[Congressional Record Volume 144, Number 73 (Tuesday, June 9, 1998)]
[House]
[Pages H4254-H4259]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SENSE OF HOUSE REGARDING FINANCIAL MANAGEMENT BY FEDERAL AGENCIES
Mr. HORN. Mr. Speaker, I move to suspend the rules and agree to the
resolution (H. Res. 447) expressing the sense of the House of
Representatives regarding financial management by Federal agencies, as
amended.
The Clerk read as follows:
H. Res. 447
Whereas financial audits are an essential tool to establish
accountable, responsible, and credible use of taxpayer
dollars;
Whereas Congress needs such information to accurately
measure performance of Federal agencies and distribute scarce
resources;
Whereas Federal agencies should meet the same audit
standards with which such agencies expect State and local
governments, the private sector, and Federal contractors from
which such agencies purchase goods and services to comply;
Whereas sections 331 and 3515 of title 31, United States
Code (as enacted in section 405 of the Government Management
Reform Act of 1994 (Public Law 103-356; 108 Stat. 3415)),
require that Federal agencies prepare annual financial
statements and have them audited, and that the Secretary of
the Treasury prepare a consolidated financial statement for
Federal agencies that is audited by the Comptroller General;
Whereas the enactment of these provisions resulted in the
first time ever that the financial status of the entire
Federal Government was subjected to the same professional
scrutiny to which many who interact with the Federal
Government are subject;
Whereas section 3521 of title 31, United States Code,
requires that the audit follow the Generally Accepted
Government Auditing Standards, which incorporate the common,
private sector guidelines of the American Institute of
Certified Public Accountants Statements on Auditing
Standards;
Whereas Congress intended these audit requirements to
provide greater accountability in managing government
finances by improving financial systems, strengthening
financial personnel qualifications, and generating more
reliable, timely information on the costs and financial
performance of government operations;
Whereas the data found in the financial reports was not
sufficiently reliable to permit the General Accounting Office
to render an opinion on the Government's financial
statements;
Whereas only 2 of the 24 Federal agencies required to
submit reports have reliable financial information, effective
internal controls, and complied with applicable laws and
regulations;
Whereas the financial statements of the Department of
Defense could not be relied on to provide basic information
regarding the existence, location, and value of much of its
$635,000,000,000 in property, plant, and equipment;
Whereas the Department of Defense could not account for 2
utility boats valued at $174,000 each, 2 large harbor tug
boats valued at $875,000 each, 1 floating crane valued at
$468,000, 15 aircraft engines (including 2 F-18 engines
valued at $4,000,000 each), and one Avenger Missile Launcher
valued at $1,000,000;
Whereas inaccurate or unreliable data, such as the findings
that 220 more tanks, 10 fewer helicopters, 25 fewer aircraft,
and 8 fewer cruise missiles existed than those reported in
the system of the Department of Defense, harms deployment
activities;
Whereas the Department of Housing and Urban Development
spends $18,000,000,000 each year in rent and operating
subsidies, with $1 of every $18 being paid out unjustifiably;
Whereas financial management is so poor within Federal
credit agencies that the true cost of the Federal
Government's loan and guarantee programs cannot be reliably
determined;
Whereas the Federal Aviation Administration's records
regarding $5,500,000,000 in equipment and property are
unreliable, including $198,000,000 in recorded assets that no
longer exist, $245,000,000 in spare parts that were omitted
from the financial statements, and $3,300,000,000 in works-
in-process that could not be verified;
Whereas the Forest Service lacks a reliable system for
tracking its reported 378,000 miles of roads;
Whereas the Medicare program identified an estimated
$20,300,000,000 worth of improper payments in fiscal year
1997;
Whereas the Social Security Administration has identified
$1,000,000,000 in overpayments for fiscal year 1997;
Whereas the Department of the Treasury recorded a net
$12,000,000,000 ``plug'' recorded as ``unreconciled
transactions'', made up of over $100,000,000,000 of
unreconciled, unsupported transactions, to make its books
balance; and
Whereas the disclaimers, mismanagement, and poor
recordkeeping in the Federal Government expose taxpayers to
continued waste, fraud, error, and mismanagement, and provide
inadequate information to Congress for budget,
appropriations, and reauthorization decisions: Now,
therefore, be it
Resolved, That it is the sense of the House of
Representatives that--
(1) the first-ever Governmentwide financial audit
demonstrated serious concerns with financial management by
the majority of Federal agencies;
(2) current efforts with respect to financial management by
all too many Federal agencies have failed; and
(3) therefore, Congress must impose consequences on Federal
agencies that fail their annual financial audits and conduct
more vigorous oversight to ensure that Federal agencies do
not waste the tax dollars of the people of the United States.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Horn) and the gentleman from Ohio (Mr. Kucinich) each
will control 20 minutes.
