<DOC>
[108th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:92126.wais]
25th ANNIVERSARY OF THE INSPECTOR GENERAL ACT--WHERE DO WE GO FROM
HERE?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT EFFICIENCY
AND FINANCIAL MANAGEMENT
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
OCOTBER 8, 2003
__________
Serial No. 108-110
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
92-126 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma C.A. ``DUTCH'' RUPPERSBERGER,
NATHAN DEAL, Georgia Maryland
CANDICE S. MILLER, Michigan ELEANOR HOLMES NORTON, District of
TIM MURPHY, Pennsylvania Columbia
MICHAEL R. TURNER, Ohio JIM COOPER, Tennessee
JOHN R. CARTER, Texas CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota ------
MARSHA BLACKBURN, Tennessee BERNARD SANDERS, Vermont
(Independent)
Peter Sirh, Staff Director
Melissa Wojciak, Deputy Staff Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Philip M. Schiliro, Minority Staff Director
Subcommittee on Government Efficiency and Financial Management
TODD RUSSELL PLATTS, Pennsylvania, Chairman
MARSHA BLACKBURN, Tennessee EDOLPHUS TOWNS, New York
STEVEN C. LaTOURETTE, Ohio PAUL E. KANJORSKI, Pennsylvania
JOHN SULLIVAN, Oklahoma MAJOR R. OWENS, New York
CANDICE S. MILLER, Michigan CAROLYN B. MALONEY, New York
MICHAEL R. TURNER, Ohio
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Mike Hettinger, Staff Director
Larry Brady, Professional Staff Member
Amy Laudeman, Clerk
Mark Stephenson, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on October 8, 2003.................................. 1
Statement of:
Gianni, Gaston, vice chair, President's Council on Integrity
and Efficiency and Inspector General, Federal Deposit
Insurance Corp.; and Barry Snyder, vice chair, Executive
Council on Integrity and Efficiency and Inspector General,
Federal Reserve Board...................................... 62
Walker, David M., Comptroller General, U.S. General
Accounting Office; and Clay Johnson III, Deputy Director
for Management, Office of Management and Budget............ 16
Letters, statements, etc., submitted for the record by:
Cooper, Hon. Jim, a Representative in Congress from the State
of Tennessee, prepared statement of........................ 10
Gianni, Gaston, vice chair, President's Council on Integrity
and Efficiency and Inspector General, Federal Deposit
Insurance Corp., prepared statement of..................... 66
Johnson, Clay, III, Deputy Director for Management, Office of
Management and Budget, prepared statement of............... 46
Platts, Hon. Todd Russell, a Representative in Congress from
the State of Pennsylvania, prepared statement of........... 3
Snyder, Barry, vice chair, Executive Council on Integrity and
Efficiency and Inspector General, Federal Reserve Board,
prepared statement of...................................... 81
Towns, Hon. Edolphus, a Representative in Congress from the
State of New York, prepared statement of................... 6
Walker, David M., Comptroller General, U.S. General
Accounting Office, prepared statement of................... 19
25th ANNIVERSARY OF THE INSPECTOR GENERAL ACT--WHERE DO WE GO FROM
HERE?
----------
WEDNESDAY, OCTOBER 8, 2003
House of Representatives,
Subcommittee on Government Efficiency and Financial
Management,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in
room 2247 Rayburn House Office Building, Hon. Todd Russell
Platts (chairman of the subcommittee) presiding.
Present: Representatives Platts, Blackburn, and Towns.
Also present: Representative Cooper.
Staff present: Mike Hettinger, staff director; Dan Daly,
counsel; Larry Brady, Kara Galles, and Tabetha Mueller,
professional staff members; Amy Laudeman, clerk; Mark
Stephenson, minority professional staff member; and Jean Gosa,
minority assistant clerk.
Mr. Platts. With the belief that a quorum will very
presently be established, we are going to begin this hearing of
the Subcommittee on Government Efficiency and Financial
Management, and the hearing will officially come to order.
Twenty-five years ago this month, Congress created
Inspectors General throughout the Federal Government in
response to serious and widespread internal control breakdowns
that resulted in significant monetary losses and reduced
effectiveness and efficiency in Federal activities. Since their
creation, IGs have been largely successful in carrying out
their mission, reporting billions of dollars in savings and
cost recoveries, as well as thousands of successful criminal
prosecutions.
There are currently 57 Inspector General offices with
11,000 employees and a total budget of nearly $1.5 billion.
Twenty-nine IGs are appointed by the President and confirmed by
the Senate, and 28 are appointed by agency heads in Designated
Federal Entities [DFEs]. Inspector General offices are
responsible for conducting and supervising audits and
investigations, promoting economy, efficiency and effectiveness
and preventing and detecting fraud and abuse in their agencies'
programs and operations. IGs serve an important function in our
system of separation of powers. Their autonomy and independence
provide a crucial balance between the executive branch and the
Congress.
In August 2002, the General Accounting Office issued a
report that explored the options consolidating some IG offices
and changing the status of others. GAO surveyed the IG
community to determine how consolidation would affect
independence, quality of work and the best use of resources.
Today, we will look at the progress that has been made in the
past 25 years since the IG Act was passed and what, if any,
legislative changes are needed to help the IG community ensure
efficiency, accountability and effectiveness within the Federal
Government.
We are greatly honored here today to have before the
subcommittee the Honorable David Walker, Comptroller General of
the U.S. General Accounting Office, and the Honorable Clay
Johnson III, Deputy Director for Management at the Office of
Management and Budget; and they will be part of our first
panel.
On our second panel we will have the Honorable Gaston
Gianni, vice chair of the President's Council on Integrity and
Efficiency and the Inspector General of the Federal Deposit
Insurance Corp.; and Mr. Barry Snyder, vice chair of the
Executive Council on Integrity and Efficiency and Inspector
General at the Federal Reserve Board. We appreciate all the
witnesses being with us, and we all appreciate your fine
service to our Nation, day in and day out.
I am now pleased to yield to the ranking member of the
subcommittee, the gentleman from New York, Mr. Towns.
[The prepared statement of Hon. Todd Russell Platts
follows:]
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Mr. Towns. Thank you, Mr. Chairman.
Last week, the Government Reform Committee reported out a
resolution commending the work of the Inspectors General on the
occasion of the 25th anniversary of the act. I strongly
supported that resolution and am proud to be an original
cosponsor.
The Government Reform Committee has a long history of
working with the Inspectors General to eliminate waste, fraud
and abuse in Federal programs. Indeed, the Government
Operations Committee drafted the original statute establishing
the Inspectors General in the executive branch 25 years ago.
The close working relationship between the Inspectors
General and our committee is entirely appropriate. The
Inspector General community is one of the Congress' principal
watchdogs in the executive branch. There is much we can learn
from each other as we work to ensure that our government
operates in the most effective and efficient manner possible.
The IGs have a very difficult job. They are appointed by
the President, but report to the Congress as well as the head
of the agency. As independent investigators within the Federal
agencies, they are often the last person a manager wants to
hear from. Yet, in many instances, the toughest jobs are the
ones that need to be done the most.
During fiscal year 2002, IGs returned over $4.5 billion to
the Federal Government in restitution and recoveries, and their
audits identified another $72 billion in funds that could be
used more effectively. They also had more than 10,000
successful criminal prosecutions. Similar accomplishments are
made year after year. The IGs have more than proven their
usefulness to Congress and the American public.
The 25th anniversary of the Inspector General Act is also a
logical point in time to examine whether any improvement could
be made to the act. Several suggestions have been made to help
enhance the independence of the IGs, adjust certain reporting
requirements, and codify in statute the existing IG Council.
I am pleased to hear that my good friend Representative Jim
Cooper is drafting legislation on these and other issues. And I
am ready to work with him and the chairman and anybody else
that is concerned about this to try and see what we can do to
strengthen the act in every way.
On that note, Mr. Chairman, I yield back.
Mr. Platts. Thank you, Mr. Towns.
[The prepared statement of Hon. Edolphus Towns follows:]
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Mr. Platts. I now would like to recognize Jim Cooper from
Tennessee. Representative Cooper is a member of the full
Government Reform Committee, and while he is not a member of
this subcommittee, he certainly has a strong interest in
improving government accountability and has drafted legislation
that proposes a number of changes to the IG Act.
I am now pleased to recognize Mr. Cooper for the purpose of
making an opening statement.
Mr. Cooper. Thank you, Mr. Chairman, and thank you to my
friend Ed Towns. I appreciate your kind words and appreciate
your letting me sit in on this hearing.
My purpose is to try to draft consensus legislation with
the help of the IGs themselves, with the help of experts in
this area, and with the help of both parties in Congress, so we
can do what we can to strengthen what is already a great
government institution.
The draft bill, as proposed, is called the Improving
Government Accountability Act, and it would do several things.
One, it would try to increase the independence of each IG by
creating a fixed term of office and eliminating any possibility
of arbitrary or politically motivated dismissals. Right now,
IGs currently serve at the pleasure of the appointing
authority, whether it is the agency they serve or the President
of the United States. And while it is indeed rare, IGs have
occasionally been dismissed for less than cause.
My bill would set a 7-year term for every IG and have
dismissal procedures for cause as is common in the private
sector. That standard for removal would be the same one that
applies currently under the statute for the Comptroller General
for permanent disability, malfeasance, inefficiency, neglect of
duty, conviction of a felony, or conduct involving moral
turpitude. That was our best thought for really ensuring IG
independence.
Second, the bill would ensure that IG offices have access
to sufficient resources from Congress. And here what we are
thinking of is, although IG funding is ultimately determined by
Congress through the appropriations process, IG budget requests
are often submitted as part of an agency's overall budget
request.
We have heard several anecdotal reports of agencies
punishing IG offices by dramatically shrinking or by reducing
the IG budget; and we were thinking that it would be good for
Congress to have copies of their funding requests sent directly
to Congress, so we could know how much the IGs were cut back,
and also require the President's budget to provide a comparison
of budget requests submitted by IGs and the budget requests
submitted by the agency involved. This provision would
partially free the IGs from being captured by the agency
appropriations process. And it would, I think, provide more
transparency.
