    [Senate Hearing 117-564]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 117-564

                     PANDEMIC RESPONSE AND ACCOUNTABILITY:
                      REDUCING FRAUD AND EXPANDING ACCESS
                 TO COVID-19 RELIEF THROUGH EFFECTIVE OVERSIGHT

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

                                    HEARING

                                   BEFORE THE

                                  COMMITTEE ON
                   HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION
                                   __________

                                 MARCH 17, 2022
                                   __________

            Available via the World Wide Web: http://www.govinfo.gov

                           Printed for the use of the
            Committee on Homeland Security and Governmental Affairs

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    49-912PDF                  WASHINGTON : 2023

            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                       GARY C. PETERS, Michigan, Chairman
    THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
    MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
    KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
    JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
    ALEX PADILLA, California             MITT ROMNEY, Utah
    JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                         JOSH HAWLEY, Missouri

                       David M. Weinberg, Staff Director
                        Zachary I. Schram, Chief Counsel
                Lena C. Chang, Director of Governmental Affairs
             Matthew T. Cornelius, Senior Professional Staff Member
                    Pamela Thiessen, Minority Staff Director
           Amanda H. Neely, Minority Director of Governmental Affairs
                       Samantha Onofry, Minority Counsel
                        Ryan L. Giles, Minority Counsel
                         Laura W. Kilbride, Chief Clerk
                         Thomas J. Spino, Hearing Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Peters...............................................     1
        Senator Portman..............................................     3
        Senator Johnson..............................................    17
        Senator Hassan...............................................    19
        Senator Carper...............................................    22
        Senator Hawley...............................................    24
        Senator Padilla..............................................    27
        Senator Scott................................................    30
        Senator Lankford.............................................    33
        Senator Rosen................................................    36
    Prepared statements:
        Senator Peters...............................................    39
        Senator Portman..............................................    41

                                   WITNESSES
                            Thursday, March 17, 2022

    Hon. Jason S. Miller, Deputy Director for Management, Office of
      Management and Budget..........................................     5
    Hon. Gene L. Dodaro, Comptroller General of the United States,
      U.S. Government Accountability Office..........................     7
    Hon. Michael E. Horowitz, Chair, Pandemic Response Accountability
      Committee, and Inspector General, U.S. Department of Justice...     8
    Hon. Larry D. Turner, Inspector General, U.S. Department of Labor    10

                         Alphabetical List of Witnesses

    Dodaro, Hon., Gene L.:
        Testimony....................................................     7
        Prepared statement...........................................    51
    Horowitz, Hon. Michael E.:
        Testimony....................................................     8
        Prepared statement...........................................    97
    Miller, Hon. Jason S.:
        Testimony....................................................     5
        Prepared statement...........................................    45
    Turner, Hon. Larry D:
        Testimony....................................................    10
        Prepared statement...........................................   111

                                    APPENDIX

    Drug Adverse Event Comparison Chart..............................   130
    Matt Weidinger, American Enterprise Institute Statement for the
      Record.........................................................   131
    Responses to post-hearing questions for the Record:
        Mr. Miller...................................................   145
        Mr. Dodaro...................................................   163
        Mr. Horowitz.................................................   167
        Mr. Turner...................................................   171

                     PANDEMIC RESPONSE AND ACCOUNTABILITY:
                      REDUCING FRAUD AND EXPANDING ACCESS
               TO COVID-19 RELIEF THROUGH EFFECTIVE OVERSIGHT

                                  ----------

                            THURSDAY, MARCH 17, 2022

                                         U.S. Senate,
                               Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:20 a.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Gary Peters,
    Chairman of the Committee, presiding.
        Present: Senators Peters, Carper, Hassan, Rosen, Padilla,
    Ossoff, Portman, Johnson, Lankford, Romney, Scott, and Hawley.

                OPENING STATEMENT OF CHAIRMAN PETERS\1\

        Chairman Peters. The Committee will come to order.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Peters appears in the
    Appendix on page 39.
    ---------------------------------------------------------------------------
        Today we will examine the Federal Government's efforts to
    conduct oversight on vital pandemic relief spending. Over the
    past two years, Congress has authorized historic levels of
    emergency relief to address the public health and economic
    challenges caused by the Coronavirus Disease 2019 (COVID-19)
    pandemic. This important emergency relief helped ensure that
    families could make ends meet, and businesses could continue to
    pay their employees during lockdowns. It also helped ensure
    that much-needed personal protective equipment (PPE) could be
    secured, and that lifesaving vaccines could be developed, to
    help get our nation closer to bringing the pandemic under
    control.
        The Federal Government's efforts to tackle this pandemic
    have been a monumental task, and our Federal agencies have been
    working literally around the clock to help keep Americans safe,
    and make sure that this critical aid reached the families,
    small businesses and health care providers who needed it the
    most.
        There is no question that there were challenges in getting
    these programs off the ground, and that criminals wishing to
    take advantage of these resources made fraudulent attempts to
    access these funds.
        That is why I was proud to work with Senator Johnson to
    ensure that these important emergency relief bills included
    important oversight mechanisms, like the Pandemic Response
    Accountability Committee (PRAC), to ensure these funds were
    being used as Congress intended and to prevent waste, fraud and
    abuse.
        Along with the PRAC, each of the agencies represented here
    today have taken exhaustive efforts to ensure the effective use
    of the nearly $7 trillion in COVID-19 relief funding that was
    passed by Congress, that provided critical aid to Michiganders
    and Americans across the country.
        Over the last two years, these key oversight bodies and
    agency inspectors general (IGs), have issued more than 350
    reports and more than 500 recommendations to improve our
    nation's pandemic response. This included efforts to uncover
    inefficiencies, such as outdated systems and infrastructure,
    and develop innovative practices to detect and prevent fraud
    and identity theft, while improving transparency for all
    American people.
        The PRAC's Pandemic Analytics Center of Excellence (PACE)
    has facilitated access to more than 150 million records that
    would otherwise have not been available to inspectors general
    and law enforcement, and the broader inspectors general
    community has made nearly 1,300 indictments and 1,000 arrests
    for pandemic-related fraud.
        While I am very grateful for these successes and that our
    Federal Government got relief funds out the door as quickly as
    possible, the swift release of funding also exposed the
    potential for mismanagement and lack of internal controls that
    left many programs vulnerable, especially to fraud.
        For example, instead of a thorough examination of an
    applicant's eligibility, many programs substituted this
    requirement with quicker self-reported information, which
    contributed to funds mistakenly being sent to deceased
    individuals, ineligible applicants, or fraudulent criminal
    schemes.
        In fact, the unemployment insurance (UI) program has
    consistently ranked as one of the highest-risk Federal benefits
    programs for known or suspected fraud, and the Department of
    Labor Office of Inspector General (DOL OIG) estimates more than
    $87 billion may have been paid improperly.
        Most shockingly, even before the release of COVID-19 relief
    funding, some estimates note unemployment insurance often has
    an improper payment rate above 10 percent, including for 14 of
    the last 17 years.
        While some measures have been taken to remediate these very
    well-known problems, tracking down and recouping money that has
    already been improperly spent has proven to be a difficult and
    ineffective solution.
        Congress and the Administration must better understand the
    underlying causes that led to the fraud across these programs,
    and put the government on stronger financial footing for any
    future spending priorities.
        I look forward to hearing today from our panel of experts
    who are going to discuss their roles in preventing improper
    payments and reducing fraud across these Federal spending
    programs.
        Ranking Member Portman, you are recognized for your opening
    comments.

                OPENING STATEMENT OF SENATOR PORTMAN\1\

        Senator Portman. Thank you, Chair Peters, and thanks to our
    witnesses. I look forward to hearing from you.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Portman appears in the
    Appendix on page 41.
    ---------------------------------------------------------------------------
        As Chairman Peters has said, we have spent an awful lot of
    money on COVID. In fact, over the past two years we have spent
    more than $5 trillion of taxpayer money to address the COVID-19
    crisis. It has gone for some necessary things--expanding
    unemployment benefits, supporting small businesses at a time
    they needed it, and other challenges. Five times we did this on
    a bipartisan basis, and I was proud to be part of that effort.
    In fact, the biggest of those bills I was one of the five
    Republicans, along with five Democrats who helped put it
    together.
        Unfortunately, as the new Administration came in, they
    decided to go it alone and not to take a bipartisan approach,
    and at the time I was very concerned about that, in part
    because it was not going to be something that we could do
    together, as we had previously, but also because most of the
    money that was spent had nothing to do with COVID.
        At the time some like Larry Summers, former Treasury
    Secretary, said this could ``set off inflation pressures of a
    kind we have not seen in a generation.'' Many of us echoed
    those concerns with the $1.9 trillion spending package, again
    that was done on a partisan basis, and unfortunately it looks
    like those warnings have largely come true. Inflation is at 7.9
    percent, a 40-year high. That is one issue. We are where we
    are.
        But against this backdrop, we have also learned that
    billions of dollars spent to help American families were
    stolen, stolen by individual criminals, stolen by transnational
    criminal organizations (TCOs), many of whom used fraudulent
    schemes to exploit the pandemic for their own financial gain.
    Many of these criminals, by the way, were, as I said,
    transnational, meaning overseas, from places like China,
    Nigeria, Russia, and elsewhere.
        It is hard to know exactly how much money was stolen.
    Perhaps we will learn more about today, as I know many of you
    have analyzed this situation. The estimates range from $87
    billion to $400 billion. To put this in context, the low
    estimate there, $87 billion, of course, is larger than the
    entire annual budget for the Department of Homeland Security
    (DHS), over which we have oversight.
        We could send almost six times the recently authorized
    amount of aid to Ukraine with this money that was stolen from
    the American people. We are talking about probably the biggest
    frauds ever committed against the American people, even though
    we do not know exactly how COVID relief funds were spent or
    exactly how much was stolen, we have, or course, a request to
    spend a lot more on COVID now. I am not suggesting we do not
    have additional needs, but it sure would be nice to know how we
    spent the money that the taxpayers sent us to protect and why
    so much of it did not get to the right place before we have
    billions more going out the door.
        One of the biggest sources of fraud involved the
    unemployment insurance programs. As you know, these benefits
    were designed to help Americans who lost their jobs because of
    the pandemic. I thought it was necessary to help those
    individuals, but billions of these dollars went to criminals,
    who used stolen identities and lacked safeguards to steal the
    money away from Americans who needed it. Unfortunately, we did
    not have the infrastructure set up to be able to protect those
    funds.
        Another major source of fraud involves the Paycheck
    Protection Program (PPP) and the Economic Injury Disaster Loan
    (EIDL) program. These are two programs that worked well for
    many small businesses to be able to survive the pandemic. Like
    the unemployment insurance funds, however, these small business
    loans became easy targets for criminals, both here and abroad.
    Money that was supposed to be used to employ American workers
    instead funded organized crime, and purchased luxury cars and
    mansions for criminals. We now know more about this from some
    of the fraud schemes that have been revealed, and again, we
    will probably hear more about this today.
        The purpose of this hearing, as I see it, is to examine the
    government's oversight of this massive spending. Specifically,
    we need to understand how this fraud occurred, what we can do
    to get the money back--some of it has been recovered, and I
    want to hear more about that--and, of course, most importantly,
    how we can prevent this from happening in the future? If we are
    going to spend billions more, let us figure out how to try to
    avoid this fraud being perpetrated on American taxpayers.
        At the beginning of the pandemic, Congress established the
    Pandemic Response Accountability Committee to provide oversight
    of the pandemic relief. This group of 21 inspectors general
    were appropriated $120 million and tasked with preventing fraud
    and mitigating risks associated with the pandemic-relief funds.
    The Government Accountability Office (GAO), the Office of
    Management and Budget (OMB), and the Department of Labor's
    (DOL) inspector general also had a role to play in overseeing
    these funds and these programs. Each of the witnesses today
    brings a unique perspective from these agencies, and I
    appreciate their work and appreciate them being here.
        I look forward to hearing what they have to say about their
    role in the oversight of these funds, and about their plans to
    help fix the structural problems that allowed this fraud to
    occur in the first place. Again, I thank them for their service
    and for testifying today, and I look forward to the discussion.
        Thank you, Mr. Chairman.
        Chairman Peters. Thank you, Ranking Member Portman.
        It is the practice of the Homeland Security and Government
    Affairs Committee (HSGAC) to swear in witnesses, so if each of
    you would please stand and raise your right hand.
        Do you swear that the testimony that you will give before
    this Committee will be the truth, the whole truth, and nothing
    but the truth, so help you, God?
        Mr. Miller. I do.
        Mr. Dodaro. I do.
        Mr. Horowitz. I do.
        Mr. Turner. I do.
        Chairman Peters. Thank you. You may be seated.
        Our first witness is Jason Miller. Mr. Miller serves as the
    Deputy Director for Management at OMB. In his role, he
    coordinates governmentwide management initiatives to empower
    the Federal workforce for a more equitable and effective
    Federal Government. Mr. Miller is also chair of the President's
    Management Council (PMC), where he leads the development and
    implementation of the President's management agenda.
        Previously, Mr. Miller served as the Deputy Assistant to
    the President and Deputy Director of the National Economic
    Council in the Obama Administration.
        Mr. Miller, welcome to the Committee. You may proceed with
    your opening comments.