The Chair recognizes the gentleman from California (Mr. Horn).
Mr. HORN. Mr. Speaker I yield myself such time as I may consume.
Mr. Speaker, on April 1, 1998, the Subcommittee on Government
Management, Information, and Technology held a hearing on the first
ever audit of the United States government. We were presented with the
consolidated government-wide financial statements issued March 31,
1998.
The Democratic 103rd Congress, in which I was a freshmen, enacted
this law on a bipartisan basis in 1994. As a result of this audit, we
found the Federal Government could not balance its books. That is why
we gave them 5 years to do it way back in 1994. In fact, the
information in the financial statements was so poor that the auditors
were not able to determine the adjustments necessary to make the
information reliable.
For the first time, however, Congress was provided a concise
accounting for the many financial management problems faced by the
executive branch of the Federal Government. This report, by the General
Accounting Office, the audit arm of the legislative branch known as the
GAO, confirmed that at least tens of billions of taxpayers' dollars are
being lost each year to fraud, waste, abuse and mismanagement in
hundreds of programs throughout the executive branch.
Government financial management is largely in disarray in some
departments. Its financial systems and practices are obsolete and
ineffective, and do not provide complete, consistent, reliable, and
timely information to either congressional or presidential decision-
makers, let alone to agency management, which is responsible for the
implementation of these various programs.
The GAO report provided a synopsis of the significant weaknesses in
the financial systems: problems with fundamental recordkeeping and
incomplete documentation. There were weak internal controls, including
weak computer controls. These structural problems then prevent the
executive branch from accurately reporting a large portion of its
assets, its liabilities, and its expenses.
According to the General Accounting Office, ``These deficiencies
affect the reliability of the consolidated financial statements and
much of the underlying financial information.'' More important, ``These
problems also,'' said the GAO, ``affect the government's ability to
accurately measure the full cost and financial performance of programs,
and effectively and efficiently manage its operations.''
Looking at some of the charts here, the subcommittee released the
first report card measuring the effectiveness of the financial
management at 24 Federal agencies, which were required over a 5-year
period to prepare financial statements and have them audited. The
grades were based on reports prepared by the various agency Inspectors
General, independent public accountants, and the General Accounting
Office.
The report card is a gauge for Congress to see where attention is
needed to push agencies to get their financial affairs in order. A few
agencies, most notably the Department of Energy and the National
Aeronautics and Space Administration, demonstrated that they could
effectively manage their finances.
However, these agencies were the exception, rather than the rule. Six
other agencies earned commendable Bs. Eleven of the 24 agencies, 46
percent, were not able to meet the March 1 reporting date in the Act.
That is 5 months after the close of the Federal fiscal year.
[[Page H4255]]
As of today, four laggard agencies, the Department of Agriculture,
the Department of Education, the Federal Emergency Management Agency,
the Department of State, have yet to submit audited financial
statements. The Federal fiscal year ended 8 months ago.
Many other agencies could not pass muster. The Agency for
International Development, the Department of Defense, the Department of
Justice, the Office of Personnel Management, they all received Fs. Two
more agencies that reported late, the Department of Commerce,
Department of Transportation, also wound up with Fs. Another six
agencies failed at the D level.
Mr. Speaker, I yield 10 minutes to the gentleman from Wisconsin (Mr.
Neumann), the author of this resolution, one of the most fiscally
conservative and fiscally articulate Members of this body, and one of
the handful of us who have spoken on the unfunded liabilities facing
the Federal Government. The gentleman from Wisconsin looked at a lot of
these documents and drew up the resolution we have before us today.
Mr. NEUMANN. Mr. Speaker, I rise today to talk about this because I
come from the private sector. In the private sector, for our business,
our small business, we literally had to go through an audit every year,
so I come into this looking at it with some private sector experience.
I bring with me the standards and the expectations that were required
of us in our business in the private sector.
