[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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------

              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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \5\Pub. L. No. 114-301 (114th Cong.).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------

                        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.

           *       *       *       *       *       *       *


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