purposes, and that's what I was trying to address. Because I'd
    rather pay for it, Mr. Chairman, to go to programs, not--I love
    accountants and bookkeepers, and bureaucrats, but I'd rather it
    go to actually providing services.
        Chairman Scott. Please proceed thank you.
        Mr. Wilson. Thank you. And Ms. Jeffrey again I want to
    thank you for your clarity and courage to expose the fiscal
    shortcomings and I'd pose the same question to you. Do you have
    confidence that the AmeriCorps can manage a phenomenal amount
    of funding effectively and responsibly?
        Ms. Jeffrey. I think it's a major challenge. I can't sit
    here and tell you that it can't be done, but it won't be easy
    to do. Now I want to note one thing that I think is a great
    advantage, and that is that there is a 1-year ramp up period in
    the bill, so that the agency actually has a year to spend not
    only planning for the new use of the new money, but a year to
    really invest in trying to get its financial house in order,
    and that is a very useful provision that's in the bill. It is a
    risk mitigator. It is not a risk eliminator.
        Mr. Wilson. And thank you for citing that. It is a
    mitigation, but goodness gracious to me putting this money such
    an increase, I can't imagine as a business operating I can't
    hey, I know it would be very difficult for me to take longer
    than a year if my salary were increased by a factor of 15,
    although my wife would help me it just couldn't be done. So
    hey, I express great concern on this.
        I think it's very irresponsible and I appreciate so much
    Ranking Member Foxx her concerns. I yield back.
        Chairman Scott. Thank you. The gentlemen from Arizona Mr.
    Grijalva.
        Mr. Grijalva. Thank you, Mr. Chairman, and thank you for
    the hearing. Ms. Jeffrey one challenge that AmeriCorps grantees
    have historically faced was carrying out background checks.
    Have you seen improvements in the background check process that
    Mr. Coles mentioned in the last set of questions, and what's
    that mean for grantee management?
        Ms. Jeffrey. I am so pleased that you asked that question
    because it is a pleasure to be able to report on the agency's
    accomplishments here. It took a great deal of time, but the
    agency came up with a very smart vendor solution that allows
    our grantees to outsource the background checks to vendors who
    can perform them not only competently and privately, but very
    quickly and accurately.
        And that has greatly improved compliance with the
    background check requirements, and that improved safety and
    efficiency throughout the agency. It's not perfect yet, it
    needs to be get better, but I am very pleased with the trend.
        Mr. Grijalva. Thank you very much. Mr. Coles I think you've
    heard in some of the questioning from my colleagues on the
    other side of the aisle that the opposition to some extent ARP,
    and to a much greater extent Build Back Better legislation that
    the House has sent to the Senate, you're at the point of part
    of that opposition in the sense that the 20 billion, 15
    billion, whatever that number ends up being after it comes back
    from the Senate, dedicated to service, and dedicated quite
    frankly to dealing with private resilience and litigation as a
    key component of that service component.
        In this 1 year ramp up that is part of the legislation,
    will we be ready and accountable at that point? And more
    importantly, outside agencies, other agencies that have been
    working in the field, conservation corps, service corps,
    others, any plans to link up, hold manage, hold share, the
    responsibility because there will be accountability not only
    from Congress, but from the public in terms of the importance
    of this particular line item that is in the Build Back Better
    plan. Your response?
        Mr. Coles. Thank you for your question Congressman. Yes, we
    are laser focused on putting our financial house in order even
    if we were not to receive an additional dime. We think the
    sense of urgency that was triggered by the funding addition of
    the additional billion dollars through ARP even riveted our
    attention more and we're keenly aware of the requirements for
    the prep, pandemic relief accountability Committee around fraud
    awareness.
        So we have a head start on coming up with successful
    strategies to indeed improve our management capacity
        Mr. Grijalva. Part of it also Mr. Coles is the emphasis
    that the House made, and the Senate is replicating dealing with
    issues of equity and under sourced communities, and the need to
    draw a civilian volunteer base from those communities as well,
    and the same question.
        I mean does the agency AmeriCorps, in fact in other areas
    primarily and good work, I don't question that work. In
    response to that mandate as well.
        Mr. Coles. Yes Congressman. We do have a strong track
    record legacy of successful programs with organizations in the
    private sector and that's probably where the focus upon
    conservation, the focus upon clean energy, the focus upon
    disaster preparedness and mitigation that talked about your
    efforts, and actually was referencing community resiliency.
        So we do feel that robust history that we have positions us
    well. This is not a new field for us, so we feel that we are
    with the ramp up time because as I say well positioned upon
    enactment to begin the process.
        Mr. Grijalva. Yes, I actually think there will be some of
    us in Congress in terms of oversight that we pay particular
    attention to the equity issue and the resource distribution
    issue by your agency upon the disbursement of those resources.
        Mr. Coles. We are fully committed Congressman to diversity
    and equity, and we're in particularly interested in making that
    broad spectrum so that it includes rural America as well as
    traditional race and ethnicity.
        Mr. Grijalva. Thank you very much. I yield back Mr.
    Chairman.
        Chairman Scott. Thank you. Next on my list is the gentleman
    from Pennsylvania, Mr. Thompson. I don't see him on screen. The
    gentleman from Michigan, Mr. Walberg.
        Mr. Walberg. Thank you, Mr. Chairman. I appreciate the
    hearing today and I thank the witnesses for being here, and for
    the Committee for holding this hearing. The findings from the
    OIG are extremely concerning, and perhaps what is more
    troubling is the apparent lack of resolve within AmeriCorps to
    resolve its financial management failures.
        Ms. Jeffrey you State in your testimony that in most
    organizations and I quote, ``A disclaimer of opinion and
    multiple material weaknesses would have been an all hands-on
    deck emergency requiring immediate action. AmeriCorps for many
    years treated it as a business-as-usual situation.''
        You go on to State and I quote, ``The truth is that
    AmeriCorps leadership simply did not treat fiscal financial
    management as an urgent priority.'' Ms. Jeffrey can you discuss
    what it means when an agency such as AmeriCorps issues a
    disclaimer of opinion?
        Ms. Jeffrey. So it is very rarely done in the civilian
    agencies of government. HUD went through a period of a
    disclaimer. They were able to get their act together and fix
    their financial management over the course of 4 years. They
    went from a disclaimer to a clean opinion, and they did it by
    getting outside subject matter leadership who had the
    temperament and the skillset to manage a large project with
    support from the administration and with empowerment from the
    head of the agency to just getting done.
        There is one other agency that I'm aware of in the Federal
    Government that's had repeated disclaimers. One other civilian
    agency, it's the Railroad Retirement Board. I am less familiar
    with where they are, but I think they're still in a disclaimer.
        This ought to be regarded as urgent. It is really
    scandalous that the agency has not made better use of its time
    to remedy these problems. And the agency wasted an awful lot of
    time in this process. It was under prior leadership, but there
    is a need to get down to work yesterday.
        Mr. Walberg. So I guess to review what you said it is
    significant for an agency or a department to issue a disclaimer
    opinion on its audit and that it happens in relatively few
    cases across Federal Government. And AmeriCorps stands out in a
    negative light with this.
        Ms. Jeffrey. I agree completely.
        Mr. Walberg. OK. Mr. Coles, AmeriCorps operates several
    programs that currently receive in total nearly 1 billion
    dollars in annual appropriations. Now having said that I know
    that this doesn't sound like a lot in today's Congress, we're
    talking about trillions as if they were thousands of dollars.
    But I know this is a problem in the real world, and that's it
    is a significant amount of money.
        How does the corporation examine the success or failure of
    each of its programs?
        Mr. Coles. We have--thanks first for your question
    Congressman. We have a robust review process on applicants upon
    their submission so that we have great rigor in the system to
    ensure that they have the organizational capacity and provide
    low risks as well.
        We have as I mentioned a newly set up monitoring office
    which has developed a risk-based monitoring framework with
    heavy emphasis in particular upon organizational readiness and
    anti-fraud awareness. It's robust and you've noticed that the
    Inspector General in her statement did mention that.
        Mr. Walberg. That doesn't involve evaluating their
    effectiveness, the effectiveness of the program. And if so, who
    does it? How is it validated? And what review cycle is it in?
        Mr. Coles. So each year our office of monitoring selects
    high risk grantees based upon their algorithm and our previous
    experience and knowledge, and their operations, and we
    prioritize them for a deep dive in terms of their capacity to
    deliver fulfillment of their objections, financial stability
    and we do it based upon the risk-based criteria that we
    mentioned.
        Mr. Walberg. Then let me ask Ms. Jeffrey should taxpayers
    have confidence that the funds are being used for the intended
    purpose, and that these programs are effectively evaluated?
        Ms. Jeffrey. So I think you've asked two different
    questions there. One of them is how organizations use the
    funds, and I do not believe the agency's monitoring program is
    effective at doing that. The other question goes to performance
    measures. What do we expect grantees to accomplish? And how do
    we know they're accomplishing that?
        The agency does have performance measures, but they are--
    they tend to be about outputs not outcomes. Some of that is
    because it is difficult to measure outcomes in social
    interventions, so it's not easy to have other performance
    measures, but I would like at some point at least to be able to
    share my view of monitoring because it is not quite as
    positive, I think as Mr. Coles has suggested.
        Chairman Scott. The gentleman's time has expired.
        Mr. Walberg. I yield back.
        Chairman Scott. Thank you. The gentleman from Connecticut,
    Mr. Courtney.
        Mr. Courtney. Thank you, Mr. Chairman and thank you for
    holding this hearing which I think demonstrates the seriousness
    with which our Committee takes the issues that we're talking
    about here today. Ms. Jeffrey, I want to just followup on one
    moment that you testified. Again, you were pretty clear to say
    that you know in terms of other examples, and you talked about
    HUD, which I think is very helpful for all of us to know that
    you know agencies can correct problems.
        But you referred to civilian agencies, and I just you know
    want to be clear, you obviously are not including the
    Department of Defense in terms of your description of that. And
    I see you nodding your head. If you could just for the read say
    that's correct.
        Ms. Jeffrey. That's exactly right.
        Mr. Courtney. Yes. And I say that because as a Member of
    the House Armed Services Committee with my friend from South
    Carolina, Mr. Norcross, in fact the Department of Defense for
    decades was not auditable, and I know that because I sat on the
    subcommittee with auditability with former Congressman Mike
    Conaway from Texas, who was an auditor.
        And with a push from Congress we actually now have started
    to finally get to the point where the Department of Navy, and
    Army, and the Air Force, are finally submitting audits. Again a
    lot of them are still not full you know clean audits, but it's
    been a monumental effort, but no one during that whole decade
    long process suggested that we should shut down the Department
    of Defense.
        You know we obviously need to have military, but you know I
    offered that example just because you know clearly you know
    you've done great work identifying problems. I think Mr. Coles
    shows a sincere effort and desire to implement those and
    obviously Congress just as we did on the House Armed Services
    Committee, needs to help push that effort so that we get to the
    point.
        But we don't shut down AmeriCorps in the meantime, and I
    would just note that you know grantees who are the backbones of
    this program, in my district--which is a military district, we
    have AmeriCorps program run by senior volunteers, Veterans
    Coffeehouse, which again has been a smashing success, to use
    Senator Kennedy's quote that was alluded to earlier here, in
    terms of connecting veterans particularly older veterans,
    through a really fun, social setting to learn about ways that
    they can get help from the VA.
        During COVID, again the vaccination rate from the
    Connecticut VA health care system was No. 2 or three in the
    country in terms of vaccinating veterans, and again the coffee
    house AmeriCorps program was instrumental in terms of making
    sure that people again got access to vaccinations in a more
    rural part of the State of Connecticut.
        So Mr. Coles, I mean again I want to talk about you know
    how you know you've plan to strengthen that grantee end of the
    system which at the end of the day is where you know the real
    work of AmeriCorps happens. And you know they obviously are
    part of this auditing problem. And maybe you could just talk
    about that for a moment.
        Mr. Coles. Thank you very much for your question
    Congressman. I'd be pleased to do so. We do recognize that we
    have high performing grantees at the local level. We salute
    them all, but we are also mindful that we need to take an
    initiative to put them into a better position for success and
    in conjunction with our Inspector General we are launching a
    web-based training program for every grantee across our entire
    program portfolio that will provide them with information with
    respect to the requirements for good stewardship of the
    taxpayer dollar.
        As well in our applications we are very clear in our
    criteria that we're looking for organizations that have track
    records of integrity and reliability, and we're very committed
    to providing training and technical assistance beyond fraud
    awareness to improve program quality of all of our programs.
        Mr. Courtney. And in our opening comments you know Ms.
    Jeffrey referred to the sort of legacy of under investment in
    terms of the agency's you know technology and you know systems.
    You know I mean I guess you know if you can just talk about
    that I mean in terms of how that has been an obstacle for the
    agency Mr. Coles.
        Mr. Coles. Thank you. Yes. Over the past probably 4 years
    we were in a resource challenged environment. We were an agency
    that was targeted to be zeroed out by the previous
    administration, and we were really under resourced when it came
    to addressing our most critical challenges and problems. And we
    lost more than 100 staff. We were reduced from 600 to 500 staff
    simply because we didn't have the financial resources.
        We also lost an opportunity to improve our technology
    modernization. We're interested in applying for a grant from
    OMB's technical and modernization fund, but we're not allowed
    to because we were on the close out list. So it has been a real
    constraint. Again, our core group is dedicated and capable, but
    we need much more capacity both internally and externally.
        We need the collaboration of our partners including the
    Office of Management Budget, GAO, this Committee and the
    Inspector General.
        Mr. Courtney. And consistency. Thank you. I yield back.
        Chairman Scott. Thank you. The gentleman from Wisconsin,
    Mr. Grothman.
        Mr. Grothman. Thank you. Ms. Jeffrey I'm going to ask you a
    few more questions. It was kind of shocking what I've heard
    today. I guess AmeriCorps to a certain extent flew under the
    radar, and I am a little bit worried that if any volunteers put
    AmeriCorps on their resume it's going to put them in their
    desire for other jobs at a disadvantage compared to other job
    applicants who worked for a more tightly run organization.
        I'm a little bit worried that we're going to forever damage
    people who worked there. But I'd like to look at some of the
    examples of fraud. There have been settlements with regard to
    the University of North Carolina, East Carolina University, and
    the North Carolina Commission on Volunteers and Community
    Service for false claims. Are you familiar with this case?
        Ms. Jeffrey. I am indeed familiar with those cases. Since
    2019 my office has recovered 4.8 million dollars in civil fraud
    settlements, plus criminal restitution order of more than half
    a million dollars.
        Mr. Grothman. Oh my goodness. According to the Department
    of Justice these entities approve false certificates for
    service hours worked and related violations. There seems to be
    a complete lack of proper oversight. Can you be a little more
    specific on your comments?
        Ms. Jeffrey. Certainly. So and for the AmeriCorps State and
    national programs members must serve a minimum number of hours
    in order to qualify for an education award, and we have found
    that in certain grantees there has been systematic fraud to
    allow people to receive education awards who were not really
    eligible to receive them.
        Mr. Grothman. Oh my goodness. There are so many employers
    in my district who would be so grateful to find a few people to
    work and they would be real jobs in which they learned real
    skills, and it's unfortunate that some people wound up working
    for this organization. It seems to be so totally damaged in its
    reputation.
        But the next thing I'd like to talk about is that there's a
    case involving embezzlement and bribes in Hawaii. Do you want
    to educate the Committee a little bit on that?
        Ms. Jeffrey. So that is one of the most disturbing cases
    that I've ever seen because it involved essentially a
    conspiracy between the Executive Director of the Hawaii
    Commission, which is one of the major prime grantees, and a
    program administrator at sub-recipient.