I have to say, after a brief review of this, it becomes very apparent
that the management here in the government is set by an entirely
different set of standards than what was expected of us out in the
private sector. I would like to explain exactly how an audit works, so
it is clear what has happened here in this audit.
What happens in an audit is the auditors come in and look at all of
the assets and the financial statements, and where the money went in a
given agency. So, for example, if you are the Forest Service, you would
look for a list of all the roads that were controlled and managed by
the Forest Service, and where they spent their $3.4 billion in the
Forest Service management. So you would take this whole list of things
and then go into it and pull a couple of the things out. You would go
looking for them.
Let me give another example. In the military, for example, in the
Navy, they went looking for 79 ships. 79 ships they went looking for.
{time} 1500
Out of the 79 ships they went looking for, they found out that in
fact they could not find 21 of them. Twenty-one out of 79 they could
not find. I am in the home building business and when they did an audit
in my company, I gave them the list of all the lots we were working
with and all the houses we had built and all the money I spent on a
given house, all the money we took in on a given house. We had to give
our auditors that and they would pull those records on a particular
house out of 120 homes that we were building in a given year. They
might pull out three or four or five and see if the money that we said
we spent to pay for drywall, for example, we actually had a check that
we could document that we spent that money.
No, in the private sector if one fails an audit, effectively the bank
shuts the business down and the company goes out of business. The
businessman must go find something else to do. That is what happens in
the private sector.
Our purpose for being here today is to, number one, disclose the
results of this audit; and, number two, disclose how different the
standards are that are being applied here in the government and what is
happening here; and three, to make sure that we start doing something
about the mess that has been created.
Mr. Speaker, I have brought a few pictures with me to help make this
clearer. When the Navy went looking for these 79 ships, they found out
they were missing tugboats. I think that is important. We are not
talking about rubber duckies in the bathtub. We are talking about the
tugboats, for heaven sakes, that the Navy has on their list that was
not available when they went looking for it.
Another thing the Navy went looking for, they went looking for these
two skiffs. These things are supposed to be out there. They are not
there. They are on their list, they say where they are, they say they
are supposed to be available. They are not there.
So when we go looking for 79 ships on the inactive list and 45 on the
active list, 21 of the 79 could not be found. But think about this for
a minute. On the active available military ships, 2 out of 45 were not
available. That is to say if we were to go to some sort of a military
conflict, assuming that these ships are available to move troops around
or to do whatever they might do, 2 out of 45 could not be found.
I have some more examples here. As I go to the Air Force, and I go to
this one that I think is very, very important, they went looking for
missile launchers. In fact, they found out they could not find this
particular missile launcher. Now, since the audit has been completed,
they believe they have found the missile launcher. But the facts are
when the time came for the auditors to go looking for this missile
launcher that was supposed to be available, they could not find the
missile launcher.
Now, in all fairness to the people in the uniform, and I want to make
this very clear, this is not a reflection of our young men and women
who are doing so much to defend our country. This is a reflection of
mismanagement by bureaucrats in Washington, D.C. That is what we need
to go after. This should not in any way reflect negatively on our
military.
In fact, as we understand that these military parts and pieces of
equipment that are so necessary for our military cannot be found, we
should understand that it puts our young men and women in uniform in
jeopardy and that is why it is so significant that we do something
about correcting this problem.
Mr. Speaker, here is another one with the Air Force which is
particularly disturbing. They said we had a C-130 transport plane. This
is what it looks like. And again this is a huge plane. It is designed
to move troops around. So if we were to have a military conflict and
they went looking for this C-130, this troop transfer plane, it does
not exist anymore.
It turns out when the auditors went to look for this C-130 plane, it
had been destroyed 4 years ago in a test involving corrosion. So the
military gave this list of available military equipment that if we were
to have a military conflict of some sort they were expecting to be able
to find, but when the auditors went looking for this particular plane,
this C-130, and, remember, they just went looking for a small sample,
when they went looking for this it turns out the thing had been
destroyed several years back.
I do not want to stop at just the military. That would be very
unfair. As we went through this audit, we found similar activities in
virtually every agency we went into and looked at. Coming from the
private sector, if we had ever been in this shape in the private
sector, we would have been out of business instantaneously because
there is not a bank in the world that would have loaned us money if we
could not have found the houses we built or if we could not find the
lots we were supposed to own to build the houses on in our company.
That is just exactly how ridiculous this situation is.
