[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
FOLLOW THE MONEY: OVERSIGHT OF PRESIDENT BIDEN'S
MASSIVE SPENDING SPREE
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HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
MARCH 29, 2023
__________
Serial No. 118-19
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Published for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
________
U.S. GOVERNMENT PUBLISHING OFFICE
54-641 PDF WASHINGTON : 2024
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COMMITTEE ON ENERGY AND COMMERCE
CATHY McMORRIS RODGERS, Washington
Chair
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio Ranking Member
BRETT GUTHRIE, Kentucky ANNA G. ESHOO, California
H. MORGAN GRIFFITH, Virginia DIANA DeGETTE, Colorado
GUS M. BILIRAKIS, Florida JAN SCHAKOWSKY, Illinois
BILL JOHNSON, Ohio DORIS O. MATSUI, California
LARRY BUCSHON, Indiana KATHY CASTOR, Florida
RICHARD HUDSON, North Carolina JOHN P. SARBANES, Maryland
TIM WALBERG, Michigan PAUL TONKO, New York
EARL L. ``BUDDY'' CARTER, Georgia YVETTE D. CLARKE, New York
JEFF DUNCAN, South Carolina TONY CARDENAS, California
GARY J. PALMER, Alabama RAUL RUIZ, California
NEAL P. DUNN, Florida SCOTT H. PETERS, California
JOHN R. CURTIS, Utah DEBBIE DINGELL, Michigan
DEBBBIE LESKO, Arizona MARC A. VEASEY, Texas
GREG PENCE, Indiana ANN M. KUSTER, New Hampshire
DAN CRENSHAW, Texas ROBIN L. KELLY, Illinois
JOHN JOYCE, Pennsylvania NANETTE DIAZ BARRAGAN, California
KELLY ARMSTRONG, North Dakota, Vice LISA BLUNT ROCHESTER, Delaware
Chair DARREN SOTO, Florida
RANDY K. WEBER, Sr., Texas ANGIE CRAIG, Minnesota
RICK W. ALLEN, Georgia KIM SCHRIER, Washington
TROY BALDERSON, Ohio LORI TRAHAN, Massachusetts
RUSS FULCHER, Idaho LIZZIE FLETCHER, Texas
AUGUST PFLUGER, Texas
DIANA HARSHBARGER, Tennessee
MARIANNETTE MILLER-MEEKS, Iowa
KAT CAMMACK, Florida
JAY OBERNOLTE, California
------
Professional Staff
NATE HODSON, Staff Director
SARAH BURKE, Deputy Staff Director
TIFFANY GUARASCIO, Minority Staff Director
Subcommittee on Oversight and Investigations
H. MORGAN GRIFFITH, Virginia
Chairman
MICHAEL C. BURGESS, Texas KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky Ranking Member
JEFF DUNCAN, South Carolina DIANA DeGETTE, Colorado
GARY J. PALMER, Alabama JAN SCHAKOWSKY, Illinois
DEBBIE LESKO, Arizona, Vice Chair PAUL TONKO, New York
DAN CRENSHAW, Texas RAUL RUIZ, California
KELLY ARMSTRONG, North Dakota SCOTT H. PETERS, California
KAT CAMMACK, Florida FRANK PALLONE, Jr., New Jersey (ex
CATHY McMORRIS RODGERS, Washington officio)
(ex officio)
C O N T E N T S
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Page
Hon. H. Morgan Griffith, a Representative in Congress from the
Commonwealth of Virginia, opening statement.................... 1
Prepared statement........................................... 4
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, opening statement..................................... 9
Prepared statement........................................... 11
Hon. Cathy McMorris Rodgers, a Representative in Congress from
the State of Washington, opening statement..................... 13
Prepared statement........................................... 15
Hon. Diana DeGette, a Representative in Congress from the State
of Colorado, opening statement................................. 19
Prepared statement........................................... 21
Witnesses
Sean W. O'Donnell, Inspector General, Environmental Protection
Agency......................................................... 23
Prepared statement........................................... 26
Answers to submitted questions............................... 120
Peggy E. Gustafson, Inspector General, Department of Commerce.... 36
Prepared statement........................................... 38
Answers to submitted questions............................... 123
Teri L. Donaldson, Inspector General, Department of Energy....... 49
Prepared statement........................................... 51
Answers to submitted questions............................... 124
Mark Gaffigan, Managing Director, Natural Resources and
Environment, Government Accountability Office.................. 78
Prepared statement........................................... 80
Answers to submitted questions............................... 126
FOLLOW THE MONEY: OVERSIGHT OF PRESIDENT BIDEN'S MASSIVE SPENDING SPREE
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WEDNESDAY, MARCH 29, 2023
House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 2:00 p.m., in
the John D. Dingell Room 2123, Rayburn House Office Building,
Hon. H. Morgan Griffith (chairman of the subcommittee)
presiding.
Members present: Representatives Griffith, Burgess,
Guthrie, Duncan, Lesko, Cammack, Rodgers (ex officio), Castor
(subcommittee ranking member), DeGette, Schakowsky, Tonko,
Ruiz, and Peters.
Staff present: Kate Arey, Digital Director; Sean Brebbia,
Chief Counsel, Oversight and Investigations; Deep Buddharaju,
Senior Counsel, Oversight and Investigations; Lauren Eriksen,
Clerk, Oversight and Investigations; Christen Harsha, Senior
Counsel, Oversight and Investigations; Nate Hodson, Staff
Director; Peter Kielty, General Counsel; Emily King, Member
Services Director; Chris Krepich, Press Secretary; Kaitlyn
Peterson, Clerk, Energy and Environment; Gavin Proffitt,
Professional Staff Member, Oversight and Investigations; Alan
Slobodin, Chief Investigative Counsel, Oversight and
Investigations; John Strom, Counsel, Oversight and
Investigations; Michael Taggart, Policy Director; Hannah Anton,
Minority Staff Assistant; Austin Flack, Minority Junior
Professional Staff Member; Liz Johns, Minority GAO Detailee;
Will McAuliffe, Minority Chief Counsel, Oversight and
Investigations; Christina Parisi, Minority Professional Staff
Member; Harry Samuels, Minority Oversight Counsel; and Caroline
Wood, Minority Research Analyst.
Mr. Griffith. Welcome to the Subcommittee on Oversight and
Investigations. We will now come to order.
The Chair recognizes himself for 5 minutes for an opening
statement.
OPENING STATEMENT OF HON. H. MORGAN GRIFFITH, A REPRESENTATIVE
IN CONGRESS FROM THE COMMONWEALTH OF VIRGINIA
Good afternoon, everyone, and welcome to today's hearing of
the Subcommittee on Oversight and Investigations. We are here
today to discuss a very serious problem, one that the Biden
administration and the previously Democratic-controlled
Congress have avoided talking about for the last 2 years.
Earlier this year, the Congressional Budget Office, CBO,
predicted a Federal budget deficit of 1.4 trillion for 2023.
Unfortunately, now--CBO now projects a cumulative deficit of
3.1 trillion over the next 10 years. That is right, folks, that
is 3.1 trillion, with a T, of real American taxpayer dollars.
Of course, numerous factors impact the Federal budget
outlook, but one thing is certain. Over the past 2 years, your
Federal Government has been spending taxpayers' dollars like it
was Monopoly money. Last Congress the Democratic majority ran
through several massive spending bills, such as the
Infrastructure Investment and Jobs Act, the Creating Helpful
Incentives to Produce Semiconductors and Science Act, and the
so-called Inflation Reduction Act. While couched as a measure--
as measures to upgrade American infrastructure or boost
international competitiveness, in reality these packages threw
money at Democratic priorities and handed Federal agencies
unprecedented amounts of funding to disperse to pet projects.
While this is all extremely disturbing, this unrestrained
spending must end. My majority colleagues on this committee and
I sent letters to several Federal agencies requesting a full
accounting of their use of these taxpayer funds, only one of
the first steps in our oversight efforts for this Congress.
The laws I previously mentioned authorized dozens of new
programs and entrusted Federal agencies to spend unprecedented
sums of real American taxpayer money. For example, according to
the Department of Energy's Office of the Inspector General,
after managing a fiscal year 2020 budget of 45.3 billion, the
Department of Energy would now administer over 100 billion of
appropriated real taxpayers' money and $336 billion in loan
authorities over the coming years from the Infrastructure
Investment and Jobs Act and the IRA alone.
Exponential funding increases, expansion of previously
troubled programs, and an explosion----
Automated voice. Say that again.
Mr. Griffith. Oh, my phone wants to talk to me.
Automated voice. Sorry, I'm having trouble hearing you.
[Laughter.]
Mr. Griffith. Is that your phone? They are listening. Stay
tuned for another hearing.
[Laughter.]
Mr. Griffith. For example--and 336 billion in loan
authorities over the coming years from the Inflation Investment
and Jobs Act and the IRA alone.
Exponential funding increases, expansion of previously
troubled programs, and an explosion of new ones certainly sound
like a recipe for disaster. However, my Republican colleagues
and I understand our constituents back home have sent us to
Washington to protect their hard-earned American taxpayer
dollars, and we intend to do just that.
Today we will hear from the heads of the agencies
responsible for fighting fraud, waste, and abuse in Federal
programs. Our witnesses will help guide committee oversight
efforts by highlighting important risk factors for
mismanagement of Federal funds and sharing lessons learned from
their previous work.
They will also share with us their upcoming plans for
monitoring this massive spending tsunami.
First we welcome Inspector General Sean O'Donnell from the
Environmental Protection Agency's Office of the Inspector
General.
Your office has noted that the EPA received ``the largest
infrastructure appropriation in its history.'' So we are eager
to hear more about challenges that accompany this rapid funding
infusion.
We are also joined by Inspector General Peggy Gustafson
from the Department of Commerce's Office of the Inspector
General. Last year the CHIPS Act appropriated 50 billion for
the Department of Commerce to spend on semiconductor programs.
Additionally, the Infrastructure Investment and Jobs Act
charged the National Telecommunications and Information
Administration with distributing $48 billion in broadband
funding.
We look forward to your insights on these programs and your
plans for conducting oversight during the 118th Congress.
We also appreciate the opportunity to hear from the
Department of Energy's inspector general, Teri Donaldson. Over
the past 2 years the Department of Energy received billions of
dollars across numerous offices to advance the Biden
administration's clean-energy agenda. The Department of Energy
has boasted that it will stand up 60--60--new programs under
the Infrastructure Investment and Jobs Act alone.
We understand this presents an enormous challenge for your
offices, and we are eager to hear your plans for protecting the
real American taxpayer money from fraud, waste, and abuse in
the various Federal programs.
Finally, we welcome Mr. Mark Gaffigan from the Government
Accountability Office. GAO has provided countless
recommendations to Congress and Federal agencies to improve the
efficacy of Federal programs. This experience will be extremely
helpful in guiding our discussions today.
Again, this hearing is only one step of many to hold this
administration accountable for its spending practices. I also
hope this hearing will inform us in our efforts to collaborate
with other inspectors general, and these productive
conversations with our witnesses and their offices will
continue.
We all have a daunting task ahead protecting real American
taxpayer dollars, not Monopoly money.
[The prepared statement of Mr. Griffith follows:]
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Mr. Griffith. I yield back. I now recognize the gentlewoman
from Florida, Ms. Castor, for her 5-minute opening statement.
OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Ms. Castor. Well, thank you, Mr. Chairman, and thank you to
our witnesses for being here.
I want to start by expressing my appreciation for the
inspectors general, the GAO, all that you do to ensure that our
agencies are implementing Federal laws effectively and that
they are allocating Federal funds responsibly. The IG and GAO
responsibilities are essential, and they help inform our
oversight work here in the Congress.
We are here today to review the implementation of three
historic laws championed by congressional Democrats and
President Biden: the Inflation Reduction Act; the Bipartisan
Infrastructure Law, otherwise known as the Infrastructure
Investment and Jobs Act; and the CHIPS and Science Act. These
laws make vital investments in improving the lives of our
neighbors, bringing good-paying jobs to our communities,
putting money back into people's pockets, and ensuring that we
live up to our moral obligation to provide clean air and clean
water and a healthy planet for our children to inherit.
Back home in Tampa and Saint Pete, my neighbors and small
businesses are already benefiting from the critical new
investments to provide safer streets, clean up polluted
Superfund sites, reconnect communities, spur needed housing,
and train workers to take advantage of all of the new
opportunities. And this is just the start.
As a longtime member of this committee and the former Chair
of the House Select Committee on the Climate Crisis, I am
particularly proud of our work to address the escalating risks
and costs driven by the climate crisis. We did a lot of great
work to unleash American clean energy that is cheaper to reduce
pollution and to ensure that it is American companies and
American workers that are leading the way. These landmark
achievements will make tangible progress on some of our
greatest challenges. We should all be rooting for their success
and the agency experts administering them.
I regret that is not the tone from the majority. They have
described these important programs as a frivolous spending
spree, to which I remind everyone that the Inflation Reduction
Act was paid for and actually will decrease the deficit by
approximately $300 billion. Rather than helping our neighbors
and all Americans benefit, some on the other side of the aisle
seem to be hoping for the first minor misstep in order to
declare these initiatives a failure.
I understand that most of our Republican House colleagues
voted against these landmark laws. By and large, they voted
against capping the cost of insulin for Medicare beneficiaries;
they voted against repairing crumbling roads and bridges and
expanding broadband access to rural communities; they voted
against initiatives that will make the U.S. more competitive
and less dependent on Chinese and other foreign manufacturers;
and Republicans voted against the oversight mechanisms that are
built into these new laws, including additional funding for
relevant offices of inspectors general.
In fact, House Republicans are dedicating Congress' time
this week to pass a bill that outright repeals major provisions
of the Inflation Reduction Act, provisions that save our
neighbors back home money at a time that they really need it.
The ``Polluters Over People Act'' would roll back key clean
energy investments and pave the way for polluters to rake in
profits at the expense of the health of the American people.
Nevertheless, I hope we can have a productive discussion
today. Oversight is very important to the success of these
vital initiatives, and attention to the planning stages will
ensure that these landmark laws deliver as we intended. So I
look forward to hearing from today's witnesses and the work
ahead.
[The prepared statement of Ms. Castor follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. Castor. Thank you, Mr. Chairman, and I yield back.
Mr. Griffith. I thank Ranking Member Castor for her opening
statement and now recognize the Chair of the full committee,
Mrs. McMorris Rodgers, for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. CATHY McMORRIS RODGERS, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON
Mrs. Rodgers. Thank you, Chair Griffith. With every passing
day, daily life gets more and more expensive for my
constituents in eastern Washington. They join people and
families across the country who are paying skyrocketing prices
to put gas in the tank, stock their shelves with food, house
their families, and pay their energy bills.
Inflation is spiraling out of control, thanks to the
President Biden's massive spending spree. It began with the
American Rescue Plan and continued to escalate with the
Infrastructure Investment and Jobs Act, Creating Helpful
Incentives for Semiconductors, or CHIPS, and Science Act, and
then the so-called Inflation Reduction Act. Most recently, the
administration has doubled down on its reckless spending with
its latest 6.8 trillion--yes, record-breaking 6.8 trillion--
budget proposed for fiscal year 2024.
We have heard a lot about the so-called historic
investments and the rush-to-green agenda that the
administration plans to advance with hard-earned taxpayer
dollars. We have had many questions surrounding this massive
spending spree that is making life unaffordable in America.
For example, how will agencies stand up dozens of new
programs in a short period of time?
Do program offices, especially brand-new ones, possess the
necessary expertise and oversight mechanisms to make
responsible investments in new projects?
How can American tax dollars--taxpayers learn more about
how Federal agencies are really spending their hard-earned tax
money?
How are conflicts of interest and political favoritism
influencing agency funding decisions?
How will agencies address longstanding problems with
programs that will now have more funding to hand out?
And how much of this money is being given to companies to
build their products in China?
My colleagues and I on the committee are pushing for
answers to these questions. My constituents sent me to Congress
to ask hard questions and to protect their hard-earned tax
dollars. They are frustrated when looking at the Federal
Government printing more and more money, doling out huge awards
and incentives to preferred industries and favored political
causes. All the while, they struggle to make ends meet every
day.
However, I want to remind everyone at home and our Federal
agencies that my Republican colleagues and I are watching. We
are ready to hold these agencies accountable, and their
leadership, for their spending decisions. As Chair Griffith
noted, our subcommittee Chairs and I have already requested a
full amount of--account of the spending from our Federal
agencies and are going to continue to push for transparency.
Inspector General and the Government Accountability Office
are integral parts of the Federal oversight community, and we
appreciate all who are here today as witnesses to join us. We
look forward to your testimony regarding the most serious
challenges facing Federal agencies, programs most vulnerable to
waste, fraud, and abuse, and lessons learned from previous
failures that Congress and agencies can apply to future
mismanagement of taxpayer dollars.
We also appreciate this opportunity to learn more about
your upcoming work, and difficulties you must confront in
conducting oversight of these ballooning agency budgets. We
plan to use the information we gather today to prioritize our
oversight efforts, pinpoint Federal programs that demand more
scrutiny, and identify how to stop wasteful spending.
We have a lot of hard work ahead of us, given this
unprecedented spending boost to many of the agencies under this
committee's jurisdiction. However, we are not going to shy away
from the challenge, and I do hope that we will do this together
with my colleagues across the aisle, Republicans and Democrats
joining together for responsible stewardship of Federal funds.
As a--we are all duly elected Members, representatives of
the people serving in the People's House. It is our Article I
responsibility to conduct oversight so that the agencies within
the Federal Government are responsive to those we serve. We
cannot let the American people become irrelevant to a growing
bureaucracy that recklessly prints and spends records amounts
of money. Federal agencies must implement the law as it is
written by Congress, the elected representatives of the people.
Again, Members on both sides of the aisle share a
responsibility to monitor these activities, and I look forward
to our discussion today.
[The prepared statement of Mrs. Rodgers follows:]
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Mrs. Rodgers. And again, thank you to the witnesses for
being here.
I yield back.
Mr. Griffith. Thank you, Madam Chair, for yielding back. I
now recognize Ms. DeGette, the congresswoman from Colorado, for
5 minutes for her opening statement.
OPENING STATEMENT OF HON. DIANA DeGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you so much, Mr. Chairman. I am subbing
in today for the full committee ranking member, who is on the
floor on H.R. 1, and I am glad that we have the opportunity to
talk about these landmark bills that passed last Congress and
the important work that the agencies are doing to implement
them.
In some of your testimony, Mr. Chairman, and some of the
comments leading up to today's hearing, the word
``unprecedented'' was used to describe the scale of the
programs and funding created through all these three programs.
And I agree, these are unprecedented investments. And like Ms.
Castor, I am glad for that. These huge investments are
necessary to take on the unprecedented challenges that our
country faces, from climate change to healthcare costs to
competition in global markets.
Now, I know that the Democratic Members and the Biden
administration want to see these programs succeed because they
are for the American people. And I also know that the agencies
that are in charge of administering these programs take their
obligations very seriously here. So far from a spending spree,
these programs are generational investments: the opportunity to
address deep inequities and the threats of unchecked climate
change. The agencies know that they are not only the first line
of attack against these issues, but also the first line of
defense against waste, fraud, and abuse.
So I don't want us to forget or to minimize the fact that
there are people working hard at our Federal agencies to ensure
that every--every--dollar from the legislation that we will
discuss today is well spent.
And the written testimony from all of the inspectors
general here today focused very, very heavily on the risks of
the program, and with good reason. These witnesses are
appropriately focused on understanding the uphill climb that
our Federal agencies face in implementing these important
programs.
But I also want to make sure that what doesn't get lost in
today's discussion is the risk of inaction. We cannot allow the
risk of imperfection in these programs to paralyze them as
bridges crumble, as manufacturing lines stall for want of
microchips, as the climate becomes increasingly hostile for our
children and our grandchildren. We have to face those risks,
and we have to do what can be done to mitigate them so that the
programs developed and funded by the IRA, the IIJA, and the
CHIPS and Science Act become true American success stories. We
need to continue to work on this. And so I would argue the cost
of obstructing the implementation of these laws is truly one
that we cannot afford.
Now, I know that the IGs and GAO have important roles in
ensuring it is done correctly, and I look forward to hearing
how we can work together to minimize risks while maximimzing
the rewards that these programs will bring to all Americans.
And I will say, Mr. Chairman, I have been on this subcommittee
my entire tenure in Congress, which is over 26 years, and this
subcommittee has a storied history of having bipartisan
oversight and investigation.
And I will assure you, Mr. Chairman, the minority intends
to make sure that there is no waste, fraud, or abuse in these
programs because every dollar that we spend that is--that was
appropriated in these three bills needs to go for the purpose
for which it was designed. And that is where all of our
wonderful witnesses and their agencies come in. It is why I am
very pleased that we had additional funding in these bills for
oversight and for regulatory reform, because we need to make
sure this money is well spent in the purpose that it is
intended. And I think we can all get behind that in this
committee.
[The prepared statement of Ms. DeGette follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Ms. DeGette. And with that, I yield back.
Mr. Griffith. I thank the gentlelady. We now conclude with
Member opening statements.
The Chair would like to remind Members that, pursuant to
committee rules, all Members' opening statements will be made
part of the record.
We want to thank all of our witnesses for being here today
and taking the time to testify before this subcommittee. Each
witness will have the opportunity to give an opening
statement--most of you have done this before, and we appreciate
you doing it again--followed by a round of questions from the
various Members.
Our witnesses today are the Honorable Sean O'Donnell,
inspector general for the Environmental Protection Agency;
Honorable Peggy Gustafson, inspector general for the Department
of Commerce; the Honorable Teri Donaldson, inspector for the
Department of Energy; and Mark Gaffigan, managing director of
the Government Accountability Office.
We appreciate you being here today, and I look forward to
hearing from you on this important--on these important issues,
and we will now swear you in.
As you know, the testimony that you are about to give is
subject to title 18, section 1001, of the United States Code.
When holding an investigative hearing, this committee has the
practice of taking testimony under oath. Do any of you have an
objection to taking testimony under oath?
And let the record reflect that no one objected.
Hearing no objections, we will proceed.
The Chair advises you that, under the rules of the House
and the rules of the committee, you are entitled to be advised
by legal counsel. Do you desire to be advised by counsel today
during your testimony?
And let the record reflect that all members responded that
they did not desire to have legal counsel present with them at
this time.
Seeing none, if you will please rise and raise your right
hand, and I will swear you in.