        And these two people were endlessly inventive about ways to
    siphon money away from the people of Hawaii who needed these
    programs and into their own pockets. We were fortunate that
    when we brought the case, we were able to interrupt and prevent
    a further bilking of CARES Act funds for the State of Hawaii.
        Mr. Grothman. Oh my goodness. I assume other people in the
    organization must have noticed this fraud. Are you afraid that
    the people who committed the fraud may be permanently educated
    the young people who were volunteering on some kind of immoral
    or sloppy behavior?
        Chairman Scott. Ms. Jeffrey you're on mute.
        Ms. Jeffrey. So sorry. In Hawaii the misconduct was really
    confined to paid staff. It did not involve members. But there
    were other jurisdictions in which sadly, AmeriCorps members
    were being encouraged to commit fraud in a program that's
    supposed to foster civic engagement, and that is truly awful.
        Mr. Grothman. I read here about some bad things going on in
    East St. Louis as well. Are you familiar with that?
        Ms. Jeffrey. Yes.
        Mr. Grothman. Do you want to educate the Committee a little
    bit about what was going on in East St. Louis?
        Ms. Jeffrey. So that one also involved the false
    certification of education awards, that is the member and the
    organization asserting that they had served service hours they
    had not in fact served.
        Mr. Grothman. Oh my goodness, and there's so many employers
    in my district who would be so grateful to take young people
    and give them a good work ethic, educate them on some skills
    that would help them throughout their life. It's unfortunately
    some of these people that caught up in the net of AmeriCorps
    but thank you for showing up today.
        Chairman Scott. The gentleman's time has expired. The
    gentlelady from Florida, Ms. Wilson.
        Ms. Wilson. Thank you so much, Chairman Scott and Ranking
    Member Foxx for holding today's hearing and thank you to our
    witnesses for appearing before our Committee. I am so grateful
    and proud of the impact AmeriCorps has made not only to my
    district, but across the country.
        AmeriCorps volunteers serve on the front line of many of
    our Nation's pressing challenges, and enrich their communities
    including by helping students graduate high school and enroll
    in college, building and rehabilitating affordable housing,
    providing financial literacy training, and responding to
    natural disasters.
        In the past year and a half AmeriCorps members and
    volunteers have made integral to COVID-19 response efforts,
    helping Americans access vaccines and distributing emergency
    food aid. In the past year alone more than 600 AmeriCorps
    members and volunteers have served in my congressional District
    across 29 different targets, and since 1994 more than 4,000 of
    my constituents have served approximately 6 million hours.
        We must preserve and strengthen this program for the next
    generation of members and volunteers so they may benefit from
    the unique opportunities for civil engagement that AmeriCorps
    provides so that we can all benefit from their service. But to
    do so we must ensure that AmeriCorps has the tools needed to
    prevent fraud and abuse and carry out a rigorous management and
    oversight strategy.
        We are here today to monitor AmeriCorps progress and ensure
    that the necessary steps are being taken so that this historic
    program can fulfill the promise with which it was founded
    nearly 30 years ago. With this in mind I have a few questions
    for our witnesses.
        Mr. Coles, grantees are the backbone of the success of
    AmeriCorps. What steps has the agency taken to require grantees
    develop and comply with the single audit process, and what work
    has the agency done to improve its grant monitoring processes?
        Mr. Coles. Thank you for your questions Congresswoman. Let
    me start with the later if I may. As referenced, we have
    created a specific unit dedicated to risk-based monitoring of
    all of our investments into local programs. And we're very
    clear in sharing with our grantees exactly what that system
    looks like in terms of transparency, so that they are aware of
    essentially the rules of the road.
        We've followed that up with regular trainings, more in-
    person, we have been doing them virtually, to make sure that
    grantees are fully aware of both their responsibilities and
    requirements to compliance. We take that responsibility very,
    very seriously.
        The second question we had with regard to the single audit
    act, that is part of the review process of our Office of
    Monitoring. In many agencies we find don't rise to the level of
    a single audit act requirement because they're under a limit of
    $750,000.00. But those that do we are very focused on ensuring
    that we take a good hard look at it, and to make sure that it
    is indeed supportive of their good standing.
        Ms. Wilson. Thank you so much. Ms. Jeffrey in your
    testimony you described that CNCS has made progress to update
    their grant risk. Could you please discuss these updates and
    why these actions were important for the successful issuance of
    grants and grant management?
        Ms. Jeffrey. I'd be delighted to. For a very long time
    AmeriCorps used a sort of one size fits all approach to grant
    risk. And we demonstrated through a study that approach was not
    effective, and then GAO came in and said also that approach was
    not effective. We worked very closely with the Office of the
    Chief Risk Officer to create a data driven grant risk model,
    and in fact we made some data sources available to the agency
    to feed into this model.
        I think that has been a notable achievement. It is still
    very new in its enactment, and it will definitely need
    refinement, but this was a very thoughtfully done effort and
    was quite an accomplishment. I do think however that there are
    significant issues in how the agency monitors grants, and large
    changes that need to be made there.
        Ms. Wilson. Thank you so much. I yield back.
        Chairman Scott. Thank you. The gentlelady's time has
    expired. The gentleman from Pennsylvania, Mr. Thompson.
        Mr. Thompson. Thank you so much. I appreciate this
    opportunity. I'd like to thank both witnesses for being here
    today and giving us the opportunity to understand the problems
    facing AmeriCorps, or more formerly known as the Corporation
    for National and Community Service.
        As we all know AmeriCorps coordinates and administers eight
    different Federal programs and initiatives aimed to educate
    students for the 21st century jobs, support neighborhoods on
    the road to economic recovery, address needs of military
    families, help communities rebuild after a natural disaster,
    promote health and well-being and preserve the Nation's parks
    and public lands.
        AmeriCorps is entrusted with over one billion dollars of
    taxpayer funds ever year. AmeriCorps cannot carry out its
    mission if it's not run efficiently. While I've been a huge
    supporter of AmeriCorps mission, I have some concerns after
    reading the Inspector General's audit report.
        Ms. Jeffrey the audit report found that AmeriCorps had poor
    communications and lacked responsiveness to auditors regarding
    information that should be readily available to the
    corporation. In addition the audit noted that it took months in
    some cases to get a response.
        Can you describe this issue in more detail what types of
    documents is the audit referring to.
        Ms. Jeffrey. These were really basic audit documents and
    basic financial data, so for example the auditors need to be
    able to take a sample of transactions to review as part of
    their work. They were not able on time to get a population that
    was complete and correct from which they could select a sample.
    That's the kind of thing.
        They're told documents exist, the documents are not
    produced, or what's produced is partial, clearly missing
    things, or they get information, data about grants that is
    internally inconsistent, so they know that it's not correct and
    it hasn't undergone a quality review.
        Let me say here I don't think this was any sort of
    deliberate effort to withhold information from the auditors. I
    think it was a level of dysfunction and disorganization, and a
    lack of sufficient people and properly trained people to be
    able to pull the necessary information.
        Mr. Thompson. Thank you, Ms. Jeffrey. Mr. Coles, I know
    AmeriCorps continue to face difficulties when complying with
    the law, in particular the Improper Payments the Elimination of
    the Recovery Act.
        While AmeriCorps has reduced improper payments as a result
    of using vendors to conduct criminal background checks for
    grantee employees, a high level of improper payments coupled
    with those payments remain a concern that draws into question
    the corporation's ability to ensure taxpayers they're funds are
    spent in accordance with the law.
        What would you say your main challenge is when it comes to
    assessing and reporting improper payments?
        Mr. Coles. Thank you for your question Congressman, and
    thanks very much to the Inspector General for her assistance in
    assisting us in improving our risk management profile system.
    Improper payments are a major concern of ours as we discussed
    earlier.
        Success goal systems need to be put in place with respect
    to criminal history checks to protect gullible populations that
    I think is a major accomplishment thus far, but there are other
    improper payments that we remain doggedly pursuing in terms of
    minimizing exposure. And around the issues of time sheets, or
    be it segregation of funds, regardless of the size of those
    they all show up as improper payments.
        We are committed through this risk-based monitoring system
    to educating and raising the consciousness of our grantees to
    ensure that they have the proper knowledge and the skills
    available to them to be able to comply with those requirements
    and minimize improper payments.
        Mr. Thompson. Well, thank you. In your opinion why has it
    taken the corporations so much time to work toward a system of
    accurate reporting?
        Mr. Coles. I think the Inspector General touched upon the
    core issue. I think it wasn't a lack of desire. It wasn't
    intentional. We simply don't have the bandwidth and the
    capacity and have not had it for years. We have a dedicated
    core group, but it's insufficient to meet--has been
    insufficient to meet all core requirements which is why we're
    doubling down so significantly right now on prioritizing
    mission support functions, especially around audit resolution.
        Mr. Thompson. Very good. Thank you both and Mr. Chairman I
    yield back.
        Chairman Scott. Thank you. The gentlelady from Oregon, Ms.
    Bonamici.
        Ms. Bonamici. Thank you, Chairman Scott and thank you to
    our witnesses. You know last year more than 3,000 Oregonians
    participated in AmeriCorps funded programs across more than 500
    service locations, and members and volunteers helped respond to
    Oregon's increasingly catastrophic annual wildfires, and in
    education they develop music programs for rural communities,
    helped to improve the health food curricula.
        These are beneficial service opportunities, but I recognize
    that AmeriCorps must act with intention to strengthen internal
    controls, rebuild the agency's workforce, and protect against
    fraud. Mr. Coles in the funding included in the House passed
    Build Back Better Act, 6.9 billion dollars is provided for
    projects related to climate resilience and mitigation,
    important work.
        The legislation directs AmeriCorps to provide participants
    with workforce development opportunities such as pre-
    apprenticeships and pathways to post service employment and
    high-quality jobs, including registered apprenticeships.
        So Mr. Coles, AmeriCorps of course needs to overcome
    current internal operational barriers and scale up to get this
    funding out the door. With these challenges as well as
    AmeriCorps primary focus on providing members and volunteers
    with short-term service opportunities, how will AmeriCorps work
    to expand its reach to meet the workforce requirements in the
    Build Back Better Act?
        Mr. Coles. Thank you for your question, Congresswoman.
    You're right the provisions in the Build Back Better with
    respect to the climate are unique. There's an intentional
    connection between the value of the service provided by the
    AmeriCorps members during the time where the civilian corps
    with a pipeline effect that will prepare them for job readiness
    going forward.
        And I think we take that very, very seriously. I think it's
    a commitment that we want to continue to make to our members
    that national service is not only a great contribution to their
    communities, but it's also a good investment in their future,
    so we're committed to totally being supportive of that dynamic.
        Ms. Bonamici. Do you have particular plans though to
    actually meet those workforce requirements?
        Mr. Coles. That will be part of our plan fortunately as was
    mentioned before, when the bill was enacted there's 180 days
    report requirement in terms of initial action, and then there
    is a 1-year ramp up period that we have to actually flush out
    the contours of those specific requirements.
        Ms. Bonamici. Thank you and Mr. Coles we know that
    AmeriCorps salary and expenses funding has decreased to stayed
    flat since 2010, and at the same time AmeriCorps has taken on
    new support roles and responsibilities, including the new
    security and reporting requirements mandated by Congress.
        And the budget for agency operations has been cut, and
    AmeriCorps has had to absorb the cost of inflation. So I'm
    going to ask a few questions about that. How will the
    additional investments provided by Build Back Better and the
    agency's personnel and infrastructure help AmeriCorps meet its
    fiduciary, financial and operational requirements identify and
    mitigate risk, provide effective program support, and also
    ensure mission success?
        Mr. Coles. Thank you, Congresswoman. Clearly, the
    resourcing provided by the American Rescue Plan is a great
    asset for us right now. It allows us to immediately go forward
    and to bring on resources to fill those critical gaps that we
    have both in terms of the skill areas and the sort of magnitude
    of the skill areas, financial management is very high on our
    list.
        The idea of data analysis skillsets that we can bring on so
    that we can make informed decisions on our investments. The
    idea of being able to attract project management talent,
    particularly that can manage IT modernization, which is a
    foundational piece of what we're doing.
        And also continuing our investments in the risk-based
    monitoring to ensure program integrity and that the taxpayer
    get the maximum return. Those are our areas.
        Ms. Bonamici. Thank you. And could you just comment on how
    the annually appropriated budget for AmeriCorps compares to
    other pre-Build Back Better to other small agencies with
    similar responsibilities.
        Mr. Coles. Regrettably I cannot. I wouldn't want to wander
    into that thicket. I can check that out and I'd be glad to
    respond back to you.
        Ms. Bonamici. I appreciate that. And I just wanted to home
    in just a little bit on your last answer. Do you have enough
    staff, will you have enough staff to achieve your oversight and
    the accountability goals, and if not, what steps are you taking
    to staff up quickly so that you can meet those requirements.
        Mr. Coles. So as I mentioned assets provided by ARP are
    fundamental to our ability to staff up, gear up, and also bring
    on external capacity and skillsets that we don't have and to
    further train our staff, but it is a short-term solution.
        The funding evaporates at the end of the Fiscal Year 2024,
    so we need to work with the administration, with OMB, with
    Congress to come up with a more sustainable funding strategy to
    ensure that we don't find ourselves you know in a slipping back
    situation going forward.
        Ms. Bonamici. Thank you, Mr. Coles. My time is expired. I
    yield back. Thank you, Mr. Chairman.
        Chairman Scott. Thank you. Next is Ms. Stefanik. I don't
    see you on the screen, then the gentleman from Georgia, Mr.
    Allen.
        Mr. Allen. Thank you, Mr. Chairman. Can you hear me OK?
        Chairman Scott. Yes.
        Mr. Allen. Thank you, sir. I want to thank you for holding
    this hearing, and I want to thank our witnesses for trying to
    explain what is going on here and the reason for the concern.
    Obviously, dealing with public funds is a high calling and
    public trust is critical you know as far as the citizenry is
    concerned today.
        That's probably where I get most of the questions about how
    we are dealing with the money they sacrifice and earn to
    support this government. Ms. Jeffrey the audit report found
    that AmeriCorps had poor communication and lack of
    responsiveness to auditors regarding information that should be
    readily available to the corporation.
        In fact the audit noted that it took months in some cases
    to get a response. Can you describe this issue in a little more
    detail, and what types of documents is the audit referring to?
        Ms. Jeffrey. Sure. So let me say this. Responsiveness has
    been a challenge at the agency for many, many years. I don't
    believe this was willful in terms of withholding information. I
    think it is in some respects a feature of the fact that the
    agency's financial systems don't lend themselves to providing
    auditable information.
        And I think some of it is just a lack of organization, and
    an inability to track the requests.
        Mr. Allen. Mr. Coles what have you done as acting CEO to
    address these problems, this lack of responsiveness. I mean
    this is unconscionable. I mean these people are dealing with
    public funds. They should understand the responsibility of
    that. Can you tell me what you're doing?
        I mean frankly you should be defunded until you correct
    these things. I mean you know this thing is going on like I
    said for 5 years. Can you tell me what you're trying to do to
    fix this?
        Mr. Coles. Thank you for your question, Congressman. I
    would first refer to the Inspector General's comments about
    disfunction and a lack of not being a lack of intent--not being
    intentional. It's a capacity issue and we're keenly aware of
    it. But more importantly, we need to adopt, and have adopted an
    agency-wide accountability model.
        And that starts at the top. That starts with folks like me,
    senior managers, taking the responsibility and ensuring that
    others understand it is their responsibility as well. We did,
    and this is specific, create a new internal audit
    accountability and reporting structure, and that was a
    derivative of the work we did to strengthen our monitoring, and
    that is going to be the epicenter of our corrective action
    process.