    TESTIMONY OF THE HONORABLE JASON S. MILLER,\1\ DEPUTY DIRECTOR
            FOR MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET

        Mr. Miller. Thank you, Chairman Peters, Ranking Member
    Portman, and Members of the Committee. I appreciate the
    opportunity to speak to you alongside my colleagues from the
    oversight community. My testimony will focus on OMB's role
    overseeing relief spending in cooperation with the oversight
    community, actions taken, and importantly, considerations for
    the future.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Miller appears in the Appendix on
    page 45.
    ---------------------------------------------------------------------------
        Implementation of the American Rescue Plan (ARP) and other
    pandemic relief efforts helped jumpstart our economic recovery.
    Moody's estimated that without ARP real gross domestic product
    (GDP) in 2021 would have grown by three percent. Instead, it
    grew by 5.7 percent, the fastest since 1984. Last month, the
    economy added 678,000 jobs, bringing total job growth since
    January 2021 to 7.4 million and the unemployment rate to 3.8
    percent.
        It is also true that the unparalleled scope and speed of
    pandemic relief have highlighted real challenges, including in
    program design and integrity, benefit systems, and equitable
    delivery. The speedy processing of benefits at the outset of
    the pandemic came with costs, affecting program design and
    internal controls.
        The pandemic revealed cracks in under-resourced benefits
    delivery systems. The 53 different unemployment insurance
    systems run by States and territories were overwhelmed by the
    historic surge of claims that jammed their underfunded and
    outdated information technology (IT) architecture, resulting in
    backlogs and a rise in improper payments, including fraud. As
    the pandemic disproportionately harmed underserved communities,
    early relief efforts often failed to reach those most in need.
        To tackle these challenges, the Administration is focused
    on delivering timely relief to the intended beneficiaries while
    strengthening government's ability to act as a trustworthy
    steward of taxpayer funds. The Administration's collaboration
    with the oversight community has proven essential. In December,
    OMB institutionalized the Administration's commitment to the
    role of inspectors general through governmentwide guidance,
    instructing agencies to restore and respect IGs' integrity and
    independence, to ensure IGs can exercise their vital role.
        Through ARP implementation we have focused on getting it
    right at the front end, working toward prevention to mitigate
    risk. New joint, gold-standard meetings offer a good example.
    OMB and the White House ARP implementation team convened agency
    officials, IGs, and leadership of the PRAC to jointly review
    new or expanded ARP programs before launch.
        The Administration has taken concrete steps to strengthen
    relief implementation. The Small Business Administration (SBA)
    quickly recalibrated the PPP program in early 2021 to better
    assist the smallest of small businesses and companies. OMB
    released governmentwide guidance for ARP, based on lessons
    learned from 2020, requiring robust controls and rigorous new
    reporting requirements.
        The Department of Labor used ARP funds to tackle immediate
    challenges, including grants to 50 States and territories to
    fight fraud and improve accessibility, tiger teams to work
    hand-in-hand with State UI officials to fix problems.
        DOL changed policy to require States to give Mr. Turner and
    his team access to State UI claim and wage data to help detect
    and prevent fraud. The Department of Justice (DOJ) and others
    in the enforcement community are undertaking an unprecedented
    effort to prosecute and recover stolen funds. DOJ reported last
    week they have filed criminal charges against over 1,000
    defendants, opened over 248 civil investigations into more than
    1,800 individuals and entities, together involving billions of
    dollars in suspected fraud.
        I want to call out four areas for further consideration.
        First, cross-cutting vulnerabilities require cross-cutting
    solutions. The rise of identity theft, targeting Federal
    benefits, is ongoing. The President launched the Initiative on
    Identity Theft Prevention and Public Benefits last year, and we
    are working toward additional steps through a forthcoming
    Executive Order (EO) to better prevent and detect identity
    theft, based upon lessons learned.
        Second, victims of identity theft deserve increased
    attention. They face a complex recovery process to resolve
    resulting harms.
        Third, Congress should consider heightening penalties for
    criminals who commit egregious pandemic-related fraud by
    amending the Emergency and Disaster Assistance Fraud Penalty
    Enhancement Act of 2007.
        Fourth, cross-cutting efforts and capabilities enabled by
    the PRAC warrant consideration for ongoing capabilities and it
    is a model for future oversight of major investment
    initiatives.
        Thank you for your attention to these issues. I look
    forward to working with the Committee and the oversight
    community to further strengthen implementation of Federal
    programs.
        Chairman Peters. Thank you, Mr. Miller.
        Our next witness is Gene Dodaro. Mr. Dodaro is the eighth
    Comptroller General of the United States and head of the U.S.
    Government Accountability Office. As Comptroller General, Mr.
    Dodaro helps oversee the development and issuance of hundreds
    of reports and testimonies each year to various committees and
    to individual Members of Congress. He has also personally
    testified before Congress several times on the long-term
    outlook for Federal spending as well as other important
    national issues.
        Mr. Dodaro, it is great to see you back again before this
    Committee. You may proceed with your opening comments.

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

        Mr. Dodaro. Thank you very much, Mr. Chairman, Ranking
    Member Portman, and Members of the Committee. I am very pleased
    to be here to talk about our work on COVID-19 relief spending.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Dodaro appears in the Appendix on
    page 51.
    ---------------------------------------------------------------------------
        As has been mentioned, great urgency was given to providing
    quick relief to deal with public health issues and economic
    repercussions of the pandemic. However, tradeoffs were made
    that limited progress in ensuring transparency and
    accountability over this money. Controls that should have been
    in place before payments were made were either reduced or
    eliminated. Also, monitoring efforts, post-payment reviews, and
    other efforts were not instituted as fast as possible after the
    payments were made, to try to assess the integrity of the
    programs and have recovery efforts underway.
        These shortcomings were exacerbated by already-existing
    problems in financial management in the Federal Government.
    Chief among these is a serious improper payment program--the
    government has a payment problem--and lack of focus on
    prevention of audits, not after-the-fact pay-and-chase.
        With regard to improper payments, since 2003, reported
    estimates total over $2.2 trillion. In fiscal year (FY) 2021
    alone it was $281 billion, a jump from $75 billion in the prior
    year. This involves 16 agencies, 86 Federal programs. Twenty-
    six, or 30 percent of them, have over a 10 percent improper
    payment rate. This is not a complete estimate. Some of them are
    not reporting. Some of the estimates are not rigorous.
        With regard to the fraud prevention issue, we worked with
    the Congress in 2016 to help Congress pass the Fraud Prevention
    Act that was supposed to have agencies focus more on preventing
    fraud. This was slow to be implemented. Therefore, we were not
    in a good position when the emergency pandemic came around to
    prevent the fraud that occurred.
        We are recommending today 10 different legislative
    solutions that Congress could pursue to address both what we
    found during the pandemic and these underlying, persistent,
    serious, fundamental financial management issues that the
    government has.
        No. 1, chief financial officers (CFOs) ought to be given
    more responsibility for improper payments estimates to certify
    their accuracy. To monitor corrective actions right now it is
    the program people who administer the programs that are
    providing the estimates, so we need more rigor in the
    estimates, more transparency, and corrective action plans. They
    ought to be mandated to be reported in agency financial
    statements every year.
        Any new program, in my opinion, over $100 million, ought to
    automatically be determined to be susceptible to improper
    payments. There should have to be proved it is low risk, not
    proved that there is a problem, and this would ensure improper
    payment estimates are made in the first year of the program.
    Right now it is two or three years down the road before these
    estimates are made and problem are already entrenched into the
    program activities.
        Second, with regard to fraud, we need to reinstitute the
    reporting requirements that the agencies have to report on the
    status of their fraud prevention efforts. This would provide
    better visibility and more assertive congressional oversight
    over their efforts, because only if the agency officials can
    prevent fraud is the most meaningful way that this could be
    addressed. Also I believe that what is now called the PACE
    Committee ought to be permanently instituted and focused on all
    Federal spending, not just COVID spending. I recommended this
    back in 2015, after the Recovery Act. Unfortunately, Congress
    and the administration did not follow that. This effort that
    was put in place was too late. It was a year after the efforts.
    It was only limited to the pandemic, so that could be fixed.
        Also, internal control plans ought to be put in place
    immediately for emergencies, so they are already in place. We
    know what the problems are. They could be tailored later if
    there was a unique need for the emergency, but they ought to be
    put in place. Normal controls is not sufficient, as we have
    seen here, and OMB should do this. Congress should mandate that
    it be done.
        Also, we need to reinstitute the requirement for the
    inspectors general to audit periodically all Federal spending
    that is displayed through USAspending.gov.
        I have other suggestions but my time is up. I am happy to
    answer questions at the appropriate time. I appreciate the
    invitation to participate today. Thank you.
        Chairman Peters. Thank you, Mr. Dodaro.
        Our next witness is Michael Horowitz. Mr. Horowitz serves
    as the Inspector General of the Department of Justice and as
    the Acting Chair of the Pandemic Response Accountability
    Committee. In his IG role, Mr. Horowitz is responsible for
    combating waste, fraud, and abuse in DOJ programs, and he
    simultaneously leads the PRAC, a committee of 22 Federal
    inspectors general that oversee Federal pandemic-related
    emergency spending.
        Prior to his time at DOJ, Mr. Horowitz worked as a partner
    at a private law firm. His practice specialized in white-collar
    defense, internal investigations, and regulatory compliance.
        Mr. Horowitz, welcome back to the Committee. You may
    proceed with your opening comments.

       TESTIMONY OF THE HONORABLE MICHAEL E. HOROWITZ,\1\ CHAIR,
       PANDEMIC RESPONSE ACCOUNTABILITY COMMITTEE, AND INSPECTOR
                  GENERAL, U.S. DEPARTMENT OF JUSTICE

        Mr. Horowitz. Thank you, Mr. Chairman, Ranking Member
    Portman, Members of the Committee. I appreciate the invitation
    to speak to you today.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Horowitz appears in the Appendix
    on page 97.
    ---------------------------------------------------------------------------
        This Committee played an instrumental role in creating the
    Pandemic Response Accountability Committee, in March 2020, to
    oversee what is now over $5 trillion in pandemic relief
    spending across 426 Federal programs at 40 agencies.
        Given the magnitude of these responsibilities and the
    amounts involved we have sought to develop, and I believe have
    developed, a new model for conducting oversight in a crisis at
    the inspector general community, and that has involved
    promoting transparency by providing the public with accessible
    and comprehensive data about spending, and that is on our
    website, PandemicOversight.gov.
        We have collaborated across the oversight community to
    identify cross-cutting issues and risks. We have been detecting
    and preventing fraud, waste, abuse, and mismanagement by using
    leading-edge data insights that we have been able to obtain
    through our data analytic tools, the PACE, as the Chairman
    referenced. We have been able to hold wrongdoers accountable by
    marshaling the investigative and analytical resources of the
    oversight community.
        One of our foundational responsibilities is transparency by
    providing information to the public about pandemic-related
    spending. Information is power, and that is what we are trying
    to do for the American public is to see how their money has
    been spent. Information also brings accountability. You cannot
    have accountability without transparency.
        Unfortunately, we have faced challenges in putting forward
    all of the information that we think should be out there. We
    have detailed that in two different reports, one in 2020, one
    in 2021, where we have identified significant agency weaknesses
    in providing complete data and gaps in reporting information
    from recipients.
        Our reports include recommendations on how to address that.
    We have had significant discussions with leadership at OMB and
    the Administration about how to address that. We appreciate
    OMB's release of a memorandum addressing some of these issues
    by outlining the need for detailed and accurate award
    descriptions, a problem we have seen; enhanced transparency of
    spending through the use of disaster and emergency funding
    codes, something that has been missing; and a commitment to
    work with PRACs and IGs to strengthen payment integrity, as the
    Comptroller General just indicated.
        We have also reported other lessons learned through our
    work. First, agencies cannot rely solely on self-certifications
    of individuals that they are eligible for benefits. Second,
    underserved communities should be prioritized for funding where
    that is needed, as we saw in many instances here. Additionally,
    agencies should use existing data to verify eligibility, like
    the Do Not Pay system. Further, relief guidance needs to be
    gotten out quickly for new programs. Finally, programs need to
    fully disclose where their money went and how it was spent.
        Briefly, let me turn to collaboration. It is something we
    recognized we need to do at the outset. We have done that in
    the past and continue to do it with GAO and their leadership.
    We have also moved forward in a very significant way in working
    with our State and local counterparts, something that, frankly,
    we had not done much of in the Federal IG community and
    something that has been very central to the work that we have
    done.
        We have also been able to develop a very strong working
    relationship with OMB leadership and the ARP implementation
    team. I have outlined that in my written statement, and we very
    much appreciate that working relationship and think, frankly,
    it is the model for how effective oversight should occur, going
    forward in the future.
        Finally, let me touch on the accountability efforts that we
    have undertaken, and that we have done through the use of data.
    You cannot oversee $5 trillion in spending with just people.
    You need the data. That is where our Pandemic Analytic Center
    of Excellence comes in. It is critical to our efforts. It is
    something that has led to our providing nearly 200 requests and
    addressing requests from law enforcement in looking at
    oversight issues and fraud issues.
        As has been mentioned, the oversight community, the Federal
    inspector general community, their work has resulted in over
    1,200 indictments and complaints, nearly 1,000 arrests, almost
    500 convictions. It is critical for the community to have these
    capabilities. I appreciate the Comptroller General's support
    for those efforts. As he noted, he supported it back in 2015.
    It went away. We had to spend a year and more taxpayer money
    recreating that database because it went away in 2015. We look
    forward to working with OMB and hopefully their support for
    that effort.
        We are going to use all of our tools--criminal, civil,
    administrative, suspension and debarment, forfeiture--to try
    and recover the funds that have been stolen that have been
    referenced, and we are doing that and we are making every
    effort.
        I look forward to continuing to work with the Committee on
    these efforts and appreciate your support for our work.
        Chairman Peters. Thank you, Mr. Horowitz.
        Our final witness is Larry Turner. Mr. Turner is the
    Inspector General for the U.S. Department of Labor, where he
    helps detect and deter waste, fraud, and abuse in DOL programs.
    Mr. Turner oversees critical programs on unemployment
    insurance, worker safety, pension and health care benefits, and
    other essential needs. Mr. Turner also leads investigations
    into organized crime influence and labor racketeering
    corruption in employee benefit plans, internal union affairs,
    and labor management relations.
        Mr. Turner, welcome to the Committee. You may proceed with
    your opening remarks.

