[Senate Report 115-239]
[From the U.S. Government Publishing Office]
Calendar No. 396
115th Congress } { Report
SENATE
2d Session } { 115-239
_______________________________________________________________________
GAO AUDIT MANDATES REVISION
ACT OF 2018
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 2400
TO ELIMINATE OR MODIFY CERTAIN AUDIT MANDATES OF THE GOVERNMENT
ACCOUNTABILITY OFFICE
[
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
May 7, 2018.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
79-010 WASHINGTON : 2018
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky HEIDI HEITKAMP, North Dakota
JAMES LANKFORD, Oklahoma GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming MAGGIE HASSAN, New Hampshire
JOHN HOEVEN, North Dakota KAMALA D. HARRIS, California
STEVE DAINES, Montana DOUG JONES, Alabama
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Daniel J. Spino, Research Assistant
Margaret E. Daum, Minority Staff Director
Stacia M. Cardille, Minority Chief Counsel
Charles A. Moskowitz, Minority Senior Legislative Counsel
Christopher J. Mulkins, Minority U.S. Government Accountability Office
Detailee
Laura W. Kilbride, Chief Clerk
Calendar No. 396
115th Congress } { Report
SENATE
2d Session } { 115-239
======================================================================
GAO AUDIT MANDATES REVISION ACT OF 2018
_______
May 7, 2018.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 2400]
[Including cost estimate of the Congressional Budget Office]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 2400) to eliminate
or modify certain audit mandates of the Government
Accountability Office, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
IV. Section-by-Section Analysis......................................3
V. Evaluation of Regulatory Impact..................................3
VI. Congressional Budget Office Cost Estimate........................4
VII. Changes in Existing Law Made by the Bill, as Reported............4
I. Purpose and Summary
S. 2400, the GAO Audit Mandates Revision Act of 2018,
revises three congressionally-mandated financial audits
conducted by the Government Accountability Office (GAO).
Modifying these audits better prioritizes resources, saving
approximately 8,400 employee hours at GAO.\1\
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\1\Email from Timothy L. Minelli, Assistant Dir. of Cong.
Relations, U.S. Gov't Accountability Office, to Daniel Spino, Research
Assistant, S. Comm. on Homeland Sec. & Governmental Affairs (Jan. 29,
2018, 01:15 EST) (on file with Committee).
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II. Background and the Need for Legislation
GAO is an independent, nonpartisan agency with a mission
``to support the Congress in meeting its constitutional
responsibilities and to help improve the performance and ensure
the accountability of the federal government for the benefit of
the American people.''\2\ During the 112th Congress, the
Committee worked with GAO to reduce or modify outdated and
unnecessary reporting requirement mandated by Congress.\3\ As a
result, Congress enacted the GAO Mandates Revision Act of 2012
to revise eight congressionally-mandated reports, allowing GAO
to focus its workforce on higher-priority oversight.\4\
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\2\U.S. Gov't Accountability Off., About GAO (2018), available at
https://www.gao.gov/about/index.html.
\3\S. Rep. No. 112-219 at 1 (2012).
\4\Id. at 2.
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In the 114th Congress, the Committee again reviewed GAO's
congressionally-mandated work and secured the passage of the
GAO Mandates Revision Act of 2016, which revised an additional
eight mandates.\5\
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\5\Pub. L. No. 114-301 (114th Cong.).
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This Congress, GAO initiated a review process in which it
conducted an agency-wide evaluation of its mandated financial
audit reports. Through this process, GAO identified financial
audits that Congress can reassign to more appropriate
Government entities. GAO and the Committee worked with
committees of jurisdiction to refine this list.\6\
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\6\Meeting with Timothy Minelli, Assistant Dir. of Cong. Relations,
U.S. Gov't Accountability Office, to Staff, S. Comm. on Homeland Sec. &
Governmental Affairs (Aug. 2, 2017); see also Email from Brett Baker,
Senior Health Policy Advisor, S. Comm. on Finance, to Daniel Spino,
Research Assistant, S. Comm. on Homeland Sec. & Governmental Affairs
(Jan. 24, 2018, 04:36 EST) (on file with Committee); Email from Lauren
Comeau, Professional Staff Member, S. Comm. on Appropriations, to
Daniel Spino, Research Assistant, S. Comm. on Homeland Sec. &
Governmental Affairs (Jan. 24, 2018, 11:07 EST) (on file with
Committee); Email from Travis Hill, Senior Counsel, S. Comm. on
Banking, to Daniel Spino, Research Assistant, S. Comm. on Homeland Sec.