Next, we would like to codify the current governing
councils for the IGs, which seem to work in an excellent
fashion, but now they are a creature of Executive order. This
would allow dissemination of best practices on an even better
basis and, I think, a unified institutional voice for the IGs,
both the Presidentially and agency-appointed ones. It would
combine both of the current councils into a single council,
codify the council and also authorize about $750,000 a year in
operating funds through the year 2009 to ensure their
organization and efficiency.
And finally my bill would improve direct access of IGs to
Congress. Under current law, IGs submit semiannual reports to
their agency heads, who then have 30 days to transmit the
report to Congress. Many IGs have argued that this process
diminishes their access to Congress and undermines their
ability to draw attention to an agency concern. This is
particularly true due to the filing dates for these reports
which oftentimes, in fact, almost invariably fall during a
congressional recess, which limits their impact.
So what we would like to do is allow IGs to report directly
to Congress and to bypass agency intercession. I think that
would enable Congress to exercise its oversight
responsibilities more effectively. And we would change the IG
reporting dates to January 31 and July 31, when we are more
likely to be in session.
So, in sum, Mr. Chairman--and I appreciate your
indulgence--we would like to applaud the IGs for their terrific
work for the American taxpayer these last 25 years. It is
incredible the efficiency and effectiveness of this group of
internal monitors in these agencies. So I would like to do what
we can, Mr. Chairman, to further enhance their ability to serve
the American taxpayer.
[The prepared statement of Hon. Jim Cooper follows:]
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Mr. Platts. Thank you, Mr. Cooper. We appreciate your
participation here today. I would like also to recognize that
we have the vice chairwoman of our subcommittee, the gentlelady
from Tennessee, Mrs. Blackburn.
Would you like to make an opening remark?
Mrs. Blackburn. Mr. Chairman, I have no opening remarks,
but as always, I have plenty of questions and will just take
advantage of the time at that point.
Mr. Platts. We will proceed with our first panel and ask
our witnesses for the first panel to stand and raise their
right hands and prepare to take the oath together.
[Witnesses sworn.]
Mr. Platts. The clerk will note that both witnesses have
affirmed the oath, and we will proceed now directly to
testimony from our first panel.
Mr. Walker, we will begin with you, followed by Mr.
Johnson; and after the conclusion of your testimonies and Q and
A with our first panel of witnesses, then we will proceed to
Mr. Gianni and Mr. Snyder.
We do have your written testimonies and appreciate the time
and effort that went into preparing those for both members and
staff and would ask that you somewhat limit your oral
statements here today to about 5 minutes. We are not going to
be a real stickler on that, because we appreciate your time and
the wisdom you will share with us.
STATEMENTS OF DAVID M. WALKER, COMPTROLLER GENERAL, U.S.
GENERAL ACCOUNTING OFFICE; AND CLAY JOHNSON III, DEPUTY
DIRECTOR FOR MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET
Mr. Walker. Mr. Chairman, Mr. Towns, other Members, I
appreciate the opportunity to be here to be able to review the
25-year experience of the IG Act. I would ask, Mr. Chairman,
that a copy of the full statement be entered into the record so
I can, just now, summarize.
Mr. Platts. It will be done.
Mr. Walker. Thank you, Mr. Chairman.
There's no question that the Inspector General community
has made a significant difference in Federal performance and
accountability during the past 25 years. As indicated by their
many reports, they have saved billions of dollars for the
public. They have made thousands of recommendations and
thousands of criminal and civil referrals.
Notwithstanding the accomplishments of the past, however,
the Federal Government as a whole, and including the
performance and accountability community of which GAO and the
IGs are a part, face continuing challenges to be able to meet
increasing demand with available resources.
One of the challenges that face us in the performance and
accountability community today is how we can do more with less
and how we can improve our own economy, efficiency,
effectiveness, transparency and accountability, because I am a
strong believer that we should lead by example, since we are
the ones holding others accountable. It's not just GAO, but
also the Inspectors General, whether part of the PCIE or the
ECIE.
Although both GAO and IGs have efforts in place to identify
major risk and challenges within the Federal Government, there
really is no current formalized mechanism in place for us as a
community to carry out a strategic and integrated planning and
coordination process, which I think is necessary in order to
maximize the return on the collective investment in the
performance and accountability community. There is a provision
in current law that requires some coordination by the IGs with
the GAO, but that has really been more ad hoc in the past, and
it is one of the areas that I think we need to figure out how
we can work together more in a complementary fashion for the
benefit of not only the Congress but the American people.
With regard to the consolidated financial audit, as you
know, IGs have a number of different roles and
responsibilities. One of the areas that the GAO works on with
the IGs, among others, is in the conduct of the audit of the
consolidated financial statements of the U.S. Government. And
most of that is going well.
As you know, 21 of 24 CFO Act agencies have clean opinions
on their financial statements, while a number have internal
control challenges and various compliance issues. But as we
look ahead to the day where, hopefully, GAO will be able to
initially express a qualified opinion on the consolidated
financial statements of the U.S. Government and, hopefully,
leading to a full opinion--I hope before the end of my 15-year
term--the fact of the matter is, we are going to have to do
things differently.
There have been some issues with regard to the agency
financial statement audits. We're going to have to have access
to records and other information a lot earlier in the process,
and certain steps are going to need to be taken in order to
assure the quality and consistency of audits throughout
government. I am happy to answer questions in that regard or
any other areas.
With regard to this--one of the things I would point out
is, through working with OMB in a constructive fashion, the
Secretary of the Treasury, the Director of OMB and myself as
Comptroller General have agreed to accelerate financial
reporting, accelerate auditing on those financial reports and
to really try to raise the bar on what acceptable performance
is in the financial management area. I think that is a major
step in the right direction, but it will place additional
challenges on all of us as we try to meet these new
requirements.
One of the other issues that I think is important is to
keep in mind is that, in the private sector, when an entity is
audited, the audited entity typically bears the cost of that
audit. I think that's something that needs to be considered for
public-sector entities as well, that the entity that is being
audited bear the cost of that audit, at least as it relates to
departments and agencies.
We also believe that it's appropriate for consideration to
be given for selective implementation of financial management
advisory committees or audit committees, at selected Federal
agencies, based upon value and risk. This is a private-sector
best practice, and we think it's something that needs to be
considered for the public sector as well, as well as certain
other aspects of the Sarbanes-Oxley Act such as certifications
by agency heads and CFOs with regard to financial reporting.
As you mentioned, Mr. Chairman, GAO issued a report last
year dealing with a number of IG offices. There are 57 IG
offices. About half of the IG's are Presidential appointees and
about half of the IG's are appointed by their agency head. We
recommended that the Congress consider consolidating the number
of IG offices. We did this for a variety of reasons: economy,
efficiency, effectiveness, flexibility, accountability and
independence.
The fact of the matter is, there are real independence
questions when the agency head selects the IG. Furthermore,
there are real issues as to economy of scale and whether or not
there is adequate critical mass with regard to some of the
smaller IG offices.
We believe it is possible to accomplish consolidation of IG
offices in a manner that would not dilute the coverage for some
of the agencies that currently have their own IG if it's
properly designed and properly implemented. Obviously we will
be happy to answer any questions on this matter.
As you might imagine, when we solicited the opinions of
ECIE members, which are the agency-appointed IGs and the PCIE
members, their opinions tend to diverge based upon where they
sat. All the parties have a vested interest in the outcome.
Candidly, we don't have a dog in this fight, and we're just
trying to make recommendations to Congress. Reasonable people
can differ, and will differ, but we think it's an area you need
to consider.
On page 16 of my testimony, I outline several other areas
where we think consideration should be given for possible
legislation dealing with the need for a coordinating mechanism,
the possibility of elevating certain current IGs to
Presidential appointee, Senate confirmation status, and the
possibility of consolidating certain IG offices.
And by the way, what we put in our report was an
illustrative example; it wasn't a formal recommendation. It was
illustrative of how you might be able to consolidate offices,
not necessarily the way to do it.
And last, also, as Mr. Cooper mentioned, my written
testimony supports the idea of formalizing, through the
statutory process, coordinating councils within the IG
community, and among the Federal performance and accountability
community as well.
Thank you, Mr. Chairman.
Mr. Platts. Thank you, Mr. Walker.
[The prepared statement of Mr. Walker follows:]
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Mr. Platts. Mr. Johnson.
Mr. Johnson. Thank you. As the Deputy Director for
Management at OMB it is my privilege to be the Chair of the
PCIE and the ECIE. What that calls for me to do is to work with
the leadership of these two groups to make sure that, in
addition to being a tough watchdog and in addition to being the
last person management wants to hear from, these groups of the
IG community are also--as their charter or as their mission
statement calls for them to be, that they are agents of
positive change, that they are finding ever more effective ways
to work with Department leadership to help better accomplish
each agency's mission, and that they are working as effectively
as possible to prevent waste, fraud and abuse in addition to
discovering it and eliminating it.
Also, it is my responsibility as the Deputy Director of OMB
to be the senior person in this administration that drives the
President's Management Agenda. So I work closely with the IGs
to look for additional ways for them to be involved in that as
their--as the IGs' mission and the stated goal of the
President's Management Agenda, those goals are the same and
that is to create--to cause the Federal Government to become
even more focused on results, to become even more effective and
to allow us to spend and account for the people's money ever
more wisely.
It's my privilege to work with Gaston and Barry and their
groups, and I find that the primary value that I bring to that
group is, I can help them work even more effectively with
agency leadership and administration leadership to accomplish
their goals and the administration's goals.
Thank you.
Mr. Platts. Thank you, Mr. Johnson.
[The prepared statement of Mr. Johnson follows:]
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Mr. Platts. We'll proceed right to questions and again
shoot for about a 5-minute question period for each of our
panel or each of the members and then have subsequent rounds as
time allows and members have interest.
Mr. Walker, if you could start, and you touched the
recommendation you have made about consolidation of the
department-appointed IGs with the Presidential appointees and
you identified a number of areas--the independence, efficiency,
effectiveness.
In your opinion, what's GAO's position, the most important
reason for that? Is it because they're not as effective as they
could be or is it more about saving dollars? Is there one of
those issues that really jumps out?
Mr. Walker. This is in no way intended to say that the
individual IGs aren't doing a good job. That's not the case at
all. The question is, what is the best way to go about ensuring
the independence of the IGs? Independence is really an issue
with regard to the agency-head-appointed IGs. There's a
fundamental, at a minimum, appearance of a conflict of interest
when the agency head appoints the IG and can remove the IG.
