[Congressional Record Volume 163, Number 43 (Monday, March 13, 2017)]
[Senate]
[Pages S1780-S1781]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. REED (for himself and Mr. Grassley):
  S. 610. A bill to promote transparency by permitting the Public 
Company Accounting Oversight Board to allow its disciplinary 
proceedings to be open to the public, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. REED. Mr. President, I am reintroducing the PCAOB Enforcement 
Transparency Act along with Senator Grassley. This bill permits the 
Public Company Accounting Oversight Board, PCAOB, to make public the 
disciplinary proceedings it has brought against auditors and audit 
firms earlier in the process.
  Over 10 years ago, our markets were victimized by a series of massive 
financial reporting frauds, including those involving Enron and 
WorldCom. In response to this crisis, the Senate Committee on Banking, 
Housing, and Urban Affairs conducted multiple hearings, which produced 
consensus on a number of underlying causes, including weak corporate 
governance, a lack of accountability, and inadequate oversight of 
accountants charged with auditing public companies' financial 
statements.
  In order to address the gaps and structural weaknesses revealed by 
the investigation and hearings, the Senate passed the Sarbanes-Oxley 
Act of 2002 in a 99-to-0 vote. Among its many provisions, this law 
called for the creation of a strong, independent board, the PCAOB, 
responsible for overseeing auditors of public companies in order to 
protect investors who rely on independent audit reports on the 
financial statements of public companies.
  To conduct its duties, the PCAOB, under the oversight of the U.S. 
Securities and Exchange Commission, SEC, oversees more than 1,500 
registered accounting firms, as well as the audit partners and staff 
who contribute to a firm's work on each audit. The board's ability to 
initiate proceedings to determine whether there have been violations of 
its auditing standards or rules of professional practice is an 
important component of its oversight.
  However, unlike other oversight bodies, such as the SEC, the U.S. 
Department of Labor, the Federal Deposit Insurance Corporation, the 
U.S. Commodity Futures Trading Commission, the Financial Industry 
Regulatory Authority, and others, the Board's disciplinary proceedings 
are not allowed to be public without consent from the parties involved. 
Of course, parties subject to disciplinary proceedings have no 
incentive to consent to publicizing their alleged wrongdoing and thus 
these proceedings typically remain cloaked behind a veil of secrecy. In 
addition, the board's decisions in disciplinary proceedings are not 
allowed to be publicized until after the complete exhaustion of an 
appeals process, which can often take several years.
  These PCAOB disciplinary proceedings create a lack of transparency 
that invites abuse and undermines the congressional intent behind the 
PCAOB, which was to shine a bright light on auditing firms and 
practices, and to bolster the accountability of auditors of public 
companies to the investing public.
  Over the years, some bad actors have taken advantage of this loophole 
to shield themselves from public scrutiny and accountability. PCAOB 
Chairman James Doty has repeatedly stated in testimony provided to both 
the Senate and House of Representatives over the years that the secrecy 
of the proceedings ``has a variety of unfortunate consequences'' and 
that such secrecy is harmful to investors, the auditing profession, and 
the public at large.
  For example, an accounting firm that was subject to a disciplinary 
proceeding continued to issue no fewer than 29 additional audit reports 
on public companies without any of those companies knowing about its 
PCAOB disciplinary proceedings. Disturbingly, investors and the public 
company clients of that audit firm were deprived of relevant 
information about the proceedings against the firm and the substance of 
any violations.
  In addition to the reasons I have already provided, there are other 
reasons why the board's enforcement proceedings should be open and 
transparent.
  First, the incentive to litigate cases in order to continue to shield 
conduct from public scrutiny as long as possible frustrates the process 
and requires the expenditure of needless resources by both litigants 
and the PCAOB.
  Second, agencies such as the SEC have found open and transparent 
disciplinary proceedings to be valuable because they inform peer audit 
firms of the type of activity that may give rise to enforcement action 
by the regulator. In effect, transparent proceedings can serve as a 
deterrent to misconduct because of a perceived increase in the 
likelihood of ``getting caught.'' Accordingly, the audit industry as a 
whole would also benefit from timely, public, and nonsecret enforcement 
proceedings.
  Our bill will make hearings by the PCAOB, and all related notices, 
orders, and motions, transparent and available to the public unless 
otherwise ordered by the Board. This would more closely align the 
PCAOB's procedures with those of the SEC for analogous matters.
  Increasing transparency and accountability of audit firms subject to 
PCAOB disciplinary proceedings is a critical component of bolstering 
and maintaining investor confidence in our financial markets, while 
better protecting companies from problematic auditors. I hope our 
colleagues will join Senator Grassley and me in supporting this 
legislation to enhance transparency in the PCAOB's enforcement process.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mr. Portman):
  S. 611. A bill to amend the McKinney-Vento Homeless Assistance Act to 
meet the needs of homeless children, youth, and families, and honor the 
assessments and priorities of local communities; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mrs. FEINSTEIN. Mr. President, I rise today to introduce bipartisan 
legislation with my colleague Senator Portman that would align HUD 
homeless assistance with existing Federal children and youth programs 
and provide flexibility to local communities to use available resources 
to meet the needs that they identify.