        Mr. Allen. All right yes, and if you would furnish it to me
    with a full report of what actions you're taking that would be
    helpful. Ms. Jeffrey the financial audit report also notes a
    key reason for AmeriCorps lack of progress with fixing its
    numerous problems is due to a lack of engagement and
    accountability by senior leadership.
        Can you elaborate on what you mean lack of engagement and
    accountability?
        Ms. Jeffrey. Well, I will say this. For about 2 years the
    agency gave responsibility to fix these audit issues to two
    senior individuals, neither of who was trained as an
    accountant. And not surprisingly they wasted a lot of time on
    unproductive efforts. I talked to the CEO and her senior
    leadership team about that problem repeatedly during the
    process, and nothing changed.
        They seemed--they conveyed to me they felt helpless to do
    anything about it. I think the level of engagement we're
    hearing about now from our polls is quite different. I think
    there's a much greater level of activism and involvement, and I
    think that tone at the top is really important and all to the
    good, but it's just a----
        Mr. Allen. I hope so. I'm just about out of time. You know
    as my colleagues have mentioned I'm very concerned with this
    issue at hand today. Government programs must be accountable to
    the taxpayers, repeated instances of non-compliance is just not
    acceptable, and to make matters worse it's mentioned the Build
    Back Better will increase funding for AmeriCorps.
        These are hundreds of worth non-profits--there are hundreds
    of worthy non-profits in my home State of Georgia and across
    the country meeting the needs of America without the burden of
    this government bureaucracy. And with that Mr. Chairman, I
    yield back.
        Chairman Scott. Thank you. The gentleman from California,
    Mr. Takano.
        Mr. Takano. Well, thank you, Chairman Scott for holding
    this hearing, and I believe it's of paramount importance that
    we ensure that inspector generals can do their job without
    reprisal or retribution. I certainly want to thank Deborah
    Jeffrey for her work and I'm proud that the committees under
    the House democratic leadership have prioritized the issue of
    allowing Inspector Generals to conduct their work
    independently.
        And I'm a proud cosponsor of Representative Schiff's
    Protecting our Democracy Act, which contains a sweeping set of
    reforms aimed at strengthening our democracy. And one of the
    critical reforms within this legislation calls for cause of
    removal of Inspector Generals to bolster the integrity of the
    system.
        And I hope Members on both side of the aisle in this
    particular instance really understand the critical role of
    Inspector Generals in congressional oversight, and for the
    people to have confidence that we have a system of government
    that will hold government officials accountable and will ensure
    that programs worked effectively.
        Protecting the independence of the Inspector Generals will
    strengthen accountability and transparency of our democratic
    institutions. My colleague, Representative Carol Maloney also
    has an effort entitled The IG Independent and Empowerment Act
    which specifically addresses issues regarding IG's and the
    Council of Inspector Generals on integrity and efficiency
    integrity Committee.
        The bill allows an IG to be removed only for cause such as
    for documented malfeasance. I would encourage all Members of
    this Committee to support both of these efforts. And I'm going
    to tell you as Chairman of the House Veterans Committee I have
    personally experienced the cabinet official attempting to
    remove an Inspector General.
        It was deeply troubling to witness such an attempt, and
    cabinet officials should not have unilateral authority to
    remove IG's without cause, and nor should a President be able
    to do this. It's very important that Congress took the straight
    skinning on what's going on with the agencies.
        With that being said Ms. Jeffrey the external auditors
    findings show that there are several areas in which both the
    AmeriCorps and National Service Trust can improve their
    financial management and internal controls program.
        Can you please inform the Committee about which findings
    and recommendations that you would prioritize.
        Ms. Jeffrey. So one feature of IG independence is that we
    need to be very careful not to design the corrective action
    plan ourselves in order to maintain independence under the
    audit rules. But I could say this. If you do a sensitivity
    analysis, and you say which changes will make the greatest
    difference to the agency, it is plainly the issues that relate
    to grants, and relate specifically to the National Service
    trust.
        I would then put in the hopper the general finding about
    financial reporting. I think until those three matters are
    fixed, it will be very difficult for the agency to move forward
    in a major way.
        Mr. Takano. Thank you. Are there any recommendations that
    in your opinion are easier to implement which should be done
    within the next three to 6 months?
        Ms. Jeffrey. Well, there's one that comes to mind, and I
    would identify it like this. There was a problem last year that
    did not appear in this year's audit that dealt with how certain
    property is accounted for. It's really important to get on top
    of that because the agency is about to undertake some new
    capital projects for IT for example.
        And if the agency doesn't fix its process now, they're
    going to end up with that as a material weakness in the future,
    and I think it's really important to prevent that.
        Mr. Takano. Well thank you. Which other recommendations do
    you believe will have the greatest overall impact if addressed?
        Ms. Jeffrey. It's clearly the ones that relate to the
    national service trust and relate to the specific grant
    matters.
        Mr. Takano. Ms. Jeffrey what do you believe is a reasonable
    and necessary timeline for AmeriCorps' team to implement the
    most impactful recommendations?
        Ms. Jeffrey. So, to some degree that's a function of what
    resources the agency can bring to bear on this, and it's a
    function of the quality of the leadership. I think with a very
    strong leader they could make tremendous progress in a two-to-
    three-year period.
        Mr. Takano. Well thank you. Mr. Chairman again I thank Ms.
    Jeffrey for her work. I thank you for your work, and I hope
    that all my colleagues will join me in focusing attention on
    how to strengthen the independence of our Inspector Generals,
    and pass legislation that will say that only they can remove
    for cause, and I yield back.
        Chairman Scott. Thank you. The gentleman's time has
    expired. The gentleman from Indiana, Mr. Banks I don't see. The
    gentleman from Kentucky, Mr. Comer.
        Mr. Comer. Thank you, Mr. Chairman. Mr. Coles as a Ranking
    Member of the House Committee on Oversight, I find the results
    from the Office of the Inspector General extremely concerning
    right now. The Democrats are negotiating a proposed 15 billion
    dollar increase to the corporation for national community
    service, yes, the same group that just failed an audit
    requiring this hearing here today by the same group in which
    Democrats are proposing a 1,500 percent increase.
        Mr. Coles, given the circumstances of your testimony before
    this Committee today, do you believe that the corporations can
    manage an additional 15 billion dollars given their continual
    failure and lack of accountability.
        Mr. Coles. Thank you for your question, Congressman.
    Actually I believe that over the past 18 months we've made
    significant progress, we've gained traction. I've already cited
    a number of the corrective measures that we've taken, and we're
    well positioned with our new audit accountability reporting
    structure corrective action plan to indeed address even more of
    these outstanding audit recommendations.
        So I feel that we have momentum behind us. I would also say
    that the timetable provided--the resources provided through ARP
    and the timetable provided by the BBB would allow us to ramp up
    accordingly and develop the management capacity that is
    essential to be good stewards of the taxpayer's money.
        Mr. Comer. Ms. Jeffrey, I'll pose the same question to you.
    Do you have confidence in AmeriCorps ability to manage the
    substantial amount of funding with responsibility?
        Ms. Jeffrey. I think it will be very challenging and a very
    heavy lift. AmeriCorps has known about some of these problems,
    including this year, that they haven't made progress on some of
    these areas since April or May. In my view they should have
    been developing corrective action plans for at least some of
    those matters so that those corrective action plans would be
    completed and would be in the midst of being executed by now,
    so that gives me some pause.
        Mr. Comer. So, Ms. Jeffrey, is it possible to verify these
    funds achieve the goals set out when these programs were
    established without any indications to the oversight reporting
    of program administration?
        Ms. Jeffrey. We generally have not--the Office of Inspector
    General has not typically looked at overall program
    performance. We've focused much more on program integrity and
    financial management. Our office is too small to be able to do
    the performance reviews, I guess this is my time to make a plug
    for more appropriations from my office, and to develop that
    capacity.
        Mr. Comer. I'm still having difficulty seeing how the waste
    that's so entrenched in these programs will ever be able to be
    rooted out short of reforming or better yet, eliminating the
    program entirely. To that point Ms. Jeffrey I have a few
    questions based on the press release from the Department of
    Justice about a case in my home State of Kentucky. Are you
    familiar with the Partner Core Stem AmeriCorps program?
        Ms. Jeffrey. I am indeed, and I'm familiar with the matter
    that you're speaking of.
        Mr. Comer. OK. So as you know during the 2017-2018 school
    year an AmeriCorps member committed six timesheets falsely
    reporting that she had performed her duties. Is that correct?
        Ms. Jeffrey. That's correct.
        Mr. Comer. So during that time what was she paid, and did
    she do any of the work that she had claimed?
        Ms. Jeffrey. During that time she did none of the work. She
    stopped showing up entirely, just kept submitting time sheets,
    and for some reason her supervisor kept signing them, not
    understanding that she wasn't showing up, which definitely
    raises questions about the quality and level of supervision.
        The amount in question, I check this the other day, it was
    about--it was less than $3,000.00, but it's more the fact that
    this shows such a weakness in the oversight of that program.
        Mr. Comer. How was this fraud caught, and how prevalent is
    time sheet fraud in the program do you think?
        Ms. Jeffrey. I can't recall how this particular one came to
    light. I think it may have been that the organization detected
    it, but too late. And that's it, they stopped payment before
    the last payment could be made because they noticed she wasn't
    showing up, and they reported it to us.
        In terms of time sheet fraud it's very difficult for me to
    say what the extent of it is. What I can tell you is that it's
    all too easy, and the agency needs to be a better job not only
    of educating grantees about fraud awareness, but helping our
    grantees develop strong internal controls to prevent this from
    happening.
        Mr. Comer. Well, thank you, Ms. Jeffrey and my time is
    expired, so I yield back Mr. Chairman.
        Chairman Scott. Thank you. The gentlelady from North
    Carolina, Ms. Adams.
        Ms. Adams. Thank you, Chair Scott, for holding this
    hearing, and thank you to the witnesses for testifying about
    funding such an important program. As we continue to look ahead
    and focus on making substantive investments in our communities,
    we hope that individuals will have an interest in serving
    through own communities through AmeriCorps.
        I would like to just take a moment here to highlight the
    numbers from my district, the 12th district of North Carolina.
    Since 1994 more than 2,300 District 12 residents have served
    approximately 4.29 million hours through AmeriCorps, earning
    single AmeriCorps toward educational awards totaling close to
    12 million dollars. That's pretty commendable.
        I look forward to seeing the continued positive impact of
    AmeriCorps as time goes on. Inspector General Jeffrey, the
    House recently passed a bill that allocated a 1 billion dollars
    to AmeriCorps for administrative expenses, or close to 9
    percent of its total outlays in the BBB.
        The bill also included robust language requiring an
    evaluation of CNCS's information technology, security,
    corrective actions to address recommendations arising from
    audits of the agency and the National Service Trust and in
    consultation with the Inspector General, the development of
    grant, fraud prevention and detection controls, and missed
    based anti-fraud grant monitoring.
        So how important will this increase in administrative funds
    and legislative requirements be in improving the effective
    management of AmeriCorps.
        Ms. Jeffrey. I think it will be critical, and I think it's
    not simply the resources, but the clear sense of Congress that
    these need to be priorities for the agency. That messaging is
    absolutely critical, and I want to thank the Congress for
    inserting those requirements. I'd like to say two other things.
    One is that it is precisely because these programs are
    important that I think it's essential that they be on a sound
    financial footing.
        I wouldn't be pouring my heart and soul into this if I
    didn't care about these programs. And the other thing I would
    say relative to the fraud issue is fraud is an issue in every
    grant program in the Federal Government. The risk and the
    problem is not unique to AmeriCorps, it's just that AmeriCorps
    really needs to ramp up its efforts to prevent and detect
    fraud.
        Ms. Adams. Thank you.
        Ms. Jeffrey. So I don't want to leave a misimpression about
    that.
        Ms. Adams. Thank you very much. Acting CEO Coles how does
    AmeriCorps anticipate drawing attention to its positive impact
    in communities across America?
        Mr. Coles. Thank you for your question, Congresswoman. Yes,
    we were enormously proud of the contributions that AmeriCorps
    has made through national service. The impacts that they have
    in solving community problems, and we always seek every
    opportunity to shine a spotlight on those remarkable stories
    and contributions.
        So we're very much committed to amplifying our successes as
    much as we are committed to addressing our shortcomings. So
    hopefully we can get to that.
        Ms. Adams. Thank you. Inspector General Jeffrey one
    challenge America grantees have historically faced was carrying
    out criminal history or background checks. So have you seen
    improvements in the background check process, and what has that
    meant for grantee management?
        Ms. Jeffrey. I think that has improved tremendously because
    the agency has developed a program by which grantees can
    outsource those checks to vendors that are able to do them with
    great precision and very quickly. And I think it's a great idea
    to take this difficult task off the shoulders of grantees and
    hand it over to experts so grantees can focus on operating
    their programs.
        Ms. Adams. Great. How does the leadership of--this is to
    CEO Coles how does the leadership of AmeriCorps anticipate the
    trajectory of its outreach so that more diverse individuals can
    be included and participate in the service that AmeriCorps
    undertakes?
        Mr. Coles. The Biden administration is committed fully to
    providing equal opportunity and access to all Americans, and we
    take that charge very, very seriously. We are committed to
    having outreach programs that engage organizations and
    particular high poverty areas that have not historically been
    able to access our resources--that's a prioritization for us
    currently.
        And in the Build Back Better Bill as well there's an
    additional provision for further outreach for both individuals
    who have historically not participated, along with
    organizations from communities that have not participated.
        Ms. Adams. Thank you, sir, I'm out of time. Mr. Chairman I
    yield back.
        Chairman Scott. Thank you. I'm not sure who's next but let
    me just call the names I have Mr. Banks, Mr. Fulcher, Mr.
    Keller, Dr. Murphy, Ms. Miller-Meeks, Mr. Owens, Mr. Good, Ms.
    McClain, Ms. Harshbarger, Ms. Miller, Ms. Sparks, Ms. Sherrill,
    Mr. Cawthorn, Ms. Steele, Mrs. Letlow. You are recognized for
    five minutes.
        Ms. Foxx. Mr. Chairman, I see Mr. Keller on the screen.
        Chairman Scott. I'm sorry, well he didn't say anything.
        Mr. Keller. I wasn't sure I was supposed to. I was just
    waiting for somebody to let me know when my turn was.
        Chairman Scott. OK. Do you want to be called now?
        Mr. Keller. I'm fine yes.
        Chairman Scott. OK. Excuse me, Mrs. Letlow, we're going to
    call Mr. Keller. The gentleman from Pennsylvania, Mr. Keller is
    recognized for five minutes.
        Mr. Keller. Thank you, Mr. Chairman. I appreciate all the
    work that is done by the Corporation for National and Community
    Service, or CNCS. Though eight out of nine material weaknesses
    identified in the Fiscal Year 2021 audit were first identified
    as early as Fiscal Year 2017. That makes it clear that CNCS
    programs such as AmeriCorps, the Senior Companion Program and
    others are in need of upgrade.
        Meanwhile, the latest version of President Biden's
    Reconciliation Bill includes 15.2 billion dollars in additional
    funding, or roughly 15 times the annual budget of the CNCS. I
    started out right out of high school working in private
    industry, but in any sector, you would not expect to see such
    an increase, in fact if you didn't see performance you wouldn't
    see any additional money you'd look at changing how they're
    doing things.
        But you wouldn't look at an increase in funding for
    something where you weren't seeing improvements. So that's not
    just private issue, that's also government. So we need to see
    dramatic improvement and fundamental change for the better. So
    I have a question for Ms. Jeffrey.
        I want to thank you for being here today and understand
    that you recently released the annual audit of financial
    information from CNCS and the National Service Trust Fund,
    which found that the CNCS lacked responsiveness and did not
    disclose large amounts of necessary information required to
    complete the audit.