It's obvious. It's recognized in independent standards with
regard to generally accepted auditing standards.
Second, the fact of the matter is there's also an issue if
you've got an IG shop that has less than 5 or 10 people. Do you
really have enough of a critical mass in order to get the job
done? Do you have access to things that otherwise you might be
able to achieve if you were part of a larger organization?
There's also an issue of flexibility in reallocating in the
areas of highest risk and highest value.
My personal view, Mr. Chairman, is, I believe that the
government as a whole--not just the IG community and the
performance and accountability community--needs to review and
reassess the number of silos that it has. I think government
has too many silos and too many stovepipes. The more silos that
you have, the more potential duplication and inefficiency you
have; furthermore, the more you have to rely on coordination of
activities rather than integration of efforts. I might note
that we basically did this at GAO where we went from 35
individual units down to 13, and it along with other actions,
has enhanced our capability quite a bit over the last several
years.
Mr. Platts. It's fair to say--kind of summarizing your
approach, what is the mission here and is there a problem with
how--what is the best way to fulfill the mission?
Mr. Walker. That's correct. This is not an indictment or a
complaint in any way, shape or form with regard to any
particular IG.
The question is--as you know, Mr. Chairman, we face large
and growing budget deficits. We face serious challenges. The
question is, how can we get as much done with the resources we
have? How can we improve economy, efficiency, effectiveness,
flexibility, and how can we assure independence. That's really
where we're coming from.
Mr. Platts. In your survey and making recommendations, you
talked to the Presidentially appointed IGs, the department-
head-appointed and the consensus and kind of a turf battle, in
a sense, that drove the general positions.
Were there any independent voices with Presidentially
appointed IGs or the department-head-appointed IGs that stood
out from their colleagues that--maybe start with the Department
appointees--that said, actually, I do think this will be a good
idea, that jump out as more the exception?
Mr. Walker. There were some exceptions and without talking
about specific individuals, I guess what I would say is that we
did the survey as a supplement to our work. Obviously, we're
not in the business of just doing polls and making
recommendations based on poll results. This is not referendum
government.
So the fact of the matter is, we wanted to be able to get a
sense from where the IG community was coming from, first from
the Presidentially appointed, the PCIE and then the ECIE, the
agency-head-appointed, because that's important input not only
for us but for the Congress to consider.
Not surprisingly, as you can imagine, reasonable people can
and do differ on the issue of consolidation, and not
surprisingly the Presidentially appointed IGs who might end up
gaining additional resources and authorities and scope
generally supported it by a wide margin. Not surprisingly, the
ECIE members many of which, not all of which, would be merged
into a PCIE, expressed concerns, some of which were very
legitimate concerns, as to what the impact might be on them,
their offices or the agencies that they have responsibility
for. However, we believe those issues can be effectively
addressed.
Mr. Platts. Was there followup, though, with the ones in
the Presidential-appointed IGs, the ones that didn't recommend
or favor consolidation? Was there followup with them? Because
they were not--I mean, it's human nature, kind of, to protect
turf; but because they were not doing that to expand their
area, did you followup with them--and same with the other
side--to give a little more weight to their opinions because
they did stand out from their peers?
Mr. Walker. We did have formal and informal dialog to try
to help understand why people felt the way that they did.
I also might say that one of the things that happened this
past year, which I am very appreciative of, is, I was given the
opportunity to attend the Inspector General's Planning
Conference for the PCIE and ECIE to be able to talk about areas
for coordination and cooperation and also to talk about this
consolidation report.
I also had an opportunity to speak one on one with a number
of Inspectors General from both the PCIE and EICE about their
views. And you know and as I said, reasonable people can
differ. We gave one example of how you could consolidate. We
still stand behind our recommendation and we believe the pluses
outweigh the minuses with regard to consolidation and, also,
elevation of some of the current ECIE members to Presidential-
appointee status.
Mr. Platts. Mr. Johnson, from the administration's
perspective, what is seen as the most important priority of IGs
auditing financial statements, guarding against waste and
fraud? It's kind of that priority mission, in the opinion of
the administration; and based on that, what do you look for as
you are looking to fill IG positions? What are you looking for
as most important, whether financial accountability,
investigative background?
Mr. Johnson. IGs themselves say that they are agents of
positive change; and that is a big umbrella, but I think the
right umbrella. It talks about prevention versus ``gotcha,''
talks about partnering--with being independent of agency
management, but also partnering with agency management in
helping agencies accomplish their missions. And I think that
collaborative, but yet independent relationship is what I
consider to be my highest priority in terms of working with the
IG community.
In terms of what we look for, it depends. We ask the same
questions of IGs that we ask of Assistant Secretaries or Deputy
Secretaries or Secretaries: What do we want the person to
accomplish in the next 2 to 3 years?
There are large investigations that need to take place, or
large financial management matters or audit matters. The nature
of the primary task in the 2, 3, 4, 5 years that a person is
likely to hold a position would determine what kind of person
we look for. If it is investigative, we would look for
investigative background. If it is financial management and
audit management, that's the kind of background we look for
also. So it depends on what we deem--what the financial
community, what the comptroller at OMB use to be the primary
challenge in that agency; and also we partner with the
Secretary in terms of determining whether the person--what kind
of person we are looking for in that position.
And also the same thing is true, is the person in that
position doing a good job? This administration has been
involved in the removal of, I think--in the point of terms, I
think it's three or four or five, I think, IGs. And the feeling
was, they were too oriented to prevention and not enough to
investigation or vice versa, or they didn't have the financial
background. Whatever the feeling was, they were not the best
fit for what the job called for at that agency at that time,
and so we went through the process of making those changes.
So again it is very specific and targeted to what the
nature of the past, what the nature of the objective is.
Mr. Platts. I want to yield to the ranking member, Mr.
Towns. But I do appreciate the kind of umbrella message, or
approach, trying to promote independence, but in a cooperative
way. Because that is something, as a subcommittee Chair with
oversight responsibilities, that we're independent as we look
at executive departments and agencies. We are not here to play
``gotcha,'' but it is to be supportive and a partner in serving
the public well.
So independent but cooperative. And that approach you are
trying to espouse throughout the IG community is, I think, very
appropriate.
Mr. Towns.
Mr. Towns. Thank you, Mr. Chairman.
Mr. Walker, I listened to your comments and, you know, Mr.
Snyder makes the point in his written testimony that this would
likely sacrifice some of the local preventive presence which
having an IG onsite ensures.
How would you respond to this point?
Mr. Walker. It would be very easy to make sure that you
deployed certain resources decentrally. In other words, if
certain ECIE-IG shops were consolidated into a PCIE IG shop,
that does not preclude the responsibility of their still having
certain IG members at that individual agency.
We have people at GAO in more than just our headquarters in
Washington, DC. We have people in 11 cities around the country.
We have certain audit sites in various major departments and
agencies where we have people there on a full-time or part-time
basis.
So I believe it's possible to deal with that issue even if
these functions are consolidated.
Mr. Towns. They could place somebody there?
Mr. Walker. Sure.
For example, if there's enough work or enough concern about
agency X, then I would argue that the Inspector General,
whoever he or she might be, consider whether or not there ought
to be people physically at agency X on the front line engaging
in activities with regard to that on a day-to-day basis. That's
part of the IG's leadership and management responsibilities. If
the Congress was particularly concerned to make sure that there
was a full presence at agency X; then Congress has the ability
to deal with that in a variety of different ways.
So I think that's a legitimate point, though I think it can
be dealt with very easily.
Mr. Towns. Would you please elaborate a bit more on your
proposal for a Federal Accountability and Performance Council
to improve coordination between the IG and GAO.
Mr. Walker. Thank you, Mr. Towns. This is a concept we
would like to be able to work or with the IG community, as well
as the Congress, because we haven't formally formulated it yet.
The concept I would give you is this: Clay Johnson does a very
good job chairing the PCIE and ECIE. There is a mechanism
within the executive branch for there to be coordination within
the executive branch among the performance and accountability
community. However, I would respectfully suggest that the IGs
really have dual reporting responsibilities.
They report to the agency head; they also report to the
Congress. A dimension that is not adequately addressed, I
believe, is the need for there to be some type of ongoing
coordination within the performance and accountability
community. That means members of the PCIE and members of the
ECIE and with the GAO.
I think there is a lot that we can and should do and, in
fact, are doing to try to work in a constructive and
cooperative fashion to leverage our resources, to minimize
duplication of effort, and to work in a complementary rather
than competing fashion. And yet, right now, the way it works
is, that it is based upon the individual good-faith efforts of
myself and other IGs and our respective staff, rather than
there being a requirement to do something.
So I think we need to explore what would make sense for the
Congress, for the IG community and for GAO.
Mr. Towns. You're not suggesting that the GAO exert control
over IGs?
Mr. Walker. No, I'm not. I am not talking about that at
all.
What I'm talking about is that we have a mechanism whereby,
from a strategic planning standpoint and from an engagement
execution standpoint, that we have more of a formalized,
ongoing process, to coordinate our efforts.
No, I do not believe that the IGs should report to the
Comptroller General or the GAO. Absolutely not. I do, however,
believe, as one example, that the IGs can play an important
role, for example, in determining who the external auditor for
agency financial statement audits is going to be. And the IGs
are going to end up coordinating the effort with GAO with
regard to who that external auditor is going to be.
I do believe that it is imperative that the Comptroller
General be consulted with regard to those decisions because in
the final analysis, we are the party who has to end up signing
the opinion on the consolidated financial statements, and we
have to be comfortable with regard to whether or not the work
that's being done is adequate.
Mr. Towns. You suggested that the agencies pay for the
audit. How would that work?
Mr. Walker. Most do that now. And let me clarify what I
mean by that.
A significant majority of the audits of departments and
agencies right now are performed by independent certified
public accounting firms--PriceWaterhouseCoopers, KPMG, Ernst &
Young, Deloitte & Touche, for example. Those are the big four
that are still left after consolidation in the accounting
profession.
There are other firms that do audits. To the extent that
those firms do the audits, they are obviously not doing it for
free, so they have to be paid. And I think it's important that
the entity that is being audited be charged with the cost of
that audit.
