    [Senate Hearing 118-341]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 118-341

                           EXAMINING THE FINDINGS AND
                         RECOMMENDATIONS OF GAO'S 2024
                       REPORT ON OPPORTUNITIES TO REDUCE
                    FRAGMENTATION, OVERLAP, AND DUPLICATION
                          AND ACHIEVE FINANCIAL BENEFITS
    =======================================================================

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                            EMERGING THREATS AND SPENDING

                                   OVERSIGHT

                                    OF THE

                                  COMMITTEE ON
                             HOMELAND SECURITY AND

                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 15, 2024

                                   __________

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

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

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                       U.S. GOVERNMENT PUBLISHING OFFICE
    55-975 PDF                  WASHINGTON : 2025

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

            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                       GARY C. PETERS, Michigan, Chairman
    THOMAS R. CARPER, Delaware           RAND PAUL, Kentucky
    MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
    KYRSTEN SINEMA, Arizona              JAMES LANKFORD, Oklahoma
    JACKY ROSEN, Nevada                  MITT ROMNEY, Utah
    JON OSSOFF, Georgia                  RICK SCOTT, Florida
    RICHARD BLUMENTHAL, Connecticut      JOSH HAWLEY, Missouri
    LAPHONZA BUTLER, California          ROGER MARSHALL, Kansas

                   David M. Weinberg, Majority Staff Director
               William E. Henderson III, Minority Staff Director
                         Laura W. Kilbride, Chief Clerk
                       Ashley A. Gonzalez, Hearing Clerk

            SUBCOMMITTEE ON EMERGING THREATS AND SPENDING OVERSIGHT

                     MAGGIE HASSAN, New Hampshire, Chairman
    KYRSTEN SINEMA, Arizona              MITT ROMNEY, Utah
    JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
    JON OSSOFF, Georgia                  RICK SCOTT, Florida

                   Jason M. Yanussi, Majority Staff Director
                    Allison Tinsey, Majority Senior Counsel
               Scott Maclean Richardson, Minority Staff Director
               Magie Frankel, Minority Professional Staff Member
                    Paul H.J. Hurton III, Subcommittee Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Hassan...............................................     1
        Senator Romney...............................................     2
        Senator Scott................................................     7
        Senator Lankford.............................................    10
    Prepared statements:
        Senator Hassan...............................................    19

                                    WITNESS
                            WEDNESDAY, MAY 15, 2024

    Hon. Eugene L. Dodaro, Comptroller General of the United States,
      U.S. Government Accountability Office
        Testimony....................................................     3
        Prepared statement...........................................    20

                                    APPENDIX

    Slides submitted by Senator Lankford.............................    31
    GAO Letter.......................................................    38

                           EXAMINING THE FINDINGS AND
                         RECOMMENDATIONS OF GAO'S 2024
                       REPORT ON OPPORTUNITIES TO REDUCE
                          FRAGMENTATION, OVERLAP, AND
                   DUPLICATION AND ACHIEVE FINANCIAL BENEFITS

                                  ----------

                            WEDNESDAY, MAY 15, 2024

                                         U.S. Senate,
                           Subcommittee on Emerging Threats and
                                            Spending Oversight,
                        of the Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 2:45 p.m., in
    room SD-342, Senate Dirksen Building, Hon. Maggie Hassan,
    Chairwoman of the Subcommittee, presiding.
        Present: Senators Hassan [presiding], Rosen, Ossoff,
    Romney, Lankford, and Scott.

                 OPENING STATEMENT OF SENATOR HASSAN\1\

        Senator Hassan. This hearing will come to order.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Hassan appears in the Appendix on
    page 19.
    ---------------------------------------------------------------------------
        Good afternoon, everyone. Today the Subcommittee on
    Emerging Threads and Spending Oversight (ETSO) holds its annual
    hearing on the Government Accountability Office's (GAO's)
    Report on Duplication, Fragmentation, and Overlap in Federal
    Programs. Led by Comptroller General (CG) Gene Dodaro, the
    Government Accountability Office is a critical partner in this
    Subcommittee's work to save taxpayer dollars and improve
    government services for the American people.
        This annual report identifies ways to save taxpayer dollars
    through more efficient and effective management. The report is
    a roadmap for agencies and Congress to make commonsense
    reforms, increase coordination, improve program outcomes, and
    exercise fiscal responsibility.
        Since 2011, congressional and executive actions to
    implement GAO recommendations have resulted in $667 billion in
    cost savings and other financial benefits for the government
    and taxpayers. This includes more than $71 billion in the past
    year alone. I look forward to hearing from Comptroller General
    Dodaro and our GAO subject matter experts about this year's
    recommendations for improving government performance.
        I am committed to working in a bipartisan way to eliminate
    duplication, overlap, and fragmentation to save taxpayer
    dollars and improve outcomes for the American people, and I
    look forward to continuing to work with Ranking Member Romney
    and my other colleagues to review these recommendations and
    develop ways to implement them.
        Thank you, Mr. Dodaro and your team, for testifying today.
    I look forward to our discussion and continuing our
    collaboration on these issues.
        With that I will recognize Ranking Member Romney for his
    opening remarks.