I have here a picture of a computer. This thing weighs 825 pounds and
is 5 feet tall. The Energy Department listed this $141,000 computer on
their asset sheet. When they went looking for the computer, it was
nowhere to be found. When people say we cannot control Washington
spending and we have no more room to get spending under control in
Washington, we do not have to look any farther than this waste and
mismanagement to understand how far it is that we still have to go to
get government spending under control.
I would like to give a couple more examples.
HUD. We hear so many cries that we have homeless people in America
and HUD needs more money. It turns out the auditors went into HUD. This
is the housing department and provides housing for homeless and poor
people in this country. They have a budget of about $18 billion, and
when they went looking for the money, approximately 1 out of the $18
billion could not be accounted for.
Let me put this in perspective. I live in Wisconsin and part of my
district is a city of 85,000 roughly, Kenosha, and
[[Page H4256]]
another city of 80,000 people called Racine. The amount of money that
HUD was missing is enough to house all the people in the City of
Kenosha and all the people in the City of Racine for an entire year.
That is just the money they cannot find and cannot account for in HUD.
This one hit particularly close to home. We went over to the FAA, and
in this audit they went looking for some of the assets that were listed
on the FAA sheets and they said they had this building out there. Well,
the auditors went to look for the building. The building had been
demolished years ago. I guess we were not supposed to feel too bad
about that because they went to another lot that was supposed to be
vacant and they found out they had built a day care center on it, but
it did not show up on the asset list.
The point again is just the total mismanagement of what is going on
in these agencies and how far we have to go to get this government
spending under control.
I would like to read specifically, and I had this prepared as a
summary for my office on this GAO audit, I would like to read a couple
of the different parts and I would like to start with Medicare. This is
what it says and I quote, and this is a GAO summary prepared for my
office.
Quote on Medicare: $23 billion, or about 14 percent of the total
payments, this is for Medicare, for reasons ranging from inadvertent
mistakes to outright fraud and abuse; $23 billion in Medicare is
missing. And the responsibility for reasons ranging from inadvertent
mistakes to outright fraud and abuse.
Here is a scary one. This is regarding the Air Force Logistics
Systems and I want to read this word for word, what the auditors found:
These databases included in the Air Force's Central Logistics System
contained discrepancies on equipment, on the number of assets on hand,
including ground-launched and air-launched cruise missiles, aircraft,
and helicopters.
Let me say that once more. This is where there were discrepancies in
this Air Force Logistics System, including ground-launched and air-
launched cruise missiles. They are unaccounted for. The numbers that
are actually existing out in the field versus the number that we are
reporting that we have at the Pentagon are two different numbers. They
are not accounted for.
Mr. Speaker, that is serious. That puts our Nation in jeopardy. We
need to get this system under control.
Let me read just one more. Whenever anybody says to me, ``Mark, you
cannot do anything more with government spending, we need to spend more
in the government, spending has to increase faster than the rate of
inflation, we cannot get spending under control,'' I come back to this.
And quote, word for word from the summary that was prepared for my
office:
The Forest Service could not determine for what purposes it
spend $215 million of its $3.4 billion in operating and
program funds.
They could not account for $215 million. We are not talking about a
buck or two here out of our wallet; $215 million that they could not
account for out of a $3.4 billion budget.
When we looked at overall Treasury, that is the cash flow of going
from one agency to another agency and the billing back and forth, the
Treasury was off by over $100 billion, some plus and some minus, and in
the end a net of $12 billion.
Mr. Speaker, we need to pass this resolution, we need to move forward
over the course of the summer and get this mess straightened out.
Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I think that every American agrees that we want fiscal
responsibility and accountability. I think both sides of the aisle can
agree on that. And I think what is important, as we set higher
standards of accountability for our government is that we take an
accounting of the measure of progress which has occurred under the
Clinton administration, because the people of this country ought to
know that before the Clinton administration took office there had never
been a comprehensive review of how the government handles our tax
dollars. As a matter of fact, after hearing a similar recitation to
that just offered by the gentleman from Wisconsin (Mr. Neumann) in our
Government Management, Information, and Technology Subcommittee, I
questioned officials of the Department of Defense and found out that in
fact for decades, for centuries, the Department of Defense has had its
problems keeping track of their materiel. It does not excuse it for one
year or one minute, but I think we have to establish a context of this
discussion this afternoon.