And so the issue is, it's not a matter of whether or not
somebody is going to pay, but who should pay and how should the
cost be allocated for that.
By the way, I am not proposing that for the consolidated
financial statement audit. We have the responsibility for the
consolidated financial statement audit, and I would
respectfully suggest that Congress appropriates money for us to
do that audit. And so I'm not asking--I am not going to send
OMB a bill for the consolidated financial statement audit. I
do, however, think that consideration ought to be given as to
whether for instance, the IRS should have to bear some costs
for its audit, just as the FDIC does and just as the SEC does,
who are two other audit clients that we have.
Mr. Towns. I see the light is on--we'll get another round.
Mr. Platts. Now recognize vice chairwoman of the
subcommittee, the gentlelady from Tennessee, Mrs. Blackburn.
Mrs. Blackburn. Thank you, Mr. Chairman. And I want to
begin by apologizing to all of you. I have been up and down
twice as you were giving your comments, and I do apologize for
that. It just seems like this is the day constituents have
decided to all come and all come at the same time, and not when
we have expected them. So I have been spending my time in the
hallway, up and down.
Mr. Platts. Mrs. Blackburn, how would you like to be 96
miles from the Capitol?
Mrs. Blackburn. When I was in the State senate in
Tennessee, I was 12 miles from the Capitol. And we love to have
them come and visit and appreciate their interest so much, but
I do feel as if the up and down is very inconsiderate of the
fact that you all take the time to prepare your testimonies and
come over here to us and talk with us.
I did want to provide that explanation.
Mr. Walker, I think I will begin with you. And, first of
all, I enjoyed the article that was in Wall Street Journal or
somewhere, your comments from the Press Club; it was excellent.
And I--it was one of those that I made a lot of notes as I read
it, and I appreciate that.
In your testimony, you had mentioned going through--having
a top-to-bottom review of Federal policies and programs that
would be conducted to make the Federal Government more
sustainable, and I think also to make it effective for the 21st
century.
My question to you is, do you think this should be handled
by an independent commission that would go in and look at
resources and programs and reallocations and such, or is that
something that could be handled through activity by the
Inspectors General?
Mr. Walker. Well, I think it needs to be handled through a
cooperative effort and the combined efforts of a variety of
parties.
First, I don't think the issue is ripe yet for an
independent commission. Let me try to elaborate on what I
intended by that.
GAO is the third Federal agency I have headed. I have
headed two in the executive branch and one in the legislative
branch, and I have had the good fortune to have leadership
responsibilities in both the public and private sector. And I
hae found that government, especially at the Federal level, is
an amalgamation and accumulation of various policies, programs,
activities and functions over decades. We have this
amalgamation and accumulation that occurs over all these
decades, and there's a tremendous amount of time focused on
whether we are going to end up getting a little bit more or a
little bit less, or tweak this here or tweak this there.
However, there's not enough of a fundamental review and
reassessment of whether or not this policy, program, function
and activity makes sense today and whether or not it will make
sense tomorrow.
I think it is critically important that we engage in that
process because the world is fundamentally different today.
It's changing very rapidly and we have very serious budget
deficits, a structural deficit that we are going to have to
deal with. And to do that, it takes combined efforts.
For example, one of a number of positive things----
Mr. Johnson. One of a number of very important things.
Mr. Walker [continuing]. One of the number of positive
things that Clay is doing is, through the President's
Management Agenda, this issue of linking resources to results.
That is part of the concept. What are we trying to accomplish?
What's the mission? How do you measure success? How can you
demonstrate you're making a difference?
That's something that I think that OMB and the agencies
have a responsibility to do. The IGs can play a constructive
role; GAO can play a constructive role and Congress, I think,
must play a constructive role not only through the oversight
process, but the authorization process and, frankly, the
appropriations process. Because if there aren't consequences
for not doing a good job, then why should people pay any
attention? If people who do a good job aren't somehow rewarded,
then what kind of incentives are we providing?
I think there is a lot that can and should be done in the
context of the current system. At some point in time, there
might be the need for a commission, but I don't think we're
there yet.
Mrs. Blackburn. Looking at going forward with that thought
pattern, if we had an independent commission or a council,
would we have members of the GAO, the PCIE and ECIE on the
commission; or should a comprehensive review by a completely
independent council?
Mr. Walker. First, I think you have to have qualified
people that have the time and the ability to get the job done.
Without knowing what it would be, it's difficult for me to
respond. Let me just say, I have seen different models work.
For example, one model could be--is that you would have the
GAO and the IGs provide support, testify and provide some type
of support to that commission.
Another model which has worked, but in a very different
context, is that the Congress decided about a year and a half
ago that there were problems in the area of competitive
sourcing; and they decided that they wanted to create an
advisory council, and actually had the Comptroller General head
that council to make recommendations to the Congress that
involved OMB, OPM, various unions and other parties.
There are different models that can work, and I think we
would have to discuss what you are trying to accomplish and
therefore what alternatives might make sense.
Mrs. Blackburn. Thank you, Mr. Chairman.
Mr. Platts. We'll come back around again.
Mr. Cooper.
Mr. Cooper. Thank you again, Mr. Chairman and madam vice
chairwoman and Mr. Towns for allowing me to participate.
Strikes me as a good news/bad news situation. I think most
Americans would be delighted that IGs have saved us nearly $72
billion and prosecuted some 10,700 bad guys. But the bad news
is there is that much waste out there and that many bad guys.
So I don't think we will ever know how much more there is to be
done, but I am thankful that they're working, as you all are,
to police that fraud and abuse.
Mr. Johnson, first question I had on the councils that you
already are the head of, what's your opinion of an idea to
codify those councils, to put them together into one group and
give them a minimal $750,000 annual operating budget? Would
that help in the sharing of best practices?
Mr. Johnson. I think they take it upon themselves now to
improve their standards and look at what their recommended
codes of conduct are and so forth. I think they do a good job.
If they were codified, they could perform that function
more readily. I think it depends on what you codify. I think
some of the CIO council and the CFO council are both codified
by statute. We have a Federal Acquisition Council that exists
by neither statute or Executive order. We just created it. I
think it can work either way. I am not opposed to codification,
but that alone will not ensure its effectiveness.
I think it's very important that the IG community be
codified by statute or by Executive order--do tie into OMB. I
think the Deputy Director for Management can be a tie to
management, and a tie to the budgets can be a most effective
tool for getting agencies to listen to what the IGs are
recommending for that agency.
I think we represent--we work with agencies all the time on
budget matters and general management issues, and to work on
matters that are brought to light by the IG community is just
an extension of that. So we are already set up to do that, to
work with the agencies, to drive them to better performance for
the American taxpayer; and to do that with the IG community is
consistent with what we already do.
Mr. Cooper. I appreciate your views on that, and I look
forward to working with you to make sure we do that.
Mr. Johnson. We will work with you on the language.
Mr. Cooper. Mr. Walker, on the point of IG independence, it
seems like there are a couple of ways to enhance their
independence. Consolidation may be one way so that an agency
head is not directly responsible for picking their own IG. The
way that we were looking at it in our draft legislation--and it
is just a draft form--is to have a 7-year term and then
dismissal for cause.
I am open-minded about consolidation. Can you be open-
minded about a term and dismissal for cause?
Mr. Walker. Absolutely. I think they're not mutually
exclusive.
My personal view is, I think it would be desirable to have
statutory criteria for Inspectors General. I think it would be
a good idea to consider term appointments.
I do think that you need to have some criteria for removal.
Who am I to argue with the criteria for the Comptroller
General? I think that the term needs to be reasonably long
enough for them to be able to make a difference. And as I
understood, what you are proposing is 7 years. I think that's a
reasonable term.
I do think the President has to play a role, but if you had
fewer PASs with a term appointment and specified grounds for
removal and statutory qualification requirements, I think that
would be a major plus for the independence of the IGs.
Mr. Cooper. I welcome your views on that.
Mr. Johnson. Mr. Cooper, may I add a comment to that?
I am not sure that anybody has indicated that there's not
already sufficient independence. My understanding is that the
independence level that exists now in the IG community is more
than adequate. I can understand there's potential--that we are
addressing potential here, but I think the way it's set up now
creates a significant amount of independence.
I personally would be opposed to a term. There were four,
five IG changes that we made at the beginning of this
administration that had nothing to do with malfeasance. We
thought the person had the wrong set of skills for what the
nature of the job was at that point in time. And having terms
would have prevented us from getting somebody better suited for
the job at that time.
The reasons you gave for just cause don't include matters
such as that. Wonderful people, they have all the right
statutory and education and experience requirements; they are
just investigative rather than financial, or vice versa; and I
think the administration's ability to deal with that is limited
if you put a term on it.
Mr. Cooper. Mr. Johnson, it strikes me that your concern is
not with the term, but the definition of ``dismissal for
cause.'' And if we define that to include a wrong fit for the
agency, that might alleviate your concerns.
Mr. Johnson. But that is so broad. We could do that, but in
effect, I think you have no term.
Mr. Cooper. My concern now, having talked to a wide number
of IGs, is that they feel considerable pressure as individuals
when they support sensitive areas and a more regular, private-
sector-like situation might be helpful. Most people in the
private sector kind of know what ``for cause'' is, and maybe we
can adjust that slightly for government contacts because we do
want the right fit and we need an appropriate balance between
prevention and ``gotcha.''
Mr. Johnson. Of course, maybe the pressure they feel is the
pressure to get it right, which is a good pressure to have.
Mr. Cooper. Well, we live in a political world, and there
are a lot of folks who know that there are certain things that
they will be in trouble if they investigate. And wouldn't it be
wonderful if we lived in world when they could investigate
wherever waste, fraud or abuse occurred?
So let's work on a way and see if we can't do that.
Mr. Walker. I think both of you made good points. Mr.
Johnson is talking about the fact that maybe you could end up
doing something on the basis for removal, but it would have to
not be so general that it really didn't have much significance.
If you look at the criteria and the reporting requirements,
they could be another check and balance.
Mr. Cooper. I look forward to working with you gentlemen on
that.
Mr. Platts. Thank you, Mr. Cooper. Our ranking member has
to leave shortly, so we will go to Mr. Towns next.
Mr. Towns. Thank you very much, Mr. Chairman.