                  OPENING STATEMENT OF SENATOR ROMNEY

        Senator Romney. Thank you, Chair Hassan. I appreciate the
    chance to have this hearing, and Mr. Dodaro, appreciate your
    willingness to continue to serve after all the years. I greatly
    value your expertise and your commitment to our government and
    to our country.
        I simply cannot imagine what it is like having your job and
    the job of your colleagues. Somehow the image that comes to
    mind is a honeybee coming to a mountain meadow filled with
    flowers, just like, ``How do I begin? How do I start?'' There
    is so much waste, fraud, and abuse, duplication, fragmentation.
    It is like, ``Where do I begin?'' I salute you for finding many
    places to begin and making the recommendations you have. I am
    cognizant of the many items that you have recommended in the
    past that remain open from various agencies, but also of the
    many areas that actually have resulted in savings having
    occurred.
        I also would note that as a result of last year's
    duplication report that you presented here, I introduced, along
    with Chair Peters, the bipartisan Government Spending Oversight
    Act, which has made it through Committee. I would like to see
    it get to the floor. I appreciate your support for that
    legislation and hope that we finally get it done.
        I also am concerned about the ability to maintain a strong
    and effective workforce at the Federal Government level, given
    the telework policies that we have. The figures we are seeing
    for vacancies in government buildings give me some concern.
    Wonder whether we are really getting the productivity from our
    employees that we hope to do. Earlier this month, my colleague
    Senator Manchin and I introduced legislation to ensure that
    Federal agencies are operating effectively by placing
    reasonable limits on the use of employee teleworking. I would
    like to get your perspectives on that.
        But today we come to hear your report and hopefully to once
    again fashion legislation that will promote the ideas you bring
    forth, as well as create a bit of a hotseat under the
    individuals responsible for managing our Federal Government.
        With that, Madam Chair, I turn the microphone back to you.
        Senator Hassan. Thank you very much, Senator Romney.
        It is the practice of the Homeland Security and
    Governmental Affairs Committee (HSGAC) to swear in witnesses,
    so if you will please stand and raise your right hand.
        Do you swear that the testimony you give before this
    Subcommittee will be the truth, the whole truth, and nothing
    but the truth, so help you, God?
        Mr. Dodaro. I do.
        Senator Hassan. Thank you. Please be seated.
        The Subcommittee is pleased to welcome back Comptroller
    General Gene Dodaro. Mr. Dodaro began his career at GAO more
    than 45 years ago, and he has led the agency for the last 13
    years. In this position, he oversees GAO's important work,
    which leads to hundreds of reports, testimonies, and
    recommendations issued each year.
        Mr. Dodaro is widely considered one of the government's
    foremost experts on government administration, efficiency, and
    effectiveness. Today Mr. Dodaro is assisted by Cathleen
    Berrick, Jessica Lucas-Judy, Mark Gaffigan, and Nick Marinos.
        Mr. Dodaro, you are recognized for your opening statement.

    TESTIMONY OF HON. EUGENE DODARO,\1\ COMPTROLLER GENERAL OF THE
          UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