       TESTIMONY OF THE HONORABLE LARRY D. TURNER,\1\ INSPECTOR
                   GENERAL, U.S. DEPARTMENT OF LABOR

        Mr. Turner. Thank you, Chairman Peters, Ranking Member
    Portman, and distinguished Members of the Committee. Thank you
    for the opportunity to testify today.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Turner appears in the Appendix on
    page 111.
    ---------------------------------------------------------------------------
        Although the OIG is responsible for overseeing all DOL
    programs, my testimony today will focus on our oversight of
    unemployment insurance during the pandemic. The views expressed
    in my testimony are based on the independent work of the OIG
    and are not intended to reflect DOL's positions.
        Mr. Chairman, the OIG has remained committed to assisting
    DOL and Congress in improving the efficiency and integrity of
    the UI program. In our view, strengthening the program to
    prevent and detect fraud are key objectives to ensure that
    unemployed workers quickly receive needed benefits while
    safeguarding taxpayer dollars.
        For many years, the OIG has highlighted significant
    concerns with DOL's and States' ability to deploy UI benefits
    expeditiously and efficiently while ensuring integrity and
    adequate oversight. The pandemic exacerbated these challenges,
    creating the perfect storm. As the OIG report States, we were
    not prepared to process the historic volume of claims,
    resulting in significant delays in benefits. The Pandemic
    Unemployment Assistance (PUA) program initially relied on
    claimant self-certification without evidence of eligibility,
    and the unprecedented infusion of Federal funds gave forces a
    high-value target to exploit. That, combined with easily
    attainable stolen identities and weaknesses previously
    identified by the OIG, allowed criminals to defraud the
    program.
        Consistent with the OIG recommendation, UI reported an
    improper payment rate of 18.7 percent for 2021. Applying the
    rate to the $872 billion in estimated pandemic UI payments, at
    least $163 billion in benefits could have been paid improperly,
    with a significant portion attributed to fraud.
        Indeed, following the passage of the Coronavirus Aid,
    Relief, and Economic Security (CARES) Act, fraud against the UI
    program exploded. The OIG has received more than 143,000
    complaints, and has independently opened more than 38
    investigative matters concerning UI fraud. That represents
    1,000 times increase in the volume of UI investigative matters.
        The OIG took immediate action to respond to this crisis. We
    hired additional investigators, deployed Federal and contract
    staff to audit the program, established a pandemic rapid
    response team, and strengthened our data analytics program. We
    also worked with DOJ to create a national UI task force,
    leveraged Council of the Inspectors General on Integrity and
    Efficiency (CIGIE) and PRAC resources, and implemented outreach
    and education programs with the States.
        In addition, we collaborated with the PRAC, DOJ, and the
    U.S. Secret Service (USSS) to recover fraudulent funds, and we
    engage with international law enforcement partners to pursue
    transnational organized criminal groups targeting the UI
    program.
        To date, our efforts have resulted in the execution of more
    than 850 search warrants, 749 indictments, and $830 million in
    monetary results. From our oversight perspective, we issued an
    advisory report at the start of the pandemic, identifying six
    initial areas of concern for DOL and the States to consider
    when implementing the CARES Act. Since then, we have released
    nine reports and alerts. For example, we identified more than 3
    million claims, totaling nearly $17 billion in potential fraud,
    including payments to deceased individuals and Federal inmates.
        In response to our recommendations, DOL has instituted
    efforts to improve the UI program. However, several OIG
    recommendations remain unimplemented in the following areas:
    OIGs need to access UI date, States' need for adequate staffing
    and modernize IT systems timely and effective guidance to
    States, and controls for improper payments.
        Mr. Chairman, I would like to also highlight two challenges
    the OIG faced, the first being the lack of direct access to UI
    data. For many years, the OIG has requested access to data to
    proactively monitor the program for systemic weaknesses and
    potential fraud. Given the magnitude of the issues we saw in
    the beginning of the pandemic, we took the unprecedented step
    of using IG subpoenas to obtain UI data directly from the
    States. The data allowed the OIG to identify billions in
    potential UI fraud. However, the IG subpoena process took
    months and delayed our ability to detect fraud early in the
    pandemic.
        The second challenge we faced was resource limitations. The
    OIG received $38.5 million in much-needed supplemental funding
    to oversee DOL's pandemic responses. However, in light of the
    unexpected fiscal year 2022 appropriation, which held the OIG
    at its fiscal year 2021 levels, additional funding would allow
    the OIG to address the issues I have discussed today.
        Mr. Chairman, thank you for the opportunity to testify
    about our work overseeing the UI program. I also want to thank
    the dedicated OIG employees who continue to work tirelessly in
    support of our oversight mission. I look forward to answering
    any questions you or the Members of the Committee may have.
    Thank you.
        Chairman Peters. Thank you, Mr. Turner.
        Mr. Horowitz, the Pandemic Response Accountability
    Committee, as we are referring to it, without question had a
    Herculean effort over these last two years, as you mentioned in
    your testimony. I would like you to tell the Committee, in your
    opinion, has the PRAC been successful in its mission to date,
    and then if you let the Committee know what more can the PRAC
    and the rest of the oversight community do to stop fraud and
    identity theft and the bad actors out there? Be specific about
    that as well.
        Mr. Horowitz. Certainly. I do think we have been very
    effective in addressing this Herculean task. As you know, when
    we were created back in March 2020, we were only overseeing
    about $2 trillion of Federal funds. It grew to over $5
    trillion.
        The key to our ability to do that has been our ability,
    thanks to this Committee's support, the data analytics platform
    that we have built, the PACE. As I mentioned, nobody can
    oversee that kind of funding without the ability to get good
    data. It is what IG Turner just mentioned. You need access to
    information and you have to have the systems be able to run
    against it. Through doing that, we have identified, for
    example, multi-dipping across programs, because we have seen
    individuals applying with the same fraudulent information
    across programs. We have seen the use of payment to individuals
    on Do Not Pay lists and other lists. It has really enabled us
    to identify, find the fraud, as well as find weaknesses in
    department programs. It has been critical.
        There is one bill I would mention that I think would make a
    difference. It is the Administrative False Claims Act of 2021,
    which you are co-sponsoring along with Ranking Member Portman.
    Senator Hassan and Senator Lankford of this Committee are also
    co-sponsoring it. It would allow us to pursue administratively
    claims of up to $1 million, not have to go through the district
    court process. We think that is likely to be a substantial
    effort. We are hoping the Senate will pass that. The bill is on
    the floor.
        We have also considered and are thinking about questions
    related to the statutes of limitations. As you know, in prior
    crises Congress extended the statute of limitations with regard
    to bank frauds from five years to 10 years. It turns out that
    the fraud here, even though lenders were giving out the money,
    the fraud here is often, for example, with the Payment
    Protection Program really of the Small Business Administration,
    not the banks. There is a real question of whether that
    extended statute of limitations applies. Loans that were given
    out in March 2020 would have a statute of limitations,
    potentially, depending on the facts, to March 2025, and given
    the amount of fraud, that may be an area that is worth
    considering as well.
        Chairman Peters. Very good.
        Mr. Turner, as you well know, probably one of the most
    high-profile areas for the improper payments and pandemic fraud
    were in the 54 State and territorial unemployment insurance
    programs, and as you stated in your testimony today, as well as
    some of the reports your office has published, there were
    serious challenges for the DOL OIG to get data from these State
    workforce agencies to conduct the audits and investigations
    that you needed to do. I have heard similar concerns about
    timely and complete access to important data from other IGs as
    well.
        Could you please discuss for the Committee the impact on
    IGs when you are unable to get timely and complete access to
    this critical data?
        Mr. Turner. Yes, Chairman. I would be more than happy to do
    so. One of the challenges and one of our issues when we cannot
    get direct access to the information is that it slows the
    process. Even once you have identified problem areas, it just
    slows the process down when you actually have to go other ways
    to get the information.
        For us, one of the tools that we have to use was our IG
    subpoenas, because we did not have direct access to labor data
    coming from the States. There are 54, as you mentioned, States
    and territories we had to look at. By us not being able to get
    that information directly it meant months that the pay
    problems, fraud problems were able to exist. We tried to go
    through the DOL to expedite this problem, but DOL had a
    challenge with the CARES, the doctrine with the CARES in terms
    of some of the information. Part of that problem was that it
    did not allow them to provide us investigative audit
    information. We were able to get investigative information but
    not audit.
        We pushed back, because we wanted to get from the
    Department all the information right away, and the Department
    would not allow us to do that. We went to subpoenas, and when
    we went to the IG subpoenas we did two rounds of IG subpoenas,
    because that allowed us to get the information we needed in a
    more direct fashion. In being able to do that, we were able to
    identify $17 billion of problem areas that came from stolen
    identification, with Social Security numbers. Part of that was
    through multi-states, multi-claims, through deceased people, as
    well as through several other areas, to include cemeteries were
    some of the areas that were identified.
        Those are some of the challenges that we faced.
        Chairman Peters. Great. Thank you.
        Mr. Horowitz, although I know you can only speak on behalf
    of the PRAC and your role as the IG at DOJ, could you provide
    this Committee any perspective on how successful the DOJ and
    the Federal Bureau of Investigation (FBI) have been in
    obtaining arrests and convictions for pandemic-related fraud?
    Then on top of that, do you believe that the new chief
    prosecutor that was announced by the White House earlier this
    month can improve the government's efforts to address fraud,
    like we are hearing from UI and the Paycheck Protection
    Program?
        Mr. Horowitz. Yes, certainly, Mr. Chairman. The importance
    of coordination here cannot be overstated. For example, part of
    the Department's Fraud Task Force. We have separately created,
    at the PRAC, our own Fraud Task Force to bring together the IG
    community with our partners in law enforcement. We work very
    closely with the FBI to ensure that kind of coordination and to
    provide them with access to certain information that we have
    through the PACE, that they may actually not have access to. It
    has been a very important collaborative, strong working
    relationship.
        I think it is very important, having been an Assistant U.S.
    Attorney (AUSA) myself in my prior stint at the Justice
    Department, having that kind of coordination at the
    headquarters level is critical. These are issues that are not
    limited to one district in the country or one State in the
    country. They are cross-cutting. They are international, in
    many instances. It is very important to have that relationship,
    that connectivity. We have a very strong working relationship.
    I have already gotten a reach-out a couple of times by the new
    prosecutor that was named the other day. I was at a meeting
    with the Attorney General (AG) and the Deputy AG to talk about
    these issues last week.
        They are including us, me not just as the IG at Justice but
    as the chair of the PRAC.
        Chairman Peters. Great. Thank you.
        Ranking Member Portman, you are recognized for your
    questions.
        Senator Portman. Thank you, Mr. Chairman, and again, thanks
    for the work you all are doing in a very difficult situation.
        I want to start with Inspector General Turner and focus on
    the unemployment insurance fraud that you talked about. You
    said that we know that at least $163 billion in pandemic UI
    benefits were paid improperly, and a significant portion was
    attributable to fraud. You said that fraud cases have exploded
    by about 1,000 percent. Could you describe your efforts to date
    to try to recover some of those improper payments,
    approximately how much have we been able to recover so far, and
    what is our plan to try to recover more of that $163 billion-
    plus in the future?
        Mr. Turner. Let me say that, I can start off by answering
    your second question first. We have $830 million in terms of
    the monetary gains that we have found so far that we have been
    able to recover. It is a challenge because I think we believe
    that it has to be a proactive effort initially to stop and
    prevent fraud before it actually happens.
        The concern, in terms of how we get it back, we go back to
    when we started the program. When we first started 20 years we
    have identified several problems within the program. A lot of
    it is lack of staffing and lack of modernization. That has
    allowed some of the fraud to occur. Athough we talk about 18.71
    percent as being the fraud rate, therefore of the $872 billion,
    that is what we believe--and that is just the IG figure of the
    $163 billion that you are talking about--we believe that it is
    going to be somewhat difficult to get that back.
        No. 1 is because a lot of the funds have been expended
    before we actually are able to get it back because so many of
    the fraudsters have already spent it in high-dollar-value
    items, whether it be homes, whether it be vehicles, or
    whatever. Some of that is hard to get back. A lot of it is also
    tied up in the courts in terms of restitution. Some of the ones
    that we have identified it is going to take years to actually
    see what that total amount of recovery will be.
        Senator Portman. Thank you for doing everything you can to
    get that taxpayer money back. Eight hundred thirty million
    bucks is a lot of money. On the other hand, it pales in
    comparison to the $163 billion, does it not?
        Mr. Turner. Yes, it does, and every dime of government
    money, we take that serious in trying to recoup all that we
    can.
        Senator Portman. Yes. Let us know how we can be more
    helpful, and part of the problem, you said, is it is converted
    to assets. Those assets can be seized, as well, and, it seems
    to me that, particularly with regard to some of the foreign
    nationals that we should have a governmentwide approach to
    this, getting more help from, in that case, the Department of
    Justice.
        Chairman Horowitz, PRAC has identified a lot of gaps in
    existing data sources--you talked about this a little bit--so
    the lack of transparency means less accountability. What are
    the key gaps in the existing data sources that you see? In your
    October 2020 report you identified 13 corrective actions, all
    Executive Branch it looks to me, to mitigate these gaps. Tell
    us how many of those 13 recommendations have been implemented.
        Mr. Horowitz. So on this issue, Senator Portman, the gaps
    are many, as you indicated. We have outlined them in our two
    reports. Let me highlight two of them.
        There is a significant issue with coding and putting
    sufficient information in about naming what the money went for.
    Our second report lays out thousands of grants that have either
    program names associated with it or things like codes of
    initials. Nobody looking at that, not us as oversight
    professionals, the public looking to see where money went,
    would have any idea where that money went from looking at that
    reporting data.
        That is not what I think Congress intended when they set up
    the Data Act and other mechanisms for reporting through
    USAspending.gov, to report out for the public to learn how
    their money was being spent. So that is one significant issue.
    Even when there are reports of where the money is spent, we are
    finding thousands of instances where, I have referred to it as
    ``gibberish,'' is there. You cannot make heads or tails of what
    the money is for.
        Another major problem we found is going beyond the first
    level of spending, to figure out where the money actually went
    to and how it was actually being used. You can see, oftentimes,
    how agencies distributed the money in the first instance, but
    in many of these programs, as you know, through the grant
    programs the money goes even further downstream, and there is
    no information about that flow.
        Finally, the information reporting back from recipients.
    What did they do with the money? How did they spend it? One of
    the big questions we hear all the time is, so the PPP program,
    $800 billion in the Paycheck Protection Program. How did that
    impact employment? We do not know. The agency does not know
    because the information is not being collected.
        Senator Portman. Huge gaps, and understanding we needed to
    get money out the door quickly there is no reason not to have
    that kind of coding and to understand where the money is going
    and then to follow the money to see whether it is working.
        In terms of the amount stolen, $87 billion to $400 billion,
    that is a pretty big range. We just learned from the IG at the
    Department of Labor it is $163 billion there alone, at least,
    so it is more than $87 billion. Can you give us your best
    guess, as the PRAC chair and as someone who has been looking at
    this for a long time and has some perspective on it, how much
    was stolen?
        Mr. Horowitz. Senator, I wish I could answer that right
    now. A couple of reasons that is a challenge. First of all, we
    do not have all the data just yet. Second, we have lots of
    cases ongoing, and, of course, there is a difference between an
    improper payment, of which there are billions and hundreds of
    billions of dollars, and a fraud. We have to sort that out
    through the investigative process.
        I cannot give precision at all. I am not even sure I can
    give a wild guess yet at what the fraud number will be. It will
    be very large. The improper payment number, as the Comptroller
    General indicated, is disturbingly large. We know about, just
    for example, $3 billion went out the door right away to
    deceased payees through the Internal Revenue Service (IRS) and
    the initial loan check distributions. Fifty thousand-plus PPP
    loans went to individual entities on the Do Not Pay list.
        Senator Portman. Chairman Horowitz, give me your best
    educated guess. Is it less than $400 billion or more than $400
    billion? That is the top of the range.
        Mr. Horowitz. Senator, I am going to be careful in giving a
    guess. It is certainly in the three-digit billion number. How
    big it is, I am just not prepared to----
        Senator Portman. You are prepared to say it is over $100
    billion but not prepared to say whether it is $400 billion or
    $300 billion?
        Mr. Horowitz. I think in light of, obviously, the UI
    numbers that IG Turner just mentioned, if you are talking $87
    billion-plus of potential fraud in that program----
        Senator Portman. 163.
        Mr. Horowitz [continuing]. $163, I am sorry, billion-plus
    in that program, you are obviously already north of that
    number. I know from SBA IG the Payment Protection Program, the
    EIDL program, is the other place where we are finding very
    substantial fraud.
        Senator Portman. Yes. When we get the Administrative False
    Claims Act done, and we are working to get that done in the
    Senate soon, and again with regard to these 13 corrective
    actions that you proposed, I would like to know if you would
    get back to us how many of those have been implemented and how
    many have not. These are all administrative Executive Branch
    functions, so we can help, perhaps, to put some focus on that.
        Thank you, Mr. Chairman.
        Mr. Horowitz. Absolutely.
        Chairman Peters. Thank you, Ranking Member Portman.
        Senator Johnson, you are recognized for your questions.