When the Clinton administration began their efforts, there were no
accounting standards for the Federal Government. Most Federal agencies
had never issued a financial statement and there had been no
governmentwide financial statement.
Furthermore, there had been no independent verification of the
agencies's estimates of their financial positions. Now, thanks to the
changes that have been put in place through the administration and, I
might say with the help and the constant vigilance of people like the
gentleman from California (Mr. Horn), we have more agencies than ever
issuing financial statements and having them audited.
As Members of Congress are aware, the Subcommittee on Government
Management, Information, and Technology headlined a series of hearings
recently on the financial audits of the Federal Government. We
conducted those hearings in a bipartisan manner because the issue of
good financial management is not a partisan issue. And we need to
continue to work in this manner. The sponsors of this particular
resolution have accommodated our concerns, and while I may not
completely agree with their positions, the need for increased attention
to financial management and strong efforts leads me to support this
resolution.
Without question, there is a need for intensified financial
management by Federal agencies. The governmentwide audit and many of
the agency audits shows that the Federal Government has a long way to
go. House Resolution 447 is based on the results of the first
governmentwide financial audit conducted in 1997. I want everyone to
listen very carefully. In 1997, we had the results of the first
governmentwide financial audit conducted that year. The law mandating
this audit was passed by a Democratic Congress, with the active support
of the Clinton administration. The Clinton administration is addressing
financial problems at Federal agencies that date back decades. And I
feel it should get credit for serious attention to this longstanding
problem, just as we must place on their shoulders, because they are
there now, the responsibility for making increased progress.
But real progress has been made by this administration. The key to a
financial audit is whether the financial information presented in the
balance sheets is reliable. When the financial information is reliable,
auditors issue what is called an unqualified opinion or a clean audit.
As we can see on this chart right here, Mr. Speaker, in 1990, only
two agencies had an unqualified opinion. But by 1997 under President
Clinton, nine CFO agencies had unqualified opinions. Clearly,
additional improvement is needed. Getting an unqualified opinion is not
sufficient. Adequate internal financial controls and compliance with
laws and regulations are two other areas where agencies must improve.
However, it is clear that the Clinton administration has come a long
way. And by 1998, the goal, as can be seen from this chart, is to come
further and to keep reaching what I think is the next plateau of 16
clean and unqualified opinions.
{time} 1515
The current administration is committed to these additional
improvements and to achieving a clean governmentwide audit for fiscal
year 1999. To that end, the President issued a memorandum to agency
heads requiring that specific agencies prepare action plans to ensure
that the government receives an unqualified opinion on its fiscal year
1999 audit. Federal chief financial officers now predict that at least
15 of the 24 Federal departments will receive clean opinions of their
fiscal year 1998 financial statements.
Good financial management of taxpayers' money is too important for it
to become bogged down in partisan warfare. There is simply too much to
the done. For that reason, I am glad we have been able to address this
issue in a bipartisan way.
[[Page H4257]]
Again, look at this, Mr. Speaker, 1997, how far we have come from
1990, and, again, when the administration began, there were no
accounting standards for the Federal Government. Most Federal agencies
never issued a financial statement. There had been no governmentwide
financial statement, no independent verification of the agencies'
estimates of their financial positions. So we have come a distance. We
have a great distance to go.
Mr. Speaker, I yield such time as he may consume to the gentleman
from California (Mr. Waxman).
Mr. WAXMAN. Mr. Speaker, I will not take a great deal of time on this
debate, but I want to take this opportunity to commend the authors of
this legislation, the gentleman from California (Mr. Horn) and the
gentleman from Wisconsin (Mr. Neumann).
As amended, the resolution underscores the importance of sound
financial management. The effort to promote sound financial management
should be and is bipartisan. As amended, this resolution deserves
bipartisan support.
The recent governmentwide audit shows that many Federal Government
agencies do not have adequate financial management. This resolution
sends an important message that we need to do more.
It is also important to recognize the progress that has been made by
this administration, by the Clinton administration, and by Vice
President Gore's reinvention efforts. In 1992, only one Federal agency
had a clean audit. Due to the administration's efforts, nine agencies
now have clean audits. Next year 15 agencies are expected to have clean
audits. So it is clear that while we have a long way to go, we are
making progress.
This resolution says that we want to build bipartisan support to push
for more progress. In that effort I join my colleagues in urging all of
the Members to vote for this resolution.