        Mr. Dodaro. Thank you very much, Chair Hassan, Ranking
    Member Senator Romney. I appreciate the opportunity to discuss
    this year's report about improving government efficiency and
    effectiveness. I also want to commend both of you for your
    persistence in helping us get these recommendations implemented
    throughout government. It is making a difference, and I
    appreciate that very much.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Dodaro appears in the Appendix on
    page 20.
    ---------------------------------------------------------------------------
        This year I am pleased to report in prior years we made
    over 2,000 recommendations. Seventy-three percent have been
    fully or partially implemented. As Chair Hassan noted, that has
    resulted in about $667 billion in financial benefits already.
    Senator Romney, you mentioned open recommendations. There are
    tens of billions of additional dollars that can be saved by
    implementing our open recommendations,\2\ and I will mention
    that in my statement today.
    ---------------------------------------------------------------------------
        \2\ The GAO Report appears in the Appendix on page 38.
    ---------------------------------------------------------------------------
        In this year's report we have over 100 new recommendations
    in 42 different areas. Now importantly, these recommendations
    will provide suggestions to strengthen the Federal Government's
    efforts to ensure public safety, to strengthen consumer
    protection, and also our national security areas. For example,
    we have made recommendations to improve tsunami warnings, to
    improve the National Wildlife Disease Surveillance Program,
    particularly for those diseases that are potentially
    transmittable to humans over time. We have recommendations to
    improve Federal efforts to combat child trafficking. We have
    recommendations to improve biosurveillance activities to
    protect the public, and also efforts to better manage the
    effects of wildfire smoke, which has been growing with the more
    and more wildfires across the country.
        Also we have recommendations to close regulatory gaps and
    improve management of fragmentation in regulations of platforms
    that trade crypto assets and in stablecoins, as well. There are
    recommendations to improve how the Federal Government protects
    Federal research projects from foreign threats, and also
    efforts to enhance cybersecurity threat-sharing information,
    particularly in critical infrastructure areas, which I am very
    concerned about.
        Also, at the Department of Defense (DOD), we have made
    recommendations there to improve fragmentation and overlap in
    about 700 medical facilities and how they manage those
    facilities. They have transferred them from the services to the
    Defense Health Agency (DHA), but it is still not complete and
    there are a lot of opportunities for streamlining and
    improvement.
        Also in research on servicemembers' fatigue, this is a
    serious problem, and it is a problem across DOD. It has led to
    deaths, accidents, tremendous loss of equipment. It is a
    serious issue. Also we found they could improve their efforts
    in wargaming. They are really not benefiting from all the
    information that they collect. It is very fragmented across the
    Department.
        Also, at the Internal Revenue Service (IRS), we have a
    number of suggestions so that they could become more effective
    in their audits of large partnerships, high wealth--or high
    income individuals, and sole proprietors. In all those areas
    there are too many audits being targeted that do not result in
    any additional tax being assessed. They are basically taking
    time up from people who are already paying their fair share of
    taxes and not effectively targeting noncompliance areas.
        Now, in terms of the open recommendations, we have 76 open
    matters before the Congress. I am very pleased that in the last
    Congress and this Congress, about 41 percent have had
    legislation introduced to implement those matters and both of
    you have been very active in that regard, and again, I
    appreciate it.
        But I will give you two areas of other ones where there are
    big dollars. One is Congress needs to reauthorize FirstNet,
    which is the first responder network that is due to expire in
    2027. If Congress does not do that, the government would forego
    the ability to collect over $15 billion to pay for that network
    going forward. Also, if Congress would pass legislation to
    equalize Medicare payments based uponsite neutrality, the
    Congressional Budget Office (CBO) estimates that would save
    $141 billion over a 10-year period.
        Again, I appreciate the opportunity to be here today, and I
    look forward to your questions.
        Senator Hassan. Thank you very much. I will start with a
    round of questions and then turn it to Senator Romney.
        Mr. Dodaro, improving program management can, as you
    pointed out, improve the health and safety of the American
    people. This year's report highlights the ways in which the
    Federal Emergency Management Agency (FEMA), National Oceanic
    and Atmospheric Administration (NOAA), and the Federal
    Communications Commission (FCC) can better collaborate, for
    instance, to alert the public to tsunami threats, as you
    mentioned, in the United States.
        It also discusses how the Department of Defense could
    improve its research on whether servicemembers are getting
    enough sleep, which could improve the military's assessment of
    and response to servicemember fatigue, so that the Department
    of Defense can better protect our men and women in uniform. I
    appreciated you highlighting that in your opening remarks, as
    well.
        Another recommendation discusses how the Environmental
    Protection Agency (EPA) can better manage public health risks
    associated with wildfire smoke.
        How can agencies better prioritize the annual report's
    recommendations that have a direct impact on the health and
    safety of the American people? For example, do agencies need to
    identify leaders to spearhead implementation or shift financial
    resources toward these goals?
        Mr. Dodaro. Yes. First I think the agencies need to have
    accountability for implementing our recommendations. I am
    pleased with some of the responses that we received. For
    example, in the tsunami warnings area, NOAA has a system, but
    their system only alerts people using wireless networks, and
    they use the NOAA Weather radio alerts, but there are gaps in
    that system.
        But FEMA has a system for national alerts that can also use
    radio, television, and cable networks, but NOAA cannot connect,
    for technical reasons, to use the FEMA system. We said have you
    ever sat down with FEMA and FCC to try to work this out, and
    the answer was no. So we said you need to get together and work
    it out.
        We have directed our recommendations to accountable
    officials. We are going to follow up and make sure, in all
    these areas, these recommendations get implemented.
        Senator Hassan. I would look forward to hearing more
    suggestions from you and your team about ways that we really
    can incentivize and steer agencies toward these kinds of
    priorities. They save us money, they also save lives, and they
    improve the quality of life and service for the American
    people.
        One of the things that I learned as Governor was the
    importance of coordination and sharing information, both
    internally and across agencies. It sounds like something so
    obvious to do, but it is sometimes very hard to actually get
    people to do it. Several recommendations in this year's report
    relate to better information-sharing within agencies or between
    stakeholders, as you have just talked about, to improve
    efficiency.
        For example, GAO recommends that the Department of Homeland
    Security (DHS) assess how it facilitates sharing cybersecurity
    threat information between law enforcement and critical
    infrastructure sectors to better prepare for and prevent
    cyberattacks. This includes sharing threat information with
    health care facilities and hospitals that face cyberattacks,
    like the attack on the United Health Group (UHG), that
    significantly affected New Hampshire hospitals and hospitals
    and providers all across the country.
        In another example, GAO found that better information-
    sharing between scientists on Federal biomedical research
    committees could reduce the risk of duplicative research, and
    as a result save taxpayer dollars.
        What are some of the common challenges associated with
    information-sharing in the Federal Government? Are there
    statutory barriers to better information-sharing and
    coordination that we could address in Congress?
        Mr. Dodaro. We have developed, over time, eight different
    factors that result in successful collaboration among entities.
    They include clear definition of goals, roles and
    responsibilities, written statements, an estimate of the
    resources needed, progress reports, accountability. A lot of it
    is Management 101, but we evaluate these efforts against this
    collaboration criteria. Routinely we find the Federal efforts
    are short of fulfilling these criteria.
        Many times Congress creates interagency committees and
    others, and that is a very good step and much needed because
    the agencies may not be getting together on their own. But if
    you could also say for every statutorily required interagency
    committee, that they must follow these collaboration practices
    and demonstrate that they have, we would have much better
    outcomes across the government.
        Senator Hassan. Thank you. That is very helpful.
        I want to turn to acquisitions and asset management for a
    minute. The U.S. Government is one of the largest buyers of
    good and services in the world. Improving the ways in which the
    Federal Government buys and uses goods, services, and real
    estate can save taxpayer dollars and lead to better services
    for the American people.
        For example, GAO recommends that the Department of Homeland
    Security improve its oversight for purchasing what it
    identifies as major assets, under their definition anything
    costing $300 million or more. An example of a major asset is
    the Transportation Security Administration's (TSA) $1.7 billion
    contract to modernize airport x-ray screening equipment.
        Improving this oversight for these large assets could save
    the Federal Government hundreds of millions of dollars each
    year, while ensuring the Department has what it needs to keep
    our country safe, secure, and free.
        Can you discuss how smarter buying practices can lead to
    better services and ultimately safe taxpayer dollars?
        Mr. Dodaro. Yes. We recommended many years ago that there
    be what is called category management, where the Federal
    Government could leverage its buying power, where it buys
    common goods, rather than each individual agency negotiating
    its own contracts, have more master contracts. Of the
    approximately $667 billion that has been saved through
    implementation of our recommendations, I would say between at
    least $50 to $100 billion of that have come from better
    purchasing efforts.
        But much more could be saved. This is still an untapped
    area, and we are encouraging OMB to work with the agencies, set
    more aggressive targets, cover more areas, and to get better
    results.
        Senator Hassan. OK. One little follow-up and then I will
    turn to Senator Romney, and I will probably come back to this
    topic again. But the oversight practices that you just talked
    about, how can they apply to smaller assets, things less than
    $300 million, because obviously $300 million is a lot of money.
        Mr. Dodaro. Right. Well, they are separate issues. Category
    management can cover all sorts of items, from common email
    services, computers, whatever. It does not just apply to large-
    dollar items.
        Senator Hassan. OK.
        Mr. Dodaro. It can be effective no matter what you are
    purchasing, and any common items.
        Senator Hassan. Thank you. Senator Romney.
        Senator Romney. I am going to yield to my colleague, and
    let Senator Scott take the microphone.
        Senator Hassan. Sure. Thank you.