        Can you explain what type of information was missing or
    delayed and how that might have affected the OIG's report?
        Ms. Jeffrey. It was actually quite a bit of information of
    many different types that was missing.
        Ms. Foxx. She's not answering the question.
        Ms. Jeffrey. In some cases it was an issue of whether the
    population was complete so that the auditors could select an
    appropriate sample. In some cases they got financial
    information that was internally inconsistent, or in some cases
    obviously wrong. They would point out the problems and it would
    take a great deal of time to get the correct information.
        That's not usual in the fifth year of an audit with the
    same auditor. And our auditors told us this year was almost
    more like a first year with the oddity than a fifth year with
    the oddity.
        Mr. Keller. I guess I have a question. Were the same people
    providing the information this year that were providing it
    previously?
        Ms. Jeffrey. So there has been a lot of turnover, and
    that's unfortunate, and one of the key positions was left
    unfilled while an individual was on previously scheduled long-
    term military leave. Part of it is the information itself is
    not stored in a way that makes it easy to furnish, and so it's
    both an issue of the agency's capacity of a lack of
    organization, and of defects in the systems.
        Mr. Keller. Why would you think they wouldn't have the
    information stored so it's easy to determine and find? Why
    would anybody not want that?
        Ms. Jeffrey. I don't think it's a question of not wanting
    it. I think these systems were designed a very, very long time
    ago, and they have not been upgraded since. And that has been a
    major albatross around the agency's neck.
        Mr. Keller. I think they should be a priority in upgrading
    their systems, but I'll move on to other questions. Again Ms.
    Jeffrey, do you believe additional congressional oversight
    would help the CNCS improve some of these troubling practices
    and help to stop wasting taxpayer dollars?
        Ms. Jeffrey. I think more congressional oversight is very
    helpful in getting the agency to prioritize the things that
    Congress believes are important.
        Mr. Keller. Yes. And just you mentioned about their
    inability to upgrade things and manage that well. So if they're
    not managing those things well, do you believe that the CNCS
    was able to properly manage an additional 15 billion dollars
    included in the Build Back Better Act?
        Ms. Jeffrey. It's a challenge. Let me say a couple of
    things about that. The 15 billion dollars is over I think it
    was a 9-year period. I remember calculating that between the
    Build Back Better money, the ARP money, and certain interagency
    agreements generally the agency's budget would roughly be
    quadrupled.
        So I think the 15 times over figure may be an inapt
    comparison.
        Mr. Keller. It's 15? I mentioned it was 15 times their
    annual budget.
        Ms. Jeffrey. It is.
        Mr. Keller. I didn't say it was in a year's time.
        Ms. Jeffrey. That's right.
        Mr. Keller. My point was it's 15 times their annual budget,
    but I'm concerned that taxpayers aren't getting the level of
    transparency, accountability they deserve from these audits and
    programs. The Committee needs to ensure that the CNCS is
    achieving its valuable community service goals while also
    remaining responsive to steward the taxpayer dollars.
        I look forward to working with Members of the Committee
    toward solutions that will drive improvement and make sure that
    the money is invested well, rather than just going into enough
    organizations that isn't managed well, and with that I yield
    back.
        Ms. Jeffrey. And we look forward to the support of Congress
    in helping the agency do that.
        Mr. Keller. Thank you.
        Chairman Scott. The gentleman has yielded back. Next is
    let's see we have DeSaulnier, Norcross, Jayapal, Morelli, Wild,
    McBath, the gentlelady from Connecticut, Ms. Hayes.
        Mrs. Hayes. Thank you, Mr. Chair. AmeriCorps has
    significant impact in Connecticut. Over the last 25 years more
    than 2,500 residents have served over 3.6 million hours in my
    district. Last year over 1,800 Americans of all ages and
    background met local needs to strengthen communities and
    expanded economic opportunity for national service in
    Connecticut.
        In fact, they'd go on to pursue careers in public service
    and continue this essential work underscoring the value of
    cultivating civil engagement. I currently have an AmeriCorps
    alumni on my office staff. My question today is for Mr.
    Jeffrey. Under the previous administration AmeriCorps lost more
    than 100 staff, in large part due to a reorganization plan that
    led to a number of early retirements, and positions not being
    filled.
        How much does that loss in personnel during this time
    impact the efficacy of AmeriCorps grant management?
        Ms. Jeffrey. I think it's not only the loss of those staff
    members, but really the way in which the new field structure
    was created. We have heard from a number of staff members in
    the field that the level of responsibility, the quantity of
    work is not doable, and that they are spending a great deal of
    time basically processing paper and are not able to devote time
    to supporting grantees, and that's a huge loss, especially as
    the agency takes on programs that require them to recruit new
    grantees from underserved communities where those grantees may
    not have a lot of capacity. They really need more support.
        Mrs. Hayes. So it sounds like you're saying that some of
    the challenges we can attribute to the fact that I mean if the
    staff are already overworked and then they're understaffed,
    that it's possible to see many of the gaps that we've heard
    about on this hearing.
        Ms. Jeffrey. Well, I'm not sure how those contributed to
    some of the financial management issues, but I think there are
    very valid concerns about the level of support that the current
    field structure can provide to grantees.
        Mrs. Hayes. Thank you. Mr. Coles in a briefing provided by
    your staff this Committee was informed that AmeriCorps is
    conducting a workforce analysis to be completed in Fiscal Year
    2022. This analysis was considered a crucial action step to
    address the staffing shortage that has accumulated over the
    proceeding years.
        Can you tell us today what is the progress of this
    analysis, and will it be completed? And are there any early
    indicators of guides for improvement of capacity of the agency?
        Mr. Coles. Thank you for the question, Congresswoman. We're
    very pleased to announce that we did make the award of our
    workforce analysis planning contract within the past month,
    month, and a half perhaps. And so it is underway.
        We have a project manager, we expect that the overall roll
    out will take 12 to 18 months, and it will inform us with
    recommendations regarding our structure, how best to meet our
    mission, type of skillsets, the volume of those skills that are
    going to be required, what can we achieve in-house, and what
    needs to be accessed externally.
        So it is going to be comprehensive, and it will vastly
    improve our ability to assign resources to meeting our mission.
        Mrs. Hayes. Thank you, Mr. Coles. And that is critically
    important especially at this time. I think what we're hearing a
    lot of today is that we passed a bill in Congress because we
    believe in the long-term benefits of programs like AmeriCorps.
    We believe in service and we would like to invest in programs
    like this, but as Members of Congress we also have oversight
    responsibilities, so it's very important that we can justify
    these appropriating funds to programs like AmeriCorps.
        So this study, and then the followup of what is found and
    how we improve the agency is critically important because as
    you heard so many of my democratic colleagues say, we do not
    believe that disbanding AmeriCorps completely as the approach
    that we should be taking.
        We should find the areas that are in need of improvement
    and support the agency to make sure that we make those
    improvements so that our communities can continue to benefit
    from programs like AmeriCorps, but it's very important that we
    are also responsible stewards of taxpayer dollars, so I look
    forward to the findings of this analysis and my time has
    expired Mr. Chair, I yield back.
        Chairman Scott. Thank you. The gentleman from Indiana, Mr.
    Banks.
        Mr. Banks. Thank you, Mr. Chairman. Mr. Coles as you are
    aware the reason, we are having this hearing is because
    AmeriCorps inability to provide auditors with the necessary
    information to conduct a full and thorough audit. This
    inability comes after an entire year's delay at the request of
    AmeriCorps.
        Mr. Cole this is not the first time this agency has found
    itself in this situation, but I would like to think with an
    extra 12 months the corporation and yourself would have been
    able to get your house in order.
        Mr. Coles after 2 years of preparation why was AmeriCorps
    unable to provide the necessary information to conduct a full
    audit? You're muted.
        Mr. Coles. My apologies. Thank you for your question
    Congressman. Yes, as I mentioned one of the cornerstones of our
    corrective action plan was to sign a shared services agreement
    with ARC or with Treasury because they are essentially a gold
    standard to be able to meet financial management procurement
    and travel requirements that we lack the in-house capacity to
    perform.
        So having it be professionalized was a major step forward.
    We just completed our first full year of that shared services
    agreement, and so we don't have the data to basically reveal
    what sort of improvements have been made which will certainly
    show up in the next year's audit.
        I would also State that the current theme here has been the
    recognition I think both all parties that historically we have
    been under resourced in terms of our capacity to both meet our
    mission externally, and to conduct the type of financial
    oversight that we essentially believe is required as much as
    you do, so----
        Mr. Banks. I'm sorry this is about wanting for money, but
    it doesn't seem like there's a whole lot of urgency here to
    perform the audit. Where is the urgency?
        Mr. Coles. There was a mutual agreement between the
    Inspector General and us last year because of the migration of
    shared services that we would not conduct an audit.
        Mr. Banks. Mr. Coles because AmeriCorps is funded through
    public funds don't you agree that there should be
    accountability on behalf of the American people who are funding
    this effort? Where is the urgency for this audit?
        Mr. Coles. As I mentioned we are in receipt of the Fiscal
    Year 2021 audit, even prior to that because of the requirements
    of ARP particularly around fraud awareness. We have set up
    internal systems with our Risk Management Council to put
    together working groups and come up with corrective action
    planning that are responsive to the 75----
        Mr. Banks. Mr. Coles the excuses and the lack of urgency is
    a slap in the face to American taxpayers. Ms. Jeffrey do you
    believe that AmeriCorps took the actions and steps necessary to
    ensure to prepare for an audit?
        Ms. Jeffrey. I'm sorry I lost a little bit of what you were
    saying.
        Mr. Banks. Do you believe that AmeriCorps took the actions
    and steps necessary to ensure they were prepared for the
    independent audit?
        Ms. Jeffrey. Obviously not.
        Mr. Banks. Yes, and you would agree that there seems to be
    a full lack of urgency on their part to participate in the
    audit.
        Ms. Jeffrey. There certainly has been over the last 5
    years.
        Mr. Banks. Yes, I agree. Mr. Coles according to your bio
    after setting up the corporation that was created in 1993, you
    went on to hold senior level positions at the corporation,
    overseeing programs such as AmeriCorps Vista, and AmeriCorps
    Seniors Program, and most recently serving as Executive Advisor
    to the Chief of Programs Operations.
        Do you believe that your expertise and tenure at the
    corporation was a key reason that you were appointed to serve
    as acting CEO?
        Mr. Coles. I do. I think having had the privilege and the
    honor to serve under 11 Presidents and 16 administrations that
    was an acknowledgement.
        Mr. Banks. I figured. So by serving in these roles
    AmeriCorps programs were, and continue to be magnets for fraud,
    waste, and abuse. So why you are relatively new in your role as
    Acting CEO, you are not new to the long-standing issues
    AmeriCorps has historically faced, and the inability of
    AmeriCorps leadership to do anything about that. Is that
    correct?
        Mr. Coles. We have historically had and continue to have a
    zero-tolerance policy for grantees to commit illegal acts, or
    perform prohibited activity. We have systems in place to hold
    individuals and organizations accountable when we discover
    those, including referring them to the Inspector General.
        Mr. Banks. Yes, all right. I'll leave it at that. The
    excuses, the lack of urgency is embarrassing, it's a slap in
    the face to American taxpayers. With that Mr. Chairman I yield
    back.
        Chairman Scott. Thank you. The gentleman from Michigan, Mr.
    Levin.
        Mr. Levin. Thanks so much, Mr. Chairman. You know
    AmeriCorps provides vital help to communities throughout the
    Nation during the most difficult of moments. AmeriCorps members
    and volunteers should be proud of the work they facilitate
    across our communities, including helping the most vulnerable
    during the COVID 19 pandemic, and cleaning up during natural
    disasters like wildfires out west and windstorms in the
    Midwest.
        So it's really important to log the successes of the
    program, but we have to take very seriously management issues,
    and as Members of Congress our oversight duties need to focus
    on what's needed for the future success of the program.
        AmeriCorps has gone through four audits by the Office of
    the Inspector General which resulted in deeply troubling
    findings. For AmeriCorps to continue the good work it does, and
    expand it, it's financial and administrative health must be
    safeguarded.
        Now in the Fiscal Year 202021 AmeriCorps annual management
    report the agencies external auditors noted that 10 out of the
    75 recommendations were now closed for AmeriCorps and 7 of the
    37 recommendations are now closed for the National Service
    Trust.
        Ms. Jeffrey, excuse me, what additional steps would you
    recommend the agency put into effect to address the auditor's
    concerns, and in particular I want to press you on timelines.
    Look, I used to run all the workforce programs in the State of
    Michigan. I dealt with you know AmeriCorps, all the WIOA
    programs.
        I had mismanagement and corruption, and we dealt with it in
    a super urgent basis. The idea of this going on for years or
    taking years to correct was something I did not accept as a
    steward of the taxpayers' dollars in the State of Michigan. So
    give me a sense of timing here. Can't AmeriCorps come into
    compliance with what it needs to do within say 1 year from now?
        Ms. Jeffrey. I think they could make a lot of good
    progress, and a lot of needed progress. It's certainly not
    going to get to a clean opinion within 1 year, partly because
    so many of the problems relate to technology and relate to
    financial systems that need to be upgraded, and the timeline
    for implementing those changes regrettably is definitely going
    to be longer than a year.
        Mr. Levin. Regardless of resources?
        Ms. Jeffrey. Resources will----
        Mr. Levin. And unlimited funding, it would still take more
    than that?
        Ms. Jeffrey. Resources will help accelerate things, but I'm
    telling you just the procurement timelines that exist, and the
    need to hire people and the typical lag time in those processes
    means it is bound to take more than a year.
        Mr. Levin. OK. Mr. Coles, I salute your efforts to address
    the audit findings, and I want to dive in to the current steps
    that you're taking. In the agency's Fiscal Year 202021 annual
    management report one of the main ways the agency proposed to
    be able to address the audit findings is by creating a new
    internal audit accountability and reporting structure which is
    supported by the existing Risk Management Council.
        Could you explain this new accountability and reporting
    structure? And I want to really emphasize again, based on my
    own experience, to the average citizen--so this could sound
    like a bunch of gobbled gook, and a lot of happy talk. You know
    you said accountability starts at the top, so talk to us about
    how you are going to grab this bull by the horns personally and
    wrestle it to the ground so that we can all be super proud of
    the amazing work that can happen through AmeriCorps.
        Mr. Coles. Thank you, Congressman. Let me first underscore
    we do have a sense of urgency here, and I do take it
    personally. The issue is that we recognize that we need to get
    traction really fast. The issue is also that we're relying upon
    our Risk Management Council which is a group of senior managers
    comprised of the CFO, our Chief Risk Officer, Chief Information
    Officer, and other senior officials.
        But the fact of the matter is it has to be agency-wide, but
    our sense of urgency is such that was the group. The Risk
    Management Council that ushered in success for us on the issues
    mentioned before are vastly forward in terms of compliance on
    criminal history checks, and the establishment of a risk-based
    monitoring system that we believe will truly deliver on
    effectiveness.
        Those are instances in which that group has set a
    foundational path for us to take on further corrective action
    planning. So they will be at the epicenter, but all of us, all
    of us would be expected to contribute.
        Mr. Levin. All right. Well, Mr. Chairman, it looks like my
    time has expired. Let me just say that we have passed the Build
    Back Better Act in the House. I certainly hope the Senate
    passes it. If so, we are giving a lot more resources to your
    agency including a lot more for internal management, and I hope
    and trust you'll use it wisely and aggressively to take care of
    these problems. With that Mr. Chairman I yield back.
        Chairman Scott. Thank you. Gentleman from North Carolina,
    Dr. Murphy.