[Witnesses sworn.]
Mr. Griffith. With that, I will now recognize Sean
O'Donnell for 5 minutes to give an opening statement.
STATEMENTS OF SEAN W. O'DONNELL, INSPECTOR GENERAL,
ENVIRONMENTAL PROTECTION AGENCY; PEGGY E. GUSTAFSON, INSPECTOR
GENERAL, DEPARTMENT OF COMMERCE; TERI L. DONALDSON, INSPECTOR
GENERAL, DEPARTMENT OF ENERGY; AND MARK GAFFIGAN, MANAGING
DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, GOVERNMENT
ACCOUNTABILITY OFFICE
STATEMENT OF SEAN W. O'DONNELL
Mr. O'Donnell. Good afternoon, Chairman Griffith, Ranking
Member Castor, and members of the subcommittee. And good
afternoon, Chairwoman Rodgers. I was supposed to be in
Washington State visiting family this week, but I would not
miss the opportunity to testify at this committee. But I should
and I will be in Seattle in time to see the Mariners' opening
day.
[Laughter.]
Mr. O'Donnell. I am Sean O'Donnell, the inspector general
for the U.S. Environmental Protection Agency. Thank you for
inviting me to testify about the importance of oversight of the
Infrastructure Investment and Jobs Act and the Inflation
Reduction Act.
The IIJA'S $60 billion represents the largest investment in
the EPA's history, funding water infrastructure projects,
electric school busses, and cleanup projects as well as
expanding the EPA workforce. This money is generally
distributed through familiar mechanisms like the State
revolving funds or existing grant programs. However, we have
serious capacity and capability concerns.
One State recently shared with us its apprehension of
receiving more SRF money now than in every previous year
combined. This is because the SRFs are getting $40 billion from
the IIJA and at least $6.5 billion from the American Rescue
Plan Act. We have seen this before: the equation of an
unprepared agency dispensing an unprecedented amount of money
times a large number of struggling recipients equals a high
risk of fraud, waste, and abuse.
I'm grateful that Congress recognized the need for
independent IIJA oversight and provided the OIG with funds for
that purpose. Since enactment, we have leveraged every aspect
of my office to identify high-risk programs and potential fraud
vulnerabilities. We are using complex data analytics to
identify where these funds are being spent and where potential
fraud might happen.
Because transparency is important to us, we've actually
made a version of our data analytics available on our website
for the public to view. Our oversight efforts have already
produced results.
Early on we released a series of lesson-learned reports
which draw on our previous work, such as our American Recovery
and Reinvestment Act work to identify historical pitfalls that
could endanger IIJA projects.
Just last week we released a report on outstanding
recommendations related to internal controls necessary to
effectively administer these IIJA programs, and this morning we
issued our inaugural oversight progress report.
We are now starting or are preparing to start at least a
dozen audits and evaluations, covering everything from
institutional controls at IIJA-funded cleanup projects to SRF
capacity and management issues.
We are also meeting with the EPA regularly to discuss its
plans for creating and implementing new or expanded programs.
More recently we have focused on having grant provisions
and policies related to fraud reporting, whistleblower
protection, and OIG access put into place before the
disbursement of funds. I expect we'll issue a report on this
shortly.
Finally, we are conducting targeted outreach to our
stakeholders. Our investigators and auditors have held 168
joint IIJA fraud briefings, reaching more than 3,700 EPA staff,
potential recipients, and other governmental officials. And we
are working with other law enforcement and OIGs, including
those here today, to share best practices for fraud prevention
and investigation.
The Inflation Reduction Act provides the EPA with another
$41.5 billion for climate change, air quality, and
environmental justice. In our estimation, this act carries even
greater risks than the IIJA.
As an example, the EPA formed the Office of Environmental
Justice and External Civil Rights from a variety of programs
already existing in the Agency, and those programs had a
combined budget of $12 million. The new office will now manage
a grant portfolio of $3 billion, all of which must be
distributed by 2026. We are concerned that the pace of IRA
spending, when conducted by new programs and received by new
recipients, significantly increases fraud vulnerabilities.
These issues make clear that there is a significant need
for strong, independent oversight. Unfortunately, the IRA did
not provide funds for EPA oversight. When combined with a dozen
years of stagnant or declining appropriations and increasing
demands for our work, we simply lack the capacity to conduct
proper oversight of this $41.5 billion of EPA spending.
But I can tell you this: We are prepared today to start
working. Just like with the IIJA, we have a plan, and we are
ready to execute. We have already shown that, with a modicum of
funds, less than half a penny for every EPA dollar spent, we
will show a return on your investment. The EPA supports the
need for this kind of independent oversight, as does Congress,
as is shown with the IIJA.
I want to thank you for this--I want to thank you for the
support that you have provided to the EPA OIG, and I look
forward to answering your questions.
[The prepared statement of Mr. O'Donnell follows:]
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Mr. Griffith. I thank the gentleman. I now recognize Ms.
Gustafson for her 5-minute opening statement.
STATEMENT OF PEGGY E. GUSTAFSON
Ms. Gustafson. Thank you, Chairman Griffith, Ranking Member
Castor, Chairwoman Rodgers, and members of the subcommittee,
thank you very much for the invitation to appear today. I
appreciate the opportunity to discuss the Office of Inspector
General's strong oversight of Department of Commerce programs
and initiatives.
Today I'll share lessons we've learned about the oversight
of emerging programs. I'll also provide an overview of Commerce
OIG's independent oversight of several high-profile areas,
including the CHIPS and Science Act, the Infrastructure
Investment and Jobs Act, or IIJA, pandemic relief funds, and
cybersecurity.
The diverse mission and reach of the Department of Commerce
often put Commerce OIG at the forefront of developing plans and
tactics for effective oversight of emerging programs. I'd like
to take a few minutes to highlight some of what we've learned
over the past few years.
OIG's audit work continues to identify vulnerabilities in
how the Department manages contracts and grants. We've
identified challenges related to maintaining the acquisitions
and grants workforce, improving processes to award and monitor
contracts and grants, and mitigating the increased risk of
fraud, waste, and abuse that additional funding brings. Our
prior work in this area provides a foundation for understanding
the challenges the Department will face in administering the
CHIPS Act and IIJA.
Likewise, my office's work in auditing and evaluating the
First Responders Network Authority, or FirstNet, is instructive
for understanding the risks associated with reliance on a
contractor, and the need for the Government to recruit staff
with the technical skills related to these programs. We have
issued numerous reports that demonstrate the Department's need
to maintain continuous, stringent oversight and independence to
ensure the objectives of the program are--programs are
achieved. Our findings and recommendations serve as lessons for
the administration of future programs of a complex and
technical nature, such as the CHIPS Act programs.
The CHIPS and Science Act affirms the need for increased
domestic production of semiconductors, and is a top oversight
priority for my office. The Act provided Commerce OIG with $25
million over 5 years to conduct oversight. We're grateful for
the funding, and we are hiring additional audit and
investigative staff to provide rigorous oversight of CHIPS
Act's programs and expenditures.
Similarly, IIJA introduced new funding and challenges for
the Department. Again, our office received $18 million for
oversight of IIJA broadband programs, and we've issued the
first in a series of semiannual reports summarizing broadband
program status. The first of our IIJA-related audits is also
underway. This is an audit of the Tribal broadband connectivity
program to determine whether NTIA properly dispersed program
funds and whether the funds are being used as intended.
We also continue to provide oversight of the Department's--
Department of Commerce's pandemic relief funds, which have
increased the Department's exposure to potential fraud. One of
our top investigative priorities is to pursue fraud associated
with the pandemic relief programs. And right now, about 15
percent of our open investigations are pandemic-related.
Another area the office remains focused on is the
Department's continuing efforts to improve its cybersecurity
posture. The risks associated with cybersecurity weaknesses can
have wide-ranging impacts. A May 2021 Executive order directed
the Government to move toward zero-trust cybersecurity
principles. This presents a challenge, because the Department
must make this move while simultaneously addressing
longstanding cybersecurity weaknesses.
Before closing, I'd like to say just a few words about
the--our staff at the Department of Commerce OIG. We are
confident in our ability to succeed in these critical oversight
missions you have entrusted to us. In recent years we've
brought about a massive transformation, improving our audit
processes, our HR functions, our information systems, and we've
rebuilt our Office of Investigations. With these improvements,
our recruiting is the best it's ever been. We attract highly
skilled and experienced candidates, we hire them quickly, and
we retain them. I'm proud of the work that this office does and
the progress we've made.
I'm extremely grateful for Congress' continued support of
offices of inspector general, and I look forward to the work
ahead of us as we provide independent oversight to help the
Department meet its mission and support Congress in its
legislative oversight roles.
Again, thank you very much for the invitation. I'm looking
forward to taking your questions.
[The prepared statement of Ms. Gustafson follows:]
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Mr. Griffith. Thank you. I now recognize Ms. Donaldson for
her 5-minute opening statement.
STATEMENT OF TERI L. DONALDSON
Ms. Donaldson. Thank you, good afternoon. Chairman
Griffith, Ranking Member Castor, and members of the
subcommittee, thank you for inviting me to testify today on the
oversight risks associated with the Department of Energy's
implementation of recent legislation.
There are actually four pieces of recent legislation that
have recently expanded the Department's mission and budget
exponentially. So I'll speak briefly about all four of those.
The first is, of course, the Infrastructure Investment and Jobs
Act, which appropriated $62 billion to the Department of
Energy; the Inflation Reduction Act, another $35 billion; the
CHIPS Act, another $30.5 billion in authorizations; and the
Consolidated Appropriations Act of 2023, moving $1 billion to
the Puerto Rico Energy Resilience Fund.
To put these numbers in perspective, the Department of
Energy's fiscal year 2022 budget was $44.3 billion. So from
approximately 44 billion, with the passage of these four acts
there is now $478 billion within the purview of the Department
of Energy.
And the Department is moving swiftly to make these funds
available. The Department has already made nearly $45 billion
available through funding opportunity announcements and has
awarded or selected to negotiate another $13 billion. For
fiscal year 2024, the Department is currently estimating a
consolidated obligation under the new legislation to be
approximately $30.4 billion.
In the interest of time, I will discuss, since I have 5
minutes, five causes of risks, more general causes of risks,
and many of the same causes that--if you look back over the
last 10 years and multiple Federal programs, you'll see these
same characteristics. They repeat themselves, unfortunately,
over time.
Number one, implementing new programs. The Chair mentioned
the programs under IIJA. The grand total of new programs, when
you roll in the IRA for the Department of Energy, is 71 brand-
new programs.
Number two, fast-moving money. We've talked about that one
already.
Number three, a large amount of money going to States,
local governments, and Tribes.
Number four, a lack of adequate funding for the
Department's oversight efforts.
And number five, a lack of adequate funding for my office.
Back to number one. We discussed the new programs, there
are 71 of them. New programs raise immediate concerns, such as
acquiring and training expert staff and developing and, most
importantly, testing your internal controls.
I'm going to skip fast money, since we've covered that.
Item three, when money moves in large quantities to States,
local governments, and Tribes. It is not yet clear whether
these entities are equipped with sufficient staffing, are
adequately trained, or have adequate control systems in place
to protect these funds. Many of these entities suffered
substantial fraud losses of the pandemic-related funds due to
inadequate local oversight budgets.