                   OPENING STATEMENT OF SENATOR SCOTT

        Senator Scott. Thank you, Senator Romney. I thank both of
    you for hosting this, and thank you for caring about how our
    Federal Government spends money.
        Mr. Dodaro, thank you for what you do. You have a great
    team, and I have been up here 5 years and your reports are
    really helpful. So you guys do a great job, and thanks for
    being responsive. I think everybody up here can say that about
    you, so thanks a lot.
        Back in 2020, I requested GAO do a study on the Office of
    Personnel Management (OPM) regarding the Federal Employee
    Health Benefit Program (FEHBP). It was revealed that OPM's
    mismanagement of the FEHB program allowed ineligible
    individuals to obtain employer-sponsored health insurance at
    the hefty price tag of approximately $1 billion in taxpayer
    dollars every year. That is a hell of a lot of money.
        I appreciate the GAO report on this, which found that OPM
    has never reviewed their enrollees, failed to include the
    impact of ineligible members in OPM's Annual Risk Assessment,
    and that OPM should identify and remove ineligible family
    members from the program.
        This is not something unique to the Federal Government.
    When I was Governor of Florida we did a review and we saved
    millions upon millions of dollars. When I was in the private
    sector we did it, I think, every year, because, if you run a
    big company there is a lot of money to be saved because people
    take advantage of these programs.
        Twenty-five States have done similar audits, including
    California, Texas, and New York. For these reasons I recently
    introduced the FEHB Protection Act with Senator Carper and it
    fortunately passed the Homeland Security Committee today. We
    believe this commonsense bill will both save Federal taxpayer
    dollars and preserve the FEHB for eligible beneficiaries, which
    is what it is supposed to do.
        My first question is, what is the scope of improper
    payments that GAO believes is happening in FEHB?
        Mr. Dodaro. We have not made our own estimate. The high-end
    range of estimates by OPM, and the OPM Inspector General (IG),
    importantly are from $1 billion to $3 billion, so it is a lot
    of money. We just did our first ever estimate of fraud across
    the Federal Government based on Federal spending between 2018
    and 2022. We estimate fraud losses of $233 billion to $521
    billion annually during that period of time, based upon the
    risk environment. Obviously the risk was higher during the
    Coronavirus Disease 2019 (COVID-19) spending era. So fraud is a
    big problem. It is a problem here, and it could be easily
    addressed.
        Senator Scott. In addition to reforms going forward, how
    important is it to do a retrospective audit of the FEHB
    program?
        Mr. Dodaro. It is absolutely essential. The bulk of the
    enrollees are people who have been in the program for a number
    of years, and if you don't audit them you are really missing a
    big opportunity to achieve potential savings.
        Senator Scott. Before you wrote the report, how focused was
    OPM on stopping ineligible individuals from getting on FEHB?
        Mr. Dodaro. There were decades of inactivity in this area,
    so it was not focused on it very much at all.
        Senator Scott. In your subsequent discussions with OPM, how
    seriously does OPM appear to be taking steps to reduce improper
    payments?
        Mr. Dodaro. They are saying the right things, and I think
    they are taking some tentative steps in the right direction.
    The Acting Director of OPM asked to see me. He came over and
    explained what they were doing. They are saying the right
    things, but they are still not planning this retroactive audit
    full-time. The records are all at individual agencies. They do
    not have a central repository, which a lot of companies would
    have that, where you could easily audit that. But you could do
    some sampling and other things.
        So there are efforts. They need to be a little bit bolder
    in their actions if they are really going to save the potential
    amount of money in this area. We will continue to have
    discussions with them.
        Senator Scott. But you could do it agency by agency.
        Mr. Dodaro. You could do it. But they do not have a lot of
    leverage to make it happen. That is part of the problem here.
    When you have these kinds of activities, where they are running
    the program but they are relying on the cooperation of the
    agencies, and they do not really have that much leverage to
    mandate that they do that, they could use support from OMB if
    they wanted to go in that direction. Even sometimes OMB is
    hesitant to mandate these things, unfortunately.
        Senator Scott. All right. Thank you. Thank you, Mr. Chair
    and thanks again, Senator Romney.
        Senator Hassan. Senator Romney.
        Senator Romney. Thank you. The 2024 GAO report highlights
    ongoing fraud in the Employee Retention Tax Credit (ERTC)
    program, and the fraud was so extreme that the IRS basically
    said, ``OK, we are going to stop processing these claims.'' In
    your opinion, is the ERTC still a valid program? Has it
    outlived its usefulness? Should we basically say, ``Enough
    already, for the ERTC?
        Mr. Dodaro. Yes, it is basically over. But they could still
    file amended returns over that period of time. I think that the
    program was a bit ill-fated from the beginning. There was
    confusion about it versus the Paycheck Protection Program
    (PPP), and whether there would be duplication. In 2022, we
    raised and made recommendations to IRS to better focus on
    compliance issues in this area, have a plan and document
    things. Fortunately, they have taken this action to put a pause
    in processing. But there are a lot of tax returns.
        The program is, in effect over, but the tax implications
    are going on for a little bit. IRS needs to focus on this,
    document it and recover, if they have overpaid in some of these
    areas, recover the money.
        Senator Romney. I presume that continues to make new
    payments going out of the program.
        Mr. Dodaro. Yes.
        Senator Romney. It ought to be eliminated.
        Mr. Dodaro. Right. We are going to continue to focus on it
    to make sure it is done right.
        I mentioned our fraud estimates, Senator Romney, on the
    program spending side. We are going to do one on the revenue
    side. Our estimate does not cover tax fraud. A lot of these tax
    credits have potential compliance problems with them. Earned
    income tax credit (EITC) is one of the highest improper
    payments, up there with Medicare and Medicaid. We have pointed
    out problems in other tax credit issues, in addition to just
    tax fraud on normal returns.
        Senator Romney. The numbers on fraud, particularly as it
    relates to government fraud perpetuated against the government,
    are just mind numbing. It is in the many billions of dollars.
    We have been going after this for years. I wonder, is there
    something we could do in general? For instance, of someone
    steals from a church, I feel the penalty ought to be greater
    than if they steal from the Walmart. Oh, maybe I am going to
    get in trouble for saying that. Maybe I should not elevate the
    church that high.
        But if someone steals from the government, my view is,
    gosh, the penalties ought to be really quite extreme. One, we
    ought to have good systems for finding it so that people are
    not tempted, and two, if we do find it, boy, you are really
    going to have the book thrown at you. My sense is that people
    figure, hey, I can steal from the government and nothing is
    going to happen, both because of lack of detection and because
    the penalty is not severe enough.
        Should we be devoting more resources to identifying fraud?
    Then should we increase the penalties for people who basically
    steal from the government? If so, where is a place to really to
    focus those kinds of efforts?
        Mr. Dodaro. Yes, and we have a number of recommendations in
    this area. It is a great question. First of all, I think the
    penalties are pretty severe. But the problem is that you have
    undetected fraud, which the government is not focused on as
    much as we should be, and that is what our estimate includes,
    potential and undetected fraud, to try to point in that
    direction.
        I sat next to, testifying before the House on Medicare and
    Medicaid programs, the inspector general from the Department of
    Health and Human Services (HHS). She basically said they have
    300 to 400 viable cases of fraud that they cannot investigate
    because they do not have the resources.
        Then you have the statute of limitations. Now on the PPP
    program, Congress extended it from 5 to 10 years. The
    Administration's trying to extend it on the unemployment
    insurance area, which I support. That should go to 10 years,
    too. So you need a little bit longer time, but then you need to
    give the IGs more ability to settle administratively.
        A lot of times they will do this, but then it gets to the
    prosecution phase and unless it is big dollar amounts there are
    not enough resources to prosecute the people, even though
    investigations might have been done. So, not enough
    investigations are being done--and not enough effort on
    prosecution. There ought to be more tools given to the
    inspectors general.
        I have also recommended that the current effort of the
    Pandemic Response Accountability Committee (PRAC) be extended.
    This is a a group of IGs that have developed 90 data-sharing
    agreements. They have developed thousands of leads. The
    Committee is due to expire in a couple of years. It should
    continue on a permanent basis.
        I made this pitch back in 2015, when the Recovery
    Accountability Transparency Board was due to disappear, and
    Treasury had the ability to pick it up, but they did not. I
    advised them to do it, and I advised Congress to make it
    permanent then. They did not. So here we are, 5 years later,
    throwing trillions of dollars into pandemic relief. This group
    was not in existence. It did not get recreated until 2021. By
    then we had already spent $2 trillion.
        So we ought to have it on a permanent basis. The scope of
    fraud and improper payments is such that it ought to be
    permanent.
        Senator Romney. Thank you, Madam Chair. Senator Lankford--
    --