        Mr. Murphy. Thank you, Mr. Chairman. I want to thank our
    guests for coming on today. I will tell you, you know, I've
    just been listening to a lot of the testimony, and a lot of the
    problems that I've heard, and I think I can say--and this is a
    bipartisan notion that if this was a private corporation that
    we were dealing with you would long since be bankrupt and out
    of business.
        It's just this malfeasance if it is in the case would just
    not be tolerated and you guys would be gone, so I appreciate
    the auditing and work that it's done. Before I really actually
    get to my questions, I want to ask two quick ones. Mr. Coles
    you had mentioned to Representative Grothman earlier that a
    billion dollars with a B was going to you guys to try to clear
    up the financial situation. Can you expand upon that just a
    little bit?
        Mr. Coles. Yes. The bill, the BBB that was passed by the
    House of Representatives has actually 15.2 billion price tag.
    One of the lines in there is for a little over one billion
    dollars, and it is dedicated to focusing on remediation of
    already acknowledged audit deficiencies.
        The need for us to do as long as we're cleaning up our
    business we need significant investments, so that's one part of
    the billion dollars. Another part of that is to stand up, sort
    of front-end broad risk protection controls required by both
    ARP and required for strong stewardship going forward.
        Mr. Murphy. Thank you. That number is simply unconscionable
    to me that we are going to spend a billion dollars on a
    billion-dollar agency to get its financial house in order. I'm
    sorry, I don't think I'm stupid, I just find that very, very
    difficult to comprehend.
        Ms. Jeffrey, really quick, you had talked earlier about
    some specific examples again that Representative Grothman
    brought up of Hawaii, North Carolina, was concerning to me
    specifically--actually East Carolina. To your knowledge were
    their criminal charges brought for those individuals who
    committed the fraud?
        Ms. Jeffrey. So there were criminal charges brought and
    guilty pleas of three people in the Hawaii matter.
        Mr. Murphy. OK. What about in North Carolina? Are you aware
    of that?
        Ms. Jeffrey. That was not a criminal matter.
        Mr. Murphy. OK. Go back to Mr. Coles. When we have
    individuals to your knowledge who are being introduced to this
    program, not as volunteers, but as paid participants, are they
    made aware that fraudulent activity will be met with criminal
    charges?
        Mr. Coles. They are indeed. It is part of every orientation
    of every incoming AmeriCorps member about prohibitive
    activities, and the risks associated with populating loss.
        Mr. Murphy. Yes. You know this is just a--I have to say
    that this is kind of the paradigm that we see with good intent
    of government programs, but this is what happens when there's
    lack of oversight and money after money after money rather than
    oversight.
        We think we fixed the problem, now pouring 15 billion
    dollars--and again I'm even blown away about 1 billion dollars,
    into a program that has just repeatedly shown that it is not
    working as far as financial activity and criminal activity. I'm
    just I'm baffled about that.
        It would be sad for this program to go away because of the
    good that it does, but the fact that there has been no
    financial accounting. I don't care about the excuses. I'm
    sorry. I don't live in a world where excuses like that matter,
    especially repeatedly over years and years and years can occur.
        So quickly, I just you know we've talked about all these
    different things. Ms. Jeffrey you've provided an audit, or at
    least an oversight to this institution. Let me ask you this,
    and this is kind of a hard question to answer, Is this
    survivable? In other words is this an investment that the
    American people should continue to make, and in your judgment
    should we be spending 15 billion dollars on an agency where we
    know has not been very good about with the taxpayer money.
        Ms. Jeffrey. So to a great degree that question is above my
    pay grade, and it really lands in the lap of Congress. I think
    the answer depends on how much you value the work of the
    programs, and how much risk you're willing to take on in order
    for that work to continue.
        Now to my way of thinking the financial management
    improvements are a must. They are essential. They're non-
    optional. If you value, the work of the programs you might say
    we are willing to invest another 2 years to see if we can get
    to where we are.
        But I do understand the sense of great impatience on the
    part of the Congress and the American people to say why should
    we keep supporting an organization that cannot produce
    transparent and accountable financial information for the
    public.
        Mr. Murphy. Thank you, Ms. Jeffrey. My time is up, but I
    could not agree with that more. I mean it's sad that this
    particular program is put in jeopardy because of lack of
    oversight, and again this is where government gets it wrong. We
    think pouring more money at something is going to fix it rather
    than accountability, but with that thank you Mr. Chairman I
    will yield back.
        Chairman Scott. Thank you. The gentleman's time has
    expired. The gentlelady from Michigan, Ms. Stevens.
        Ms. Stevens. Thank you, Mr. Chair. Mr. Coles do you happen
    to know the average age of an AmeriCorps participant?
        Mr. Coles. I'm not sure I can provide the average age. I
    can certainly let you know the majority of the participants
    fall in the age range of 18 to 25, but it's--that's recon.
        Ms. Stevens. Yes, it's fair to say it's a program for young
    people and as a point of personal privilege, as a Member of
    this Committee participating in this hearing I just can't help
    but reflect that yesterday we had a terrible shooting in
    Michigan, and we lost three young people who could have been
    participating in AmeriCorps.
        And as we're evaluating this program, and as we're
    evaluating how to create experiences for young people in
    America to become leaders, we've got to address gun violence in
    this country. 22 years since Columbine and we do nothing. And
    here we are evaluating and reviewing a program that is for
    young people, and we've got to think bigger. And we've got to
    think about how we ensure the safety so that what happened in
    Oxford High School yesterday in Michigan never happens again.
        Now I'm a former Treasurer appointee, and I am aware of you
    know this point about the administrative resource center within
    the Department of Treasury that the audit is recommending. And
    I'm especially eager--I know Mr. Banks briefly touched on this,
    but I'm especially eager to know what services will be covered
    by the administrative resource center.
        Mr. Coles. Congresswoman, yes, in particular they fall into
    the current agreement into four areas. One is a vast array of
    financial management service which we really lack sort of
    definite capacity to provide a small agency. The second is
    around procurement which is quite frankly a major league deal
    in the Federal Government, and third is around our travel
    services.
        But as importantly, as was alluded to a number of times
    here, we have antiquated legacy technology systems, and what we
    really need to do is to move forward to a single financial
    platform, and that's going to be integrated with ARC's
    financial platform. They use oracle, you know the gist of it is
    we have recently signed at the end of September a 3.6-million-
    dollar phase two agreement with ARC to help us both manage the
    transition of data migration for the short-run on two systems,
    but ultimately to move to have one unified system that
    integrates and interfaces with theirs.
        Ms. Stevens. OK, Mr. Coles when this transition is
    completed will that help address or resolve the audit
    recommendations?
        Mr. Coles. It will be a major fundamental piece of that
    because as was mentioned earlier the inability of our current
    system to provide reliable data on an on-time basis is a close
    to fatal flaw, and in concert with upgrading both internally
    and externally, our human capital to be able to evaluate and
    manage data analysis, I think those will be the two sides of
    the coin that leads that switch.
        Ms. Stevens. And so the auditors found that transition
    caused some of the disruption in AmeriCorps, and that the
    transition is also a material weakness.
        Mr. Coles. Right.
        Ms. Stevens. You know how is AmeriCorps you know
    effectuating this?
        Mr. Coles. Let me try, that was the last point that I was
    making is that we have an antiquated system.
        Ms. Stevens. Yes.
        Mr. Coles. I will mention it does not crank, it does not
    interface, it does not feed data and can't into the oracle
    system, so we need to maintain them as separate systems for the
    time being while we're also worried about the business of
    constructing that single unified platform that allows our new
    modernization technology system to directly talk to or
    interface with ARC.
        Ms. Stevens. Yes. And you know I can vouch for the
    Treasurer Department's resources, and I think that approach
    actually will prove to be pretty successful here, and I'm going
    to yield back the remainder of my time. I've got about 20
    seconds left, so thank you.
        Chairman Scott. Thank you. Next will be my distinguished
    colleague from Virginia, Mr. Good.
        Mr. Good. Thank you, my distinguished Chairman from
    Virginia. Thank you, Chairman Scott, and Ranking Member Foxx
    for holding the hearing, and I thank also, our witnesses, Ms.
    Jeffrey, Mrs. Coles, and for your participation today.
        I have 17 years of experience in the financial sector, and
    I would submit that if we had run our company the way
    AmeriCorps has been run we would have been fired if we weren't
    already bankrupt. If AmeriCorps were a public private help
    entity it certainly would have gone solvent some time ago by
    the way, it's been operating.
        The recent audit of your agency states that you have made
    ``little progress at correcting the pervasive problems.'' That
    have left the agency unable to produce audible, financial
    material for the last 5 years. In addition, after the 2019
    AmeriCorps audit, 75 recommendations were given to improve the
    agency's performance. However, only 10 of the recommendations
    were implemented.
        I think by any objective assessment that is a failing
    grade. Ms. Jeffrey, will you please explain the agency's
    inability to respond to more than 60 of the recommendations
    regarding how to more efficiently and effectively, use taxpayer
    dollars?
        Ms. Jeffrey. I'm not sure I can offer you an explanation
    because this was certainly not what I expected to see. To me I
    agree with you, this should have been an all hands-on deck
    emergency. It should have been that way after the first year.
        But the agency just hasn't put resources and hasn't put
    attention into this, and while I agree very much with Mal
    Coles, that resources were not thick on the ground here, let me
    note that during that same 2019-2020 period when very little
    happened here, the agency spent 3.9 million dollars to create a
    new grant system that it's never going to use.
        Mr. Good. If I may interject, is there a reason to expect
    an agency will adapt and improve in the future based on the
    past?
        Ms. Jeffrey. You know I would have to say that I think
    there are two things here that argue in favor of that. One of
    them is the level of interest from this Committee, and I think
    the mandate of this Committee is having a profound effect on
    the agency.
        The second one is I think it does make a difference that
    the agency is now in an environment when it is getting support
    and resources from the administration and from OMB, and it's
    that keeps me potentially optimistic that we may get a
    different result.
        Mr. Good. Thank you, Ms. Jeffrey. To be honest I would
    advocate for elimination of the program, but I think at the
    very least the question is would a smaller budget help because
    the most recent audit report consistent with every other repot
    published by your office, or the GAO in the last decade,
    illustrates a troubling pattern.
        Addressing financial management clearly does not seem to be
    a priority currently or in the past, and again if after all
    these years the agency is not prioritizing the necessary steps
    to ensure taxpayer dollars are used efficiently and
    effectively, and appropriately, I don't know how anyone can
    expect reasonably that there would be anything different going
    forward.
        Do you think that what we need is additional oversight in
    order to have improvement?
        Ms. Jeffrey. I think the more oversight the better because
    it keeps people motivated. I mean all agencies respond to
    congressional oversight.
        Mr. Good. How about just to have a smaller budget, reduce
    the budget. Would that help them to keep up with the
    accountability if they just had a smaller budget to oversee?
        Ms. Jeffrey. I'm not sure that it would. I really can't
    speak to that.
        Mr. Good. Do you agree that the lack of strict
    accountability measures and the fact that AmeriCorps has never
    faced consequences for its actions sends a message that the
    proper stewardship of taxpayer dollars is not a priority?
        Ms. Jeffrey. I do agree with that.
        Mr. Good. Well thank you for that. I appreciate that. And
    as I hope you're well aware internal survey to three
    SeniorCorps programs found that 10.6 million, or a full one-
    third of the budget, was spent on members and staff with
    inadequate criminal background checks. In one instance over 46
    individuals were apparently working in the foster grandparent
    program, and the senior companion program without the
    appropriate background checks.
        Are you concerned Ms. Jeffrey these inadequate background
    checks are putting Americans in danger who are being served by
    AmeriCorps? I think you're muted.
        Ms. Jeffrey. That has been a constant refrain of my office.
    The need to upgrade the criminal history checks, and we have
    actually found instances in which convicted sex offenders had
    access to members of vulnerable populations because the checks
    were not performed properly.
        Mr. Good. Well I appreciate your answers today, and as a
    small government conservative, I'm skeptical of the need for
    programs like these. And again I would honestly advocate for
    elimination, but at a minimum, there should at least be
    increasing accountability on government
        funding and how it's being spent. Thank you Chairman I
    yield back.
        Ms. Manning: Mr. Chairman you're on mute.
        Chairman Scott. OK. Now the gentlelady from North Carolina,
    Ms. Manning.
        Ms. Manning. Thank you, Chairman Scott. Thank you for
    holding this important hearing. And I want to thank our
    witnesses for addressing some very tough issues head on.
    Inspector General Jeffrey clearly, we've touched on some
    serious staffing issues, and we know that AmeriCorps is in the
    process and will need to take additional steps to address the
    major shortages of agency staff shortages caused by the Trump
    administration's continued attacks on the agency.
        Do you have recommendations on what roles AmeriCorps should
    be prioritizing for hiring and onboarding, based on both the
    existing opportunities for improvement, as well as the
    additional resources and grant making activities the agency
    will be carrying out?
        Ms. Jeffrey. So I think the field staff clearly needs to be
    increased. They are at the breaking point now. I don't think we
    can afford to wait for the results of a workforce study that we
    might have in you know 9 months and then we have to make
    decisions, and then we have to ramp up hiring.
        We know that needs to happen now. The same thing is true
    for the financial staff, and I think that when it comes to
    agency operations the agency needs to look outside its existing
    ranks to recruit people who have management experience and have
    not if you will grow up in an environment that's dysfunctional.
        Those would be my principal areas. Let me say one more
    thing. I think the agency need to rethink the manner in which
    it performs grant monitoring. It focuses to much too great a
    degree on compliance, and not enough focus on substance. We
    have talked to the Department of Monitoring about it. I'm not
    sure they really get that, but they said they'll think about
    it.
        I think that is a series need and is important to protect
    the integrity of program funds.
        Ms. Manning. Thank you. And can you speak to ways--has
    AmeriCorps improved staff experience and training?
        Ms. Jeffrey. So this is a really interesting question.
    AmeriCorps provided a great deal of training for the new field
    staff that it onboarded. But we knew form the beginning that
    the best way you learn from people is to have someone who's
    knowledgeable sitting next to you and working with you.
        And a lot of the feedback that we're getting is gee that 2
    weeks of training was really nice, but it's drinking out of the
    fire hose. I need to learn from colleagues. And when the
    colleagues are you know just one chapter in the book ahead of
    me, that's not useful learning.
        So I think they may need specialists in each of the
    regional offices to facilitate the learning that's needs to
    take place.
        Ms. Manning. And are you suggesting that these specialists
    would need to be people who are brought in from the outside who
    have some of the skills that perhaps are currently lacking?
        Ms. Jeffrey. So I think what we are really talking about
    are the skills for assisting grantees in their financial
    management and assisting grantees in their programmatic
    activities. You know a lot of the people who left the agency in
    that reduction in force were people with those skills and
    that's a darn shame.
        Ms. Manning. So is there an option do you believe of going
    back to some of these people who had those good skills and
    bringing them back in?
        Ms. Jeffrey. I think it is worth exploring because I know a
    lot of those people left with the utmost reluctance and were
    deeply committed to seeing grantees function appropriately.
        Ms. Manning. You mentioned the financial skills, you
    mentioned management skills, are there other skills you think
    the agency should be focusing on acquiring particularly in the
    next 6 months?
        Ms. Jeffrey. I think project management skills are
    essential. All of these reforms will require great project
    management, and that involved accountability, it involves
    tracking, it involves the ability to look at an entire program
    and see here's the weakness, here's what's not performing,
    here's where I need to intervene to deal with an obstacle. I'm
    not sure there are many people if any in the agency with that
    suite of skills and I think it's critical.
        Ms. Manning. But were there people who had those skills
    prior to the reduction in force?