                  OPENING STATEMENT OF SENATOR JOHNSON

        Senator Johnson. Thank you, Mr. Chairman. I think we are
    probably only looking at the tip of the iceberg here, and I
    think you are kind of indicating that as well. I think part of
    the big problem is the fact that Congress took a shotgun
    approach to COVID relief as opposed to targeting our relief. I
    personally think it was hundreds of billions of dollars that
    went to people that in the end did not need it.
        A lot of them did not commit fraud. We just set such a low
    hurdle rate. For example, in the PPP program, again, if you
    were concerned about the economic uncertainty, you qualified
    and we just forgave the loan. I thought it was madness. I spoke
    out about it at the time. But, a lot of this falls on Congress'
    shoulders here in terms of the amount of fraud that eventually
    will be uncovered, and we probably will not uncover the vast
    majority of it.
        I do not see how anybody can take a look at our response to
    COVID and call it a success. Nine hundred sixty-five thousand
    Americans dead. The human toll of the economic devastation from
    the widespread shutdowns, I argued against those at the time.
    What we have done to our children. I want that to sink in--what
    we have done to our children, the delayed learning.
        I will tell you. Whether you agree with masks or not, I
    will tell you where masks would not work--on a child--and yet
    we have subjected them to two years of wearing masks, delayed
    speech, could not see their teacher's face, the smiles of their
    classmates. We need to really do oversight on what our response
    was, what a miserable failure it was, so it never happens
    again.
        Mr. Horowitz, you have done a lot of investigations. I sent
    35 oversight letters, and I think one thing you have to
    recognize about me--and I think you would agree with this--I
    have never used the ``everything and the kitchen sink''
    approach. I have tried to really target my response to get
    information that we would actually use. My oversight letters
    have been very focused on issues, asking for information that I
    believe the American people deserve.
        I want to ask you, if you would get the response I have
    been getting, which is basically we are not going to respond
    other than refer you to our website, does that happen to you in
    your investigations?
        Mr. Horowitz. Actually, on occasion, we have had problems,
    and I agree, we push back, and we push back hard, and
    oftentimes I have been in front of this Committee, on multiple
    times, including when you were Chair, to talk about those
    issues. I agree, you deserve and are entitled to answers. We
    are, as you know, very responsive to you and your staff as well
    as other Members here, because it is important for Congress to
    be able to get the information it needs to do the oversight it
    needs to do.
        Senator Johnson. A brief list of some of the things I have
    asked questions about. By the way, I think our biggest blunder
    was we did not put enormous time and effort and resources into
    exploring and researching early treatment. In fact, we
    sabotaged early treatment. But I have written letters. How much
    did we expend? What were our efforts? I do not get anything.
        We have requested the emails from Dr. Fauci, unredacted,
    4,000 pages. We do not get them. We have been given access to
    about 400, in dribs and drabs, 50 pages at a time. We do not
    actually get them. We have to review them on camera.
        I have asked questions, what did the Food and Drug
    Administration (FDA) do in August 2021, when they extended the
    emergency use authorization (EUA) for the vaccine that is
    available in the United States, and granted full licensure on
    one that is not available? What was that all about. It is
    confusing. I get no answer whatsoever.
        We have we not acknowledge and explore natural immunity?
    Why have we not factored that into these idiotic and pointless
    vaccine mandates?
        One of the more recent ones was information on the Defense
    Department's (DOD) DMED database, that showed a three-to
    tenfold increase in different diagnoses of cancers and things
    like myocarditis, and neurological problems.
        The DOD, by the way, did respond to a PolitiFact request,
    before they responded to me in a very inadequate way. But what
    they said is, ``Oh, we recognized a glitch in our system.''
        What we have is from whistleblowers, doctors, military
    doctors, who were seeing vaccine injuries. They did an
    analysis, the previous five years versus 2021. They saw a
    tenfold increase in these diagnoses.
        What the DOD told us is, ``Oh, we were wrong for the
    previous five years,'' and all of a sudden they have given us
    some data where those things shot up ten-fold. What is pulling
    off here? They are not showing us the data.
        But I think one of the more troubling ones--and why don't
    you put up my chart\1\ here--very early on in the process--
    again, I was a big supporter of Operation Warp Speed (OWS). I
    am not anti-vax in any way, shape, or form, but I think you
    have to take a look at the data coming in. The data coming in
    was concerning to me. I was asking questions back in March,
    April, May 2021, when the Vaccine Adverse Event Reporting
    System (VAERS) were showing 2, 3, 4, 5,000 deaths. Today we are
    up to over 25,000 deaths reported in the VAERS system, 1.168
    million adverse event.
    ---------------------------------------------------------------------------
        \1\ The chart referenced by Senator Johnson appears in the Appendix
    on page 130.
    ---------------------------------------------------------------------------
        What this chart shows is a comparison--for example,
    ivermectin. You are not supposed to say that word. By the way,
    in New Hampshire, I guess, their Assembly just approved over-
    the-counter use of ivermectin, because it is pretty safe.
    Fifteen deaths, on average, over 26 years on the VAERS system.
    Hydroxychloroquine, 70 deaths. Annual flu vaccines, 78 deaths.
    Remdesivir now 721 deaths. COVID vaccines, 25,158 deaths.
        Again, now I realize VAERS does not prove causation.
    Twenty-nine percent of those deaths are occurring on days zero,
    one, or two following vaccination. It is something I would be
    concerned about.
        I write the FDA. I write the Center for Disease Control and
    Prevention (CDC). I write National Institute of Health (NIH).
    What is happening here? I asked them about their other
    surveillance systems. I get no information whatsoever. It is
    not that I do not get information, the American people do not
    get information.
        The reason the American people have lost faith in our
    health care agencies is because they have been completely non-
    transparent. They have not provided the information that we are
    getting from other public health agencies from around the
    world. We have had to look to Israel. We have had to look to
    the United Kingdom (UK) to find out what is happening here.
        I guess the plea I am making to this Committee, the
    Chairman of the Permanent Subcommittee on Investigations (PSI),
    in which I am Ranking Member, is this needs to be investigated.
    If the agencies do not respond to us, we need to issue
    subpoenas. Congressional oversight is almost a joke nowadays.
    You can do an investigation at the Department of Justice. You
    can do pretty good investigations in the IG's office. Congress?
    The agencies just thumb their nose at us, and doing so they are
    thumbing their nose at the American people.
        This is outrageous. It cannot continue. Mr. Chairman, I am
    calling on you, as Chair of this Committee, to start
    strengthening our ability to get information out of these
    agencies. It is outrageous what has been happening, our lack of
    information, our lack of transparency, the lack of honesty
    coming out of our health care agencies.
        This is a scandal. The fraud, the hundreds of billions of
    dollars probably sent to people that did not need it is a
    scandal. This impacted people's lives. We need answers, and we
    need answers now.
        Thank you, Mr. Chairman.
        Chairman Peters. Thank you, Senator Johnson.
        Senator Hassan, you are recognized for your questions.