                 OPENING STATEMENT OF SENATOR LANKFORD

        Senator Hassan. Senator Lankford.
        Senator Lankford. Thank you. Gene, good to see you again.
    Thanks for all the work that you and your team do so much. What
    is interesting to me is you just finished up talking to Senator
    Romney about trying to be able to deal with that permanent area
    of oversight. Actually, Senator Romney has that bill. I am on
    that bill, and we are trying to be able to figure out how we
    are actually trying to be able to get that done long-term, as
    well, because that is an area that we have to be able to
    resolve in the days ahead.
        Senator Hassan, do I have permission to be able to, or
    authority, or your blessing to be able to put some slides up on
    the screen?
        Senator Hassan. Indeed, you do.
        Senator Lankford. I will take that. Let me put a few things
    up on the screen here. Gene, you and I have talked for years
    about the Taxpayer's Right to Know and the ability to be able
    to allow very taxpayer, and including all the taxpayers that
    sit on this dais, as well, to be able to actually see the
    programs that are out there. As you know, the Federal Program
    Inventory now, after years of work from both of us, that now
    exists in its infancy, and it has moved from a pilot program to
    a program that actually exists out there.
        the Federal Program Inventory, I have put a slide up there
    to be able to show everybody what it looks like. I would
    encourage folks to be able to go, test this out for a test run,
    to be able to show what it is.
        This particular slide is just the opening page of it, to be
    able to see just doing a program search on it, of about $4.47
    trillion in obligations from 2022, 2,388 programs on it. We
    just asked the question to be able to show some of the disaster
    relief programs (DRP), and to be able to filter out how many
    disaster relief programs are there that are on the list. There
    are 83 of those total across the Federal Government and all
    agencies, and listed out to $45 billion in obligations just in
    that area.
        Then you can drill down, just in DHS programs, to be able
    to ask it that question. Then you can drill down even more in
    each program, and it gives you an outline of what that program
    does, and then drill down even more about how the obligations
    have worked over several years, where the trend line is on
    that. Then you can ask it a fun question that we do not ask
    enough, is, that program exists--who authorized that? Where did
    it come from? What law actually connects to that, which we have
    always felt is incredibly important to not have programs that
    are out there that they cannot figure out what statute actually
    authorizes that, that it is just somebody wanting to do it so
    they created it. That is now how it is supposed to work. All of
    these have to have their authorizing statute, and then the
    actual results from it.
        Now this is in its infancy, and as I mentioned before,
    there are about 2,300 programs there. Gene, are there more than
    2,300 programs in all the Federal Government?
        Mr. Dodaro. Yes.
        Senator Lankford. Yes. So they have taken information that
    already exists in other places, and the Office of Management
    and Budget (OMB) has dropped that into this new Federal Program
    Inventory, which is extremely helpful as a starting point. The
    data, the system, the usability of it has been helpful.
        I want to just raise a couple of things just in this
    conversation. You have been tracking this, I know, a lot, as I
    have been, on how it is actually being rolled out and what is
    being done. Are we in the pilot phase of this or are we
    actually in the implementation phase of this? Because it has to
    be complete by 2027.
        Mr. Dodaro. Right. OMB is still in the early stages of
    implementing it. OMB has taken some good next steps. They are
    having the agencies track existing program laws and map them
    against about 2,300 programs and make sure it can be more
    complete.
        The first step is to make it more complete and make sure it
    tracks to all the programs, and there is alignment between what
    they have in there and all the different program activities.
    They have set some target dates for them to do this, the
    agencies, this summer, and then by the fall timeframe. That is
    a good first step.
        The law also requires, as you well know, that in addition
    to the information you showed there would be a link to program
    evaluations on each of these programs, whether they are
    actually achieving the objectives that they say that they are,
    whether there could be issues of improper payments, fraud, et
    cetera, et cetera. So that has to be done.
        Senator Lankford. Was that done for any of the programs at
    this point?
        Mr. Dodaro. I do not believe so.
        Senator Lankford. I do not believe so either, not that I
    have been able to see or we have been able to find on it.
        The goal of this, as you know full well, the goal was the
    ability for Members of Congress, watchdog groups, or just
    everyday taxpayers, if they wanted to ask a question, how many
    disaster programs are out there, to be able to pull down a
    list, see how much was spent, and then to evaluate them. Are
    they evaluated at all for their effectiveness, for their
    oversight? If they are evaluated, how? Which one is working,
    which one is not? This works really well on things like job
    training programs.
        We have a lot. If you pull down job training programs in
    this you do not get very many because we know there are a lot
    of them that have actually not been added to the system. But we
    want to be able to know where did that program come from, is it
    working, how many employees are being set aside for that one,
    how much money is being allocated, how much money is actually
    getting to the end or how much is being spent in the
    bureaucracy.
        This was a way to do a couple of things. One is for
    agencies to be able to oversee themselves. If they start a new
    program, they should be able to do a search to be able to
    determine, is someone else already doing this same thing? Right
    now that cannot be done, or it can only be done in its infancy
    to be able to determine that.
        The second thing is Congress should be able to look at it
    and say before we pass a new law to be able to quickly
    determine, is somebody already trying to do this same thing,
    that we can either say that needs to be tweaked and fixed
    because it is a problem, or nothing exists so we need to try to
    start it. And so we can actually take out duplication.
        We have all griped about duplication from this dais year
    after year. This gives us the opportunity to actually see
    duplication, set programs side by side, and figure out how they
    have been evaluated.
        But we are not complete on that yet. It is getting the rest
    of the data in. From all your interactions with OMB, they have
    done a great job of getting this started. The big missing piece