Next, the Department of Energy's oversight funding. Only a
small amount of funding was included for administrative costs
in the IIJA, arguably more flexibility in IRA. And the concern
here is that administrative cost is a very large category that
typically includes the bulk of the funds being used to move the
money out. Oversight is a small amount of administrative costs.
So if you start with a low number for administrative costs,
what the number is for oversight will be substantially less
than that.
I turn now to item five, which is the lack of funding for
my office, the Office of the Inspector General. Prior to the
passing of the four pieces of legislation, my office was
already significantly underfunded. To further exacerbate the
historic underfunding issue, my office received only $62
million under IIJA and only $20 million under IRA to oversee
those programs for up to 10 years to come. We received nothing
in the other two pieces of legislation.
As a result, my office faces an immediate funding shortfall
of over $300 million as even a first installment for my office
to conduct appropriate oversight. So without additional
funding, we will be stretched so thin that critical preexisting
areas will not receive appropriate OIG oversight. These areas
include research security, grant fraud, environmental cleanup,
and nuclear stockpile stewardship, to name just a few.
I have been working with both Congress and OMB to correct
my office's funding shortfall. The President's fiscal year 2024
budget includes $165.2 million for my office, which, if
enacted, would leave a shortfall of $16.8 million in my base
budget, but over $300 million in the budget that I would need
to begin robust oversight efforts in connection with the new
bills.
The President has also issued a statement proposing an
additional $150 in funding to assist underresourced inspectors
general but has not yet announced the amount of this funding
that might be allocated to my office if the funds are
authorized by Congress.
I greatly appreciate these efforts to begin to address this
problem, but more needs to be done.
I turn now to the topic of the oversight efforts my office
has already undertaken with respect to the recent legislation.
We started by providing pertinent historic reports to the
Department summarizing our own previous work in a series of
four capstone reports. We have also initiated hundreds and
hundreds of fraud awareness briefings. We meet regularly with
the Department, two to three times a month, and the
implementation team in order to resolve as many issues as we
can in advance.
Thank you very much. I look forward to taking your
questions.
[The prepared statement of Ms. Donaldson follows:]
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Mr. Griffith. Thank you. I now turn to Mr. Gaffigan for his
5-minute opening statement.
STATEMENT OF MARK GAFFIGAN
Mr. Gaffigan. Thank you, Chairman Griffith, Ranking Member
Castor, members of the subcommittee. I appreciate the
opportunity to be here to discuss oversight of these three acts
and GAO's views on that subject.
First off, these three acts combined provide over $1.7
trillion in taxes and tax incentives and spending, and that's a
significant amount. It includes important issues for Commerce,
DOE, and EPA to address: broadband, energy, water
infrastructure. Collectively between those three agencies is
$300 billion. To put some of that in perspective, collectively
the annual budget for all three of those agencies is $150
billion. So this does present huge challenges for the agencies
to effectively implement these programs, for Congress to
conduct its oversight, and for the oversight community to
assist in that.
I want to talk about three things that GAO will try to do
in helping with this oversight: first, talk about our overall
oversight and these--for these three acts; second, talk about
lessons we've learned from the Recovery Act and grants
management in the past; and thirdly, talk about particular--
these three agencies that are relevant to the funding that
they're receiving under those three acts.
First, in terms of GAO oversight, for IRA we have eight
ongoing and 24 planned jobs looking at things like energy and
Justice40. For IIJA we have 17 ongoing and 36 planned jobs
looking at things including broadband, energy, and the
environment. And under the CHIPS Act, we have a annual mandate
to report every 2 years on the semiconductor work, and we'll
continue to follow up on our recent work outlining the Federal
role in that area.
Secondly, what broad lessons have we learned in the past
looking at this type of funding? And I want to talk about three
common themes that we'll try to bring to this oversight.
One is the sort of striking the balance between streamlined
systems to provide the grant funding as well as at the same
time having internal controls. And the danger here is either
we're too involved or we're not involved enough, and finding
that sweet spot is really important into getting these programs
implemented in an effective way. And it requires looking at the
characteristics of these programs in terms of how long the
funding is. Is it a new program? Is it an existing program? So
the answer is not always the same, but that's a challenge that
we've found in past work and we expect to find going forward.
Secondly, a common theme is transparency and accessible
data to assess where the money's going, to track the money and
follow the money. That's been a problem in the past. We've had
recommendations and matters to the Congress, for example, on
USspending.gov. Still a lot of work to do in that area.
Third, the third theme here is the need for collaboration
and consultation. There are so many entities involved in
addressing these problems at the Federal, State, local, and
Tribal level and outside of government from the recipients and
stakeholders. And so that consultation and that collaboration
is really key to avoiding duplication, overlap, and
fragmentation to make sure, again, that these funds are spent
effectively.
Lastly, I'll talk about the three agencies and work that we
have ongoing. In the past, that's led to 29 recommendations
that are still open that we think are relevant to the funding
for these programs going forward.
For example, at Commerce we recently did two reports on
broadband. One identified over 100 programs in the Federal
Government, 15 different agencies, all addressing broadband and
the need for a national strategy to bring those agencies
together to work effectively and collaborate on those programs.
Secondly, at Commerce itself, looking at the NTIA, which is
charged with implementing the broadband program, we identified
a lack of performance measures as well as an entity to take the
lead on fraud risk assessment and to actually do that
assessment. That's going to be key for that agency in carrying
out its broadband program.
At DOE we've done some work on cost controls, so that'll be
really important to the clean-energy programs to ensure that we
have an off ramp when things aren't going well, and avoid
spending money when it shouldn't be spent.
And lastly, at EPA we have a history of doing grants work
there. Typically, almost half their budget is through grants.
They have a lot of experience in doing that. But we've made
recommendations in the past about increasing their expertise
and the workforce capacity. And with this huge increase, we
want to relook at those and make sure that the recommendations
we made in the past are still going strong.
So that sums up our statement, and I look forward to
working with you and our colleagues in the oversight community
to exercise oversight over these important programs.
Thank you very much.
[The prepared statement of Mr. Gaffigan follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Griffith. Thank you, Mr. Gaffigan.
Thank you all for your testimony. We will now move into the
question-and-answer portion of the hearing. I will begin the
questioning by recognizing myself for 5 minutes.
So, Mr. Gaffigan, I didn't hear you say you needed more
staff to handle all this money. Some of the others said that.
Is that something that you also would need, as a result of
these three and four large new spending items?
Mr. Gaffigan. That would be very helpful. We did receive
$25 million under the IIJA, and 5 million under IRA--or one or
the other. That will help some. But we need auditors.
So when I started here in 1987, we had 5,100 FTEs. It went
all the way down to 3,000. Congress has been very supportive in
getting us back. We hope to get to 3,500 FTEs this year. But we
really need analysts to cover the things, because since 1987
the work has not gotten easier and the programs have not gotten
smaller.
Mr. Griffith. Thank you, I appreciate that.
Ms. Donaldson, you indicated that you had a $300 million
shortfall. And the way I heard that--and you correct me if I am
wrong--what I heard was that that is 300 million even if we
adopted the President's budget with an extra 165 for your
agency and 150 million spread across all the IG agencies. Did I
understand that correctly?
Ms. Donaldson. [Inaudible.]
Mr. Griffith. Mic. Sorry, yes.
Ms. Donaldson. Yes, we would back out of that number
whatever amount of the 150 million might become available to my
shop. That number, though, of 300 million does not include the
loan portfolio, which is a huge portfolio, which is why I
characterize it as the first installment----
Mr. Griffith. Right.
Ms. Donaldson [continuing]. Of what we will really need in
the end.
Mr. Griffith. And going forward, you are--what you are
saying is you think that Congress should put ample amounts for
the inspector general's offices into any significant spending
increase. Is that correct?
Ms. Donaldson. Yes, Mr. Chairman.
Mr. Griffith. All right. Now, you brought up the loan
program. And I have been keeping an eye on the DOE's loan
program for years. With all this new money, has your office had
any discussions with DOE leadership about--since this report
and all has come out--regarding the major risk areas that your
office has identified?
Ms. Donaldson. We have. We meet two or three times a month,
and the loan program office has actually made two presentations
to the Office of General Counsel staff. We're not allowed to
consult or advise. That would impinge upon our independence.
But we do ask a lot of questions. So--and they've already been
in the queue twice with us.
Mr. Griffith. Well, I hope, as you are asking those
questions, you will ask if they have safeguards to make sure
that we don't end up with another Solyndra problem. Because in
that case they didn't follow the off ramp that Mr. Gaffigan--
there was one built into the code, and DOE didn't follow the
off ramp. And as a result, it cost the taxpayers additional
money.
I understand there is always a risk when you do a new
program, but in this case, as you will recall, they defaulted
in December of 2010 and didn't bankrupt until after we had
given them some--I want to say 110 million or more, it might
have been 125, but somewhere in that neighborhood--million more
money.
So are you not advising but asking them if they are
prepared to make sure that, if they get something bad, that
they cut their losses as quickly as possible?
Ms. Donaldson. Yes, that issue has come up, Mr. Chairman.
Mr. Griffith. I am glad it has. I am particularly concerned
about your office's finding in the special report that actions
by the loan program office officials potentially violated
standards of ethical conduct and could call into question the
office's integrity.
Do you know about what I am talking about? This is the--
yes, this is a question I have got here that deals with--what
we asked for was Secretary Granholm seeking more information
about what DOE has done to address its loan program risk
factors, as identified in the June 2022 DOE Office of Inspector
General Special Report. That is the report I am referring to.
Ms. Donaldson. That's correct, Mr. Chairman. That report
was a capstone report. So we pulled from previous work, some of
which was even accomplished during the Solyndra era. That
report was not a comment on the current loan program office.
They are staffing up, working very hard, hiring outside
consultants. They are rebuilding that office.
Mr. Griffith. So they are dealing with what you all
identified previously as some potential ethical problems.
Ms. Donaldson. Correct, Mr. Chairman.
Mr. Griffith. All right. I appreciate this. And I assume
you are going to continue to monitor all of this.
Ms. Donaldson. Yes.
Mr. Griffith. As you move forward.
Ms. Donaldson. Yes, sir.
Mr. Griffith. All right. I appreciate that, too.
Data collection monitoring, project to collect and analyze
oversight information from five DOE programs. I am pleased to
see that you all are doing that, including that loan program,
because I have been very concerned about that.
Ms. Donaldson. Yes, sir.
Mr. Griffith. OK. I do appreciate your time here this
morning, or this afternoon, and I will now yield back and
recognize Ranking Member Castor for her 5 minutes of questions.
Ms. Castor. Well, thank you, Mr. Chairman, and thank you
all again for being here. It is vitally important that we
ensure that these very significant investments actually deliver
for the American people, and you all are key to doing that.
That is why we included in these new laws funding increases for
the IGs, criteria to maintain program integrity, and GAO
studies to inform policy.
I heard a couple of different scenarios from you. Ms.
Gustafson said you are confident in your abilities now, your
recruiting is the best it has been, but Ms. Donaldson kind of
painted a different picture. I hear you loud and clear.
Mr. O'Donnell, how about your shop?
Mr. O'Donnell. Thank you for asking. We were fortunate to
receive support----
Ms. DeGette. You need to turn on the mic.
Voice. Mic, please.