                  OPENING STATEMENT OF SENATOR HASSAN

        Senator Hassan. Thank you so much Mr. Chair and Ranking
    Member Portman for this important hearing, and thank you to all
    the witnesses for your critically important work to prevent
    waste, fraud, and abuse of taxpayer dollars and to improve
    management of pandemic relief programs.
        I want to start with a question to you, Inspector General
    Horowitz, and then to Comptroller General Dodaro. To date, the
    GAO and inspector general community have made hundreds of
    recommendations to Federal agencies on how to improve their
    response to the pandemic and ensure that relief funds have the
    maximum benefit. However, as of December 2021, agencies have
    implemented less than one in five GAO recommendations.
        Inspector General Horowitz, you talked a little bit about
    some of this with Senator Portman, but in your review as chair
    of the Pandemic Response Accountability Committee, what more
    can agencies do to address IG and GAO recommendations that
    could help them curb waste, fraud, and abuse of COVID-19 relief
    funds?
        Mr. Horowitz. Senator, as you indicated IGs have issued
    hundreds of reports now to date. They include hundreds of
    recommendations in them about how to improve programs, and you
    are right, the track record of agencies in implementing them
    has been uneven, I would say at best. Some perhaps do better
    than others.
        But one of the things we do now, in the IG community, is
    make that information public. On oversight.gov and on IG
    websites we are trying, through making the information public
    where agencies stand in implementing them, in an aging list.
    You can see how long it has taken them to do. Our strongest
    tool in that, to get that done, is not only speaking and
    elevating it within the agency but frankly talking now more
    frequently with OMB leadership, so that they can do, with the
    tools they have available to them, to try and push agencies to
    more promptly implement these recommendations.
        Senator Hassan. Thank you. Comptroller General Dodaro, what
    recommendations should agencies prioritize to maximize the
    effectiveness of their pandemic response in a cost-efficient
    way?
        Mr. Dodaro. I have sent letters to every head of every
    department and agency in the Federal Government with a priority
    list of recommendations. Those have been provided to the
    Congress. They are public on our website. I have met with all
    the new leadership of the departments and agencies, urged them
    to do that. In some agencies we have regular meetings to focus
    on the progress in implementing our recommendations, and other
    agencies, not so much, particularly the Department of Health
    and Human Services (HHS).
        I am disappointed at the pace. Like Mr. Horowitz said, we
    have been working with OMB, and I have regular meetings with
    the White House coordinator, Gene Sperling, on this, to try to
    enlist their support to get the agencies to move faster in
    implementing these recommendations.
        I do believe additional congressional attention to this
    matter would be very helpful. I have also used the high-risk
    list. When I was here last March I mentioned that I put the
    emergency loan programs of the Small Business Administration on
    the high-risk list, because it is not only our recommendations,
    they failed their audit the last two years. They have not been
    able to get a clean audit and show the proper accounting of
    this money. I have also added HHS's leadership and coordination
    in January as a high-risk issue. Clear roles and
    responsibilities are not there. There is not a lot of clear
    communication. These have been problems for decades.
        I am doing everything that I can, but I could always use
    extra help.
        Senator Hassan. Right. We can return to that priority list
    and see if we can focus on it to, because I think that is
    important for us all to be speaking with one voice, to
    prioritize the best ways to have the most efficient and most
    impactful results.
        Let me turn to you, Inspector General Turner. Single sign-
    on technology allows users to create one username and password
    to securely access many different websites. This is not just
    convenient for consumers but it can also prevent fraud when
    single sign-on technology verifies users' identities.
        For example, during the pandemic some States managed access
    to pandemic relief applications through single sign-ons using
    identity verifications. States that used these tools
    experienced a significant decrease in fraudulent claims and
    were able to prevent billions in improper unemployment
    insurance payments.
        Inspector General Turner, how could the Department of Labor
    work with State partners to implement these identity
    verification tools across the country?
        Mr. Turner. Senator, that seems like something that the
    State workforce agencies would be able to share, in terms of
    best practices, and I think that is something that we could
    probably pass onto them as well as the Department could. The
    Department, part of reducing the possibility of fraud is also
    sharing best practices across the government. There are like 53
    different entities, so they have their own way of doing
    business, and sometimes you have some that do a better job than
    others. But I think if they could kind of share that
    information, and that is something I will pass on to the
    Department.
        Senator Hassan. Thank you. I want to turn to Mr. Miller on
    some of this same issue. Last September, the Technology
    Modernization Fund (TMF) awarded $187 million to the General
    Services Administration (GSA) to expand its single sign-on
    service, login.gov. Part of those funds are intended to shore
    up login.gov's identity verification capabilities.
        How could these identity verification tools help the
    Federal Government prevent improper payments, not just of
    COVID-19 relief funds but of payments that the government makes
    daily?
        Mr. Miller. Thank you, Senator, for that question, and
    login.gov is an important tool but it needs to be strengthened
    going forward. This is something that we are working on.
    Looking actively at, to Mr. Turner's point, when you looked at
    those 53 different systems some of them were not using identity
    verification for reasons like they could not afford identity
    verification tools. The end cost of that was substantially
    larger than the cost of identity verification on the front end.
        The second thing on this is right now we largely leave
    agencies and States to their own devices to determine how best
    to do these. We need stronger tools in place on identity
    verification. That is why we are investing in login as a
    potential option, and it is a topic that we are working hard on
    at OMB.
        Senator Hassan. Thank you. Mr. Chair, if I could, I want to
    follow up for one short bit on that, because some Federal
    agencies such as IRS, the Department of Veteran's Affairs (VA),
    and Social Security Administration (SSA) already partner with
    private single sign-on companies to verify customer identities
    and prevent fraud. How can OMB work with the GSA as well as GAO
    to ensure that its efforts to expand identity verification
    through login.gov does not overlap or duplicate the existing
    agency efforts here?
        Mr. Miller. One thing that we want to make sure that we are
    putting in place is clear standards and guidelines for agencies
    as they are moving forward, so that we have strong identity
    verification tools while also ensuring that those tools are
    allowing access and protecting individuals' privacy.
        Senator Hassan. Thank you very much. Thanks for the extra
    time, Mr. Chair.
        Chairman Peters. Thank you, Senator Hassan.
        Senator Carper, you are recognized for your questions.

                  OPENING STATEMENT OF SENATOR CARPER

        Senator Carper. Thanks very much. Welcome. Some of you are
    not strangers to this Committee, and we are delighted to see
    those who might be here for the first time or those who have
    been before us many times. Thank you all for the great work
    that you do and for your leadership.
        I am just wondering, Mr. Turner, do you remember when you
    were sworn in as the Inspector General of the Department of
    Labor?
        Mr. Turner. That would have been December 7, 2021.
        Senator Carper. Does that date have any special meaning to
    you, when you think of it, besides for being sworn in that day?
    Any other special meaning?
        Mr. Turner. Not that I can think of.
        Senator Carper. It is Pearl Harbor Day, the anniversary of
    Pearl Harbor, when we lost so many. I am a retired Navy
    captain, so for my family it is something that is real.
        For the people in Delaware it is also real in another way.
    It is the day that Delaware ratified the Constitution. It
    became the first State to ratify the Constitution. For one
    whole week we were the entire United States of America (USA),
    and then we opened it up and let in Maryland, Pennsylvania, and
    the rest. I think it has turned out OK, for the most part, but
    it is still early.
        When you look at the Preamble of the Constitution--this is
    where I am going with this--it starts off, as you recall, ``We,
    the people of the United States, in order to form a more
    perfect union, establish justice, insure domestic tranquility,
    provide for the common defense, promote the general welfare,
    and secure the blessings of liberty.''
        We are talking about here the response of our country, our
    people over the last two years to really, in a way that is
    consistent with the Preamble of the Constitution, promote the
    general welfare and secure the blessings of liberty to
    ourselves and our posterity.
        It is important work, and it is consistent with what our
    Founding Fathers, the framers of the Constitution, had in mind.
        I have a couple of questions. I probably will not have time
    to ask all of them, unless the Chairman wants to require
    everybody else to yield their time to me, which is probably not
    likely.
        But my first question would be of you, Mr. Miller. Over the
    last couple of years, through two administrations, Congress has
    approved about $4.5 trillion, I am told, to support COVID
    response and recovery efforts. So far, agencies have obligated
    $4.2 trillion. I am not sure how far back we have to go in our
    nation's history where that is actually more money than we
    would spend in a given year through the Federal Government. It
    is probably not all that far. It is a huge amount of money, and
    requires a lot of oversight. We want to thank all of you and
    the folks who work for you, with you, for leading the oversight
    effort and for testifying today.
        Mr. Miller, we learned a lot about Federal and State
    technology systems, staffing, resources, and communication
    processes during the pandemic. We are still learning. My
    constituents would tell me that we learned a lot about what did
    not work as well as what did. In your testimony you outlined a
    number of steps the Administration is taking to improve
    communications and access across the Federal Government, in
    execution across the Federal Government.
        With that said, State and local governments are responsible
    for implementing, as you know, many of these programs. How is
    the Administration ensuring they have the necessary support and
    sufficient communications with Federal agencies? That would be
    my question for you, Mr. Miller.
        Mr. Miller. Great. Thank you for that question, Senator.
    Yes, State, local, tribal, territorial (SLTT) governments are
    critical in successful implementation. Open communication
    channels, both at an agency level and an administration level
    and a program level are important. Certainly this is something
    that Treasury has done, and it is well underway, in terms of
    implementing the programs over the course of pandemic relief.
    We are also taking steps on this as we are implementing the
    Bipartisan Infrastructure Law, where that specific set of
    investments is almost entirely reliant on States, localities,
    tribal, and territorial governments.
        One additional way, in partnership with the oversight
    community, that we are trying to make sure that we have strong
    collaboration and coordination, is not with those executing the
    programs but with those who are auditing and investing in the
    programs, so that they have the information that they need to
    protect program integrity and support States and localities in
    executing these programs.
        Senator Carper. All right. Thank you for that response. My
    second question would be, Mr. Turner, for you. The question
    deals with improving the unemployment insurance program,
    something that some of us on this Committee have given a lot of
    time and attention to.
        Mr. Turner, I have a wonderful constituent services team.
    They work hard every day to advocate for Delawareans seeking
    help, but including Federal assistance. The top issue we hear
    about is delays in processing unemployment insurance claims.
    That may be at the top of the charts in terms of complaints
    that we hear from our constituents. These delays predate the
    COVID pandemic, but the pandemic has certainly exacerbated this
    particular issue.
        You noted in your testimony ongoing challenges with States
    having sufficient staffing and systems resources to manage UI
    claims. You also noted an earlier, unsuccessful attempt by the
    Department of Labor to help States modernize their legacy IT
    systems through Federal funding. Why did this not work, and
    what lessons has the Department of Labor learned from this
    effort?
        Mr. Turner. Let me first say thanks for the question.
    First, we have been identifying, for the last 20 years, the
    Labor OIG, some of the problems that are existing now with
    COVID. These are problems with lack of IT modernization. As a
    matter of fact, around 2010, there was $7 billion that was
    dedicated and funded for States to modernize their systems, and
    in most cases they did not. In some cases, I think of the $7
    billion that was set aside for that only $4 billion was
    actually used. About $2 billion was used to pay benefits, which
    was allowed, but I think it should have gone toward the
    modernization. Those were some of the challenges.
        But when we look at the work we have done the last 20
    years, to include 10 years ago, we find some of those same
    problems, and those problems actually added to the explosion in
    terms of lack of support for claimants, during COVID.
        Those have been some of the challenges. Also, I think the
    biggest thing was that a lot of the States were not adjusting
    to the new UI care packages, in a sense, because some of them
    were different. I will give you an example. The gig from the
    PUA, that was different because this was talking about, in some
    cases, gig workers, self-employed workers. There were different
    requirements for those workers. In some cases there was not the
    safeguards that had been in the normal UI program.
        Senator Carper. OK. Mr. Chairman, if I could, for the
    record, I will state the question and then ask you to respond,
    Mr. Turner, for the record. How can Congress and the
    Administration work together to effectively help States address
    staffing and systems shortfalls moving forward? The last thing
    for the record, a question. There has been a good deal of
    conversation about data gaps that are challenging effective
    oversight. What steps is the Administration willing to take to
    address these gaps and how can Congress help?
        Again, our thanks to all of you. I hope you feel welcomed
    here. We very much welcome you, and I think you know that, and
    your teams, the folks that are sitting behind you and those
    that you represent. God bless you. Thank you. Happy St.
    Patrick's Day, even if you are not Irish.
        Chairman Peters. Thank you, Senator Carper.
        Senator Carper. We are lucky to have you in our service.
        Chairman Peters. Thank you, Senator Carper.
        Senator Hawley, you are recognized for your questions.