        Ms. Jeffrey. If there were there were not many. I do not
    think so.
        Ms. Manning. Thank you. My time is about to expire, I yield
    back.
        Chairman Scott. Thank you. The gentlelady from Iowa, Dr.
    Miller-Meeks.
        Mrs. Miller-Meeks. Thank you, Chairman Scott, and I thank
    you for the panelists who are here presenting today. As a new
    Member of Congress having met as a State Senator with members
    from AmeriCorps, and members from RSVP, these findings, and the
    findings in the OIG report are just profoundly disappointing.
        And I think the fact that we're talking about increasing
    budgets and increasing allocations or appropriations to an
    agency who has year over year over year shown that it is not
    accountable to anyone and is not interested in getting its
    financial house in order is a disservice to both the
    organization, to those who have an intent to set up this
    organization as to recruit volunteers to help in various
    different endeavors, and it's a disserve to taxpayers.
        I find it unconscionable that we would be considering
    giving more money to an organization that has such little
    recognition over its financial resources that it's been granted
    through the taxpayers of the United States, so I want to say
    that up front having met with people who worked in these areas,
    respected them, and would like to support them.
        I don't find that's a valuable way to spend taxpayer money
    if we continue along this track. You can't hold organizations
    accountable if your answer to accountability is to give them
    more funding. With that I'm going to direct my question to a
    different area which I don't think has been addressed yet, but
    as a Member of Homeland Security this is a very important area
    to us as well.
        So Ms. Jeffrey according to your testimony AmeriCorps
    cybersecurity program is not effective in its current State,
    and the independent audit once again found a significant
    deficiency in the security of AmeriCorps financial system. And
    we already know that other government agencies have had
    breaches and have released private information when it was not
    intended to include social security numbers.
        So moreover the audit found significant issues related to
    AmeriCorps security management contingency planning and control
    over access to agency data and information. All of this leaves
    the agency very vulnerable to a cyberattack, potentially
    allowing bad actors access to hundreds of thousands of
    individuals' personal identifiable information.
        So can you describe the key vulnerabilities in AmeriCorps
    information technology system, how long has AmeriCorps been
    aware of these issues and then how can they be addressed?
        Ms. Jeffrey. So annually IG's throughout the Federal
    Government do two things. They look at the security of
    financial systems as part of the financial statement audit, and
    they do a separate evaluation of information security programs
    throughout all phases of the agency.
        And AmeriCorps has basically been stuck where it is at a
    relatively low level since 2018. They made some progress
    between 2017 and 2018, but they've pretty much stood still
    since then. There has been some improvement but not enough to
    move the needle and it's frightening.
        Mrs. Miller-Meeks. And is there you know potential
    consequences if these issues aren't addressed? Could you
    comment on that?
        Ms. Jeffrey. The potential consequences include a breach,
    and you know unauthorized release of information. If that
    happens the agency not only takes a profound and possibly fatal
    blow to its reputation, but also the economic costs of
    remediation in terms of credit monitoring, et cetera, could be
    ruinous. You know there are lots of agencies have had breaches,
    but we don't really have any choice about whether we deal with
    the Social Security Administration.
        People have a choice about whether to engage with
    AmeriCorps, and if AmeriCorps can't safeguard their
    information, they may just kind of vote with their feet and go
    elsewhere.
        Mrs. Miller-Meeks. And so what I'm hearing is not only is
    there a lackadaisical approach to the revenues that they have,
    they have no outcome measures for the programs that they have
    that they could elucidate to their success other than the
    numbers of individuals that they reach, but they also have a
    lackadaisical approach to the personal identifiable information
    of other citizens and people who come in contact with the
    agency, so thank you so much I appreciate it. I yield back my
    time.
        Chairman Scott. Thank you. The gentleman from Indiana, Mr.
    Mrvan.
        Mr. Mrvan. Thank you, Chairman. Ms. Jeffrey the Build Back
    Better Bill, the Build Back Better Act requires the CNCS
    develop a robust project, operations, and management plan to be
    completed within 180 days of enactment of the BBB. In
    consultation with the CNCS OIG, what steps will your office
    take to help ensure this plans incorporates the necessary
    protections for responsible stewardships of taxpayer dollars in
    the implementation of the Build Back Better funds at CNCS?
        Ms. Jeffrey. So there are a couple of ways we can
    contribute to that. One of them is to make sure that the plan
    includes appropriate corrective actions for the recommendations
    that we've seen in the financial statement audit and in the
    information security audits.
        Another thing is to provide critical information about
    anti-fraud measures that the agency should be taking, and my
    office is currently working on a report that will offer a
    number of very practical solutions, some of which have been
    adopted at other agencies to help our grantees stay out of
    trouble.
        Mr. Mrvan. Can you do me a favor and define critical
    information?
        Ms. Jeffrey. Critical information, I'm sorry I know I used
    the phrase, but I can't remember in what context now.
        Mr. Mrvan. Well, you said that you would want to make sure
    that there is outcomes, and you have as your agency is guiding
    critical information and being able to protect that and
    providing them with that. You're muted I'm so sorry.
        Ms. Jeffrey. Sorry about that. I think our office can
    provide critical learning to the agency about effective
    measures to prevent and detect fraud, and to assist our
    grantees in adopting anti-fraud measures.
        Mr. Mrvan. And that would be obviously strong internal
    controls and also segregation of duties as examples, correct?
        Ms. Jeffrey. Among those things what I would like to do is
    offer them some sort of practical things, in other words not
    follow the rules, but you will be better off if you do things
    this way rather than that way. Here is a tool you can use to
    make this work better.
        Mr. Mrvan. And too if I could Congresswoman Miller-Meeks
    asked a question and Ms. Jeffrey you had answered that as far
    as the breaches of technology that there are some things that
    they have made improvements on. What are some of those things
    that they made improvements on.
        Ms. Jeffrey. So every year the FISMA evaluation looks at
    the number of critical risks and high risks in terms of
    configuration management, things that need to be patched but
    aren't. The agency reduced those critical and high-risk items
    by about 75 percent if memory serves in the last year.
        Now there are still way too many in act, but they made some
    real strides in the last year in terms of reducing.
        Mr. Mrvan. So they did make strides on protecting the data
    that they have by 75 percent of the critical risks that they
    had?
        Ms. Jeffrey. Correct. But it's still not enough. They've
    got to get to 100 percent of those.
        Mr. Mrvan. I agree. Right all of us are working toward
    perfection every single day, but I do thank you very much and I
    appreciate all that you've done with that I yield back.
        Chairman Scott. Thank you. The gentlelady from Illinois,
    Ms. Miller.
        Ms. Miller. Thank you. Mr. Coles a 2016 report showed that
    AmeriCorps funds were used for abortion services which is
    illegal. The report showed that AmeriCorps employees were
    providing services at three New York City clinics operated by
    the Institute for Family Health. Are you aware that AmeriCorps
    funds were used to provide abortion services in violation of
    Federal law?
        Mr. Coles. Thank you for the question Congresswoman. As I
    mentioned earlier, we have zero tolerance, a zero tolerance
    policy to grantees who knowingly engage in prohibited
    activities or commit illegal acts. We have systems in place to
    hold them accountable and we do, including referring them to
    the Inspector General.
        So whenever there's an instance, we are quick to be
    responsive.
        Ms. Miller. Thank you. But even if there have been steps
    taken by the organization to address these illegal practices,
    how can we know that they have actually stopped without having
    proper accountability. Can you ensure the Committee that these
    practices have been stopped?
        Mr. Coles. I can assure you that when instances of
    allegations and violations are brought to our attention that we
    take a look at them internally and based upon the severity of
    them we do refer them to investigation to our Inspector
    General. It is our fervid belief and our strong practice to
    tolerate none of that.
        Ms. Miller. With all due respect sir you cannot make such a
    clam because without a proper audit and accountability we have
    no idea where all the funds are going. We should not be
    awarding funds that could go toward abortion services. Thank
    you and I yield back.
        Ms. Foxx. Would the gentlelady yield for a question?
        Mrs. Miller. Yes, I yield my time.
        Ms. Foxx. Thank you. Mr. Cole, I want to followup on what
    Congresswoman Miller was saying. She is exactly right. You're
    on the wrong track on this. I want to know how you're going to
    ensure that grantees are not engaging in illegal activity to
    begin with. Your question was extraordinarily week on this.
    Stop it from happening. That's what we want.
        Don't allow it to happen. So what are you going to do to
    keep it from happening?
        Mr. Coles. Thank you, Congresswoman. As I mentioned earlier
    part of the foundation of our revised risk-based grants
    management system is a provision that the upfront application
    process. When an application for resources first come in, they
    are thoroughly reviewed for risk exposure, programmatic,
    financial and fraud.
        And we are very, very careful and keen to make sure that
    the profile of an organization that applies for our resources
    is not positioned--them or us, in a way that would expose us to
    violations.
        Ms. Foxx. OK. Let me followup on that. So how often does
    the corporation conduct a comprehensive review of all grantees?
    And if such a comprehensive review has never been initiated,
    when do you plan on conducting such an analysis?
        Mr. Coles. We conduct this evaluation and assessment each
    year.
        Ms. Foxx. On every single grantee?
        Mr. Coles. On every single incoming grantee, usually it's a
    3-year sample.
        Ms. Foxx. No, not in incoming, on all grantees? On all
    grantees.
        Mr. Coles. We identify them based upon the risk factors
    that are built into our system to detect lack of compliance,
    and we prioritize those that surface for a deeper dive.
        Ms. Foxx. Ms. Jeffrey have you analyzed this risk factor
    issue that Mr. Coles is talking about? And if not, I don't know
    if it's the role of the Inspector General to do that or not,
    but who is doing that and how do we know whether they have
    identified the correct risk factors?
        Ms. Jeffrey. So that is a major challenge, and it's a
    question that we have been asking. Right now the risk model was
    developed by the chief risk officer and her staff. We had some
    input in terms of information, but we think there are better
    ways to gather data about what's actually going on at the sub-
    grantee level.
        And one of the things we have been recommending for years
    is the use of surveys because you can reach more members who
    will tell you what is actually happening on the ground. That's
    really important. The agency does a good job I think, of having
    its grantees teach people what are the prohibited activities,
    but whether they really internalize that information, and
    whether they follow the rules, that's something we need to do
    more to determine, and we've got to do that directly.
        Ms. Foxx. Well, Ms. Jeffrey and Mr. Coles, I can tell you
    I'm going to be delving into this a lot more on individual
    basis with both of you. This Committee cannot tolerate this
    kind of abuse, illegal activity, and abuse of taxpayer dollars.
    Thank you Mr. Chairman I yield back to Ms. Miller.
        Chairman Scott. The gentlelady's time has expired. I think
    we have several Republicans left, many more of the Republicans,
    so we'll go to Ms. Sparks next, the gentlelady from Indiana is
    recognized for five minutes.
        Mrs. Sparks. Thank you, Mr. Chairman. I've been listening
    you know as a former auditor that audited Fortune 500 companies
    when I read this report. Ms. Jeffrey a quick question for you.
    If a public company would have a disclaimer of opinion and
    material witnesses and controls. I don't know what kind of risk
    assessment they're doing they're definitely not working.
        What would happen to public private companies the auditor
    would disclaim.
        Ms. Jeffrey. I think you would see wholesale resignation of
    firing of the leadership team, and I think the rest of us would
    be shorting their stock.
        Mrs. Sparks. That's right, and I don't think we would be
    given more money, we'd give a billion dollars this year, and
    that the recent bill proposes over 15 billion to give more, so
    I think this is really unbelievable for me to hear that. But I
    have a quick question for you, and it's something maybe I would
    like to work on.
        I'm the co-Chair of CPA Caucus and really looking at how
    the government is audited it just breaks my heart to see that
    if nothing is auditable you know, and one of the things that I
    can recall and I wanted to get your opinion, and I was actually
    in the State Senate which is to your audit Committee, and we
    would try to align our State legislation to audit as Federal
    legislation, and I was surprised to learn that there is an
    exception to a transaction, individual transaction under
    $750,000.00 for auditing, and I felt that has actually posed
    significant fraud risk.
        That's why Enron happened. If I would want to commit fraud,
    I'll make sure that I have several non-profits, maybe 10 of
    them get half a million each and then I can funnel five
    million, and my risk--my likelihood of being audited is going
    to be very remote. So do you believe we need to prescribe more
    in predictability procedures you for so that there is you know
    some deterrence of fraud.
        And also, what can we do to improve that you actually can
    do a better job as Inspector General, or maybe look at quality
    control and better auditing and better auditors, because it
    gives you more auditors because we're dealing with big money
    here and this is a significant public interest.
        Ms. Jeffrey. So you've raised a question about the single
    audit threshold. There were a number of us in the IG community
    who were against raising the threshold to $750,000 billion for
    just the reason that you indicate, but OMB chose to raise it
    because figuring that the greatest risk is where the greatest
    dollars are involved.
        That puts more of the burden on individual OIG's to do more
    work. It puts more of the burden on agencies to do better
    monitoring, and those are both challenges. I think there can be
    a lot better coordination between the Federal Inspector General
    community and the states, and that is actually something that
    the Council on Inspectors General for integrity and efficiency
    is currently pursuing.
        So we try our best to work with State auditors on these
    issues. If we're finding problems at a grantee, changes are the
    State either ought to look at it, or they have already known
    about problems, and so we want to share information.
        Mrs. Spartz. So from your perspective if you would improve,
    because this is a complete failure of an agency, and I'm sure
    there are a lot of other ones like that too you know, when I
    look at the disclaimers and opinions, what do you think--how
    can we make sure that there are actually agencies that do have
    better control systems, internal controls, preventative and
    detective in place that they provide this you know processes
    before we find the flaw.
        Otherwise it's impossible to be able to audit to the level
    and express an opinion. So what do we need to do?
        Ms. Jeffrey. So I don't think fraud was the real barrier to
    getting an opinion on the financial statements. I think the
    agency needs to do more to prevent and detect fraud, but that
    wasn't the major impediment here. There's a lot the agency can
    do a better job of preventing and detecting fraud, particularly
    in the grant area. That was a priority in the prior
    administration.
        It is continuing as a priority in this administration, and
    the IG's are working with OMB and with the Pandemic Response
    Accountability Committee and with the ARP Implementation Team
    in the White House to ensure that there are stronger anti-fraud
    measures.
        Mrs. Spartz. I think risk of fraud can be mitigated to an
    acceptable level if controls are in place. And if we have you
    know in this case you now material weaknesses, so definitely
    the system is not functioning. But from your perspective as an
    agency, what tools and mechanisms would help you, and maybe we
    need to utilize technology better to actually do a better job
    dealing with agencies like this one.
        Ms. Jeffrey. So fortunately, AmeriCorps situation is not
    common across the Federal Government, and clearly better
    technology is necessary. AmeriCorps has had this non-compliant
    accounting system since time and memorial. And that needs to
    change and as Mr. Coles just testified, the agency has entered
    into an agreement with the administrative resource system that
    will discontinue the non-compliance system and upgrade
    everything to ARC's compliance system which I think will be a
    very positive development. I yield back.
        Chairman Scott. Thank you. The gentleman from New York, Mr.
    Bowman.
        Mr. Bowman. Thank you, Mr. Chairman and thank you to all
    the witnesses for being here today. I want to start by
    recognizing the 542 AmeriCorps members and volunteers in my
    district which covers the Bronx and Westchester, New York. From
    Vista working with groundwork, Hudson Valley to Yonkers to
    foster grandparent volunteers at the New York City Department
    for the Aging, to the RSVP of Westchester volunteer center at
    home on the Sound in the Merrimack.