& Governmental Affairs (Jan. 29, 2018, 05:50 EST) (on file with
Committee).
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The result, S. 2400, revises three financial audits related
to the Congressional Award Foundation (CAF), the Patient-
Centered Outcomes Research Institute (PCORI), and the Troubled
Asset Relief Program (TARP). The bill removes the requirement
that GAO conduct a duplicative review of the annual financial
audits of the CAF and PCORI. CAF presents its audit directly to
Congress, and a duplicative review is unnecessary.\7\ PCORI's
financial audits are prepared by an independent auditor that
has not found any questionable results or practices.\8\
Finally, the bill moves the annual audit of TARP from GAO to
U.S. Department of the Treasury Inspector General. GAO
currently hires an independent contractor to conduct these
audits using funds from TARP, essentially making GAO an
unnecessary middle man.\9\ The department's inspector general
is a more appropriate entity to manage this audit of the
program.\10\
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\7\Id.
\8\Patient-Centered Outcomes Research Institute, Financial Report
2016 (Sept. 30, 2016); Patient-Centered Outcomes Research Institute,
Financial Report 2015 (Sept. 30, 2015); Patient-Centered Outcomes
Research Institute, Financial Report 2014 (Sept. 30, 2014); Patient-
Centered Outcomes Research Institute, Financial Report 2013 (Sept. 30,
2013); Patient-Centered Outcomes Research Institute, Financial Report
2016 (Dec. 31, 2012); Patient-Centered Outcomes Research Institute,
Financial Report 2016 (Dec. 31, 2011).
\9\Email from Francisco Riojas, Special Advisor, Dep't of Treasury,
to Daniel Spino, Research Assistant, S. Comm. on Homeland Sec. &
Governmental Affairs (Feb. 21, 2018, 05:35 EST) (on file with
Committee).
\10\Id.
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III. Legislative History
Ranking Member Claire McCaskill (D-MO) and Chairman Ron
Johnson (R-WI) introduced S. 2400, the GAO Audit Mandates
Revision Act of 2018, on February 7, 2018. The bill was
referred to the Committee on Homeland Security and Governmental
Affairs.
The Committee considered S. 2400 at a business meeting on
February 14, 2018. The bill was ordered reported favorably en
bloc by voice vote. Senators present for the vote were Johnson,
Portman, Paul, Lankford, Enzi, Hoeven, Daines, McCaskill,
Heitkamp, Peters, Hassan, Harris, and Jones.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1. Short title
This section establishes the bill's short title as the
``GAO Audit Mandates Revision Act of 2018.''
Section 2. Audits modified
Subsection (a) eliminates the requirement for the
Comptroller General of the United States to review CAF's
financial audits.
Subsection (b) repeals the requirement that GAO review
PCORI's annual financial audit and amends the reporting
requirement so that GAO only reports every five years.
Subsection (c) transfers the responsibility of reviewing
TARP's financial audit from GAO to the Inspector General of the
U.S. Department of the Treasury. Subparagraph (2)(A) states
that the Secretary should transfer the necessary funds to
reimburse the Inspector General of the Department of Treasury
for performing the audit. Subsection (B) explains that the
reimbursements should be accredited to the ``Salaries and
expenses'' account of the Treasury OIG.
Subsection (3) requires TARP to take action to address any
deficiencies that are identified by the auditor. When no
actions need to be taken, TARP needs to certify with the
appropriate congressional committees that no action is
necessary.