Mr. KUCINICH. Mr. Speaker, I yield 2 minutes to the gentlewoman from
New York (Mrs. Maloney).
Mrs. MALONEY of New York. Mr. Speaker, I thank the gentleman for
yielding me this time.
First of all, I would like to thank the ranking member, the gentleman
from Ohio (Mr. Kucinich), for his hard work on this, and also the Chair
on the subcommittee on which I had the honor to serve for many years,
the gentleman from California (Mr. Horn), for working hard on this and
for accepting some changes in the language from the Democrats to
Resolution 447, which we are now supporting.
The bad news contained in this resolution is that the Federal
Government, the world's largest financial entity, has financial
problems. These problems are not new; they have existed for decades. We
knew this when we decided to initiate reforms. When we began reforms,
there were no accounting standards for the Federal Government. Most
Federal agencies had never issued a financial statement, and there had
been no independent verification of the agencies' estimates of their
financial position. So in a bipartisan effort, a Democratic Congress
crafted and passed the Government Management Reform Act along with the
Republicans in 1994, and a Democratic President signed it into law.
The administration has worked hard to implement this law. Next year
15 of the 24 major agencies are expected to receive clean financial
opinions. This year the administration met the bill's statutory
deadline by completing the first governmentwide audit ever, the first
in more than 200 years. We should congratulate them for this effort.
I commend the ranking member and all who have worked on this. As we
have worked in the past for increased procurement reform, for increased
debt management and position systems, I join my colleagues in
supporting this.
Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume.
I think it is important for the American people to have a progress
report at this moment as to Federal financial management, because that
is what this resolution lends itself to. We have stated earlier that
prior to the administration taking office, that there were no general
standards, but now a structure has been put in place to assure fiscal
accountability for the American people.
Qualified chief financial officers and deputy chief financial
officers have been appointed so there is accountability and there is a
system of command. Accounting standards have been issued. We have had a
foundation for agency financial statements, the accounting standards
that have been developed by the Treasury, the Office of Management and
Budget and GAO, working together through the Federal Accounting
Standards Advisory Board, and that was initially created in 1990 to
fill a void. But so far, through the help of OMB, we have seen some
real strength put into that process, and accounting standards have been
issued. And that information has been transmitted down through the
departments.
The OMB has issued financial system requirements, and the agencies
are now issuing audited financial statements.
I would also like to point out that it was on March 31, 1998, that
the Department of the Treasury issued the first ever audited,
consolidated financial statement for the Federal Government.
The President's budget states the objective of having an unqualified
audit opinion, a clean audit on the government's 1999 financial
statements, so the President has firmly stated the administration's
goal of receiving a clean opinion on the 1999 governmentwide financial
statements, and also the administration has been very interested in
identifying weaknesses in the audit as far as the first ever
governmentwide statement for fiscal year 1999.
As I am sure many Members know, the President has directed agency
heads to submit action plans to address impediments to an unqualified
audit opinion on the government's 1999 financial statements.
Mr. Speaker, we could ask, as we are thinking of our financial status
and whether or not the American people are getting a good accounting,
we could look at a glass and say, is it half full or is it half empty.
We can point today to deficiencies which do exist, and we could say the
glass is half empty. But we could also say that with all the water that
has gone under the bridge, we have a lot of progress that has been made
towards rebuilding the financial accountability of the country.
I know with some testimony I heard in committee, it would seem as
though the glass is neither half empty nor half full, it is missing.
Wherever that is the case, we certainly want to make sure that our
audits work to identify wherever there is waste and inefficiencies in
the Federal Government, and we need to work to rid it out.
Again, Mr. Speaker, we have come a distance. We have a great distance
to go to have the kind of accountability which the American people have
a right to expect, but I think at this time a progress report has been
in order.
Mr. Speaker, I reserve the balance of my time.
Mr. HORN. Mr. Speaker, I first thank both the former ranking member
and the current ranking member. We have worked on a bipartisan basis.
We have got a lot accomplished. I appreciate their kind words.
Mr. Speaker, I yield the balance of my time to the gentleman from
Texas (Mr. Armey), distinguished majority leader, PhD in economics, who
also knows how to read a balance sheet.
The SPEAKER pro tempore (Mr. Upton). The gentleman from Texas (Mr.
Armey) is recognized for 5 minutes.
Mr. ARMEY. I thank the gentleman for yielding me this time.
