[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 
muted, and use your phone to immediately call the Committee's 
IT director whose number was provided to you in advance.
    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 [email protected]. 
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 
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    [Whereupon, at 1:47 p.m., the Committee adjourned.]

                                 [all]