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. Congressional Budget Office Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 23, 2018.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2400, the GAO Audit
Mandates Revision Act of 2018.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall,
Director.
Enclosure.
S. 2400--GAO Audit Mandates Revision Act of 2018
The Congress routinely requires the Government
Accountability Office (GAO) to perform annual examinations of
programs, agencies, or federal activities. S. 2400 would repeal
the requirement for GAO to audit and review the Congressional
Award Foundation and the Patient Centered Outcomes Research
Institute. In addition, the bill would transfer GAO's
responsibility for auditing the Troubled Asset Relief Program
to the Department of the Treasury.
CBO estimates that implementing S. 2400 would have no
significant effect on the federal budget. GAO has an annual
budget of more than $500 million and prepares hundreds of
reports for the Congress each year. CBO expects that
implementing S. 2400 would decrease the agency's costs by less
than $500,000 a year. Any reduction in the agency's spending
would depend on the amounts provided to GAO in future
appropriation bills.
Enacting S. 2400 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting S. 2400 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
S. 2400 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
VII. Changes in Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in brackets, new matter is
printed in italic, and existing law in which no change is
proposed is shown in roman):
UNITED STATES CODE
* * * * * * *
TITLE 2--THE CONGRESS
* * * * * * *
CHAPTER 19--CONGRESSIONAL AWARD PROGRAM
* * * * * * *
SEC. 807. AUDITS.--
(a) * * *
(b) Annual Report to Congress on Audit Results.--Not later
than May 15 of each calendar year, the Board shall submit to
appropriate officers, committees, and subcommittees of Congress
[and to the Comptroller General of the United States] a report
on the results of the most recent audit conducted pursuant to
this section, and shall include in the report information on
any such additional areas as the independent public accountant
who conducted the audit determines deserve or require
evaluation.
[(c) Review by the Comptroller General of Annual Audit.--
[(1) The Comptroller General of the United States
shall review each annual audit conducted under
subsection (a).
[(2) For purposes of a review under paragraph (1),
the Comptroller General, or any duly authorized
representative of the Comptroller General, shall have
access to any books, documents, papers, and records of
the Board or such corporation, or any agent of the
Board or such corporation, including the independent
external auditor designated under subsection (a),
which, in the opinion of the Comptroller General, may
be pertinent.
[(3) Not later than 180 days after the date on which
the Comptroller General receives a report under
subsection (b), the Comptroller General shall submit to
Congress a report containing the results of the review
conducted under paragraph (1) with respect to the
preceding year.]
* * * * * * *
TITLE 12--BANKS AND BANKING
* * * * * * *
CHAPTER 52--EMERGENCY ECONOMIC STABILIZATION
* * * * * * *
Subchapter I--Troubled Assets Relief Program
* * * * * * *
SEC. 5226--OVERSIGHT AND AUDITS.--
(a) * * *
[(b) Comptroller General Audits.--
[(1) Annual audit.--The TARP shall annually prepare
and issue to the appropriate committees of Congress and
the public audited financial statements prepared in
accordance with generally accepted accounting
principles, and the Comptroller General shall annually
audit such statements in accordance with generally
accepted auditing standards. The Treasury shall
reimburse the Government Accountability Office for the
full cost of any such audit as billed therefor by the
Comptroller General. Such reimbursements shall be
credited to the appropriation account ``Salaries and
Expenses, Government Accountability Office'' current
when the payment is received and remain available until
expended. The financial statements prepared under this
paragraph shall be on the fiscal year basis prescribed
under section 1102 of title 31.
[(2) Authority.--The Comptroller General may audit
the programs, activities, receipts, expenditures, and
financial transactions of the TARP and any agents and
representatives of the TARP (as related to the agent or
representative's activities on behalf of or under the
authority of the TARP), including vehicles established
by the Secretary under this chapter.
[(3) Corrective responses to audit problems.--The
TARP shall--
[(A) take action to address deficiencies
identified by the Comptroller General or other
auditor engaged by the TARP; or
[(B) certify to appropriate committees of
Congress that no action is necessary or
appropriate.]