        Volunteers of all ages in my district are engaging and
    giving back to the community in so many positive ways to a
    program that was funded at around 1.1 billion for Fiscal Year
    2021, which is a relatively small amount compared to other
    nationwide programs. It's clear to me that CNCS and national
    service in general is a multiple for good.
        In my district just a few months ago Hurricane Ida wrecked
    historic damage throughout the Bronx and Westchester. We lost
    lives in our communities because of the storm. Entire homes
    flooded with several feet of water, more than any typical heavy
    storm. But that's the thing. These increasingly severe storms
    are becoming more frequent and causing more damage than ever
    before because we are in a climate crisis.
        My constituents are still reeling from this trauma on the
    long road to repair and recovery. I saw the damage myself
    standing in my constituents homes and businesses and houses of
    worship where everything they owned had been destroyed. I
    couldn't help but think volunteers from a unified, well-funded,
    diverse civilian climate corps would be extremely helpful in my
    district right now.
        The agreed upon 15.22 billion for AmeriCorps in the House
    Bill Build Back Better Act will created 400,000 CCC service
    positions, allow us to increase the educational awards in all
    participants for 5 years to $10,500.00 and raise the wages of
    all participants for 5 years to $15.00 an hour.
        I also want to associate myself with the comments of
    Representative Haley Stevens earlier connecting the lack of
    opportunity and hope to the mass shooting that just happened in
    a Michigan high school. This program focuses on providing
    opportunities for young people, and there are millions of young
    people across this country who yearn for opportunities like
    this as a pathway to success and serve in their communities,
    especially in the area of dealing with climate and climate
    catastrophe that we're living in.
        We did our part in the House 12 days ago when we passed the
    Build Back Better Act and now it's in the Senate to pass it
    next. Mr. Coles thank you for being here today and for your
    efforts as the Acting CEO. I look forward to CNCS benefiting
    from President Biden's nominations, and a fully filled board
    with people dedicated to community service and undoing the
    Trump administration's effort to sabotage AmeriCorps.
        Can you just speak openly and generally about the
    importance of national service and why it matters.
        Mr. Coles. Congressman, thank you for your question.
    National service is actually the greatest illustration of a
    win/win proposition I think that we have here in American
    society. It's the opportunity for individuals to become engaged
    in creative problem-solving processes in their own communities,
    and in doing so actually develop skills, capacity and
    relationships that allow them to further propel themselves in
    their own career development.
        So it's the dual victory of having community outcomes be
    realized through national service, and the investment take away
    from the individual participating so it can be launched forward
    for a successful career. Underlying that as well is the
    opportunity to share common experiences with individuals that
    you might not have an opportunity to do so in your regular
    life.
        And it also allows you to sort of savor and to develop that
    lifelong contribution of civic engagement.
        Mr. Bowman. So thank you very much for that. Can you
    briefly speak to what more is possible within the agency with
    an increase in funding. What more could you do?
        Mr. Coles. Again we're very thankful for the investments
    that have been made, regular order with ARP and what's
    projected for Build Back Better. I think those are all areas in
    which we have proven track records, and so we're very anxious
    to be able to sort of expand out on the initiatives that we
    have demonstrated success on, so we're very eager to do so.
        Mr. Bowman. Thank you and I yield back.
        Chairman Scott. Thank you. The gentleman from Wisconsin,
    Mr. Fitzgerald.
        Mr. Fitzgerald. Thank you, Mr. Chairman. I might you know
    at this point often times there's a redundancy in some of the
    questions that are being asked, so one of the things that I was
    curious about and obviously I don't think anybody asked
    directly. So a question for the Inspector General.
        Inspector General Jeffrey, so this is an annual report and
    I'm brand new to this, just got elected last November, so this
    is an annual audit and then report. Is that accurate?
        Ms. Jeffrey. That's correct.
        Mr. Fitzgerald. So what was discovered in the last audit
    that was not fixed? Were there specific items that were
    identified as needing to be addressed, and then it was either
    ignored, or what does that list look like?
        Ms. Jeffrey. So most of the material weaknesses that were
    identified in 2021 date back either to 2017 or 2018. Some of
    the underlying problems date back much further than that. These
    didn't arise you know quickly, but the agency has not moved
    effectively to solve those problems.
        Mr. Fitzgerald. Yes, I would expect I mean with your job
    and that position you know it's--and there were a couple of
    Members who talked about it earlier, it's not exactly an
    exciting thing for somebody to say we're here again to do your
    annual audit. Let me ask you this. If there are actions that
    are taken, what's the follow through? How does that work and
    are there any consequences for not making changes or
    complying--I guess ``complying'' with you know what has been in
    place as a result of an audit and recommendations.
        Ms. Jeffrey. So, as an Inspector General my only authority
    is to make recommendations and to publicize information. I
    can't require the agency to act. What I can do is tell Congress
    and the public about where the problems are. Whether the agency
    has its own accountability measures, you know that's up to the
    agency.
        So far, they haven't seemed to produce real returns, so I
    think by any measure the accountability has been insufficient
    and ineffective.
        Mr. Fitzgerald. Very good. So, I guess I'd ask Chairman
    Scott. Chairman, what do you think you know is there something.
    You know I don't want to make it seem like we're chasing our
    tail here, but there's an annual audit recommendation done,
    findings are made and then you know unfortunately, there's no
    action. I mean it seems like obviously a bipartisan thing that
    everybody would have an interest in trying to tackle and make
    some changes here. I'm just curious what your thoughts are on
    that.
        Chairman Scott. Thank you to the gentleman yielding. The
    purpose of this hearing is according to the rules if an agency
    has an audit where the I think the technical term is where the
    opinion is disclaimed by the auditors, the Committee of
    jurisdiction is required to have a hearing.
        Although this has been going on for a couple of years
    during my Chairmanship the first notice I got was in the middle
    of the pandemic last year, and we didn't have such a hearing,
    but we had another disclaimed audit this year, and so we're
    obligated to have a hearing this year, and that's why we're
    having this hearing.
        It would be my expectation to continue having hearings that
    the acting CEO has indicated a willingness to have for the
    called CAP's to set objective standards so we can follow the
    process to make sure they're actually fixing the problems.
        And so this is not expected to be the last hearing on this
    issue.
        Mr. Fitzgerald. Yes, I would just say, I would urge
    obviously working with Ranking Member Foxx and other Members
    that have an interest in this topic that you know hopefully we
    can dig in, roll up our sleeves, dig in and continue to
    hopefully make changes here, so thank you and I yield back.
        Chairman Scott. Thank you. The gentleman from New York, Mr.
    Espaillat.
        Mr. Espaillat. Thank you, Mr. Chairman. Mr. Coles the Build
    Back Better Act provides major investment in national service
    obviously, and it includes 7 billion dollars to establish a
    civilian and climate corps with over half of the funding, which
    is a total of 15.2 billion funneled through the AmeriCorps
    agency. This is a timely and much needed program that will help
    combat the climate crisis and create green jobs on our road to
    net zero.
        What are some of your plans to guarantee that the agencies
    and organizations in front line communities, like my district
    are awarded funding to make national service a more equitable
    opportunity for all Americans? I am concerned about those
    communities that have been hurt the most by climate change, but
    yet contribute less to the problem not accessing the dollars to
    their just fair share of the dollars to remediate some of those
    problems.
        What is your strategy or your plans to address that?
        Mr. Coles. Thank you very much for your question
    Congressman. You're right, the BBB provides unique
    opportunities for us particularly and intentionally we will be
    extending in a very assertive way our outreach to communities
    and individuals historically who have not had access to
    national service or their programming.
        That as well is integrated into the BBB, that outreach
    capacity is stated there clearly, and it's also funded. We take
    that charge seriously because equal opportunity and equity is a
    great consideration and concern to the administration, and we
    share that fully, so you can be assured that we're going to
    take that on with a great search, so we're looking forward to
    doing that.
        And I might also mention that as I did before the BBB there
    is over a 10-year period of commitment of funding to strengthen
    our agency staffing technology, upgrades and other critical
    support functions, and that will go hand in hand with our
    capacity to extend the reach if you will of national service to
    communities and individuals who historically have not been able
    to take advantage of it.
        Mr. Espaillat. I have Mr. Coles, a permanent parking lot in
    my district. It cuts right through the middle of my district,
    it's called the Cross Bronx Expressway, and of course it
    contributes to probably the worst quality of air in the entire
    city of New York and some of the highest asthma rates in the
    country and contributing also to respiratory problems for
    seniors and the like.
        And so what you're saying is that you will recruit from
    those neighborhoods, and you will ensure that a significant
    portion of that budget will be spent in those particular
    neighborhoods?
        Mr. Coles. We are dedicated to the proposition that we are
    going to do significant outreach to ensure that historically
    underrepresented communities have greater access, particularly
    on the BBB civilian climate for--that's a charge that we take
    seriously, and it's the type of programming that we experienced
    in the past, but that we plan to expand upon.
        Mr. Espaillat. Mr. Chairman I hope that we work together as
    a Committee to ensure that these practices are implemented, and
    that in fact that those neighborhoods that have been left back
    for so long, that have maybe been outreach, but in many cases
    some of them may not have the infrastructure, they may not even
    have the organizations to put in place for these initiatives,
    that those neighborhoods are not left behind again.
        I think if we are going to combat global warming and this
    climate crisis, and if we are going to make sure that this
    program, this new initiative will be successful to the Civilian
    Climate Corps, we must ensure that the dollars reach those
    neighborhoods, and that the young people there, folks in
    general are engaged--not just recruited. We can try to recruit,
    but sometimes those neighborhoods suffer from chronic
    disadvantages that leave them out in terms of the
    infrastructure that's needed to put those programs in place.
    Thank you.
        Chairman Scott. Will the gentleman yield?
        Mr. Espaillat. Yes.
        Chairman Scott. Yes. I think we should warn Mr. Coles that
    this may be an area for oversight to continue the program, and
    we would want to ensure that the people in those districts are
    in fact the ones getting many of the opportunities, so we'll be
    following through on that.
        Mr. Espaillat. Thank you, Mr. Chairman.
        Chairman Scott. Thank you. The gentlelady from California,
    Ms. Steel.
        Mrs. Steel. Thank you, Mr. Chair. If the Build Back Better
    Act becomes law, it will include 15 billion dollars more in
    taxpayer funds for AmeriCorps. We have seen issues with this
    program in my own State of California, and last year the
    University of San Francisco agreed to pay over 2.5 million
    dollars to a set of fraud allegations.
        From 2014 to 2016 the University used fraudulent claims to
    obtain Federal grant money from the AmeriCorps State and
    national program. Taxpayers need to know that their hard-earned
    money is not being abused by fraud. So I want to ask questions
    to Ms. Jeffrey. Are you familiar with the settlement with the
    University of San Francisco? If you do, is that really true
    that the University of San Francisco agreed to pay 2.5 million
    dollars for fraud claims, and I just want to know if it's
    correct or not.
        And how was this fraud uncovered? Was it through oversight
    by Corporation for National and Committee Services, or under
    your investigation?
        Ms. Jeffrey. So, it is correct that the University of San
    Francisco Teacher Residency Program paid basically 2 and a half
    million dollars to settle claims that it was submitting time
    sheets for services that weren't performed, that is falsifying
    time sheets, and then falsely certifying education awards.
        This came to our attention by a whistleblower. Somebody who
    in this case blows the whistle for a finder's fee and then the
    United States has an opportunity to come in and take over that
    case. So, we were asked to investigate it, we found that all of
    the allegations were very, very well supported, and the U.S.
    Attorney's office in San Francisco pursued the case to recover
    those funds.
        Mrs. Steel. Thank you for that answer. So, once the
    whistleblower comes forward how long does it take to complete
    an investigation, and what happens to the grants they have
    while that investigation is happening? Does CNCS take any
    action while accusation is investigated, and these schools are
    still getting paid?
        Ms. Jeffrey. So, as with the answer to most legal questions
    it depends. How long it takes depends on how complicated the
    allegations are, that is how much work it takes to investigate.
    In this case there was so much turnover in the U.S. Attorney's
    office that the case took longer than it should have to pursue.
        We work closely with the agency so that when we become
    aware of fraud that is happening on a current basis, we ask the
    agency to suspend further funding to that grantee to stop the
    bleeding. We can't do it all the time, but whenever we can we
    go to the agency and make that request, and I'm not aware of
    any time that the agency has declined to do that, that we have
    requested.
        Mrs. Steele. OK. So with this case because the
    whistleblower we found out there was a fraudulent claim, and
    they got the money and they found out. But so it's very tough
    to find out because all these times sheets, but what kind of
    investigation do you to find out? How often do you do for these
    universities, or for other non-profit organizations, and how do
    you get into that and what's the percentage of this kind of
    like a you know fraud cases coming out when you investigate
    with the whistleblowers?
        Ms. Jeffrey. So I wish I could give you an overall
    percentage. The fact is that my investigative staff is too
    small to investigate all of the matters that come to our
    attention, and we have recently increased our investigative
    staff and we still have a backlog of leads.
        There are in addition to the calls we get from
    whistleblowers, occasionally an organization will itself
    discover that someone has committed fraud, and the organization
    will self-disclose, and we encourage that.
        A lot of times we can do what's called data analytics, and
    we can look at certain patterns of payment, and we could say
    this is suspicious, we wanted to make some inquiries here.
    Sometimes we find this fraud because we're already doing an
    audit of these grants, and in the process of auditing we
    discover information that shows fraud has occurred.
        So there are many different ways this comes to our
    attention.
        Mrs. Steel. I want to ask more but Mr. Chairman I know my
    time is up, so I yield back.
        Chairman Scott. Thank you. Gentlelady from Louisiana, Ms.
    Letlow. Thank you for your patience.
        Ms. Letlow. Thank you, Mr. Chairman. Mr. Coles and Ms.
    Jeffrey thank you for taking the time to testify before the
    Committee today. There are several good AmeriCorps programs
    that benefit Louisiana's Fifth District. In fact, every year my
    State faces hurricane season which can cause significant damage
    to our communities.
        This year was no different, and Louisiana faced a category
    four storm with Hurricane Ida. I recognize and appreciate that
    over the years AmeriCorps teams have been deployed to Louisiana
    to assist with the disaster recovery and cleanup which is
    helpful to communities that have been hard hit by natural
    disasters.
        While I appreciate that help, we're here today to discuss
    the latest inspector general audit report released a few weeks
    ago. Unfortunately, the IG has not been able to complete a
    comprehensive financial report because the corporation has been
    unable to produce auditable financial material.
        It is my understanding that this has been the case for the
    past 5 years. I find this very troubling. If an agency is
    unable to adequately account for the funding it receives,
    serious reform needs to be considered and implemented. It is
    important to address and improve upon these concerns, so
    taxpayer dollars are used wisely, appropriately, and
    efficiently.
        Ms. Jeffrey in June 2014 the OIG released its report on
    AmeriCorps audit, a blanket purchase agreement, for
    professional consulting services which found AmeriCorps engaged
    in a ``shocking waste of taxpayer funds, lax oversight and
    widespread noncompliance,'' with rules and regulations. My
    questions are more general in nature, but I think it's
    important to understand the overall picture of what is going on
    at AmeriCorps.
        Do you believe AmeriCorps has been irresponsible with
    taxpayers funds, and do you believe AmeriCorps is continuing to
    be irresponsible with taxpayer funds?
        Ms. Jeffrey. I think AmeriCorps has not properly been
    scrutinizing in the procurement area, not properly been
    scrutinizing the personal services contracts to look at the
    invoices and see are people actually providing the services
    we're paying them for?
        So sometimes they pay a summary invoice, and they don't ask
    for the backup which shows everybody's timesheets. You want to
    see that backup because often people are working on multiple
    projects, and you want to make sure they aren't representing
    that they're working more than 100 percent of the time. That's
    a classic way to commit fraud, and you will never know unless
    you look at the comprehensive timesheets.