    on this, internally on it, is data. The other one is the search
    feature. You have to know the magic Federal word to be able to
    search it, and if you do not put in the actual Federal program
    name, you cannot just put in general ``jobs training,''
    something like that. That is not going to get you there. You
    have to actually hit the magic name that it is called by the
    agency to be able to search it. We have to be able to improve
    the search to be able to dig into that.
        How is OMB's commitment to this project, that you have
    seen?
        Mr. Dodaro. It is the best I have ever seen, and I have
    been following this, as you know, for a decade or more on this
    particular effort.
        When we started overlap, duplication, fragmentation, the
    laws that your predecessor requested and put in a law, Senator
    Coburn, if we would have had something like this we could have
    been done a lot faster. I mean, we had to go around and
    actually extract data from individual agencies. We found that
    there were 140 housing programs and, 40-some job training
    programs. Only 4 of the job training programs had ever been
    evaluated. It took a lot of digging and research.
        This tool would be terrific when it is done. It is also why
    I supported the DATA Act, which is now 10 years in its running.
        The real important thing will be for OMB to get this
    completed initially, but then have a data governance structure
    to keep it updated going forward. It needs to be maintained. It
    would be a shame to have it built properly and then atrophy
    because of lack of interest. So they need to sustain their
    commitment over time, and I know GAO will.
        Senator Lankford. Right. The belief in this is once it is
    all set up and the data is in there the first time, it is
    easier to be able to maintain it. Every agency knows when you
    get the program up and going you have to also enter that data
    over there. But it also hopefully encourages every agency to
    say before you start a program to know you have to evaluate it,
    you are going to search the statutory authority, and you
    probably should check and see if this already exist before you
    launch something.
        Mr. Dodaro. Absolutely. I appreciate your interest and your
    support on this.
        Senator Lankford. Well, this, long term, I think has a real
    benefit to us, to be able to get rid of a lot of duplication
    that we have all been chasing for a very long time.
        Mr. Dodaro. Absolutely.
        Senator Lankford. Thank you.
        Senator Hassan. Thank you, and thank you, Senator Lankford,
    for your leadership. I have been glad to work with you on this.
    I am glad to kind of see some tangible evidence of the progress
    that we are making, and we still have a long way to go.
        Senator Lankford. We have a little bit to go.
        May I ask unanimous consent (UC) to be able to add the
    slides\1\ I showed everybody actually put in the record?
    ---------------------------------------------------------------------------
        \1\ The slides submitted by Senator Lankford appears in the
    Appendix on page 31.
    ---------------------------------------------------------------------------
        Senator Hassan. Absolutely.
        Senator Lankford. Thank you.
        Senator Hassan. Without objection.
        I have three additional questions which I think are pretty
    quick ones, and then I think this is probably the extent of
    members who are going to be asking questions today.
        I wanted to follow up. We talked about purchasing
    practices. I wanted to follow up to talk a little bit more
    about recommendations that you made about better data on the
    use and maintenance needs of Federal buildings. This data could
    help agencies decide when to downsize their footprint or invest
    in improvements, which could save hundreds of millions of
    dollars over the next decade, and inform how agencies manage
    their in-person workforce.
        What prevents agencies from being able to better manage
    their assets and making better buying decisions?
        Mr. Dodaro. There are actually not that many barriers. It
    takes a little bit of leadership. We recommended that OMB work
    with the agencies to come up with a utilization benchmark.
    Right now the agencies are all doing it differently. Most of
    what is known about utilization rates applies to headquarters
    buildings in Washington, not the buildings throughout the
    country and all the different assets. You need different
    benchmarks for like laboratories versus other kinds of
    facilities. It is not an easy job, but somebody needs to take
    leadership.
        You also can use more of these predictive models to deal
    with deferred maintenance. Deferred maintenance has increased
    quite a bit. We found, of the four agencies we looked at, which
    are huge property holders, only one of them was utilizing
    predictive modeling to say, OK, if I make an investment here I
    can save this amount of money, when is the best time to make
    that investment, et cetera. And so those are two suggestions
    that we made.
        Real property management has been on our High Risk List for
    a long time. Part of it was because of the underused nature of
    buildings. I think there has been progress in the leasing area,
    but more could be done there too, in light of the new working
    arrangements that agencies are kind of forging and working
    their way through.
        Senator Hassan. OK. Thank you.
        I now want to turn to background check systems. This year's
    report identified three distinct challenges facing the National
    Background Investigation Service (NBIS), which is run by the
    Department of Defense in collaboration with several other
    agencies. Can you talk a little bit about each of these
    challenges?
        Mr. Dodaro. Yes. First, we have been looking at this system
    for a while now. In 2021, we issued a report that said they do
    not have a reliable schedule, and so they do not know how long
    it is going to take. Then we looked at it in 2023, and they
    still did not have a reliable schedule, and we also found that
    their cost estimate was not complete. We were a little
    frustrated, and we elevated that to a matter for Congress to
    direct DOD to develop a reliable cost schedule.
        Now this system is supposed to replace, eventually, the
    systems that were at OPM back in 2015, when they had the breach
    of all the security information. So here we are. We are coming
    up on a decade later and we still do not have these new systems
    in place.
        Now the other problem we identified is the lack of
    reciprocity, where one agency can do a security background
    check and another agency would accept that check. A key
    challenge is that the information in the current information
    technology (IT) systems that record security checks are not
    complete.
        Senator Hassan. OK.
        Mr. Dodaro. We surveyed 31 different agencies, and 28 said
    that the IT system, when they check it from another agency, is
    not complete, so they do not have all the information. Then