Mr. O'Donnell. Thank you. We were fortunate enough to
receive support under the IIJA. And as I said, we moved out
immediately. We've hired auditors, evaluators--our evaluators
tend to be technical--and investigators.
But we have been suffering for more than a decade under
flat or declining budgets. And if I can put it into real terms,
terms that I think are a little stark, is 12 years ago we were
funded for 365 full-time equivalents, and now we're down to
270. This is our base budget.
What I've talked about today is getting funds for coverage
of the IRA. And I think that the proposal that we've talked
about is a modicum of support, taking part of what was given--
less than half a penny--to the agency to help fund us to ramp
up oversight. And I know the agency has supported us in this
proposal as well.
Ms. Castor. So that is--we hear a similar song from the EPA
Administrator, Michael Regan, about hiring at the Environmental
Protection Agency.
So let the call go out to talented young people across this
country right now. Your country needs you to help tackle these
problems, tackle the climate crisis, unleash American clean
energy, rebuild our roads and bridges, our water systems. So I
hope--I say this because there are young people in the audience
today, and I hope they will help spread the word. There are
enormous opportunities to serve your country in this way.
Mr. O'Donnell, you highlighted right off the bat you were
concerned about the Clean Water Revolving Loan Fund, very
significant investments in cleaning up waterways and water
systems across the country. Coming from the State of Florida,
you know, we--the list is so long of projects that we need to
protect, to protect water everywhere, to update wastewater
systems and water systems. So it concerns me that you are
highlighting that right off the bat as an area of concern.
I am concerned that the State of Florida doesn't have the
cops on the beat at the State level. Meanwhile, our local
communities are ready, willing, and able with their engineering
partners to get to work on this.
What else do we need to know about the Clean Water
Revolving Loan Fund, and the--your interactions with the
Agency, and what else you are going to be doing there?
Mr. O'Donnell. Thank you for asking, and we share your
concern.
For the first time in 15 years, we're starting to review
the financial statements of the State revolving funds to ensure
that they are healthy.
We're also looking at how they're handling things like
single audits of their recipients and their subrecipients. And
I have actually made a concerted effort to go out to the
different States to meet with the Administrators of the SRFs,
to hear from them----
Ms. Castor. Have you been to Florida?
Mr. O'Donnell. I have. I went to Florida in December.
Unfortunately, we were not able to--we tried--we were not able
to meet. But it is----
Ms. Castor. That is concerning.
Mr. O'Donnell [continuing]. My plan to go to Florida, to go
before it gets too hot, and to meet there and have that same
conversation. And that conversation is exactly along the lines
of what you said, which is we want the States to know that we
are their partners in helping to make sure that these funds are
executed appropriately, and with our partners in fighting
fraud. We have trained investigators who are ready, willing,
and able to look at water infrastructure and crimes that are
committed in the construction or the operation of the water
infrastructure.
Ms. Castor. Yes, our economy is based on clean water and
clean beaches. So I will be very interested in following up
with you on that.
So over at the Department of Energy, are there any--what is
piquing your interest right off the bat what do you want to
highlight as a concern?
I hear what you say on the oversight of the loan program,
but what else?
Ms. Donaldson. I would say it's the combination of so many
new programs and the fast money. Some of the risks that I
talked about actually all exist cumulatively. So that gives me
great concern.
I would like to see the Department move forward with a more
robust use of data analytics. I think that would be a
tremendous tool for them. They are working on that now.
But there are so many new things happening over there, it
would be hard to really rank them at this moment in terms of--
--
Ms. Castor. OK.
Ms. Donaldson [continuing]. Program-specific risks.
Ms. Castor. Are you able to have--well, I see I am over my
time.
Thank you very much, Mr. Chairman. I will yield back.
Mr. Griffith. The gentlelady yields back. I now recognize
the Chair of the full committee, Mrs. Cathy McMorris Rodgers,
for her 5 minutes of questioning.
Mrs. Rodgers. Thank you, Mr. Chairman, and I appreciate you
all being here.
I wanted to start with one program, one of many, but the
EPA's Clean Bus Program. I recently visited some propane
suppliers in Spokane who were quite concerned about the way
that this program is being implemented. It is a program--at
least as it was described to me, 50 percent was to go for
electrification of school busses, 50 percent for propane--or
alternative.
And the way it is being implemented, 100 percent is being
reimbursed if it is an electric school bus, costing $370,000
each, versus the alternatives that--EPA has decided to
reimburse a third of that cost if it is an alternative. So for
propane, a bus would cost 107,000, EPA will reimburse a third
of that. If it is an electric costing 370,000, it will pay the
whole thing.
I just wanted to ask about this program in particular, if
you would elaborate on just the implementation, if they plan to
modify the program, given the supply limitations. And according
to the 2022 rebate, winners have already been announced. What
challenges does EPA and EPA OIG face in monitoring these funds
after winners have been announced?
Mr. O'Donnell. Thank you for the question, and we share
your concern with respect to the Clean School Bus.
We announced a project recently--an audit of how the Agency
is handling supply-chain issues and decision-making issues with
respect to the clean school busses. Early indications are that
the capacity of the United States to produce enough clean
school busses or electric school busses along the lines of what
the Agency envisions is not possible, that these funds would
not be executed in time to actually meet the goals of the
program.
We have concerns that go beyond this too. It is one thing
to give a school district an electric bus. It is another thing
then for them to recharge that electric bus. And at this point,
we're concerned that there isn't the infrastructure for them to
recharge these electric busses----
Mrs. Rodgers. OK. So what would happen to the--excuse me,
what will happen to the money if they can't spend it?
Mr. O'Donnell. This is--this touches on a continuing
recommendation that we make with the Agency, which is
monitoring funds that are obligated but not spent, and having
the Agency appropriately de-obligate those funds.
Mrs. Rodgers. OK.
Mr. O'Donnell. My--I cannot remember, and I will get back--
--
Mrs. Rodgers. I will follow up later. OK, thank you.
Ms. Donaldson, Department of Energy, we had sent--Chairs
Griffith, Duncan, and I had sent a letter to DOE asking for
some accounting of some funds and major spending laws, some of
which we have discussed today. And I was disappointed with the
response. I probably shouldn't be surprised, but it was
incomplete. We got it last night.
But it is a pattern over the last 2 years. The Department
has not been cooperating with us. For me, it is unacceptable.
And one of the things they pointed to was USAspending.gov, that
that is where I should go to get the spending, I guess, of the
Department of Energy.
You mentioned data analytics that they are developing.
Would you speak to the timeline of these data analytics, and--
--
Ms. Donaldson. They have not described a timeline. I think
they are--and I don't mean to speak for them, that would be
another witness to answer this question--I don't know that they
have sufficient funding or staff dedicated to this mission yet.
I think they recognize the power of the tool, but they are in
early days in terms of designing an effective data analytics
program.
Mrs. Rodgers. OK, thank you. Well, and I was in Congress
when the Recovery Act was passed, the ARRA, and I remember they
set up this whole website, and they had congressional districts
that didn't exist that were getting funded, you know, and we
are talking I don't know how many times the money now, seven,
eight times the money.
To Mr. Gaffigan, I wanted to ask about data analytics and
just how we--how are we doing, as far as internal controls, to
be able to have any kind of tracking of this--these dollars?
Mr. Gaffigan. Yes, and I mentioned, as one of the themes of
that past work, because I also helped audit the ARRA funds, and
there was great hope for the setting up of these data sources
and a way to analyze it, but it's fallen short. And just the
quality of the data, as you alluded to, has not been well done.
And we've had some recommendations to OMB and Treasury to
try to work on that, and also matters to Congress to try and
improve that situation.
Mrs. Rodgers. Well, would you speak to what you believe can
be done, either at an agency level or a Federal Governmentwide,
to increase some kind of accountability?
Mr. Gaffigan. Well, we talked about clarifying OMB and
Treasury's responsibilities. We have also recently testified in
10 different matters for Congress to try and improve Federal
spending information, and included having the IGs do some of
the checking of these reports.
Mrs. Rodgers. OK. I have a lot more questions, but my time
is expired.
I yield back.
Mr. Griffith. I thank the gentlelady. I now recognize the
former Chair of this subcommittee, Diana DeGette, for her 5
minutes of questions.
Ms. DeGette. Thank you very much, Mr. Chairman.
First of all, I was pleased to see that, as part of these
bills, there was an increase in funding for inspector generals'
offices, for the most part, and to do this work, because I
think it is important work.
Ms. Donaldson, I was dismayed to hear that you did not
receive the funding that you need to do your job. And I was
pleased to hear that at least some of that funding is included
in President Biden's budget this year.
So I am sure all of my Republican colleagues will be
supporting these provisions of the President's budget because
they are so concerned about oversight, and I will make sure
that I remind them of that when we do the appropriations bills,
because you do have to--you can't just wave a magic wand and do
oversight. So I appreciate that.
So the--so I--right before I came over today I was
speaking--I am a member of a group called the House Democracy
Partnership. And we work a lot with legislators around the
world. And I speak to them quite frequently about the
importance of oversight over government spending. So I said I
was coming over an oversight hearing.
And they said, ``Oh, what is the topic of the hearing?''
And I had to really think, because the topic of the hearing is
``Follow the Money: Oversight of President Biden's Massive
Spending Spree.'' And it is a little embarrassing for someone
like me, who is trying to tell colleagues around the world that
we need to have robust oversight, that the U.S. Congress is
actually having an oversight hearing that is so vague that you
can't possibly see what we are going to do, especially since it
is--we are bringing in inspectors general from three important
agencies, and especially since the programs are only now just
being implemented.
So the first thing I want to say is kudos to the three of
you for thinking ahead about the protocols we are going to put
in place to make sure that these funds are spent wisely in the
way they were intended.
Secondly, thank you for giving detailed written statement,
even though this was a very vague topic of this hearing.
And thirdly, thank you for your very persuasive, albeit
limited, verbal testimony today about your intentions.
I just want to ask each one of you one question. And in the
John Dingell tradition, it can be answered with a yes or no.
And the question is, does your agency intend to oversee the
implementation of the provisions of this legislation that you
oversee with full and robust efforts?
Yes or no, Mr. O'Donnell.
Mr. O'Donnell. Do you mean my office or the EPA?
Ms. DeGette. EPA and your office.
Mr. O'Donnell. My office, yes.
Ms. DeGette. Ms. Gustafson?
Ms. Gustafson. Commerce OIG, yes.
Ms. DeGette. Ms. Donaldson?
Ms. Donaldson. Yes, ma'am.
Ms. DeGette. So good news. They are all going to do their
best to oversee it.
I would suggest, Madam Chair, that we actually have
hearings directed at specific programs. I think that will be a
much better use of this committee's time.
And with that, I yield back.
Mrs. Lesko [presiding]. And the Chair calls on Mr. Burgess
for 5 minutes of questions.
Mr. Burgess. I thank the Chair.
Look, I don't mean it to be like this, but I am--it is
going to sound like I am overly critical, and you all are not
the problem. But oh, my God. You have described an absolutely
staggering, astonishing volume of dollars which the country
didn't have, and had to borrow from China to pay for these
things. And now you need more money to make sure that the
people in the agencies don't rob the taxpayer of further
dollars.
I mean, you can't make this stuff up. It is like a Franz
Kafka novel.