[[Page S1781]]

  According to the U.S. Department of Education, approximately 1.2 
million children were homeless during the 2014 to 2015 school year; 
this is a 34-percent increase from the 939,903 homeless students in the 
2009 to 2010 school year.
  In California, over 229,000 children experienced homelessness in 
2015, nearly four times the 65,000 homeless children in the State in 
2003.
  Unfortunately, the numbers reported by the HUD Point-in-Time count 
fail to reflect these increasing numbers.
  According to the national 2015 HUD Point-in-Time count, there were 
only 206,286 people counted as homeless in households that included 
children, a fraction of the true number.
  This is important because only those children counted by HUD are 
eligible for vital homeless assistance programs and included in local 
planning efforts. The rest of these children and families are simply 
out of luck.
  The Homeless Children and Youth Act of 2017 would allow HUD homeless 
assistance programs to serve extremely vulnerable children and 
families, specifically those staying in motels or in doubled-up 
situations because they have nowhere else to go.
  These families are especially susceptible to abuse and trafficking 
because they are often not served by a case manager and thus remain 
hidden from potential social service providers.
  As a result of the current narrow HUD definition, communities that 
receive Federal funding through the competitive application process are 
unable to prioritize or direct resources to help these children and 
families.
  This bill would provide communities with the flexibility to use 
Federal funds to meet local priorities. The bill requires the Secretary 
to assess the extent to which Continuums of Care use separate, 
specific, age-appropriate criteria for determining the safety and needs 
of children and unaccompanied youth and divert people to safe, stable, 
age-appropriate accommodations.
  And I would note that the bill does not impose any new mandates on 
service providers.
  Finally, this legislation improves data collection transparency by 
requiring HUD to report the point in time PIT count and the Annual 
Homeless Assessment Report, AHAR to include data on all categories of 
homelessness.
  Mr. President, I am pleased that Senator Rob Portman has joined me as 
an original cosponsor on this bill. Homelessness continues to plague 
our Nation. If we fail to address the needs of these children and 
families today, they will remain stuck in a cycle of poverty and 
chronic homelessness.
  It is our moral obligation to ensure that we do not erect more 
barriers for these children and families to access services when they 
are experiencing extreme hardship. I believe this bill is a commonsense 
solution that will ensure that homeless families and children can 
receive the help they need.
                                 ______
                                 
      By Mr. LEE (for himself and Mr. Hatch):
  S.J. Res. 38. A joint resolution providing for congressional 
disapproval under chapter 8 of title 5, United States Code, of the rule 
submitted by the Environmental Protection Agency relating to 
``Approval, Disapproval and Promulgation of Air Quality Implementation 
Plans; Partial Approval and Partial Disapproval of Air Quality 
Implementation Plans and Federal Implementation Plan; Utah; Revisions 
to Regional Haze State Implementation Plan; Federal Implementation Plan 
for Regional Haze''; to the Committee on Environment and Public Works.

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