        Ms. Letlow. Thank you. That segues into my next question.
    Do you believe AmeriCorps faces a lack of oversight?
        Ms. Jeffrey. Well I guess it depends on what you mean by
    oversight. Let me just say again my office is very small. If we
    had a larger budget, we could provide greater oversight. There
    are a lot of oversight activities we know need to be done, but
    we are prioritizing and making choices.
        Ms. Letlow. Sure. And finally do you believe AmeriCorps
    struggles to comply with the rules and regulations prescribed
    in the law?
        Ms. Jeffrey. I think it varies according to what the rule
    and regulation is, but there are certainly some that the agency
    would acknowledge it hasn't complied with. We were told earlier
    this year that the agency knew it wasn't meeting its obligation
    to followup on single audit reports, and the agency told us
    that and told us it was something they wanted to work on.
        We appreciated them acknowledging it, so we didn't have to
    ferret that out. I think there are other areas in procurement
    where we know there were challenges to compliance, and that is
    one of the reason that the agency has outsourced that function
    to the Treasury Department.
        Ms. Letlow. Thank you so much for your time Ms. Jeffrey. I
    yield back to Ranking Member Dr. Foxx.
        Ms. Foxx. Thank you very much Ms. Letlow, I appreciate it.
    I want to followup a little bit more on what you were saying
    with Ms. Jeffrey. Ms. Jeffrey since you've been with the agency
    how much fraud have you uncovered in AmeriCorps?
        Ms. Jeffrey. So what I can tell you about what we track in
    bulk are the major civil and criminal cases that we've done.
    Since 2019 we have recovered 4.8 million dollars in civil
    settlements, plus we have gotten a criminal restitution order
    of $527,000.00. Again, if I had more people those numbers would
    be higher. It takes a long time to investigate these cases.
        Ms. Foxx. So, have you only been with the IG for a short
    time? I was under the impression you had been there a long
    time. So, you're only talking about 2018?
        Ms. Jeffrey. Well, I'm talking about 2019 to the current
    time because that's when you started a large emphasis on going
    after fraud civilly. Before that I did come to the agency in
    2012. Before that we didn't have the capacity to take on those
    large, complicated cases, so we handled mostly smaller matters,
    and we handled them administratively.
        It was also early on very difficult to get prosecutors to
    agree to prosecute our cases. Now with our increased capacity,
    and with the body of work we've built up, we don't have any
    trouble getting prosecutors to agree to take our cases.
        Ms. Foxx. Thank you, and I thank the lady from Louisiana
    for yielding time.
        Chairman Scott. Thank you. The gentlelady's time has
    expired. The gentleman from North Carolina, Mr. Cawthorn.
        Mr. Cawthorn. Thank you very much Chairman, and Dr. Foxx,
    Ranking Member, thank you very much for the leadership in this
    Committee. Ms. Jeffrey I'd like to ask a question of you. And
    my question refers to aiding institutions, a major part of the
    strength of this country. You know our country, our government,
    only works because ordinary citizens believe that those in
    positions of delegated authority are not taking advantage of
    them and using the fruits of their labor responsibly.
        In your testimony you referred to numerous weaknesses and
    deficiencies in AmeriCorps that have been found over the years.
    These deficiencies have rendered AmeriCorps unable to be
    transparent with the American people. Many of them remain
    unresolved.
        How do you think American should feel about such an
    outrageous lack of transparency?
        Ms. Jeffrey. I mean I think it is profoundly disturbing. It
    has been profoundly disturbing to us that the agency has not
    treated this with the urgency that we believe it requires, and
    that we are basically reporting the same findings year after
    year after year. It's like that movie Groundhog Day. I mean the
    reports basically write themselves at this point.
        Mr. Cawthorn. Got you. I cannot imagine how frustrating it
    is to be in your position and have to deal with that. You know
    listening to you over the past couple hours you expressed some
    optimism on changes to the agency. I think, and really and
    others, are likely to be skeptical based on prior experiences.
    Based on AmeriCorps history what reason do we have to believe
    that we are not just throwing good money at following bad
    money?
        Ms. Jeffrey. That is a very reasonable question. I think if
    you talked to the agency you would find that in their view I'm
    not much of an optimist. I'm pretty skeptical. The reasons that
    I am somewhat more optimistic now is because there are
    resources that are coming to the agency from external sources.
    And I think in particular the support of the technology
    modernization fund really will provide some structure and a
    much greater certainty that the agency is going to get
    something for what it spends on technology.
        That hasn't been the case in the past. Now I think that is
    a condition for success. Let me say it that way.
        Mr. Cawthorn. Well that's great to hear. So just one
    followup question you know as a Member of Congress in this
    entire body and this Committee you know really the remedial
    remedies that we have at our disposal are either defunding or
    increased oversight.
        But can you think of any other remedies that we can as
    Congress, and as Members of Congress, to be able to support you
    and make AmeriCorps more transparent?
        Ms. Jeffrey. Well you can always give us more money. You
    know that is really a limiting factor in our oversight. We
    greatly appreciate the support that we've gotten, and the
    increases that we've gotten to our budget, and indeed the Build
    Back Better Act would resource my office considerably.
        But it takes a lot of time and effort to investigate and to
    do these audits in a way that produced change. And the more
    people we have the greater the impact we can have. We usually
    find that grantees when we do an audit they are concerned, and
    they want to fix things, and they do their damnedest to fix
    them because they understand the consequences of not doing so
    are very serious. It's the same with our investigations, now
    that we've got traction with prosecutors, we don't have any
    trouble getting prosecutors to accept a good case.
        And in fact we often pursue small cases because of the
    educational mission that has, and the way that it informs the
    grantee community about what the expectations are and the
    standards they'll be held to. And I'm very pleased to say that
    the prosecutors throughout the United States are supportive of
    that mission and it makes a difference.
        Mr. Cawthorn. Oh that's great. Well Ms. Jeffrey I can tell
    that we're birds of a feather, so I really appreciate your
    service to our Nation and doing what you're doing, but I would
    yield any remaining time I have to Dr. Foxx if she would like
    to consume it, OK with that then I yield back.
        Ms. Foxx. Wait, wait, wait, I'm sorry. I'll pursue that
    just a little bit.
        Chairman Scott. Dr. Foxx you're going to be next to be
    recognized, so why don't we just add a minute to your time.
        Ms. Foxx. OK thank you Mr. Chairman. I appreciate that.
        Chairman Scott. The gentlelady from North Carolina, the
    Ranking Member is recognized for 6 minutes.
        Ms. Foxx. Thank you very much Mr. Chairman, that's very
    kind. Ms. Jeffrey let me pursue a little bit about what Mr.
    Cawthorn was asking. And I appreciate you've alluded to this
    before. You mentioned I was going to ask you is the fraud
    mostly in the large national grantees, or simply across the
    board?
        Ms. Jeffrey. So we have found fraud in the large grantees,
    or in the State commissions, but a lot of it occurs at the
    subrecipient level, and so that happens with smaller grantees.
    Nobody is immune from fraud it happens at all levels.
        Ms. Foxx. Right. And you know there's been a lot of excuses
    made for the fact that the ``small grantees'', let's say what
    is the smallest grantee? Do you have an idea what that is?
        Ms. Jeffrey. There are some grantees in the AmeriCorps
    Seniors Program that if memory serves get about $40,000.00.
        Ms. Foxx. Well OK, well that's pretty small.
        Ms. Jeffrey. That's small.
        Ms. Foxx. Well I know agencies, there are humane societies,
    there are arts councils, there are all kinds of groups in our
    communities run by volunteers that don't seem to have the same
    problem that the people who are getting taxpayer dollars are
    having, so it makes no sense to me to give an excuse to them
    for saying they don't have systems set up because there are
    lots of groups out there that have less money, and account for
    it every year with clean audits.
        So it seems to me there is a systemic problem here that's
    an abuse of taxpayer dollars all the way around.
        Ms. Jeffrey. I can tell you Dr. Foxx that fraud in the non-
    profit sector is a major concern, and that's not limited to
    AmeriCorps grantees. There is a lot of fraud that takes place,
    typically in the form of conflicts of interest or related party
    transactions, and so it doesn't often get reported because it
    is very hard to detect, especially when you have a completely
    volunteer-run system.
        But I'm not sure the non-profit sector is sort of quite as
    clean living as we might like to think.
        Ms. Foxx. So it seems to be that way in the communities I
    represent. Now I want to go, I mean, but again you had
    University of San Francisco have to pay back 4.8 million
    dollars. That's not a small organization. We had two public
    universities in North Carolina and the North Carolina
    Commission, and they had to pay back $842,500.00, so these are
    not small organizations that don't have systems set up.
        Ms. Jeffrey. Correct.
        Ms. Foxx. So who paid that settlement of $842,500.00 from
    North Carolina.
        Ms. Jeffrey. Because these are public institutions it comes
    out of the pockets of the taxpayers.
        Ms. Foxx. So the taxpayers are paying for whatever they are
    it seems to me, so we've got rampant fraud and rampant misuse
    of funds, and it's always the taxpayers who are paying for it.
    You've already said that if you had more staff you could do a
    better job of that. And I think that certainly should be where
    if we're going to have money spent, that's where it should go.
    In all the IG's offices so that we can have better
    accountability.
        I don't believe that we should be paying volunteers to be
    doing things, and that's another problem that we have. So we
    will have in our group, I appreciate what Mr. Fitzpatrick said
    earlier about wanting to work with the Democrats. Mr. Chairman,
    I'd do away with this program. I'm like Mr. Good, I would do
    completely away with it, and I'll do everything in my power to
    do so.
        However, Mr. Chairman, I would think that because you all
    support this program so much that at least you'd want the money
    to go where it should be going, and I hope again Ms. Jeffrey
    you said this program is so completely failed, and it started
    failing almost from the beginning, isn't that correct?
        Ms. Jeffrey. I think the financial management was flawed
    from the beginning.
        Ms. Foxx. From the beginning. So there's been a lot of
    picking on the last 2 years or last 3 years, and yet I assume
    the 2017 audit was based on 2016 activities. Is that correct?
        Ms. Jeffrey. The 2017 audit audits Fiscal Year 2017.
        Ms. Foxx. OK. Which would have been set up and most of the
    people there would have been coming from the previous
    administration.
        Ms. Jeffrey. Yes. There's not a lot of turnover in the
    workforce when an administration changes. The turnover happens
    at the leadership level.
        Ms. Foxx. Sure. And yet we've been told a lot of people
    left, 100 people left, and that hamstrung the agency? I'm not
    sure how did that happen?
        Ms. Jeffrey. So those riffs happened when the agency
    undertook its reorganization principally in 2018-2019-2020 when
    it closed all of the State offices, consolidated into eight
    regions, and because the agency felt that it couldn't support
    the size workforce it had with the administrative budget that
    it then had.
        Ms. Foxx. Thank you, Mr. Chairman, I yield back.
        Chairman Scott. Thank you. I remind my colleagues that
    pursuant to Committee practice materials for submission into
    the record must be submitted to the Committee Clerk within 14
    days following the last day of the hearing, which would be
    close of business December 15, preferably in Microsoft Word
    format.
        The material submitted must address the subject matter of
    the hearing. Only a Member of Congress or an invited witness
    may submit materials for inclusion in the hearing record.
    Documents are limited to 50 pages each. Documents longer than
    50 pages will be incorporated into the record by way of an
    internet link that you must provide to the Committee Clerk
    within the required timeframe, but please recognize that in the
    future that link may not always work.
        Pursuant to House rules and regulations items for the
    record should be submitted to the Clerk electronically by
    emailing submissions to edandlabor.hearings@mail.house.gov.
    Again I want to thank our witnesses for their participation
    today. Members of Congress may have additional questions for
    you, and we ask you to please respond to these questions in
    writing. The hearing record will be held open for 14 days in
    order to receive those responses.
        And I would remind my colleagues that pursuant to Committee
    practice witness questions for the hearing record must be
    submitted to the Majority Committee staff or Committee Clerk
    within 7 days. Questions submitted must address the subject
    matter of the hearing.
        I will now recognize the distinguished Ranking Member for
    any closing statements she may want to make.
        Ms. Foxx. Thank you, Mr. Chairman. Mr. Chairman I
    appreciated the hearing today because I think it brought to
    light one more time the real concerns that everybody should
    have over this program. I frankly don't think the benefits are
    there for the amount of taxpayer dollars that we put into this
    program.
        I'm going to submit some questions that I would like to be
    asked like how many times has the IG recommended criminal or
    civil proceedings that have not been followed up on because I
    don't think we have a real sense of the scope of the fraud and
    abuse and the illegal activity.
        But as I've said to you in my comments before, if there is
    any plan to try to keep this program alive, and I would think
    that Democrats who have been exposed now to all this
    information today we had good participation, you would at least
    want the money to go where it's supposed to go.
        And I do believe that when the American people understand
    that this program is going to fund the civilian climate corps,
    you are going to see some tremendous resistance against this
    program because this is something the American people don't
    want in this country. I don't believe they want people telling
    them how to live their lives as far as climate is concerned.
        Whether they should turn down their thermostat, or what
    kinds of things they should be doing. So I would seriously urge
    you to consider taking that out of any kind of a program you
    want to support. I'm all in favor of helping people get good
    experiences when they're young people.
        There are many people in the country would like to see us
    have a service program for everybody in the country. It could
    go to military service or do something for the community, but I
    don't believe that's what most people have in mind. But thank
    you very much for holding the hearing and for exposing all of
    the bad stuff that we've heard about these programs, thank you.
        Chairman Scott. Thank you. I now recognize myself for the
    purpose of making my closing statement. As the Committee on
    Education and Labor meets today, we cannot ignore the tragedy
    yesterday in Michigan in which four children were killed, and
    reports are that one additional child passed away, four
    children were killed and seven injured by gun violence.
        And another situation in Tennessee last night after a
    school basketball game involving one fatality and multiple
    injuries. This Committee has reported legislation in the past
    in dealing with gun violence and will continue. If it does not
    become law, then we will continue to make efforts to try to
    reduce gun violence.
        I want to thank our witnesses for your time and expertise.
    Today we reflected on AmeriCorps decades-long service to
    neighborhoods across the Nation, and the importance of
    strengthening its accountability and grantee management.
    AmeriCorps has been essential in uplifting communities out of
    disaster, especially throughout their Coronavirus pandemic,
    while also serving as an engine for economic mobility for
    thousands of AmeriCorps--hundreds of thousands of AmeriCorps
    members.
        This is one reason why the House passed the American Rescue
    Plan and Build Back Better Act, which provides what we believe
    to be sufficient funding to both personnel and equipment to
    help AmeriCorps address its ongoing challenges, and to expand
    its capacity to deliver on its mission to bring Americans
    together through service.
        This hearing has brought attention to the urgency of
    developing a cap, a corrective action plan in each of the
    outstanding 73 recommendations. Caps have the advantage of
    establishing clear, quantifiable objective measurement by which
    the Committee can determine whether progress is being made on
    each of the recommendations.
        Mr. Coles you didn't cause this mess, but we're counting on
    you to clean it up because if it's not cleaned up quickly you
    can imagine that AmeriCorps may well lose its strong bipartisan
    support that it usually enjoys. I look forward to continuing
    our Committee's oversight role in ensuring our investments are
    used being as properly and effectively to meet the needs of
    other communities, and I want to thank Ms. Jeffrey and Mr. Cole
    for your time today.
        If there's no further business to come before the Committee
    without objection the Committee stands adjourned. Thank you
    very much.
        [Questions submitted for the record and the response by
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        [Whereupon, at 1:47 p.m., the Committee adjourned.]

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