So being a student of Willie Sutton--you remember the guy
that robbed the banks, and they asked him why he robbed the
banks, he said, ``That's where the money is''--you guys have
the money. I mean, I didn't really do a running tally of the
amounts, but I--would you all agree that that is a staggering
amount of money that is aggregated in what we are talking about
today?
I mean, I can't remember ever having had a hearing about
that number of dollars. And yet you are telling us, to a
person, you can't manage to make sure that these funds are
properly expended unless you get more money.
And, you know, I am sorry for people watching this, if
anyone is--I hope they are, they probably aren't--but for
anyone watching this, they are not going to understand. You
could not run a business that way. You could not just go into
debt indefinitely. Your share value would be zero by the end of
the day, and you would be as broke as cryptocurrency.
So again, this is going to sound critical. I don't mean for
it to, but am I correct in the statement that this staggering
amount of money that we are talking about today is likely money
that had to be borrowed from somewhere?
Mr. O'Donnell, I will start with you.
Mr. O'Donnell. I am not--that is my--not my expertise.
But I wanted to just make one point here. With respect to
the funding for my agency and for the others is--independent
audit, whether it's a corporation or the government, is an
essential function that--sort of three lines of defense in
making sure that money is spent well and in compliance. And
what we're saying here today is not to give us new money, but
to actually use the money that's already been given to pay for
that independent audit, so we can make sure that third line of
defense is there.
Mr. Burgess. Sure. That was part of the CFO Act from the
1990s, the George Herbert Walker Bush administration, when they
were trying to get control over this.
But unfortunately, every dollar that we are talking about
is going to be borrowed. And what has happened to the interest
rate in the 2\1/2\ years of the Biden administration? It has
gone through the roof. So, you know, again, I apologize if I
sound--and I am not frustrated with you, but having spent part
of the morning in a budget hearing and seeing all the charts
and graphs that literally go off the top, I don't see how it is
sustainable, what the Democrats have put us into.
Mr. O'Donnell, let me just ask you too, because I think I
saw your written statement, the comment that these funds will
remain available until expended. Is that correct?
Mr. O'Donnell. For the IIJA, that is. For most of those,
that's true. Though I believe, if you look at them in terms of
the State revolving funds, those funds will revolve back, and
so they will in some sense perpetuate.
Mr. Burgess. Yes, perpetuate. Thank you. That is the word I
was looking for and I couldn't find.
So all of the dollars that you are talking about also are
compounded by the fact that interest will have to be paid on
those dollars. And again, as we heard this morning in another
budget hearing, we are very quickly on the road where we are
going to be spending more money, mandatory spending, on the
interest payments that we spend on defense of the United
States, which, again, is an untenable situation in a very
dangerous world.
Mr. Gaffigan, let me just ask you this, because my office
is on the west side of this building, and I look out over the
expanse of the Hubert Humphrey building. And for the last 3
years, I swear, there has not been a soul in that building. Is
it expensive to maintain a Federal building that is not
occupied?
Mr. Gaffigan. There's a lot of work on sort of
reappropriating and trying to minimize footprints. And I know,
with the pandemic, that's created a whole new set of questions
for agencies, in terms of whether they need to reduce their
footprint.
Mr. Burgess. I would say it has been pretty effectively
reduced for the last 3 years. There is a little daycare center
that I can see from my window, and there hasn't been a child
playing in the daycare center since March of 2020. It is an
expensive proposition, and it is one that, really, at some
point we are going to have to get our hands around.
Ms. Donaldson, this committee came to fame with the
investigations over the Solyndra funding, which you--with which
you are very familiar. What do you think about the DOE loan
authority? Is that going to be--continue to be a risky program,
where there is continued risk for dollars going where they
weren't supposed to?
Ms. Donaldson. I think they are staffing up and working
very hard right now, and the future will tell.
I actually wasn't the inspector general during Solyndra,
so----
Mr. Burgess. Sure.
Ms. Donaldson [continuing]. I've reviewed the reports, and
you know a lot more about Solyndra than I do, I would hazard a
guess.
Mr. Burgess. Yes, Mr. Griffith rose to fame on those
investigations.
Look, these are serious problems. And I don't mean to make
light of them. I do appreciate your efforts, because I think
they are extremely important. It is just extremely frustrating
to me that we have--someone talked about the next generation of
Americans. We have burdened them with an untenable amount of
debt. And unfortunately, they are the ones who are going to
have to pay it.
Thank you, I will yield back.
Mrs. Lesko. Thank you. The Chair calls on Ms. Schakowsky
for 5 minutes of questioning.
Ms. Schakowsky. Thank you so much.
For decades, companies have outsourced the manufacturing
of--oh, sorry. I will start over. I have got time.
So for decades, companies have outsourced the manufacturing
of advanced semiconductors, and these chips are needed to
produce what we need to manufacture here in the United States,
which is, of course, our big goal right now, to make sure that
we have this supply chain.
The CHIPS and Science Act will--what is this? Oh, OK.
Anyway, the CHIPS and Science Act is exactly what I think that
we need.
And in fact, in the--in my State of Illinois just
yesterday, Illinois Governor J.B. Pritzker announced a new
initiative of--called Innovate Illinois. And the--this public-
private partnership will bring together stakeholders and the
State legislature and in business, and maximize the impact of
Federal funding that is coming.
And so I wanted to ask Ms. Gustafson--no, is that right?
Did I say it right? Good. OK. I know that, as the CHIPS Act is
being implemented, that you--your office is going to play a
vital role in making sure that we oversee how it is--how it
evolves. And so my question to you is, how are you preparing
the Commerce Office of Inspector General and all the staff to
be able to perform the oversight that we need, the efficiency
that we need, and make sure that it really works?
Ms. Gustafson. Thank you for that question. As I mentioned
in my opening statement, my office is extraordinarily very
grateful that we did receive dedicated funding for oversight of
the CHIPS and Science Act. We received $25 million over 5
years.
So what we are able to do and what we are in the midst of
doing is hiring new folks with technical expertise, because I
think that one of the biggest challenges for something like the
CHIPS Act is that it's an extremely technical activity, you
know, building semiconductor chips, that maybe the Government--
most parts of the Government don't have the technical expertise
in.
So one of the things that we have undertaken that we have
emphasized as well to the Department is that it's important
that the Department understand as these--as the bids start
coming in--or not the bids, apologies--as the requests for the
funding start coming in, it's really important that the
Department of Commerce and the Office of Inspector General have
the technical expertise to oversee these programs. So we are
staffing up in that arena.
We are also--CHIPS, of course, is very new. The notice of
funding opportunity was just released at the end of last month.
The applications are not yet in. It's expected to be an
iterative process. But just like Ms. Donaldson had mentioned,
we are in constant communication with the Department, hearing
what they are doing, being kept abreast of their activities,
and emphasizing to them their important role in overseeing this
program and how--there's a lot of us out there looking for
oversight staff right now, including the departments, and so--
--
Ms. Schakowsky. Well, I am sure. Let me just ask you this:
What are some of the best practices that the Department of
Commerce could do to make sure that they communicate with
prospective grant recipients and do it in the best way?
Ms. Gustafson. So I think the key on that one is--exactly
to your point--is communication, is outreach, because it is a
brand-new--CHIPS is brand new. So I think the best practices
are practices that, you know, can be taken from things,
frankly, like IRA or the pandemic relief, where there was
communication being undertaken by the Department stakeholders
about what the program is, what the requirements are.
I can't sit here and tell you how well they're doing,
because we haven't done a review of it. But I think there are a
lot of lessons to be learned in the Government. CHIPS is kind
of the newest act of all the ones that we're talking about, so
I think it's important that the Department be learning from
what has already been undertaken in the last several years----
Ms. Schakowsky. OK, thank you so--let me just say that,
unfortunately, most of my--our Republican colleagues voted
against the CHIPS and Science Act. I hope that we are going to
be able to work together to make sure that this program is done
well, and that it actually does improve commerce and
competitiveness in the United States.
And I yield back.
Mr. Griffith [presiding]. I thank gentlelady for yielding
back. I now recognize the gentleman from Kentucky, Mr.----
Mr. Guthrie. Thank you.
Mr. Griffith [continuing]. Guthrie, for his----
Mr. Guthrie. Thank you Mr. Chair. I appreciate the
recognition, and I want to--this first is for Ms. Gustafson.
Your written testimony notes that the CHIPS Act and--CHIPS
and Science Act provides the Department of Commerce with up to
39 billion in direct funding for semiconductor activities, 11
billion for semiconductor research and development, and up to
75 billion in direct loans and loan guarantees.
Your testimony also states that the Department's strategic
goals for implementation of this act include investment in U.S.
production of strategically important semiconductor chips.
Like many of my colleagues, I am concerned that this
taxpayer funding could wind up funding production of
semiconductors in China or enriching our global adversaries, or
also joint ventures with China here in the United States. Based
on your experience, what challenges does the Department--my
question--based on your experience, what challenges does the
Department of Commerce face in administering this funding to
retain its benefits domestically?
And what role, if any, will your office have in making sure
these funds don't get to China, either production in China or
joint ventures here with China?
Ms. Gustafson. Thank you. Thank you for your question.
I think that the key--the biggest challenge and the biggest
piece of advice I would give the Department of Commerce as it
relates to this is that they--it's one thing to have a program
that makes it very clear that there are restrictions on what
the recipients of this program, the business that they can be
involved in.
And to your point, the key is going to be enforcement and
whether the Department is taking that role seriously. And to
that end, I would note that the statute takes great pains--and
I don't mean that in a painful way, I mean has made it very
clear--that there are guardrails in place to protect against
some of that.
What is going to be incumbent and I think that what is
crucial but is too early to tell is whether that oversight at
the Department level happens and whether the actions that are
allowed to--that are provided to the Secretary of Commerce for
taking action in those instances, whether those happen.
And I would note--I'm sure you're aware of this--that we
would be looking at this anyway. But certainly, the statutory
mandate for the Department, for the Department of Commerce
inspector general, very specifically says that Congress wants
to know about that and within a certain amount of time. So we
are certainly absolutely going to do that. So----
Mr. Guthrie. OK, thank you. I appreciate that.
So, Ms. Donaldson, according to the Department of Energy's
website, the new Grid Deployment Office will be responsible for
implementing many of the Infrastructure Investment and Jobs Act
and Inflation Reduction Act grid resilience and reliability
programs. Do you have any concerns about how this new office
will handle programs addressing such an important issue and
involving so much money so soon after its creation?
And have you been part of any conversations with the
Department of Energy leadership regarding how this office will
coordinate with and avoid duplication with other offices with
such--a mission such as Office of Electricity, Office of
Cybersecurity, and so forth?
Ms. Donaldson. Yes, and we have had a conversation covering
aspects of the Grid Deployment Office. It's, again, been one of
those subjects that we've teed up during our meetings every 2
to 3 weeks. We don't have a lot of information in yet about the
Grid Deployment Office. We have an outstanding monitoring
project, data acquisition. So that information is now coming
in. So it would be too early for me to have much of an opinion
on how it is going over there.
Mr. Guthrie. Thank you.
And Mr. Gaffigan, has the Government Accountability Office
reviewed or otherwise been involved in the Department of
Energy's reorganizations?
And what general concerns or pitfalls should Congress be
aware of accompanying agency reorganizations?
Mr. Gaffigan. We haven't had any recent work on DOE
reorganizations. Probably the last questions we got were when
NSA broke off from Defense programs. But that's been a while
ago.