I just want to ask Mr. Walker, you mentioned that IGs must
abide by the GAO government auditing standards, the so-called
``yellow book'' that, among other things, governs government
auditors' professional qualifications, the quality of the audit
effort and the characteristics of professional and meaningful
audit reports.
I understand that every IG must undergo a peer review every
3 years by another IG to determine compliance with these
standards. Can you please tell us what GAO's own experience has
been with peer review? Has there ever been an independent
review of a GAO compliance with its own audit standards?
Mr. Walker. Good point, and let me tell you what we have
done and what we are doing.
No. 1, we are subject to an external audit and have been
for a number of years--a financial statement audit. We have
gotten a clean opinion, no material control weaknesses, no
compliance problems for several years.
Second, we have a peer review conducted every 3 years by a
major accounting firm, one of the big four firms of our work in
conjunction with our financial statement audits: the audit of
the consolidated financial statement of the U.S. Government,
the IRS, the Bureau of Public Debt, the FDIC.
However, when I became Comptroller General, it became
evident--and we do have our own Inspector General, but it did
became evident that the scope of that peer review did not cover
program evaluations, policy analyses and other types of work.
So, therefore, I have worked with my colleagues from around the
world. We have now formed a consortium of auditors general from
around the world, and GAO will have a peer review done, led by
the Auditor General of Canada, next year for the rest of our
work.
So we've always had a peer review for part of our work, but
I want to make sure that we have a peer review for all of our
work.
Mr. Towns. Mr. Johnson, last year the IG community achieved
one of its main legislative priorities in the Homeland Security
bill, gaining statutory law enforcement authority. Would you
elaborate on how this authority has been implemented. Have
there been any significant problems that we should know about?
Has there been any resistance to the implementation?
Mr. Johnson. I'm sorry. I'm not familiar with the
situation, but I'll be glad to find out the answer to that
question and get back to you, yes, sir.
Mr. Towns. I'd like to make that----
Mr. Johnson. I apologize.
Mr. Towns. Thank you very much. I'd be delighted if you'd
do that.
I yield back, Mr. Chairman.
Mr. Walker. Mr. Chairman, if I can, we also have a very
extensive and elaborate internal quality assurance process as
well. I'd be happy to brief you on it at some point in time. We
have our own office of quality and continuous improvement, but
I appreciate your question about the peer review. It's a very
good one.
Mr. Towns. Thank you very much. And Mr. Johnson--for the
record I'd like for Mr. Johnson to respond to my question in
writing.
Mr. Platts. Sure. We'll be keeping the record open for that
followup.
What we're going to try to do, because we do have votes on
the floor, and it's going to be a series of five, so a lengthy
period of time, is try to push through as many questions here
for our first panel, and then we break, then that will conclude
with our first panel, followup with my questions that we don't
get included in writing to include in the record your
responses, and then start with the second panel when we come
back so we're not keeping two of you here while we're over
for--and for our second panel witnesses, we apologize. You'll
have to wait until we come back over.
Let me jump into the issue of the consolidation, and, Mr.
Johnson, the administration's position on the GAO
recommendation in a broad sense about consolidating the ECIE
positions into the Presidentially appointed positions. Are
there certain ones that the administration is especially
concerned about or has a position that you don't think it would
be a good idea?
Mr. Johnson. No. We have not looked at it by a specific
agency. Our focus has been on if we're going to change
something, let's understand specifically what it is we're
trying to accomplish. Are we trying to accomplish--create an
independence that doesn't exist? Are we trying to save X amount
of money? What do we think the opportunity is and at what cost,
what interaction or communication cost is that, but just be
real clear about what the goals are, be real clear about what
we think the risks and opportunities are before we actually
decide to proceed.
Mr. Platts. And making that type of risk assessment, cost
benefit assessment, is there a position today on the
recommendation of the broad consolidation?
Mr. Johnson. Well, I support what Barry Snyder said,
which--I think what they have now is working fine, but I think
we'd be perfectly open to studying that and understanding what
the opportunity for savings are. I don't believe there is a
need for additional independence. I think there's about as much
independence as there can be, but perhaps the savings, the
efficiency thing, is an opportunity that exists.
Mr. Platts. One specific consolidation that the
administration has supported or recommended, and it seems to
deal more with efficiency, not independence but cost benefit,
is with Treasury and the tax administration IG. Do you want to
expand on that?
Mr. Johnson. Seventy percent of the Treasury's duties and
responsibilities were transferred to Homeland Security, and so
they have the leadership there to oversee a much larger
operation than they have to oversee, and it seemed like there
was an opportunity to combine those two for almost exclusively
efficiency reasons. There are large operations, like the FBI
does not have a separate IG from Justice Department, and the
FAA does not have a separate IG from Transportation. So there's
plenty of precedent for large seemingly independent operations
not having separate IGs, and I think the same case might apply
here.
Mr. Platts. In this year's April semiannual report to
Congress from the Treasury IG, the last sentence in that
transmittal letter said that, ``We no longer have the resources
necessary to provide timely audit and investigation services to
the Department.''
Were you aware of that statement and have you looked into
the accuracy and how has that been addressed that they do have
the resources?
Mr. Johnson. Well, the way we addressed it was Linda
Springer, who is the Comptroller, talked to Homeland Security
and identified additional resources that had been moved--OIG
resources that had been moved to Homeland Security that--new
audit issues at Treasury that could be detailed back to
Treasury to deal with audit matters. So they addressed very
specifically the concerns that the Treasury Inspector General
identified, and that's one of Linda's responsibilities, is to
make sure that if there's some temporary adjustments to be made
to deal with these kinds of things that it's taken care of.
Mr. Platts. Thank you. I want to allow Ms. Blackburn, did
you want to get another question or two in?
Ms. Blackburn. You know, we're going to submit all of ours.
I do have several, and I know we do need to go vote.
Mr. Platts. And I apologize for the timing. Mr. Cooper, did
you want to----
Mr. Cooper. As I understand it, Fannie Mae and Freddie Mac
don't have IGs today. Would that be an appropriate use of the
surplus Treasury IG talent to look into some of their
activities?
Mr. Johnson. Of the surplus--I don't think there is surplus
IG talent at Treasury.
Mr. Cooper. I thought you said a great deal of the Treasury
activities had been transferred to the Department of Homeland
Security.
Mr. Johnson. Right, along with the IG personnel.
Mr. Cooper. So that went with them too. OK. Well, what
about the general topic of Fannie or Freddie having IGs,
because they're viewed as government-sponsored entities that--
--
Mr. Johnson. I did not know until you just said that they
don't have IGs. Should have, but don't.
Mr. Walker. OHFEO is the body right now that has the
responsibility. There is a proposal, I understand, to transfer
responsibility for oversight of Freddie Mac and Fannie Mae to
Treasury, but I don't believe it deals with this issue.
Mr. Cooper. A final question. Your idea about getting each
agency to pay for its own audit is part of the reasoning behind
that, to encourage an agency to be more auditable once they're
having to bear the costs? Because the DOD may take a generation
to be fully auditable unless we find another incentive for them
to bear down.
Mr. Walker. I clearly think it is an incentive. I mean,
it's an incentive for people to be able to make sure they have
the right type of controls and systems in place. I also would
respectfully suggest that you wouldn't even want to try to
audit DOD until you believe that they're in a situation where
in fact they are auditable, because otherwise it would be a
waste of taxpayer resources.
Mr. Cooper. Thank you, Mr. Chairman.
Mr. Platts. Thank you, Mr. Cooper. I'm going to try to
squeeze in two more specific areas before we break and run
across. One is on--a kind of followup on the consolidation, Mr.
Johnson, and a specific position is when we look at the Postal
Service and the size of the IG at USPS, and I think the fifth
largest from a budget standpoint of all the IGs; yet, it's a
department head, agency head appointee versus Presidential.
Does the administration support that one being elevated to a
Presidential because of the size and responsibility of it?
Mr. Johnson. Well, they think an IG being Presidentially
appointed or not ensures independence. The IG at the Postal
Service I understand is primarily focused on internal auditing
of contracts as opposed to the general responsibility of an IG,
and when there are general audit issues, other groups get
involved.
So I think the issue is what is the role of the IG, what is
the responsibility, is it expanded in scope. I don't think the
issue at the Postal Service is the lack of or presence of
independence of the IG, given what their current
responsibilities--the current responsibilities are.
Mr. Platts. Is it fair then to say that really the
administration, whether--when it comes to adding more--
consolidating or having more Presidential appointed IGs really
is not in the administration's position kind of relevant. It's
more the independence of those IGs, the resources given them,
not whether Presidential appointed or not.
Mr. Johnson. Well, I think we would like--the
administration likes to be able to reserve the right to change
IGs if they think they are not appropriate for the task at
hand. Now, whether they are Senate-confirmed or not is another
matter.
Mr. Platts. Mr. Walker, do you want to answer?
Mr. Walker. Mr. Chairman, just because somebody is a PAS
doesn't mean they're going to be independent. I think the issue
is to what extent does the appointment mechanism involve a
party independent of who they're supposed to be auditing,
investigating, evaluating and reporting on; and the fact is,
that if you look at the Postal Service, there is a degree of
independence, because the Inspector General is appointed by the
Board of Governors. The Inspector General is not appointed by
the Postmaster General, and so there is a degree of
independence. But if you look at most of the other ECIE
members, I'm not saying they're not acting in an independent
manner, but what I'm saying is there's absolutely no question
that at a minimum there's a major appearance of an independence
problem. There's just no question about it. And, if the person
you're supposed to be auditing, and investigating and
evaluating is the one that appoints you and has the authority
to remove you, it's hard to say there's not an issue there.
Now, whether or not in fact it manifested itself is a
different issue versus whether or not it could manifest itself
and whether or not as a matter of integrity and public
confidence you wanted to try to deal with a problem before it's
a problem. We've seen some things that have happened in the
private sector. I would respectfully suggest we want to be
ahead of the curve, not behind the curve.
Mr. Platts. Final question and then we will recess till
approximately 3:45, based on how quickly the votes go. To both
of you, seeing the number of the 2002 fiscal year--savings of--
or projected savings in the area of $72 billion, how would you
quantify that savings in the sense of what does that mean to
the taxpayer when we talk that amount of money that is
identified as projected savings, money recovered, not spent,
how would you best quantify that?