    there is a basic lack of trust here. One agency does not trust
    another agency's vetting determination.
        Those are the issues that we point out. This is on our High
    Risk List. I am also concerned about the pace of implementing
    our recommendations. I just talked to OMB and I have talked to
    Director Haines at the Office of Director of National
    Intelligence (ODNI)--about why they are slow to implement a lot
    of these recommendations. I had higher hopes that they would be
    further along in this process, but they are not.
        Senator Hassan. Thank you for that. And just to kind of
    follow up, you mentioned that the Department of Defense's
    efforts to fully implement the National Background
    Investigation Services Program are both behind schedule and
    they are over budget. GAO recommends that Congress require the
    Department of Defense to review the National Background
    Investigation Services Program and update its project schedule
    and cost estimates, so we actually know what is going on.
        How could Congress' action here help get this program back
    on track?
        Mr. Dodaro. Congress could force them to make some
    decisions and disclosures. A lot of times there is this sort of
    mystical hope that this is all going to work out OK, and I can
    assure that it will not. If you do not have a good schedule, if
    you do not have a reliable cost estimate it is not going to
    work out. It has not worked out so far. They have been doing
    this for a number of years. They need to be forced to come up
    with a reliable schedule and cost estimate.
        We developed best practices for how to do a schedule and
    also how to do a cost estimate. We gave it to the agencies and
    said, ``Here, follow this.'' So it is like an open book test.
    We go in and say, ``OK, are you following this?'' No. They may
    be following a part here or there, but not all of it. Because
    we cannot audit every system in the government, so I try to
    give them self-help tools to do a better job in this area.
        We have IT management and acquisition on the High Risk List
    across government because this is not the only system that is
    having this type of problem. We routinely find it.
        I think there needs to be more emphasis on Congress making
    agencies follow these best practices, because if they follow
    these guides you get a better outcome, and you get it sooner,
    and you get it cheaper.
        Senator Hassan. OK. That is helpful. You referenced this in
    the answer you just gave, but I just want to give you a chance
    to say anything else that you wanted to about this. You talked
    about the reciprocal nature of these background checks and the
    need for agencies to work together.
        As we think about agencies needing to work together and
    collaborate and depend on each other for information as we go
    forward, how can they avoid the challenges, similar to ones
    that DOD is dealing with now, when they are working on these
    large interagency programs?
        Mr. Dodaro. You need to have good communication and good
    regular communication, and you need to have structure. There
    needs to be written agreements. This gets back to those eight
    collaboration criteria that I mentioned. If you follow those
    eight criteria you get a good outcome at the end of the
    process. It sort of walks you through how to do a joint project
    together across government. Most things now require multiple
    agencies because of the complexity of the problems facing our
    government.
        I mean, we make a living, at GAO, point out where they are
    not working together very effectively. I wish we could give up
    this job and they could do it right. But it is just time after
    time they are not doing it. It is varying degrees of
    effectiveness, but it could be done much better if they
    actually followed these best practices.
        Senator Hassan. OK. Thank you for that.
        Last question from me. As Congress and Federal agencies
    work to review and respond to the recommendations in this
    report how can GAO assist us with prioritizing the
    recommendations that need most urgent attention?
        Mr. Dodaro. Yes. Every year I send a letter to every
    department and agency head in the Federal Government, and
    prioritize our open recommendations to them. We make those
    letters available to the Congress, so we could use that to
    develop a priority list for this Committee.
        We also have a list in this report of areas where we think
    you could save over $1 billion by implementing the
    recommendations. So that is a prioritized list on financial
    benefits and cost savings. Then there are other areas where we
    point out where, as you mentioned in your opening statement,
    there could be improvements to public safety.
        I would say the criteria ought to be--and we can help
    create a list for you--ones that would improve public safety,
    ones that would provide better consumer protections--and this
    whole crypto asset, stablecoin area needs regulatory
    attention--and also where there are dollar savings to be had.
    We will be happy to do that.
        Senator Hassan. Thank you. Senator Romney.
        Senator Romney. I have a couple of items, pretty broad
    items. I am just going to begin with one that is more narrow. I
    begin by noting that the Federal workforce is in many cases
    extremely productive, hardworking. I spoke with a family member
    of a Federal employee just today, spoke about how their spouse
    is just working like crazy. On the other hand, I am concerned
    that some other people in the department are not working quite
    so hard, and all the burden is falling on the few rather than
    the many. This revolved around the teleworking that we do
    following COVID. I mean, everybody went home and interestingly,
    not everybody has come back to the office.
        Had the response time of consumer calls--people calling in,
    either the IRS, or calling in for information on labor,
    agriculture, and so forth--had the response time been the same
    as before COVID, fine. But in fact, the lines are longer.
    People are having a harder time getting in touch with the
    government. You wonder how well is teleworking working for us
    and do we need to oversee somehow in a better way, a more
    effective way, what happens when people are working from home?
        Do you have any sense of whether this is an issue we need
    to give consideration to?
        Mr. Dodaro. Yes. We are looking at that issue right now
    across government, at a number of different agencies, what
    effect it has had on customer service, on the agency
    achievement of its mission, and on recruitment and retention,
    too. There are issues there.
        I would say the focus Congress ought to put on this, in my
    opinion, is on outcomes, as you said. Are we getting the right
    outcomes that we want to achieve, and not try to micromanage
    how that happens. But if you don't get the right outcomes, you
    need to hold the agencies accountable.
        It may be that it is telework, or it may be they do not