But we--there are some lessons learned in terms of
reorganizations that we've developed some criteria around which
would apply to any agency reorganization, if we're asked to do
so.
Mr. Guthrie. OK, thank you. And back to Ms. Gustafson--I am
sorry, I apologize.
Is there--you said guardrails on making sure the investment
doesn't go to China, because the idea is that we are going to
bring this technology here and not in China. But is there any
guardrails in preventing joint ventures--from American
companies to do joint ventures on domestic soil with China, so
China has our technology?
Ms. Gustafson. I would have to get back to you on whether
the statute gets to that. Honestly, I don't know. But I'm happy
to get that answer back to you, sorry.
Mr. Guthrie. OK, that would be helpful.
Ms. Gustafson. Yes.
Mr. Guthrie. Thank you.
I will yield back.
Mr. Griffith. The gentleman yields back. I now recognize
Mr. Tonko for his 5 minutes of questioning.
Mr. Tonko. Thank you, Mr. Chair. It is clear our country is
on the--is called upon to meet the challenges of an innovation
economy, to win a global race in that innovation economy. And I
hope we all respond by embracing a spirit of can-do. That is
including adequate resources and staffing levels at key
agencies to make this happen. Failure is not an option here.
So let me just go into the water infrastructure area. It is
unacceptable that so many Americans lack access to safe
drinking water. The water system is plagued by frequent main
breaks, massive leaks of treated water, PFAS contaminations,
and an estimated 10 million lead pipes in service, which are
overwhelmingly found in low-income communities and communities
of color.
As past Chair and now ranking member of the Environment
Subcommittee, ensuring that all Americans have easy access to
safe drinking water has been a long-time priority. As a result
of decades of inaction to replace aging lead pipes, millions of
American families and children have been exposed to lead-
contaminated water. We have even reduced staffing at some of
these agencies to a really dangerous level.
With passage of the Infrastructure Investment and Jobs Act,
the Federal Government is finally investing in our water
systems and lead service line replacement, which will have an
enormous impact on families' health and well-being.
Specifically, the IIJA provides 43 billion in State revolving
funds to improve the water infrastructure grants in communities
across our country. These investments in clean water are
essential, and we need to make certain they are implemented
effectively.
So I know what the EPA agrees--that the EPA agrees with
that, and they are working hard to ensure that every dollar
counts and to get the staffing where it should be. IGs can play
a significant role in protecting important government programs
like the State revolving funds.
So, Mr. O'Donnell, in your testimony you mentioned that
your office has reviewed EPA's prior responses to water
emergencies, and that you are focused on oversight of the State
revolving funds. Based on your office's ongoing work in this
area, how should the EPA make certain that the State revolving
funds are reaching the areas of highest need while hopefully
preventing future water emergencies?
Mr. O'Donnell. Thank you. One of the first projects that we
announced, the first office we announced, is looking at how the
Agency is identifying those communities in need for lead
service line replacement, because it was our sense from
previous water emergencies that the Agency does not have a
great sense of where those lead service lines are and where
those things--where those lines need to be replaced.
And I agree with you on the need for the robust oversight
of the water system. We have ongoing right now three reviews
that touch on the failures of the water system. We have two
projects involving Jackson, Mississippi. In fact, I just met
with Representative Thompson this morning to discuss our
oversight of the Jackson water crisis. We have one in Red Hill,
with the Honolulu water system, and one in Saint Charles,
Missouri, for their water system.
We intend to fully become more robust partners in
oversighting the State revolving funds so they do exactly sort
of what you want them to do.
Mr. Tonko. Well, it has been a long overdue.
So Mr. Gaffigan, in your written testimony you highlighted
some past recommendations that GAO has made to EPA to improve
its monitoring of grants and ability to track the financial
sustainability of the SRF. As you noted, EPA has implemented
many of these GAO recommendations. How would those improvements
help EPA better manage the clean water and drinking water State
revolving funds?
Mr. Gaffigan. I think it'll help them very much. I think
they've been pretty responsive to our recommendations in the
past. They have, for example, I think, one sort of outstanding
recommendation around financial indicators, but it allows them
to have a better sense of the sustainability of these funds by
implementing these recs.
And I'll also mention that we have some ongoing work
looking at the formula for some of these funds, which hasn't
been looked at in a long time.
Mr. Tonko. And what else does EPA need to do to ensure that
this increased investment has the greatest impact on the
communities that need it the most?
Mr. Gaffigan. I think their commitment to their workforce,
in terms of having good workforce to handle this huge increase,
will really lead to some benefits, and also being able to
weigh--because now they have the option to address both lead
and drinking water and the PFAS. They were specifically called
out in the legislation. So I think that will help them with
their criteria, in terms of determining where the biggest needs
are.
Mr. Tonko. OK. Well, we will all be watching and doing what
we can to ensure that our agencies have the support and
guidance they need to effectively carry out their missions.
Americans deserve the benefits that these programs have to
offer, and we in Congress will move to make certain they
succeed. We cannot fail in this innovation race. I want to see
a good, robust, can-do attitude and spirit. Make it happen.
Let's work together, and let's get it done.
I yield back.
Mr. Griffith. The gentleman yields back. I now recognizes
the gentlelady from Arizona, Mrs. Lesko, for her 5 minutes of
questioning, and recognize the vice chairman of this sub.
Mrs. Lesko. Thank you very much, Mr. Chairman, and I want
to applaud all of you for your hard work and for your offices'
hard work. Very vital.
Ms. Donaldson, your March 13th, 2023, report stated that
the DOE Office of Science failed to adequately audit at least
$56 million in grants. You wrote that the DOE Office of Grants
and Cooperative Agreements within the Office of Science told
your office that, because of contract specialists' high
workloads, they focus on issuing awards and do not have
adequate resources to verify where the grantee is compliant
with audit requirements.
I understand that to mean that the DOE focuses on getting
money out the door and not on whether recipients are complying
with oversight requirements. Ms. Donaldson, is that a fair
interpretation?
Ms. Donaldson. Well, I'll say this about the volume of
anything that gets audited, be it grants, cooperative
agreements----
Voice. Can you pull your mic closer?
Ms. Donaldson. Oh, I sure can. Thank you. Yes, my comment
about what volume of dollars get audited is there is no Federal
agency that's ever at 100 percent. So what--and it wouldn't be
efficient to be at 100 percent.
So what that report was about is looking at whether or not,
in a particular area, the percentage was high enough, you know,
to be protecting the resource. And in the opinion of my audit
team, it was not.
Mrs. Lesko. Thank you. Ms. Donaldson, how can the DOE
adequately audit billions of dollars of new money if they
weren't able to adequately audit millions?
Ms. Donaldson. I think there's the two big problems that I
alluded to earlier. There has to be an adequate reservation of
oversight dollars--because the Department of Energy also
conducts audits, I don't conduct 100 percent of the audits. So
they are the front line of defense. So they need adequate
resources.
And then, of course, the Office of the Inspector General
needs adequate resources. And you will never achieve 100
percent, but you want to achieve in any particular program a
high enough number to where you have some confidence that those
funds are safe.
Mrs. Lesko. Ms. Donaldson, thank you. Do you have an
estimate on how much taxpayer money may be lost to fraud,
waste, and abuse because of the agency's lack of proper
oversight?
Ms. Donaldson. That's an interesting question. I think that
might require a bit of a crystal ball.
I will comment on the general topic of oversight dollars
and recovery money. So I always say that oversight dollars
usually make money, don't lose money. So, for example, the work
of the offices of inspectors general, much of what we do can't
be monetized. We put people in jail. There's deterrence. We
correct standards. A lot of what we do, you can't put a number
on.
When we do put a number on things that we can put a number
on, most offices of inspector general recover more money than
we cost. So we are not a cost center, we're the opposite of
that. So oversight dollars well spent can reduce that level of
fraud, waste, and abuse. So I think it's very important to
think of oversight dollars in that way: not money wasted, money
recovered.
Mrs. Lesko. Understood. Last question: If a longstanding
program office such as the Office of Science cannot manage the
oversight of its financial assistance awards and absorb new
funding, how can taxpayers trust new offices to administer
their grants appropriately?
Ms. Donaldson. That's another tough one. I think you have
to look at those same issues. There has to be the resources,
that level of audit, inspector general audits coming behind it.
All of those things have to happen so that you have some
assurance that those funds are going where Congress intended
them to go.
Mrs. Lesko. Well, let's hope that we get proper oversight
and that we give the oversight offices enough money to do their
jobs, because I am very concerned that, if we can't do proper
oversight on millions of dollars, how are we going to do it on
billions of dollars of all these new programs?
And with that, I yield back.
Mr. Griffith. I thank the gentlelady. I now recognize the
gentleman from California, Dr. Ruiz, for his 5 minutes.
Mr. Ruiz. Thank you, Chair Griffith.
Our Nation faces numerous challenges, whether it be climate
change, the ongoing drought in the West, or our Nation's
crumbling infrastructure. In the last 2 years Congress faced
these challenges head-on with bold investments like the
Bipartisan Infrastructure Bill, the CHIPS and Science Act, and
the Inflation Reduction Act. I supported these bills because my
district has suffered from underinvestment for years and I am
focused on bringing Federal resources to promote equity and
help those in most need.
Today I want to focus on one particular way that we
delivered for the American people last Congress, and that is
through broadband. There are tremendous disparities across the
country when it comes to broadband access. In my district
alone, in Imperial County, one of the most impoverished,
underresourced counties in the State of California, 15 percent
of households go without broadband internet subscription.
According to the FCC, about 21 percent of people living on
Tribal lands and 17 percent of people living in rural areas
lack access to broadband.
The Bipartisan Infrastructure Bill provided $65 billion to
ensure that every American has high-speed internet; $48 billion
of this funding is dedicated to closing the digital divide by
bringing affordable and reliable high-speed internet to
underserved communities. This includes the Tribal Broadband
Connectivity Program, which received $2 billion in additional
funding. From the 23 projects funded in 2022 from this program,
more than 40,000 Native American households will be connected
to the internet and over 1,000 new jobs will be created in 15
States.
Ms. Gustafson, as you shared in your written testimony,
your office is creating specialized broadband audit teams. You
have also begun an audit of the Tribal Broadband Connectivity
Program and have started issuing semiannual reports summarizing
the status of Bipartisan Infrastructure Law programs. Will your
office's oversight activities evaluate whether these funds
under the Bipartisan Infrastructure Law are distributed
equitably and are reaching historically underserved
communities?
Ms. Gustafson. Thank you for your question. Our oversight
is going to be directed in several ways--in several areas, as
you can imagine.
One of the first concerns since--there have been, and it's
been mentioned previously, there have been broadband programs
before, obviously, in the Federal Government, including at
Commerce, when under the Recovery Act there was the BTOP
program. So we are going to be focused, first off, on making
sure that the program is doing what is intended, to your point.
So is it going to--because if the main point is to serve
the underserved communities, which it is, we have concerns
about duplication of effort where it's already been done. So
that's one of the first things that, you know, we're looking
at, making sure that this is truly not going to places where
there is already broadband and whether it's achieving--and
whether it's achieving its purpose, and----
Mr. Ruiz. In order so that you can get your focus on areas
that don't have broadband.