(b) Audits.--
(1) Annual audit.--The TARP shall annually prepare
and issue to the appropriate committees of Congress and
the public audited financial statements that shall be--
(A) prepared in accordance with generally
accepted accounting principles;
(B) prepared and audited in the same manner
as the financial statements of covered
executive agency components under sections 3515
and 3521 of title 31, United States Code; and
(C) prepared on the fiscal year basis
prescribed under section 1102 of title 31,
United States Code.
(2) Audit costs.--
(A) In general.The Secretary shall transfer
to the Inspector General of the Department of
the Treasury such sums as are necessary to
reimburse the Inspector General for the full
cost of performing an audit required under
paragraph (1) or procuring the audit from an
independent external auditor.
(B) Credit.--The reimbursements described in
subparagraph (A) shall be credited to the
appropriation account ``Salaries and expenses,
Office of the Inspector General, Department of
the Treasury'' current when the payment is
received and remain available under expended.
(3) Corrective responsive to audit problems.--The
TARP shall--
(A) take action to address deficiencies
identified by the auditor of the TARP financial
statements; or
(B) certify to the appropriate committees of
Congress that no action is necessary or
appropriate.
* * * * * * *
TITLE 42--THE PUBLIC HEALTH AND WELFARE
* * * * * * *
CHAPTER 7--SOCIAL SECURITY
* * * * * * *
Subchapter XI--General Provisions, Peer Review, and Administrative
Simplification
* * * * * * *
PART D--Comparative Clinical Effectiveness Research
(a) * * *
* * * * * * *
(g) Financial and Governmental Oversight.--
(1) Contract for audit.--The Institute shall provide
for the conduct of financial audits of the institute on
an [annual] basis by a private entity with expertise in
conducting financial audits.
(2) Review and annual reports.--
(A) Review.--The Comptroller General of the
United States shall review the following:
[(i) Not less frequently than on an
annual basis, the financial audits
conducted under paragraph (1).]
[(ii)](i) Not less frequently than
every 5 years, the processes
established by the Institute, including
the research priorities and the conduct
of research projects, in order to
determine whether information produced
by such research projects is objective
and credible, is produced in a manner
consistent with the requirements under
this section, and is developed through
a transparent process.
[(iii)](ii) Not less frequently than
every 5 years, the dissemination and
training activities and data networks
established under section 937 of the
Public Health Service Act [42 U.S.C.
299b-37], including the methods and
products used to disseminate research,
the types of training conducted and
supported, and the types and functions
of the data networks established, in
order to determine whether the
activities and data are produced in a
manner consistent with the requirements
under such section.
[(iv)](iii) Not less frequently than
every 5 years, the overall
effectiveness of activities conducted
under this section and the
dissemination, training, and capacity
building activities conducted under
section 937 of the Public Health
Service Act. Such review shall include
an analysis of the extent to which
research findings are used by health
care decision-makers, the effect of the
dissemination of such findings on
reducing practice variation and
disparities in health care, and the
effect of the research conducted and
disseminated on innovation and the
health care economy of the United
States.
[(v)](iv) Not later than 8 years
after March 23, 2010, the adequacy and
use of the funding for the Institute
and the activities conducted under
section 937 of the Public Health
Service Act, including a determination
as to whether, based on the utilization
of research findings by public and
private payers, funding sources for the
Patient-Centered Outcomes Research
Trust Fund under section 9511 of the
Internal Revenue Code of 1986 are
appropriate and whether such sources of
funding should be continued or
adjusted.
(B) [Annual r] Reports.--Not later than April
1 of each year, in which a review is conducted
under subparagraph (A), the Comptroller General
of the United States shall submit to Congress a
report containing the results of the review
[conducted under subparagraph (A) with respect
to the preceding year (or years, if
applicable),] together with recommendations for
such legislation and administrative action as
the Comptroller General determines appropriate.
* * * * * * *
[all]