                  OPENING STATEMENT OF SENATOR HAWLEY

        Senator Hawley. Thank you very much, Mr. Chairman. Thanks
    to everybody for being here, to the witnesses.
        Mr. Miller, if I could start with you. I want to try to
    understand what is happening with the special inspector general
    for pandemic recovery. This is, as you know, a position that
    this body, Congress, created when we passed the CARES Act
    several years ago now. The Senate confirmed a nominee to lead
    that office. Multiple Senators have referred complaints to that
    office. For example, on July 15, 2020, Senator Warren wrote to
    the Special Inspector General for Pandemic Recovery (SIGPR)
    calling for an investigation into a ``COVID lobbying
    palooza''--those are her words--and stating her understanding
    that SIGPR was created--I am quoting her again now--``to
    investigate any fraud, waste, and abuse of Coronavirus Aid
    Relief in the Economic Security Act funds.''
        On August 6th of that year, 2020, 28 other Senators--that
    includes me--wrote to SIGPR requesting an investigation into 43
    Planned Parenthood affiliates that applied for and received
    CARES Act funds through the Small Business Administration's
    Paycheck Protection Program, despite clear rules against that.
        My point is that multiple Senators have referred multiple
    things to SIGPR. It is in the legislation. However, the Biden
    administration and DOJ, in consultation with OMB, stripped
    SIGPR of almost all of its jurisdiction pretty much as soon as
    he came to office, in April 2021. I am trying to understand
    what is going on here. Why has SIGPR been stripped of its
    jurisdiction? Why is it not able to perform its mandated
    functions? What is happening here?
        Mr. Miller. Senator, thank you for the question to receive
    clarity on this issue. The dispute that you are referring to go
    back into the prior administration with regards to SIGPR's
    authorities. SIGPR went to the Office of Legislative Counsel
    (OLC), at DOJ, which makes determinations for the Executive
    Branch regarding authorities when they are disputes within the
    Executive Branch. OLC consulted with OMB informally, as it
    would on any matter, where it felt OMB's input would be useful.
    OLC determined that the legislation had specific authorities
    for SIGPR, and the Executive Branch follows what OLC
    determines.
        Senator Hawley. You are saying that OMB did not recommend
    that SIGPR be stripped of its jurisdiction? Is that your
    testimony?
        Mr. Miller. OMB answered questions and input from OLC and
    did not make a determination. OLC made a determination.
        Senator Hawley. Will you provide us with records of that
    communication?
        Mr. Miller. It occurred before my time. I would welcome
    follow-up discussion.
        Senator Hawley. Wait a minute. The OLC-OMB communication
    occurred before your time? It occurred under this
    Administration, though.
        Mr. Miller. I was sworn into office at the end of April.
        Senator Hawley. But it occurred during the Biden
    administration, right? I do not particularly care when you were
    there. I care when it happened. I care that you are there now
    and have some authority. It does not matter to me when you were
    in office or not. It matters to me that you are before this
    Committee, that presumably you have sworn an oath to answer to
    this Committee the questions. I am asking you a direct
    question, whether you will give us the communications. I do not
    care if you were there or not.
        Mr. Miller. I would welcome follow-up with you on this,
    Senator Hawley.
        Senator Hawley. Is that a yes or a no or a maybe?
        Here is the deal. I want to know why in the world this
    Administration has taken an act of Congress and gutted it, and
    that is what they have done with SIGPR. You have gutted it.
    There are trillions of dollars that have--let us just review.
    The CARES Act spent more money than we spent on World War II,
    and we have no effective oversight, in my view, of how that
    money is being spent when it comes to waste, fraud, and abuse,
    because this Administration has chosen to gut the IG system
    that was set up to oversee it. I want to know why, and I want
    to know if we can get the information from you. That is my
    question to you.
        Mr. Miller. This Administration has taken active steps to
    reassert the role of IGs in providing oversight.
        Senator Hawley. SIGPR?
        Mr. Miller. OLC made a determination with regards to
    SIGPR's authorities. In 2020, actions were taken to undermine
    the IG community. We believe that IG roles----
        Senator Hawley. Indeed actions were taken to undermine the
    IG. In April 2021, this Administration gutted this IG. They
    gutted the IG that we created, that Congress created, on a
    bipartisan basis, and that bipartisan groups of Senators have
    referred information to. Now this entity cannot carry on its
    work because your Administration gutted it.
        Let me come back to my question. Will you provide this
    Committee the communication between OLC and OMB regarding the
    decision to gut SIGPR?
        Mr. Miller. You are welcome to request----
        Senator Hawley. I am requesting it now. That is what I am
    doing.
        Mr. Miller. We will look into the specifics of the
    communication and absolutely get back to you on that.
        Senator Hawley. So is that a yes?
        Mr. Miller. I would like to look into the specifics of the
    communication.
        Senator Hawley. That sounds like, frankly, a non-answer to
    me, and unfortunately, that has been the case for a year now,
    since this Administration gutted SIGPR. I have introduced
    legislation that would restores SIGPR's jurisdiction and
    restore its funding. Frankly, I think it is being funded on a
    shoestring budget. It needs to be funded more than it is. It
    needs to have the full resources to carry out its mission to
    oversee waste, fraud, and abuse and get to the root of it in
    this huge amount of spending that we did for an unprecedented
    crisis. But to do that amount of spending, and to look at the
    fraud reports that we have been getting, and to not have SIGPR
    funded and with its jurisdiction fully intact to me is totally
    inexplicable. I continue to be amazed that the Administration
    is doing this.
        I will follow up with you, but frankly, I am disappointed
    in your answer.
        Let me ask about something else. Yesterday, The New York
    Times reported that the Biden administration is taking $377
    million in Federal emergency housing aid from States mostly
    controlled by Republicans--I am quoting from The New York
    Times--and redirected that cash to States that have already
    used their allotted money, including New York, California, and
    New Jersey.
        Is there statutory authority for this?
        Mr. Miller. I am not familiar with the specific decision
    that you are referring to, but I am happy to follow up with you
    on it.
        Senator Hawley. It is right here. ``Treasury shifts $377
    million among States as pandemic housing aid dries up,'' from
    The New York Times. It is about the $46 billion in emergency
    rental assistance that this program enacted back in 2020.
        Mr. Miller. It is a program that is critical to keeping
    people in their homes.
        Senator Hawley. My question to you is, is there statutory
    authority to shift around almost half a billion dollars from
    one State to another without the State's consents.
        Mr. Miller. I would expect the Treasury only take action
    consistent with statutory authority. If they did to, it would
    be inappropriate.
        Senator Hawley. OK. That is a yes, you think there is
    statutory authority? What would it be? Can you direct me to
    the----
        Mr. Miller. I would be happy to follow up with you on the
    specifics. Again, if Treasury took action that was inconsistent
    with statutory authority that would be inappropriate, and I
    would hope that Treasury's IG would say so as well.
        Senator Hawley. My time has expired here and there are
    other Senators who want to ask questions. I have a few
    questions for you, Mr. Turner, about some of the things that
    you have discovered in terms of delays and providing disaster
    relief, so I will get those to you for the record. Thanks for
    the work you are doing. Thanks to you all for being here.
        Thank you, Mr. Chairman.
        Chairman Peters. Thank you, Senator Hawley.
        Senator Padilla, you are recognized for your questions.

                  OPENING STATEMENT OF SENATOR PADILLA

        Senator Padilla. Thank you, Mr. Chair. I appreciate the
    participation of all the witnesses here today.
        Let me begin by uplifting a dynamic of disparities. There
    has been a lot of talk in recent years, and not just relative
    to COVID but because of the impacts of COVID, responses to
    COVID. A lot of the preexisting inequities in our society have
    been exacerbated, frankly. Although underserved communities, in
    many ways, experience disproportionately the harms from the
    COVID pandemic, from a health perspective, from an economic
    perspective, and more, Federal relief programs often fail to
    reach those most in need.
        Federal legislation enhanced unemployment insurance
    benefits, for example, and expanded eligibility amid the severe
    economic shock caused by the pandemic. However, during the
    first year of the pandemic, Black and Latino applicants were
    less likely to receive unemployment insurance benefits than
    white applicants. We have the data that tells us that.
        Additionally, a University of California, Los Angeles
    (UCLA) report found that the first distribution of loans
    through the Paycheck Protection Program actually widened pre-
    pandemic racial inequalities by supporting far fewer jobs per
    resident in Black and Latino neighborhoods than in white
    neighborhoods in California. I would be shocked to think that
    that was an isolated dynamic to California alone.
        These disparities are certainly not new, as I mentioned,
    but the COVID-19 pandemic certainly exacerbated them, and it is
    particularly disconcerting that Federal relief programs may
    have made disparities even worse. I am proud that the American
    Rescue Plan included language that helped put equity front and
    center as part of our recovery efforts, but we need to make
    sure that its implementation actually improves upon those
    underlying inequities.
        My first question is for Deputy Director Miller. How is the
    Biden administration using COVID relief efforts and other
    Federal funding to address these underlying inequities?
        Mr. Miller. Thank you, Senator. Thank you for the
    opportunity to talk about these efforts. As I noted in my
    opening remarks, the pandemic disproportionately harmed
    underserved communities, and too often relief did not reach
    those intended. One of the early actions of the Administration
    was making adjustments to the PPP program for the items that
    you noted that were widely and publicly reported in terms of
    access to PPP loans for some of the smallest, disadvantaged
    businesses, at a time where Black-owned businesses were closing
    at twice the rate of other types of businesses, making sure
    that they had access to PPP.
        Another thing that we have done with regards to
    implementation of ARP is on the front end of programs, bringing
    together, as noted, the gold-standard meetings with agency IGs,
    the PRAC, OMB, the ARP implementation team, and agencies so
    that we are taking steps in program design, ensuring that both
    relief is targeted where intended, and that we are putting in
    place reporting mechanisms that get the right balance between
    ensuring that we are getting the outcomes that we need while
    reducing burden for applicants.
        Senator Padilla. That definitely acknowledges the progress
    that has been made in thinking about this on the front end, and
    I certainly hope that it becomes institutionalized and baked
    into efforts going forward across the board.
        The next question is for Chair Horowitz. I would like to
    ask what recommendations you may have for how the Federal
    Government can better ensure that underserved populations are
    prioritized for funding and resources.
        Mr. Horowitz. Senator, thank you for the question. One of
    the challenges we found again is the data gaps here. What we
    have seen is we have looked to see how have underserved
    communities been advantaged by these programs, or disadvantaged
    by these programs. We are finding there is a lack of data. We
    are not sure what the backgrounds are of those who have gotten
    the loans. We are not sure about the economic status of
    individuals who have applied. It has been one of the things we
    have reported on, and we have actually held hearings on, about
    some of the challenges in us even trying to figure out how that
    came about. I think one of the first things is agencies making
    sure they get data.
        Another is what GAO found, in a report they did about PPP
    and the furtherance of the PPP program, by ensuring that
    Community Development Financial Institutions were available to
    distribute loans. That was an important step forward, a very
    important GAO report in that regard.
        Also, with regard to how programs were run, operated, and
    money was distributed, what we found is those who did not have
    internet service, those who did not have the ability to apply
    through the processes set up could not get it, and that harms
    mostly those in rural communities and in underserved
    communities, generally, because of broadband issues.
        Senator Padilla. That is a classic example, where it might
    have been well intentioned, not completely thought through.
    Efficiency is to be gained by being primarily digital, but
    without recognition of yes, a digital divide is still alive and
    well in America. We are only worsening those pre-existing gaps
    and inequities.
        Mr. Horowitz. Can I add one other----
        Senator Padilla. Please.
        Mr. Horowitz [continuing]. Which is the fraud we have
    talked about. It not only victimizes the program, but
    particularly for several of these programs it victimizes those
    who they were intended for, which often are those most in need.
    We actually had a meeting about this just the last couple of
    weeks, on the identity theft issue--we heard from
    representatives of underserved communities about how what
    happens when people in underserved communities seek to apply
    for those benefits, that they are the ones legitimately
    entitled to but their identities have been stolen. It turns out
    they are the ones being in question, as if they are the
    fraudsters. They are the ones that struggle to get their
    identities back.
        It is actually a very big issue. When we talk about
    identity theft we think about how the programs have been
    defrauded, but they harm the people whose identities were
    stolen.
        Senator Padilla. I would like to follow up with you on what
    we are doing after the fact to assist those who have been
    victims of identity theft, as opposed to, sorry, we are going
    to make this hard for you, and we leave them on their own to
    figure it out.
        I know my time is limited. I do want to put one more issue
    on the table here, and that is the use of facial recognition,
    and more specific to how it has been brought up earlier in the
    hearing.
        As we continue to combat fraud, to your point, in Federal
    programs, it is important that our efforts to provide program
    integrity do not come at the cost of privacy and accuracy. I
    recently joined Senator Menendez and other colleagues in
    sending a letter to the IRS, highlighting well-documented
    concerns about the use of facial recognition technology,
    especially for individuals who have poor internet service at
    home, who rely on computers in public libraries, for example,
    or who use older phones, or for whom English is not their first
    language.
        I am pleased that the IRS has taken initial steps to
    transition away from the use of facial recognition technology
    to verify identity. However, given the gravity of the threat to
    civil rights and civil liberties by this technology, especially
    against immigrants and people of color, and other vulnerable
    communities, I remain concerned about the continued use of this
    technology and the vast amount of biometric data that agencies
    and contractors are managing.
        Question for Comptroller Dodaro. How do you think agencies
    can best uphold the integrity of the programs without
    undermining the civil rights and civil liberties of program
    beneficiaries?
        Mr. Dodaro. They have to make sure that they first address
    those issues, they recognize what those issues are and properly
    address it. They need to go through the due process of hearing
    from different people. But you have to understand the
    technologies. Facial recognition, a lot of agencies are using
    it now, mostly in the law enforcement communities. We have made
    several recommendations about this, and some of the
    technologies have built-in limitations in them. You have to
    understand the limitations in the technology, particularly for
    people of color for facial recognition technologies and others.
        There are ways to do it, but it has to be a very thorough,
    deliberative, careful process that make sure that it is only
    used with proper understanding of not impinging on people's
    civil liberties.
        Senator Padilla. Obviously I have a lot to follow up on
    there, in a deeper dive on specifics. I would argue because it
    is not in more widespread use among other departments, other
    agencies, other sectors, not just the Federal Government, does
    not mean that it is not problematic in those areas as well. Let
    us not point to it is being used in law enforcement as to a
    reason to forge ahead without the thoughtfulness required.
        Mr. Dodaro. I understand, and that is what I am saying. I
    am saying that even in law enforcement it needs to be careful.
    We have made recommendations on making sure people understand
    the information that they are getting. But if you go outside
    that area you need to have due care. We are in agreement on
    that.
        Senator Padilla. Thank you.
        Mr. Dodaro. Can I add one thing on that, because there has
    been a lot, and there is a lot to be concerned about it. But it
    cannot also paralyze us and agencies from taking steps to
    prevent identity fraud and identity theft. There has to be that
    kept in mind. There are often times that we cannot use this
    tool so we will stop trying, and I just encourage, because it
    has such wide ramifications, the identity theft. We have seen
    it endemic in these programs over the last few years, and it is
    hurting those who the money should go to.
        Senator Padilla. Thank you.
        Chairman Peters. Thank you, Senator Padilla.
        Senator Scott, you are recognized for your questions.