Ms. Gustafson. Right. To your point, many of these programs
are very specifically designed for that, so that our oversight
will be directed to----
Mr. Ruiz. Mr. Gaffigan, you mentioned in your testimony
that the GAO issued a report in January with recommendations to
improve program performance measurement and that the National
Telecommunications and Information Administration concurred
with those recommendations. How might adoption of these
recommendations enhance the impact of NTIA's expansion of
broadband access to Tribal lands and other communities that
lack access to high-speed internet?
Mr. Gaffigan. I think it'll help in two ways. One, it'll
sort of ensure that the fraud risk framework is established,
and so that the monies go to where they need to go. And also,
it'll talk about if they implement our recommendations around
performance measures so we can see we're getting value for
money here.
And I'll also mention, in terms of disadvantaged
communities, we also have ongoing work that will crosscut with
this on Justice40 initiatives, where 40 percent of benefits
should go to disadvantaged communities. And we're looking at
that right now.
Mr. Ruiz. Thank you. You know, having access to high-speed
broadband is now becoming a common good, because our society is
tied into the ability to access high-speed broadband. We can't
ask our children to do homework on the internet when our
children don't have access to the internet, and we can't ask
people to go online to receive essential information, to
receive essential services, when they don't have access to the
internet. It will only exacerbate the disparities that we see
in healthcare, in education, in employment, in business
development, and we need to end that once and for all.
And so I strongly believe that, with proper oversight,
these programs can help bridge the digital divide and give
everyone in our country a real chance to share in our country's
prosperity. I believe it's a common good. We should start
having conversations about it, as utility companies are a
common good. And I'm glad that Congress passed these crucial
measures and bills to--revisit them now to see the good work
they are already doing for the American people.
And I yield back.
Mr. Griffith. I thank the gentleman for yielding back and
now recognize Mr. Duncan for his 5 minutes.
Mr. Duncan. Thank you, Mr. Chairman.
And, you know, this has been in the news, so it is no
surprise to anyone, but Congress and the administration are in
the process of negotiating raising the Nation's debt ceiling.
And what that means is the Nation has maxed out its credit
card, and we have got to go back to the banks and ask them to
increase the credit limit.
Most banks would ask us to come up with some sort of
business plan or model of reforms to show we are going to
actually rein in our spending, get a hold of our spending
addiction, and show them a plan of repaying the debt. That is
what banks do for private businesses that ask for a credit line
increase for their business, or us as individuals as we go and
get home equity lines and other things. So the Nation is $31
trillion-plus in debt. That meter is running every day.
So, General Donaldson, according to the Department of
Energy, the misnamed Inflation Reduction Act authorizes it to
administer $8.8 billion in rebates for home energy efficiency
and electrification projects. The Department's home efficiency
rebate program will award grants to State energy offices to
provide rebates for energy-saving retrofits and housing
structures.
Additionally, the Department plans to issue grants to
States and Tribal entities for home electrification and
appliance rebates program.
In your experience, what concerns should Congress be aware
of regarding the rebate programs, generally?
Ms. Donaldson. In general----
Mr. Duncan. And you can aim that microphone a little
closer, if that works.
Ms. Donaldson. In general, rebate programs are, in fact,
risky. There's a tremendous volume of recipients. It can be
difficult to have them properly identified. They could be
people who are already deceased. Yes, rebate programs are
difficult. Grant programs raise some of those same issues.
So it's really important, I think, that you combine two
things--well-thought-out internal controls and the use of data
analytics--because the volume of rebates moving through some of
these programs is going to be staggering.
So collect quality data on the front end, scrub it, look at
it, check for red flags, you know, take a more modern approach
on things such as rebates, and you'll be able to safeguard a
higher volume of those funds.
Mr. Duncan. So these grants are given to the State energy
offices. And what sort of oversight is there from the Federal
level of those programs? Because it seems to me like we're just
giving the money to States, allowing them to run the programs,
and there's not a lot of Federal oversight.
Ms. Donaldson. There is some concern. I cochair the group
of inspectors general managing IIJA funds. One of our subgroups
is State, local, Tribal inspectors general. My shop also staffs
that group. So we've had a lot of conversations with them, and
there is a lot of concern that it is not clear what amount of
funds they can use for oversight. They are understaffed.
You know, many of the same things we've been talking about
here today can be even worse at a State, local, or Tribal
level. So when the Federal Government--before the Federal
Government transfers large amounts of money in bulk, it has to
ensure that the State, local government, or Tribe is ready to
receive it and can administer it appropriately, or the losses
will only continue to domino outward.
Mr. Duncan. Right. When I hear ``understaffing,'' I think
that the Federal Government created a problem of understaffing,
because you gave them all this money and required them to do
certain things. And States want to give out the money, I get
that, but we created the problem by our funding, and now there
is going to have to be increases at the State level or even the
Federal level to increase the amount of personnel, which means
government just continues to grow and the dominoes keep
falling.
This would apply to the Weatherization Assistance Program.
That program received $3.5 billion from the Infrastructure
Investment and Jobs Act, according to the White House. Do the
concerns you highlighted in this special report in your
testimony still persist regarding this program?
Ms. Donaldson. That's another program where they are
staffing up. They have the benefit of our prior
recommendations, because that was a preexisting program at the
Department. So the future will tell----
Mr. Duncan. Yes.
Ms. Donaldson [continuing]. You know, whether or not those
funds land where Congress intended.
Mr. Duncan. Yes, so we are just--through the infrastructure
bill, through the misnamed Inflation Reduction Act, we are just
growing government and requiring more staffing as government
grows, to administer programs where the money is given to the
State with very little accountability, very little oversight of
the State that the programs are--actually work to do the things
that the misnamed bills hope to do. So thanks for your clarity
on that.
Mr. Chairman, I yield back the balance.
Mr. Griffith. I thank the gentleman for yielding back and
now recognize the gentlelady from Florida, Mrs. Cammack, for
her 5 minutes of questioning.
Mrs. Cammack. Well, thank you, Mr. Chairman. I guess we all
got the memo on the blue blazers and black shirts today. Mr.
Chairman, where did you go wrong?
Mr. Griffith. I am a little off today.
[Laughter.]
Mr. Griffith. And some would say today is not an exception.
Mrs. Cammack. Well, I appreciate the chairman for hosting
this very, very important oversight hearing. And thank you to
the witnesses for being here.
I am going to start with you, Inspector General Gustafson.
The Infrastructure Investment and Jobs Act established the
Broadband Equity Access and Deployment program under which the
National Telecommunications and Information Administration,
NTIA, will distribute 42.45 billion in broadband infrastructure
funding to States and certain territories.
This program is structured as one big block grant to
States, and then the States are responsible for awarding the
funds to the entity that will be deploying the broadband in
different parts of the State. Given that the NTIA does not have
direct control over awarding funds to each grantee, what
oversight challenges does that present for the agency and your
office, particularly as we are trying to handle overbuilding in
certain areas?
Wow, this is a big one.
Ms. Gustafson. Right.
Mrs. Cammack. Take it away.
Ms. Gustafson. So there is no question that the--you know,
we believe that--Commerce and Commerce OIG, you know, that our
responsibility does not, to your point, end at the block grant
level.
I mean, we are keenly aware that, after the grants are
going to be sent to the States based on the FCC maps, that is--
the funds are still supposed to be used--you know, they don't
lose their intended purpose. You know, they're still--they're
supposed to be used for that.
And it is a--I will say it is a tremendous challenge in
that all of a sudden you aren't talking about the conversations
that we can have with NTIA, you're talking about innumerable
State and local entities for a staff of, you know, two teams,
you know--and even our total staff is under 200. So there are
absolute challenges.
What we have communicated to the Department is that we want
them, you know--we want to be part of the outreach that is
happening as the program is being rolled out. I mean, we want
the State auditors and the local entities to know that the OIG
is here, that Commerce is here, that there are still--you know,
that the--that we are keenly interested in overseeing and being
told--and hearing about issues that are coming up, because, to
your point, the issues on the block grant don't happen at that
level. They happen two, three, four steps down.
And so we will do our level best, you know, to get that
word out, but it's going to be a challenge because we are all
of a sudden talking about hundreds, you know, hundreds of
projects, probably thousands of projects.
Mrs. Cammack. I understand this is a gargantuan one, but, I
mean, $42 billion. We are going to have to do better than our
level best, for sure. And I recognize that we are dealing with
State--all the different States.
And this actually follows right into my second question,
where NTIA was recently directed by Congress to establish six
new broadband programs over the last 3 years. Some of these
programs have similar goals, but they have different statutory
requirements, different funding levels, different timelines, et
cetera.
So have you guys had any discussions with NTIA before they
established the programs to discuss how integrity was going to
be accounted for, and also to reduce the likelihood of fraud in
these programs?
Ms. Gustafson. We have had conversations with NTIA. We have
made it clear that, while we cannot give our stamp of approval
on what they're doing, we stand ready to talk about lessons
learned and things that we would like to see as the oversight
entity, you know, things that we would like to see in the
Notices of Funding Opportunities that will allow the
transparency needed to follow the money. So I think that, you
know, those conversations have occurred.
To your point, NTIA has not been in the business of
broadband grants for a while. So they're having to kind of
almost start over because BTOP was under--it was many, many
years ago. So there are grantmaking entities within the
Department of Commerce. NOAA makes a lot of grants, NIST makes
a lot of grants. So we've also emphasized the importance of it
not being just an NTIA job, that there be conversations and
working together with the other grantmaking entities within
Department of Commerce to make sure that those controls are
being placed in. So the conversations are happening.
But our work, of course, will really begin in earnest when
the money----
Mrs. Cammack. Can you proactively and are you proactively
reaching out to States as we are dealing with these block
grants to talk about what requirements are going to be
happening or coming out? That way they can be compliant on the
front end, rather than catching up on the back end.
Ms. Gustafson. We are absolutely being proactive. I know
other IGs are involved in IIJA as well, and often it's a joint
effort. We're appearing together sometimes at State and local
auditors' conferences, at those--at meetings.
So we are--and for my office--and it's often a
representative not just from audit but from the investigative
side, from the Office of Investigations, to talk about what the
fraud indicators are, what the people should be looking for
that might indicate that there's a problem. So we--the--we are
having those discussions right now.
And the nice thing about the IIJA Working Group is
sometimes it's Department of Transportation who is out there.
But, you know, I know that he--Mr. Soskin is actually talking
about the programs in general so that, again, that level of
awareness is happening. Because, to your point, a lot of people
don't know what an OIG is, you know, unless you're here. So it
really is important to get that word out. And I say that as
somebody who worked in a State auditor's office for 8 years,
and we knew that GAO existed but didn't really know about OIG.
So it's important to have those proactive conversations.
Mrs. Cammack. Well, excellent. I know my time is expired.
I'm way over. But I appreciate it. Thank you so much, Mr.
Chairman. I yield back.
Mr. Griffith. I thank the gentlelady. And seeing that there
are no further Members wishing to ask questions today, I would
like to thank all of our witnesses again for being here today.
You have been very informative and energetic.
Anything?
Ms. Castor. Thank you all very much.
Mr. Griffith. And in pursuit of the--in pursuance of the
committee rules, I remind Members they have 10 business days to
submit additional questions for the record, and I would ask the
witnesses to submit their response within 10 business days upon
receipt of the questions.
Without objection, the committee is adjourned.
[Whereupon, at 3:46 p.m., the subcommittee was adjourned.]
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