Mr. Walker. I'll address GAO. I would respectfully suggest
that Mr. Johnson or the IG should address what they do. For us,
we have financial benefits. What financial benefits are, part
of them are savings, absolute cost avoidance and additional
recoveries. Some of it is where people adopt our
recommendations and it frees up additional resources for
redeployment to better use, and either the agency or the
Congress may decide to do that.
In our view our job is to look for economy, efficiency,
effectiveness, and accountability. If somebody adopts our
recommendation and it results in savings or somehow recovering
resources or freeing up resources that can be redeployed to
higher use, that's what we call a financial benefit. Our number
for fiscal 2003, because we've closed the books, it could go
up, it won't go down, is about $35 billion, which is a $78
return for every dollar invested in GAO.
Mr. Platts. Mr. Johnson.
Mr. Johnson. I know that the IG community has looked at
trying to remove all duplication of this benefit reporting,
which is good, and we can always find--look for better ways of
reporting the benefits of this activity. There's--in addition
to the different categories of benefits that David talked
about, there's real money saved versus potential money saved.
Was that money really, really saved, implemented, did it really
happen, or was it the possibility of savings? And so, again,
that would call for post-activation audits and so forth. Then
you get into the question of do you want to spend the money on
the audits--you know, it's those kinds of issues, but we ought
to be looking for real savings. And every new program we
develop and every old program we audit, we cannot spend enough
time on what real results are being accomplished with all the--
--
Mr. Platts. That defectiveness--you know, the efficiency
aspect of the IG responsibility, is what is the mission, how
are we doing it and is it the best way.
I do apologize. We need to run, but I thank both of you for
your participation today and we'll followup with some other
specific questions. Thank you.
We stand at recess till approximately 3:45.
[Recess.]
Mr. Platts. We're going to reconvene our hearing, and I
want to first thank our witnesses and all who have been very
patient while we took care of our votes and kind of get started
here again. We need to start with swearing in our witnesses. If
you'll raise your right hands, and if there are any staff who
will be part of it.
[Witnesses sworn.]
Mr. Platts. And the clerk will reflect that both witnesses
answered in the affirmative. And we're going to jump right into
your testimony, Mr. Gianni.
STATEMENTS OF GASTON GIANNI, VICE CHAIR, PRESIDENT'S COUNCIL ON
INTEGRITY AND EFFICIENCY AND INSPECTOR GENERAL, FEDERAL DEPOSIT
INSURANCE CORP.; AND BARRY SNYDER, VICE CHAIR, EXECUTIVE
COUNCIL ON INTEGRITY AND EFFICIENCY AND INSPECTOR GENERAL,
FEDERAL RESERVE BOARD
Mr. Gianni. Thanks, Mr. Chairman. I'm pleased to be here
today to recognize the 25th anniversary of the Inspector
General Act. On behalf of the IG community, we sincerely thank
you for calling this hearing and your support of the IGs over
the years. In the last Congress the entire House Committee on
Government Reform was instrumental in helping the IG community
achieve our No. 1 legislative priority, providing most
Inspector Generals with statutory law enforcement authority. We
appreciate your efforts in getting this important tool enacted
into law.
Over the next few minutes I would like to highlight
important events leading up to the enactment of the IG Act and
the impact that the act has had on our government and possible
legislation refinements to the act.
I addressed the GAO consolidation report in my written
statement. I would ask that my entire statement to be included
in the record, and will defer to my colleague Barry Snyder to
address those issues.
For the last 25 years IGs have served as independent voices
to their agencies and to the Congress. Early in the 1960's this
subcommittee of the House Government Operations Committee began
to highlight the need for independent statutory IGs. In 1974
further work by this same committee revealed that the
Department of Health, Education and Welfare lacked effective
processes for investigating program fraud and abuse. In 1976
this resulted in a statutory IG at HEW. Then on October 12,
1978, the IG act was created. Twelve IGs were bestowed with
powers and responsibilities modeled after HEW IG. The House
passed the act with strong bipartisan support, while the Senate
passed it without opposition. The IG Act was signed into law by
President Jimmy Carter.
Mr. Chairman, nearly 40 years ago the Congress was clearly
looking to shine the light on the Federal programs and
operations and to provide a mechanism for independently
reporting the results. This desire produced the IG Act, a
unique piece of legislation that has stayed the test of time.
The act gives the IGs authority and responsibility to be an
independent voice for economy, efficiency, effectiveness within
the Federal Government. These basic tenets of the act remain
constant and strong today.
In response to changes in our government, the act has been
amended several times. The most extensive amendment occurred in
1988, when reporting requirements were clarified and IGs from
designated Federal entities were added, more than doubling the
size of the community. Today there are 57 of us.
I believe the act has had a profound impact on our
government, which can be seen in improved Federal operations,
sharper focus on governmentwide initiatives, and increased
attention from our colleagues abroad. Impact is also evident in
the fact that the IGs are being repeatedly asked by their
agencies and the Congress to conduct audits, evaluations and
investigations. Congress has seen fit to expand the duties of
the IG by assigning new responsibilities through general
management laws like the CFO Act, Reports Consolidation Act and
FISMA, the Financial Information Security Management Act.
It has been talked about today what our accomplishments
were last year--$72 billion in potential savings from agency
actions on current and prior investigations and through our
investigative efforts. We had nearly 10,700 successful
prosecutions and suspensions or debarments of over 7,600
individuals or businesses. We had 2,200 civil or personnel
actions. The IG community in total had over 234,000 complaints
which we processed. More than 4,600 reports were issued, and we
testified before Congress 90 times collectively as a community.
In addition to focusing on unique issues in our individual
agencies, IGs have been attentive to matters that transcend
agency lines and impact the government as a whole, such as
accelerated reporting on our audited financial statements,
annual independent IT--i.e., information technology--security
evaluations, critical infrastructure protection programs,
erroneous payments, purchase card fraud and abuse and controls
over Social Security numbers.
In addition, we are continuing to host foreign delegates
who are hoping to replicate the basic IG principles in their
government.
Mr. Chairman, one of the many issues that the House
subcommittee wrestled with many years ago was the lack of
effective coordination and communication between departments
and agencies. The IG Act and the Executive order creating the
PCIE in 1981 sought to resolve these issues. The PCIE and the
Executive Council on Integrity and Efficiency subsequently
created several years later once the DFE IGs were established
serve this community. We currently have an executive committee.
We have six standing committees that deal with coordinating and
processing our work. We have five roundtables and working
groups that delve down into topical issues that help various
IGs working in these areas do their work.
We actively coordinate with other Federal management
councils such as the CFO, CIO, as well as maintaining ongoing
dialog with the GAO.
We maintain two professional training facilities and
promulgate standards for our community to ensure that our work
is of the highest quality and integrity. We oversee a peer
review process to ensure that our audits and investigative work
is done in accordance with professional standards. We maintain
an IG community Web site, and we publish semiannually a
professional journal.
It is important to note that the two councils do not
receive any funding to support these items and rely on
individual IGs to absorb the costs. Codification and funding
support of the two councils, which is one of our legislative
proposals, would help to eliminate these funding issues and
provide opportunities to enhance our initiatives.
As I mentioned before, we believe that the act's provisions
have worked quite well; however, in anticipation that the
Congress might revisit the act for our 25th anniversary, we
developed four proposals which are summarized in my written
statement. These proposals, which are still under review by the
IG community, include codification of the PCIE and ECIE,
creation of statutory terms of office and removal for cause
protection, personnel flexibility for inspectors general, and
changing the reporting periods of our semiannual reports.
As I mentioned, these proposals are still under review
within the IG community and will need to be thoroughly
discussed with our oversight committees as well as with OMB
before we can endorse them.
We understand, as Congressman Cooper has discussed, that he
is planning to introduce legislation on improving government
accountability. We look forward to working with him and your
subcommittee to refine these proposals.
As far as the future direction of the community, I agree
with Clay Johnson's written statement that the future of the IG
community is bright, but speaking as a former auditor, in order
to keep that future bright we need to be constantly looking for
ways to improve our operations and to ensure that our nearly
11,000 employees are adequately trained and well-equipped. We
must also remain ever mindful that our integrity and
credibility is of the utmost importance to remain effective in
our unique position as IGs and as agents of positive change in
our agencies.
IGs have been operating in a changing environment for many
years. We remain flexible and ready to mobilize as new issues
emerge, such as accelerated financial statements, erroneous
payments, and IT security. Twenty-five years ago IGs were given
the authority to be independent voices for assuring economy,
efficiency and effectiveness and promoting integrity,
accountability and transparency in the Federal Government. We
take this authority and responsibility very seriously.
Mr. Chairman, in closing, I would like to again thank you
and members of your subcommittee for having this hearing. We
would also like to express our sincere appreciation to you, Mr.
Chairman, and to Mr. Towns, Congressman Cooper and to House
Government Reform Committee chairman, Tom Davis, and the
committee's ranking member, Henry Waxman, for your involvement
and your support of H.J. Res. 70, a joint resolution in
recognition of our 25th anniversary.
Mr. Chairman, that concludes my remarks, and I will be
happy to take questions when you're ready.
[The prepared statement of Mr. Gianni follows:]
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Mr. Platts. Thank you, Mr. Gianni.
Mr. Snyder.
Mr. Snyder. Thank you, Mr. Chairman. Let me also express my
appreciation on the opportunity to meet with you today to
discuss the 25th anniversary of the IG Act. I'm here today as
the vice chair of the ECIE. A lot has been talked about the
ECIE already, so I'm sure we'll have a lot of questions on
that.
Let me just say that the 28 members of the ECIE represent
agencies that are a bit different, in that they are regulatory
entities, Federal commissions, independent corporations, and
boards and foundations. They also have different types of
funding, administrative authority, and practices. They have
different congressional oversight and funding processes and
separate governances and oversight structures. They perform
regulatory and other missions and have significant impact on
the private sector and the public.
I'm going to paraphrase from my written statement today,
but just wanted to give you a feel for what the agencies are
that make up the ECIE--and I ask that my written statement be
put into the record.
Mr. Platts. Without objection, it will be.