                   OPENING STATEMENT OF SENATOR SCOTT

        Senator Scott. Thank you, Chair Peters. This is an
    important hearing and I want to thank everybody for being here,
    and I want to thank each of you. I have read your reports and
    they are very helpful, and thanks for working with my office to
    get us information.
        My first question is for Mr. Miller, and it might have been
    asked before. I was not here for the whole hearing.
        The Biden administration asked for another $30 billion in
    COVID relief and did not ask that it be taken out of unspent
    COVID dollars. If you look at the numbers I think it is
    hundreds of billions of dollars that is unspent. Can you
    explain why the Biden administration does not think we should
    use unspent dollars?
        Mr. Miller. Sure. So 90 percent of pandemic relief funds
    have been obligated. The Administration requested $22.5 billion
    in funds for additional action to support our needs going
    forward--vaccines, tests, treatments, supporting the uninsured.
    Like other emergency funding, we do not believe it needs to be
    offset. We think this is absolutely imperative, and we will
    work with Congress. OMB would be happy to provide technical
    assistance to you and Congress to move forward.
        Senator Scott. I have been up here three years and I have
    been talking about this excessive government spending is going
    to cause inflation, and I am concerned about the Federal debt.
    The Committee for Responsible Federal Budget recently found
    that ongoing COVID relief under the Biden administration is
    definitely contributing to inflation. They estimated these
    ongoing COVID programs will cost $160 billion this year and
    cause a rise in the Consumer Price Index (CPI) inflation by 68
    basis points if these policies continue.
        Mr. Miller, could you talk about exactly where we are with
    CPI and PPI, and what the Biden administration is doing to
    bring inflation down?
        Mr. Miller. Sure. I think first, stepping back, when you
    look at GDP over the last year it is at 5.7 percent.
    Unemployment rate is down to 3.8 percent. It was the largest
    year of job growth on the record. We have strong overall
    economic performance but real challenges, absolutely, with
    rising prices. The President laid out three actions to deal
    with that: supply chains, which throughout the pandemic have
    continued to create challenges; the second, competition, making
    sure that we have appropriate competition in the market to
    drive down prices; and third, investing in things that matter,
    for families that are impacting their bottom lines, like
    prescription drugs, like childcare.
        Of course, the Fed plays an important role with its dual
    mandate, stable prices and full employment.
        Senator Scott. Do you know where CPI is now and PPI, what
    the numbers are now?
        Mr. Miller. Yes. The number was quoted earlier by Senator
    Portman, 7.9 percent.
        Senator Scott. What is it?
        Mr. Miller. 7.9 percent.
        Senator Scott. How about the Federal debt? Can you talk
    about where we are now and what do you think ought to be
    happening with the Federal debt?
        Mr. Miller. I think the President has been clear on this.
    We are putting forward budgets that are responsible, where
    increased spending proposals and tax cuts are paid for. That
    was true with the fiscal year 2022 budget. That will be true
    for the fiscal year 2023 budget.
        Senator Scott. What is our debt now?
        Mr. Miller. It is over $20 billion.
        Senator Scott. Also, can you talk about deficits? The Biden
    administration has run significant deficits. Can you talk about
    what the deficit was last year and what you anticipate, how you
    anticipate to reduce it?
        Mr. Miller. So deficit is on its way down. The most
    important thing is driving an economic recovery, putting
    forward budgets that are responsible, as this President is
    committed to doing. Those are going to be our steps.
        Senator Scott. The deficit was $2.8 trillion. I mean, that
    is the second-biggest deficit in the history of the country.
        Mr. Miller. Yes.
        Senator Scott. I mean, this is not sustainable.
        It is my understanding that the Biden administration made
    the decision to not require the States to go after individuals
    that committed fraud with regard to the unemployment under
    COVID. Is that accurate?
        Mr. Miller. That is not accurate. States should be going
    after individuals that committed fraud under the unemployment
    insurance program.
        Senator Scott. OK. There is nothing the Biden
    administration has put out to tell the States that they do not
    have to go after people for unemployment fraud?
        Mr. Miller. If somebody has committed fraud, someone should
    go after them, and we should put resources behind doing it.
        Senator Scott. If States did not do the right thing to
    watch how the money was spent, do they owe the money back to
    the Federal Government?
        Mr. Miller. These systems were overwhelmed. The systems
    were fully overwhelmed. They were underfunded. They were under-
    resourced, period. We saw that. We saw huge claims backlogs. We
    saw people attacking these State systems. We put money into the
    unemployment insurance system, critical lifeline for millions
    of Americans.
        But clearly--and you saw this with the rise in improper
    payments--it showed that we need to fix these systems, and one
    thing that I hope that we can do together is really take a
    serious look at how are we going to fix these systems. I
    believe the Comptroller General talked about the number of
    years which we have had improper payment rates, at inflated
    levels in UI, and we need to fix it going forward.
        Senator Scott. Will the Biden administration go after
    States that violated the law?
        Mr. Miller. States that violate the law?
        Senator Scott. Yes. If States did not comply with the law,
    are you going to go after them?
        Mr. Miller. The President does not have any tolerance for
    fraudsters. He does not have any tolerance for not complying
    with the law.
        Senator Scott. If States decided to allow people to go on
    unemployment, even though they were employed, gainfully
    employed, would the Biden administration go after those States
    for allowing that to happen?
        Mr. Miller. You have a combination of actions that
    happened. During the early stage of 2020, where you had
    overwhelmed systems, you sometimes had undertrained employees
    making substantial numbers of mistakes, sometimes someone who
    is eligible making an overpayment or an underpayment, and other
    times an individual committing fraud on the system. We should
    go after the fraudsters, first and foremost, and dedicate our
    resources accordingly.
        Senator Scott. If anybody intentionally did not enforce the
    law, you will go after them also?
        Mr. Miller. If someone identified that there is fraud, they
    should go after those who are committing fraud.
        Senator Scott. But somebody intentionally did not enforce
    the law, will you go after them? If a State decided not to
    enforce the law?
        Mr. Miller. If the State decided not to enforce the law.
        Senator Scott. Right. If they decide to say, they are going
    to let people go on unemployment that did not have any right to
    go on unemployment, that is against the law.
        Mr. Miller. If that individual fraudulently obtained
    dollars through the unemployment insurance system then yes,
    they should be prosecuted accordingly.
        Senator Scott. Mr. Turner, I am thankful the OIG initiated
    an audit of the Department's oversight of unemployment
    insurance integrity activities, and your team does a great job.
    Is your ongoing investigations into the pandemic-related
    unemployment program, in your investigation what have you
    uncovered so far?
        Mr. Turner. What we have uncovered is that, again, to go
    with what Mr. Miller mentioned, there is a lack of training, a
    lack of modernization, and in some cases there has been uneven
    distribution of the rules and regulations when it comes to
    unemployment fraud by the States because there are obviously
    54, 53 entities.
        Senator Scott. So is it accurate that the Administration
    issued guidance to the States saying they are not required to
    recoup erroneously disbursed funds?
        Mr. Turner. No, I have not seen anything. I know they put
    out a waiver that the Department has recently sent out, and
    that waiver specifically stated that fraud would not be
    tolerated.
        Senator Scott. Do you believe the Administration is going
    to go after States, the people that erroneously collected
    unemployment?
        Mr. Turner. I would expect they would. We plan on putting
    that on our audit, in terms of looking at that area.
        Senator Scott. All right. I thank all of you. Thank you.
        Chairman Peters. Thank you, Senator Scott.
        Votes have been called. I am going to proceed to vote.
    Senator Rosen will take the chair, and prior to her moving over
    here, Senator Lankford, you are recognized for your questions.