Mr. Speaker, I want to thank the gentleman from California (Mr. Horn)
and the gentleman from Wisconsin (Mr. Neumann) for their persistence on
this matter.
I listened with some interest to the remarks that were being made as
I came in. It is always interesting to try to debate whether the glass
is half full or half empty, but I think we would all agree that in any
enterprise in America, other than the government, whether it be our
family, whether it be our business, whether it be even a State or local
government enterprise, everybody would understand that they have to
have an audit to determine how much water is in the glass. Then we can
debate whether it is half full or half empty, as long as we know that
half of the capacity for the glass is taken up. And our problem with
our government, Mr. Speaker, it does not know what it has. It does not
know what it does. It loses things, sometimes
[[Page H4258]]
things that would be fairly difficult to lose.
A missile launcher was identified as lost for 6 months, and it is not
clear to us that they realized that it was lost until Congress
encouraged them to have an audit, find out what they had and where it
was.
They did finally find the missile launcher. I am not so sure that
without the work of this committee they would have suffered enough
embarrassment and awareness of their loss to have found the missile
launcher. But the job is not done. We still are missing a tugboat, a
crane and other large equipment.
Nobody here is seeking to be angry or nasty about this. We are not
even particularly interested in criticizing or blaming. But the fact of
the matter is that every organization in the world must know what it is
doing with its money, and certainly the Federal Government of the
United States, a government that is given the trust and confidence of
the American citizens to spend literally $1.5 trillion of our money,
should be willing to subject itself to the same auditing principles,
the same accountability as any small enterprise that may, in fact, find
itself subject to the audits of some of those very same government
agencies that are not doing so well in these audits.
Jerry Jeff Walker has a wonderful song. The song is ``The Pot Can't
Call the Kettle Black.'' If the government will not accept the rigors
of auditing, the rigors of accountability, how can the government have
any moral basis by which they would themselves hold you and I
accountable for these same rigors as they seek to regulate and invest
in our lives?
The IRS might even come in and lock your doors, throw the business
owners in jail for negligence, embezzlement or worse.
Now, I, as the gentleman from California said, I am an economist. I
deal with all these things in theory. I am proud to tell colleagues
that in theory my world is, as they like to say, tractable, all the
pieces fit. That is very comforting to me.
My daughter, on the other hand, pity her, is an auditor. She
understands that when she shows up, she is not going to be welcomed
with open arms. As I said earlier before the committee, pity the poor
auditor. They are always the skunk at the garden party.
{time} 1530
But the auditor in any business will tell you, the audit department
is absolutely imperative. I have made the homely observation before
many times that Armey's axiom is, ``Nobody spends somebody else's money
as wisely as they spend their own.'' The auditor does that. The auditor
comes in and says to the agency of the Federal Government that is not
doing well, not showing up well on the books, ``You and I are doing the
same thing here. We're really quite the same. I spend that money like
it's my money, and you spend that money like it's my money.''
Everybody in every agency should be encouraged to take the rigor,
face the hard recordkeeping, the disciplined process of knowing exactly
what they are doing with the taxpayer's dollar, having a clear idea
what their responsibilities are, how they intend to fulfill those
responsibilities, and what and how they spend of the taxpayers dollars
in the fulfillment of those responsibilities, and then just having the
fundamental decency to be accountable in the expenditure of those
dollars.
Where does the Congress come in in this process? The Congress of the
United States is as if we were the board of directors. It is our job to
see to it that the rigors and the disciplines, the protocols, the
techniques and the methods are as rigorously adhered to in each and
every agency of this Government as this Government in fact would
require them to be adhered to by each and every business enterprise,
each and every charitable enterprise that exists in our districts.
There is another old saying that maybe comes into play here: ``What's
good for the goose is good for the gander.'' The Federal Government of
the United States in fulfilling its obligations and its duties to
police the integrity of business practice and enterprise in America so
that markets can work smoothly cannot possibly have a moral authority
by which that is done unless they first accept that responsibility and
fulfill that responsibility in full accountability in the manner in
which they do their own job. That is really what this is all about.
Will this Congress accept its responsibility, and by so doing so, can
we assure our constituents that, in response, every agency of this
Government fulfills its responsibility so that we can measure and we
can judge and we can improve the extent to which the taxpayer gets
something that is known in the private sector as value for your dollar.
Once again, I want to thank the committee for their hard work.