Mr. Snyder. Gaston has talked a little bit about the
history of the Inspector General Act leading up to the passage
of the act in 1978 and some of the things that have happened
since that time. I think the one thing to look at is the
success of the act that led Congress to expand the provisions
to other major departments and agencies and eventually to
smaller Federal entities. During the 10-year period following
the passage of the act, the legislative history reflects that
Congress gave careful consideration on how best to address
audit and investigative coverage in these smaller agencies.
Studies and analyses were conducted, bills were introduced and
hearings were held, and stakeholder reviews were collected and
considered.
In 1984 and again in 1986, GAO issued reports which
uncovered many of the same problems in these smaller agencies
that prompted Congress to establish the IGs in the original 12.
Specifically, GAO found a lack of audit independence because
auditors were supervised by officials who were directly
responsible for the programs and activities under review,
inadequate audit coverage of important and vulnerable agency
operations, lack of evaluation of significant fraud problems by
internal audit or investigative staffs, and audit resolution
and followup systems that did not meet government requirements.
I think Gaston as well as other presenters here today have
also given you an overview of the accomplishments that have
been attributed. I won't go into those. Let me just add that as
full-time and onsite, the DFE IGs have contributed
significantly and tangibly to enhancing programs and activities
within their agencies. Over the years, DFE audits and
inspections have addressed their agency's various program
activities as well as wide-ranging administrative and
management issues and concerns such as human capital
management, procurement, financial management, budgetary
processes and electronic government.
Also, our investigations have uncovered program fraud and
addressed travel card abuses, conflict of interest, procurement
irregularities and other essential organizational and employee
integrity issues.
I would also today say that the DFE IGs are continuing to
have a substantial impact on many of the critical and topical
challenges facing our government, including financial
management, information technology, and emergency preparedness.
For example, the Accountability of Tax Dollars Act of 2002
brings the CFO Act concepts of annual audited financial
statements to a number of smaller agencies. Some of these
agencies are for the first time now preparing financial
statements that will be subject to year-end audit. The DFE IGs
are playing a key role to meet the act's requirements of
conducting or overseeing these financial statement audits in a
timely manner.
Similarly, the IT area has been the focus of IGs not only
from an operational point of view but also from a security
perspective. Like our Presidentially appointed counterparts,
DFE IGs are performing and reporting independent security
evaluation and agency compliance with the Federal Information
Security Management Act. Emergency management and continuity of
operations have also continued to be a focal point of DFEs as
they address how their agencies can enhance security after
September 11th.
Gaston has also talked about the IGs and the councils and
committees. I will just add that the ECIE are members on the
PCIE committees so that we don't duplicate effort, and the
various roundtables and working groups that we have look at a
wide range of issues such as government performance,
information technology and misconduct in research.
One of the key reasons I think I'm here today is to talk
about the GAO consolidation report. Let me say that while each
DFE IG probably has a unique perspective on the report, the
formal comments in the report that were incorporated reflect
the general comments from 26 of 28 DFEs regarding GAO's
conclusions in matters for consideration in the report.
First and foremost, the DFE IGs emphasize that
consolidation would likely sacrifice providing a local
preventive presence and oversight and focus at individual
entities in favor of potentially fragmenting the attention of
larger IGs across a broader, more diverse spectrum of programs
and operations.
From the history, it's clear that Congress took a very
measured and careful approach in deciding to provide an onsite,
accountable IG presence specifically dedicated to carrying out
the IG Act mandate at those agencies selected as designated
Federal entities. Therefore, DFE IGs indicated that care should
be taken to avoid making a change as significant as
consolidation without compelling evidence that a consolidation
approach in fact would foster better government.
We believe that the simple organization and operation
structure that comes with being a smaller DFE is well suited to
the organizations covered by the 1988 amendments, and that
congressional wisdom in taking this approach was well placed.
By virtue of being onsite and knowledgeable of an entity's
legislative backgrounds, operating environments, cultures and
policies and procedures, DFE IGs are able to act quickly to
bring about positive change in entity operations.
Increasingly DFEs are leveraging their limited resources
and contract dollars to respond to legislative requirements for
specific audit and evaluation work, such as FISMA, and
reporting on their agency's progress in a number of areas of
interest governmentwide, such as the President's management
agenda.
We note that alternatives to consolidation, such as the use
of consultants and memorandums of understanding with other IGs
that have developed specialized expertise, have been used
successfully in the past to augment scarce resources and may
offer a way to further strengthen the resources across all IGs.
As a result of this analysis, the DFE IGs expressed concern
that GAO proposed significant and far-reaching changes to the
IG Act and to IG organizations largely based on subjective
responses to one survey without providing sufficient supporting
evidence that indicates changes in the current IG structure are
truly warranted and without views of the entity management,
customers and key stakeholders.
Absent more detailed information regarding the existence
and magnitude of problems with the current structure, the DFE
IGs question whether conversion or consolidation would bring
about more cost-effective value-added IG operations and
results.
Almost all of the DFE IGs commented that GAO's proposed
consolidation scenarios were a bit overly simplistic given the
diversity of the unique agencies that comprise the designated
Federal entities. In fact, the end result of consolidation
could bring an unprecedented level of complexity to the long-
standing IG concept and framework and may serve to only
distance the Congress, the public and agency management from
the central, dedicated IG at key entities.
As far as the future, I think Gaston has highlighted four
legislative proposals where we are getting a consensus from the
IG community. I would discuss a couple of those in a little bit
more detail, particularly the concept of removal for cause and
establishing the term limit. Under GAO's recently updated
government auditing standards, DFE IGs are in fact
organizationally independent to report externally. The original
IG Act provided a number of safeguards to allow that.
However, there continues to be a perception that DFE IGs'
independence is hampered because the IG is appointed by the
agency head. If this is indeed the concern, then I think the
two provisions that are here, removal for cause and term
limits, could go a long way to help remove that perception.
I also would want to add one other item that has not been
discussed, and that would be to extend the Program Fraud and
Civil Remedies Act authority to DFE IGs. That act, when it was
passed in 1986, enabled agencies to recover losses resulting
from false claims and statements when claims were less than
$150,000.
Executive departments, the military establishments and
agencies defined by the original IG Act, and the U.S. Postal
Service have this authority. It's our understanding that
Congress intended to provide all IGs with the authority under
the Civil Remedies Act when it was enacted, but the DFE IGs
obviously came along 2 years later.
The legislative committee that we have in the PCIE notes
that this proposal has received virtually unanimous support
from the entire IG community and could be achieved with a very
simple adjustment to that act.
Mr. Chairman, this concludes my prepared statement and in
closing I would like to again thank you and members of your
subcommittee for having this hearing and allowing us to focus
on the 25th anniversary of the IG Act and to reflect upon our
past accomplishments and future direction. We appreciate your
interest in and support of the IG mission and the community and
welcome an ongoing dialog going forward.
I join Gaston in expressing our appreciation to you,
Congressman Towns, Congressman Cooper and committee Chairman
Davis and Ranking Member Waxman for sponsoring the joint
resolution in recognition of the 25th anniversary.
I agree with Gaston that the IG community takes its mission
and authority very seriously and remains committed to promote
integrity, accountability and efficiency and effectiveness in
operations within the individual departments and agencies and
across government. At this time, I would be happy to respond to
questions.
[The prepared statement of Mr. Snyder follows:]
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Mr. Platts. Thank you, Mr. Snyder, and my thanks again to
both of you for not just being here today but for your service
day in and day out in your respective agencies.
Let me begin maybe with a broad approach with the--we
talked a lot today with both panels about communication between
Congress and the administration, between the IGs and their
respective agency heads or the administration. Between the two
councils, if I understand the written testimony here today, the
training program is shared by both councils and operated
together for the benefit of all IGs.
Mr. Gianni. That is correct, sir.
Mr. Platts. What type of interaction occurs between the
councils and the IG members on the council on a monthly basis,
you know, as far as kind of sharing ideas or what's, you know,
working, what's not working and your respective duties?
Mr. Gianni. We have multiple forms of coordination. I sit
on the Executive Council on Integrity and Efficiency. Barry
sits on the President's council. So we have both opportunity to
be knowledgeable of what each council's concerns are. As Barry
indicated in his time, our various committee structure is
comprised of both PCIE and ECIE members. So those people who
are addressing audit issues, for example, represent the entire
IG community. Those people who are dealing with investigative
issues, we have an investigative committee, represent the whole
IG community. So we go at length to ensure that there is
collaboration and communication.
In addition, we meet jointly twice a year. And then in
addition to that, we have a number of our working groups that
have both PCIE and ECIE members, who are addressing a focused
issue, such as erroneous payments or accelerated reporting.
In addition to that, we have meetings from time to time to
discuss mission-related issues. For example, Barry and I are
IGs of regulatory agencies. There are seven IGs that have
regulatory responsibility. We get together on a monthly basis
to talk about financial regulatory issues.
Mr. Platts. And regardless whether PCIE, ECIE?
Mr. Gianni. Right. We have a common mission where our
missions come together. So we coordinate, we look for
opportunities where we can do work together on common issues
and have done that in the past. We look at how we're
communicating with the Congress and how we're working with our
agency. Also when we have, let's say, an issue that we're faced
with within our respective office or agency, we have our peers
who act as a sounding board to exchange ideas and seek advice
on some common answers.
Now, this happens elsewhere within the IG community.
Mr. Snyder. I would only add that we also have an annual
planning conference that we go to where all of us get together
as well, in addition to all the ones that Gaston mentioned.
Mr. Platts. Given these extensive interactions with IGs in
both type of departments, agencies, is it safe to assume that
pretty unanimously the IG community would support a
consolidation of the two councils into one council, and the
second part then, and making it statutory as opposed to
Executive order?
Mr. Gianni. I do believe there would be support for that
within both councils.
Mr. Snyder. I agree.
Mr. Platts. Because it seems that you're doing that, you
know, in every instance you can while also maintaining the
official separation.
Mr. Gianni. The councils are administrative bodies created
by Executive order. I think that the idea of codifying the
council would be to also recognize that we do have a reporting
relationship with the Congress and that it gives us some
credibility as a council to the Congress. And as David Walker
was talking about, it also would give us an opportunity to
build on the working relationships that we have with GAO right
now to deal with some of the issues that the Comptroller
General was talking about.