                 OPENING STATEMENT OF SENATOR LANKFORD

        Senator Lankford. Thank you, Mr. Chairman. Thank you. Thank
    you to the witnesses. Thanks for being here.
        Mr. Miller, I want to follow up as well. Senator Scott had
    mentioned before that there had been some questions just on
    spending and what has happened already with the spending that
    has occurred, what is left of different accounts. You had
    mentioned before you did not feel like some of the new spending
    for COVID needs an offset. We are still trying to get answers
    to questions of what has been spent, and what category.
        Some pretty basic things. Obviously, COVID vaccine
    acquisition, the distribution of the COVID vaccine, research
    and development (R&D) for COVID vaccine, test production, test
    acquisition, therapeutics production and acquisition, PPE
    purchased. I mean those are pretty standard questions to be
    able to go through on it, to be able to get total dollars, to
    be able to see what has been spent from each account and then
    what is unspent on it. How could we best get those totals?
        Mr. Miller. Sure. First, overall, over 90 percent of funds
    have been obligated over pandemic relief efforts.
    USAspending.gov as well as the PandemicOversight.gov captures
    spending by recipient, by State. In addition to that, at the
    request of Congress, OMB has been providing ARP balances, ARP
    obligations, to budget committees, both parties.
        Some specifics, $30.4 billion spent on COVID-19 vaccines;
    $13.5 billion spent in vaccine support, like distribution and
    tracking and promoting vaccine. I am happy to provide that
    information. Senator Romney also sent a letter to the White
    House, as you may be aware, along similar lines.
        Senator Lankford. Right. So we are trying to figure out,
    can we also get what has been spent versus what is obligated?
        Mr. Miller. We sent a response to him with regards to the
    specifics, going through some of the key categories. Those
    online, our USAspending.gov, has obligations as well as
    outlays, in terms of what has been spent.
        I would note, one of the things that is an important
    distinction in some of the funds that have been unobligated,
    they may have been allocated. For example, the biggest buckets
    within ARP is the State and local relief fund at the Treasury
    Department. Because it was tranched, a lot of States and
    counties know the amount of money they are expected to get, and
    those tranches and the dates are defined in the statute. That
    means in most cases they have actually budgeted for those
    resources, even though they have not yet been obligated.
        Senator Lankford. Do we have a listing of what has been
    reprogrammed?
        Mr. Miller. Do we have a listing of what has been
    reprogrammed? I would be happy to follow up with you on the
    specifics of the question around that.
        Senator Lankford. Beautiful. There are multiple different
    categories. We hear that monies are reprogrammed into other
    areas. For instance, HHS moved money over to Office of Refugee
    Resettlement (ORR), dealing with unaccompanied minors. We are
    trying to get details of what has been reprogrammed, where were
    those reprogrammed.
        DHS has been particularly difficult to be able to get
    reprogrammed dollar amounts and what has been moved from HHS
    down to the border. We understand quite a bit was moved to the
    border. Obviously there are pandemic issues related there as
    well, and they are still ongoing, but we are trying to be able
    to figure out what was actually reprogrammed and sent down
    there. Can we get a listing on that?
        Mr. Miller. I am happy to follow up with you on that.
        Senator Lankford. That would be helpful.
        Gene Dodaro, good to see you again.
        Mr. Dodaro. Good to see you, Senator.
        Senator Lankford. Thanks for your extended work for so many
    years and so many things. There are lessons to learn from this
    as we go through. One of them, it deals with a topic that you
    and I have talked about for years, and it is the taxpayer's
    right to know, that OMB has been very engaged in trying to be
    able to apply.
        OMB has been engaged in trying to be able to determine
    categories, to be able to list out for taxpayer's right to
    know. That is an ongoing work behind the scenes for them, that
    I think they are doing a really good job on trying to get done.
        There are a lot of challenges in that. Are there lessons we
    can learn from trying to categorize things through COVID relief
    to be able to develop buckets of money in categories that could
    be transitioned in lessons learned for the long term, for
    taxpayer's right to know obligation?
        Mr. Dodaro. Yes. There are always lessons to be learned out
    of these activities. I think the main thing, though, that I am
    concerned about, that I have been trying to deal with is
    getting more timely information, regardless of the categories.
    This could help on the categorization, particularly for
    emergency spending, and they could adjust the codes that they
    use to code with Treasury on the money.
        But part of the problem is that to get the information you
    requesting, to get it up to date, you have to get it from each
    individual agency. It is not on USAspending.gov, and it is
    delayed. You really do not have that information available. To
    me, the timeliness of this.
        Now in the Recovery Act, when that was passed, the lesson
    learned out of that is you had direct recipient reporting to a
    website. You did not have to go through the agencies. In this
    case that was not used, as the important part of this. We are
    still going to have trouble finding out what the States did
    with the two funds that they had, because they are going to
    distribute it to sub-recipients. There is no auditing done of
    sub-recipient data.
        One of the recommendations I make in today's testimony is
    to have the IGs--their requirement for auditing the data on
    USAspending.gov has expired, and unless Congress reinstates
    that requirement, very few IGs will audit the data. The quality
    and completeness of the data is still at risk. Of 57 or 56
    entities that the IGs looked at, 44 IGs found problems with
    completeness, accuracy of that information. That needs to be a
    requirement. Nobody is auditing the sub-recipient data. I am
    going to take a look at what we can do at GAO, working with the
    IG community or whatever.
        The basic lesson learned out of all this is better
    categorizations, as you suggest, and I think we have learned
    some things on that, not only coding the spending data but the
    procurement data in the systems. We have had some
    recommendations on that. But the main thing is the quality, the
    completeness, and timeliness are still major issues for all
    Federal spending.
        Senator Lankford. Because we can get a big category and say
    X amount of dollars has been allocated, but trying to be able
    to get what it was spent for or where it went, how it went, was
    it actually used for that purpose at the end of it, we are not
    able to see at this point.
        Mr. Dodaro. No. You need better systems. One of the other
    recommendations that I recommended today, statutorily, is that
    Congress reaffirm the requirement for OMB and the agencies to
    have 5-year system modernization plans. A lot of the systems,
    financial management systems, are not able to produce that type
    of timely information. They can do it once a year, to get an
    audited financial statement, but to get the type of data, real-
    time data that you have, we need better systems. There needs to
    be better plans to get there.
        Senator Lankford. Yes, we cannot do oversight of what we
    cannot see. To go back to Mr. Turner's comment earlier,
    billions of dollars are allocated to States years ago to be
    able to improve their unemployment systems, and those dollars
    were not actually allocated in actually improving systems. Then
    every State was hammered in 2020, and trying to be able to
    figure out how to be able to deal with this. Secret Service and
    everyone else was engaged in trying to be able to chase down
    fraud by the billions of dollars in unemployment systems
    because the States did not actually allocate the dollars toward
    actually modernizing their system. Additional dollars were
    allocated to the States to be able to improve their system, but
    we do not know if that is really being done at this point,
    other than States putting pressure on individuals to say that
    cannot happen again.
        Mr. Turner, is that correct?
        Mr. Turner. That is correct, Senator.
        Senator Lankford. Yes. That is an area that we are going to
    have to be able to work on long-term in how we handle the
    oversight on it. Thank you to all of you. Mr. Horowitz, you got
    off clean with me, so I apologize for that. We will visit
    another day.
        Mr. Turner. Although I would like to make one
    clarification. Earlier we talked about improper payments as far
    as being $160 billion, and I think it was confusing as to
    whether that was improper payment or fraud. The $160 billion
    was improper payment, and there was a smaller subset that they
    have not figured out yet what the fraud rate is.
        Senator Lankford. Yes. It is still undetermined on how high
    the fraud rate. We know it is in the billions, but it is still
    undetermined what that number is.

                   OPENING STATEMENT OF SENATOR ROSEN

        Senator Rosen [presiding.] Thank you, Senator Lankford, for
    bringing up IT modernization, and the reason the real need for
    having systems that are nimble and flexible and work together,
    and I am all for that and will work with anyone on trying to
    improve that.
        Thank you all for being here today. This is really an
    important topic of accountability, how we spend our money, what
    the data is, what we learn from it, what we do with it for the
    next time we need to react to whether, God forbid it is not a
    pandemic, but react to whatever situation that we have to do.
    We have an oversight responsibility.
        We know when COVID-19 shut down our economy, almost exactly
    two years ago, Congress did act quickly to provide support for
    American workers and families in the form of enhanced
    unemployment assistance, direct tax credits, support for small
    businesses, and other programs. Of course, we made sure that
    these laws had unprecedented requirements around transparency,
    oversight, and auditing, that make this hearing possible today.
    I think we probably need to extend those timeframes as they are
    about to expire.
        But I want to talk a little bit about the SBA, because over
    the past two years Federal relief programs, such as the
    Paycheck Protection Program, EIDL program have helped so many
    businesses, so many small businesses in Nevada, across the
    Nation, keep their doors open, keep their workers on the
    payroll. In my State of Nevada, approximately 79,000 small
    businesses participated in the PPP program, and for you to know
    that 99 percent of businesses in the are small businesses. So
    it is particularly important to us.
        But the PPP program helped us keep the doors open, helped
    people pay their employees, and I really want to thank Nevada's
    SBA office, their employees, all our financial institutions.
    Everybody worked hard to be sure their friends, their community
    members, had all the proper tools to see it through, and we are
    not quite through yet.
        Mr. Dodaro, every program, every agency is different. We
    are legislating in a crisis. Of course, we just had to go out
    and do what we needed to do. We set up a number of new
    programs. How should agencies like the SBA, which never before
    has stood up such a large program in such a short amount of
    time, how can we help them better develop strategies to prevent
    fraud? Can GAO provide a general framework or assistance?
    Because I hope this is the last time we have to do something so
    quickly but it may not be. And so the lessons learned, how can
    we help the SBA help our small businesses?
        Mr. Dodaro. Yes, Senator Rosen. First, we have developed a
    framework for helping agencies prevent fraud and how they could
    follow that process. Congress legislated GAO's framework be
    implemented in 2016. Unfortunately, a lot of agencies,
    including SBA, did not implement that legislation as intended.
    They were supposed to designate an entity to focus full-time on
    anti-fraud activities, do fraud risk assessments.
        SBA, just in February 2022, designated their anti-fraud
    agency, after I recommended again during the pandemic. They
    have done their first risk assessments, but it is all done
    after all the money has been spent.
        There were expectations that these things be addressed
    before the pandemic occurred, but the agencies did not move.
    There needs to be more assertive encouragement, both from OMB
    and the Congress, to focus on this going forward.
        SBA also resisted overtures that I made early in the
    pandemic to help them. During the global financial crisis we
    worked with the Treasury Department to put in internal controls
    right in the beginning of the Troubled Asset Relief Program
    (TARP). They were able to get a clean audit opinion. We got
    most of the money back from the banks.
        SBA did not heed any of our recommendations. We even had
    difficulty getting information out of SBA on who was getting
    the loans initially. I had to go to the Congress and try to get
    support from the Congress to get basic information out of them.
    I have talked to every administrator that has been there. It is
    better now than it had been. But in the beginning they needed
    to accept some help, and they needed help but they rebuffed it.
        I think the lesson to me out of this thing is that it is
    better if Congress, in legislating future emergency spending,
    make it very clear about how the agency is to accept
    recommendations from the oversight community and get some help,
    because we all have, collectively, lots of experience. We could
    have helped them avoid a lot of these pitfalls, and they need
    to aggressively implement and deal with these fundamental
    management weaknesses ahead of time.
        Senator Rosen. I think you are exactly right. No time to
    waste. When there is a crisis we need to have an all-hands-on-
    deck approach in order to do the right thing, particularly by
    taxpayer dollars.
        I know that all of my colleagues ahead of me talked a lot
    about unemployment, and so I am not going to belabor the point
    about that. But we know there was some fraud in unemployment.
    Of course, there are always people who try to game the system,
    whatever the system.
        Mr. Turner, could you talk about how fraud may have
    threatened not just the taxpayer dollars but how it could have
    slowed down legitimate applications? Because I know in Nevada
    we had people who legitimately were waiting for their
    unemployment, and the system, of course, was flooded with so
    many others. How does fraud impact people who really deserve to
    get it, like in my State of Nevada, and, of course, these
    outdated systems, maybe what role that had to play in it?
        Mr. Turner. What it did, it delays those claims, is
    actually what happens. I think the Department shoots for trying
    to get claims out at 87 percent by 14 to 21 days. And so that
    did not occur in the first couple of months, due to fraudulent
    attempts. That was part of the challenge. It slowed the actual
    people that needed those benefits from actually getting them.
        We did some work on that and we found out--and we actually
    put out an alert on that, to the Department, because we were
    concerned about, obviously the goal is to get those out very
    swiftly, and when that does not happen then you have people
    that are actually losing homes and other things like that.
        The Department also identified, a few months later, that
    out of 53 entities, only five had met that requirement of
    getting it out in 14 to 21 days. So that is a challenge the
    Department understood, and we did make them aware of through
    our audit reports.
        Senator Rosen. Thank you. As I said, as a former computer
    programmer systems analyst, I want to have nimble systems that
    collects the data and supplies the data to all of us to do the
    appropriate audits. Because data tells a story if you know how
    to analyze it correctly. This is case, again, for IT
    modernization, for us to be nimble, to help us all do our jobs
    better.
        I thank you all for being here today. It is a really
    important discussion. I thank you for your work and your
    insight, and ensuring the effective use of the nearly $7
    trillion in COVID-19 funds. It was no easy task. But we look
    forward to working with each of the witnesses here today on
    critical steps to ensuring that taxpayer dollars are spent
    efficiently and effectively, because they deliver critical
    services to the American people. The testimony we have heard
    today will help inform our legislative efforts and I appreciate
    it.
        The record for this hearing will remain open for 15 days,
    until 5 p.m. on April 1, 2022, for the submission of statements
    and questions for the record.
        This hearing is now adjourned. Thank you.
        [Whereupon, at 12:18 p.m., the hearing was adjourned.]

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