The SPEAKER pro tempore (Mr. Upton). The time of the gentleman from
California (Mr. Horn) has expired. The gentleman from Ohio (Mr.
Kucinich) has 5\1/2\ minutes remaining.
Mr. KUCINICH. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Horn).
Mr. HORN. Mr. Speaker, I am sure the gentleman from Ohio who supports
this resolution, I appreciate that, and the ranking member on the
committee, I have appreciated his support.
Mr. Speaker, I yield to the gentleman from Wisconsin (Mr. Neumann)
who did the craftsmanship of this particular resolution.
Mr. NEUMANN. Mr. Speaker, I would just say it is very important to me
that we keep this from becoming a partisan issue. This is not about
Republicans or Democrats, or even about the Clinton administration.
This is about where we are right now today. In my opinion after
reviewing this audit, we have a long way to go in this Government.
It is incomprehensible to me, coming from the private sector, to look
at this situation and say it is okay. It is not okay. Before we go out
and spend $1.7 trillion more of the taxpayers' money next year, I think
we should put some things into place that force these agencies to at
least know what it is they have, where it is located, and how they are
spending their money. I would hope we proceed with that over the course
of the next 6 months here yet this year.
Mr. HORN. Mr. Speaker, I think as the gentleman from Ohio knows and
certainly as the gentlewoman from New York (Mrs. Maloney) knows, the
ranking member, the aim of our committee over time is to assure that
the Federal Government not only has audits but also that the Federal
Government can measure the effectiveness of its programs which has to
be basic when the President has to make a determination between do I
keep this program or do I reduce or do I add to it, and the same
decision has to be made by the Congress. There is only one State in the
union that has a system like that, that is the State of Oregon with its
benchmarking of programs. There are only two countries in the world
that have a fiscal system such as that, and that is Australia and New
Zealand. We have a lot to learn from both of them.
Over the last 3 years, we have been holding various hearings on how
this could be done so that the program analysis becomes part of the
monetary cost of the particular unit of program. That is what is
important if we really want to make sure that the taxpayer dollars are
not wasted.
I do not think there is a person in this Chamber that wants to waste
taxpayer dollars. I think sometimes by either our failure to be very
specific in a law or the executive branch's failure to interpret the
law, regardless of party, regardless of ideology, but you have got a
culture there that when you get to the end of the fiscal year that
says, ``Well, let's spend it, and if we don't spend it, the Congress
won't give it to us.'' I have seen that in universities, I have seen
that in city government, I have seen that even in business, in large
corporations. It is something that we have got to fight if we are going
to be conscious of where the money comes from. It comes from the
pockets, the hard-earned pockets of the American taxpayer.
Mr. KUCINICH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I first want to say how much I appreciate a chance to
work with the gentleman from California (Mr. Horn) on issues of this
import in the Subcommittee on Government Management, Information, and
Technology. I congratulate him for his tireless dedication to the
American taxpayer. I also want to congratulate the
[[Page H4259]]
gentleman from Wisconsin (Mr. Neumann) for bringing this resolution
forward and for working with us in crafting the language which would
enable it to have bipartisan support.
I think it is important that we proceed in a bipartisan manner here,
because the American people expect us to, and they know the only way we
can make Government accountable is if we insist from both sides that
Government be accountable. Certainly it needs to be said again that the
Clinton administration has taken the lead in highlighting and
addressing the problems that have been discussed here today.
In 1993, Vice President Gore recommended annual consolidated
financial reports and comprehensive Governmentwide accounting standards
as part of his Reinventing Government Initiative. The Federal
Accounting Standards Advisory Board completed basic Federal Government
accounting standards in record time. And as has been previously stated,
the administration submitted the first Governmentwide financial audit
by the statutory deadline of March 31, 1998. President Clinton has sent
a memorandum to each agency head requiring that specific agencies
prepare action plans to ensure that the government receives an
unqualified opinion on its fiscal year 1999 audit.
Mr. Speaker, the administration needs both of us, needs all of us, to
work with it to make Government work better. I remain dedicated to that
cause. I know that is a dedication that I share with my colleagues,
with the gentleman from California (Mr. Horn), with the gentleman from
Wisconsin (Mr. Neumann) and with everyone else.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from California (Mr. Horn) that the House suspend the rules
and agree to the resolution, House Resolution 447, as amended.
The question was taken.
Mr. HORN. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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