    have the right people in the first place. They have not trained
    them properly to answer the calls. They are not holding them
    accountable. People are not smarter because they are sitting in
    a government building.
        But I think being outcome oriented is really the way to go.
    That is the way I manage the GAO workforce. If we get the right
    outcomes you can have workplace flexibilities, but if we do not
    get the right outcomes we are not going to do it. Fortunately
    for us, we study it and evaluate it, and our outcomes are
    really good, and it does not matter where people are. We are a
    knowledge-based agency.
        Plus there are skill gaps across the government. Of the 37
    high risk areas, 26 or 25 are on there because there are
    critical skill gaps. Right now agencies are struggling to get
    the right people, like people with AI skills. The government
    cannot pay the same salaries, but you can give some workplace
    flexibility. You can get some high-tech talent, and we have
    been able to do that at GAO--scientists, computer, security
    people--by giving them some workplace flexibilities they cannot
    get anywhere else. You would not have that caliber of talent in
    government if you could not offer those flexibilities. There
    needs to be flexibility, depending on the mission.
        Now, some agencies need to have people there to deal with
    the public or they need to be in person for missions--they
    cannot deal with on a remote basis, but I think the way to
    approach this--and it would solve broader problems--is to focus
    on outcomes. What are your goals, where are you short, what are
    you doing to make improvement, and to hold the agency officials
    accountable. I am up here all the time before Congress
    discussing shortcoming in the agencies. They are not up here as
    much defending what they are doing and telling Congress what
    they are going to do to fix some of the problems.
        I think more oversight would be effective. I think you are
    right to be concerned about this. But the focus, in my opinion,
    ought to be on are they achieving their missions, and if not,
    why not?
        Senator Romney. Artifical Intelligence (AI). You said the
    magic word that I want to talk about just briefly or get your
    perspectives on. It is going to be extraordinarily disruptive.
    It is going to be helpful, make us more productive. I would
    imagine much of what AI does is going to be focused on white-
    collar work. That is mostly what government does is white-
    collar work.
        Will AI dramatically reduce the need for personnel, do you
    believe, in the Federal Government? Are there adjustments we
    are going to need to make to usher in the capacity and
    capability of AI? What is your perspective of where that is
    going to take us? I am very optimistic about how it can make us
    more effective and more efficient. I am also scared to death
    about things it can do inappropriately. I do not begin to
    believe we have thought about how to regulate it or manage it
    at all, but what are your perspectives on the advent of AI and
    the impact it is going to have?
        Mr. Dodaro. Looking at it broadly, beyond the Federal
    Government, just for the country as a whole, I think it will
    have enormous implications for the workforce, both in a
    positive and a negative way. It could affect blue collar as
    well as white collar workers, broadly across government. You
    are right, in terms of the government workforce.
        Since 2018, we have done 50 studies on AI. We have looked
    at AI in accelerating drug development, medical testing,
    diagnosis, and treatment for patients. We have looked at the AI
    algorithms used for DNA testing, for example, and other things.
    We have developed the framework for how to audit artificial
    intelligence algorithms.
        In the government, I am mostly concerned because as we
    talked a little bit with Senator Lankford, some of the data in
    the government is not good at all. It is not complete. It is
    not accurate. It is not reliable. If it is used for AI
    applications, all you are going to get is bad outcomes faster.
    So the limitation in the government, because of the lack of
    reliable data, is enormous and should not be underestimated.
        Also in the Federal Government we have looked at the
    applications in DOD as well as in civilian applications. The
    government is going to have difficulty getting people who are
    trained in AI, so we need education programs. The government
    needs better recruiting and training. Is is still short in
    computer security people, even though that has been a problem
    for decades now. I think AI is going to have enormous
    implications, and not too far behind it will be quantum
    computing, which is going to completely upend all the
    cryptography that is in use.
        These changes are happening rapidly. Government always has
    a problem responding as fast as change in the environment.
    These science and technology (S&T) changes are coming the
    fastest in human history. Government has to keep up better in
    these areas. So you are right to be concerned about AI. It has
    potential benefits if managed properly, but it can also have a
    dark side too, just like any other technology that could be
    used to perpetrate fraud and other crimes. We have already seen
    some fraudsters, using AI against the government. They are more
    creative than the government.
        But speaking on fraud, just one last point on that, we
    worked with Congress on the Fraud Reduction and Data Analytics
    Act od 2016. The Act required agencies to implement GAO's
    framework for preventing fraud in the government. Agencies just
    have not implemented it fully, and Congress has not held them
    accountable. One of the things they are supposed to do is do a
    fraud risk assessment of new programs. When the Small Business
    Administration (SBA) did the first fraud assessment on the
    Paycheck Protection Program? In February 2022, when the program
    was over. They were not ready. That law was in place 4 years
    before the pandemic. Many agencies did not do it too. I do not
    mean to single them out alone.
        So that is another tool I think Congress can use to help
    prevent fraud in the first place.
        Senator Romney. Thank you.
        Senator Hassan. Thank you, Senator Romney, and thank you
    again, Mr. Dodaro. As always this is really helpful. To you and
    your entire team we thank you for your service and your work
    and your insights.
        Thank you to all of your agency for everything you do to
    improve government services for the American people. I look
    forward to continuing to work to address your recommendations,
    to save taxpayer dollars, and deliver better services to all
    Americans.
        The hearing record will remain open for 15 days, until 5
    p.m. on May 30th, for submissions of statements and questions
    for the record.
        With that this hearing is adjourned.
        [Whereupon, at 3:42 p.m., the hearing was adjourned.]

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