Mr. Platts. The other aspect, codifying a single council,
that would also be the funding of that council directly, you
know, from an appropriations as opposed through--because
currently your efforts--if I understood you correctly, the cost
of your efforts come out of your IG offices, your individual
agency budgets, that somehow you take a part of your individual
office and put it toward that joint effort. Is that----
Mr. Gianni. That is correct, sir.
Mr. Platts. There's no funding for the council per se?
Mr. Gianni. There is no funding at all. We're very
appreciative of Congressman Cooper's thinking of a funding
allocation.
A couple of things when it comes to funding. We have two
training academies. These training academies are training our
investigators. They're training our auditors. We spend over $6
million as a community to operate these training academies.
Funding comes from our operating budgets.
There is a certain amount of opportunity costs, if you
will, that are constant, and to the extent that Congress was
willing and saw fit that they would be able to help support
those academies in some way, I think that would be certainly
beneficial and helpful.
When the Congress created the TVA as a Presidential IG
office, they also created the authority for us to have an
investigative academy and a forensic academy, and for funds to
be appropriated accordingly. We have never received any
appropriations for those. We have operated our investigative
academies from our own budgets by--in the investigative matter,
it's an allocation based on the number of investigators that we
have within the community. On the audit side it's a cost per
training activity. So if you use it, you pay; if you don't, you
don't have to pay.
But because of those different funding mechanisms, it kind
of stifles our opportunities to improve our academies to where
they need to be.
Mr. Platts. Walk me through from a funding standpoint
typical nonPresidential appointed office, as far as how you
come up with your annual budget request, and by what you
determine how many personnel you think you need to do your job
and that translates to salaries and benefits and all related
expenses. How does that happen on an annual basis in your
respective agencies, you know, with your agency head, and what
type of give and take in it, you know? And if you can give me a
general idea of what you ask for, what you typically get in
response.
Mr. Gianni. I'll take a crack at it. I've been in my
position for over 7 years. So if the Congressman's bill were to
pass, I'd have to leave.
Mr. Platts. Now, he may grandfather in----
Mr. Gianni. No. I'm just bringing in a little levity here.
The point on budget, when I--my budget has been reduced
over the past 8 cycles. I've done this----
Mr. Platts. Every cycle for----
Mr. Gianni. Every cycle for the past 8 years. I had an
office that consolidated two IG offices. We had to do some
downsizing. We did that accordingly. We entered into----
Mr. Platts. That downsizing was dictated to you by agency
head or internal; you said we have the opportunity to do this?
Mr. Gianni. It was dictated by the circumstances in our
corporation. As the corporation was downsizing we also felt
that we had to be a part of that downsizing. We were the
destined--so we created plans for our downsizing. And the
corporation bought into it, certainly supported it. I present
my budget to my chairman. The chairman basically agrees on two
things, my staff size and the total dollars. He says, I agree
with that. We send it to OMB. OMB forwards it to the Congress,
and the Congress reviews it as part of its normal appropriation
process.
Mr. Platts. When you say the chairman agrees, you know,
there's a give and take every year, or is it basically he
tells--says here's what we'll accept, and that's the way it is?
Mr. Gianni. He has accepted what I've put forward every
year.
Mr. Platts. Mr. Snyder.
Mr. Snyder. It's different at the Federal Reserve, in that
we are a nonappropriated agency, so we don't go through the
congressional budget process. However, we do have a separate
budget within the board related to IG activities. When the IG's
office was established in 1987, the Board felt that something
less than 10 positions would be enough to do the job. So we
started with nine people. That's less than 10.
Over the years we--well, it wasn't long after we were there
that it was clear that number was not going to be sufficient to
get the job done, and we made a request to the board to have
our resources increased. There was a good bit of give and take
at that meeting. Unfortunately, at the time I was the Assistant
Inspector General for Audit. The IG was in the hospital. I got
to go and defend the budget. So we had a significant large
discussion about the duties and responsibilities of IG,
particularly me and one Governor. But ultimately, our budget
was increased to 32 positions.
In 1997, we cut back 10 percent, or 3 positions,
recognizing that the Board as a whole was also trying to hold
its budgets down, and we complied with their direction to all
divisions that were there.
We've felt free, though, to ask for something additional if
need be. We've kind of held our budget at that level since that
time.
Mr. Platts. A lot of our focus today is independence and--
--
Mr. Snyder. I will say I'm a bit unique in having my own
budget I think as far as the DFE community goes. A lot of their
budgets, I believe, are incorporated in their agency's budgets.
They do have to--they are probably in competition with other
programs within the agency in terms of funding, and there's
probably not another level of review that particularly takes
place to any great degree at OMB or here at the appropriations
process, unless somebody requests what that level is going to
be.
Mr. Platts. With the absolute, you know, agreement that
independence is critical for IGs being able to do their job
well, both in reality and in perception, that perceived
independence, the fact that the norm is that IG budgets go
through and are really decided by those that you're supposed to
be kind of watching over seems one of the most problematic
aspects of the existing structure, and if we were to
statutorily create the council for all IGs as one, that maybe
then presents an avenue where Congress in appropriating the
funds works directly with the IGs through that entity as
opposed to the individual departments and agencies.
A related question, then, is in the amount of money you
get, your auditing of your respective departments, agencies
comes from those funds that you're--you talked about you
approved, how many positions and total dollars. Of that total
dollar, your auditing expenses come from that, correct?
Mr. Gianni. Yes, sir, audit and investigative expenses.
Mr. Platts. So the amount you devote to the audit--and this
kind of--I think, Mr. Snyder, in your comments you talk about
the new requirement pursuant to 2002 with more agencies having
to do that----
Mr. Snyder. Correct.
Mr. Platts [continuing]. As those agencies--were they given
more money?
Mr. Snyder. I think it varies from agency to agency that's
out there. I----
Mr. Platts. Because if not, to fulfill the audit
requirement they've obviously got less to do in the other
investigative, whatever it may be, aspects of your mission?
Mr. Snyder. That's true. I believe most of them have taken
the route that we have, though, and that is to contract with an
independent public accounting firm to do the audits and leave
the IG's operations to oversee and to judge the quality of
those audits.
Mr. Platts. But the cost of those contracts still comes out
of the IG's budget?
Mr. Snyder. It would come out of the IG's budget and I
think many of them had their contract dollars increased to do
this.
Mr. Gianni. Mr. Chairman, one point of clarification on my
part. I misinterpreted your question. The financial auditing
for my agency is paid for by the corporation, and it's paid to
the General Accounting Office, who is the auditor of record for
the financial audits.
Mr. Platts. Separate from the budget for IG's budget?
Mr. Gianni. Separate from my budget.
Mr. Platts. That's probably the exception, though, for
the----
Mr. Gianni. That is the exception. That is the exception.
There may be one or two other IG offices where the department
is paying for the audit out of their revenues as opposed to the
IG budget, but I think for the most part it's coming out of the
IG budget.
Mr. Platts. Because the--and my staff will correct me if
I'm wrong in this. When we did a hearing regarding Homeland
Security this year for their auditing, there really was no
funds for their financial auditing, and the IG office I think
came up with 4.5 million, which obviously takes from their
ability, and that department, because of, you know, the
consolidation of 22 different agencies, we really want that IG
to be as active and effective as possible, and that is an
example where their ability to fulfill some important parts of
the mission probably has been diminished because they weren't
given money, but yet they had to come up with money for that
financial audit aspect.
Mr. Gianni. When the CFO Act was passed over 10 years ago,
many of the IGs had to take the cost of conducting the audits
out of their budgets, and during that time, I mean, you factor
a lot of things in. We've gone through cycles where many of the
IGs were in a period where they were competing for resources
within their agency, and it had an impact. My personal opinion
is the more that we can create a system that allows for
openness of what is being transpired and that then the Congress
can say we either agree or we don't agree with what's going on,
the more we can create that type of transparency to the
process. Because of our unique nature I think it would go a
long way in helping us be successful.
Mr. Platts. What would be--if you--in looking as part of
that 25th anniversary, what, if any, statutory changes should
be addressed? If you had to focus--you know, I'm always asked
this, and I hate being asked this, but one specific change,
what would be the most important thing we could do, whether it
be for the PCIE member IGs or ECIE IGs, the one thing that
Congress could do to allow you to be more effective, more, you
know, efficient in your mission assignment?
Mr. Gianni. My personal opinion would be the codification
of the PCIE and ECIE with some funding. I think that would be
the primary one from my perspective, and I can prioritize the
others accordingly. I think that's what the community would
suggest also, but, you know, I leave that open for future
discussion.
Mr. Platts. OK.
Mr. Snyder. I would agree on the codification. I think the
Program Fraud Civil Remedies Act is an easy one to do for the
DFE IGs. Related to the question of independence, though, as I
stated in my testimony, it could be that the removal for cause
and the term limit would be right up there.
Mr. Platts. On the GAO report and the recommendations of
consolidation--and, Mr. Snyder, with your IG members being
maybe most dramatically impacted, and you've given us some good
reasons why it's not just about turf, it is about the
effectiveness of the IG operations in your members' offices--
are there any of those now, you know, DFE IG offices that you
would maybe collectively--ECIE members collectively say would
make sense? Like, I'm going to say Amtrak with DOT. Are there
any, you know, that specifically because of the circumstances
make greater sense than collectively consolidation?
Mr. Snyder. I think my answer would be none of them, but
let me clarify as we go along here. I think the big concern is
if the Congress wants oversight at a particular agency, then
the staff needs to be onsite and working at that agency, and
that's truly, I think the question.
We've talked a lot about size and efficiencies and
independence and what have you, but it really comes down to do
you want a presence that understands programs and activities of
that agency and can provide oversight of that agency? Because
absent forcing that--in which case I would ask then why are we
consolidating--but absent forcing the level of resources at
that agency, then there is the probability and likelihood that
the agency--that the DFE resources that would be transferred or
somehow moved to the consolidated entity, thus creating some
savings I guess would not necessarily be sent back. A number of
the scenarios that were there, the DFE agencies and operations
that would be consolidated wouldn't even come close to some of
the major programs and activities of the departmental agencies
that are there. The size is just too different.
I don't think it's unreasonable to think that the size of
the DFE IGs are small because of some actions to keep them that
way. I think what we're looking at is the size of the agencies
are small. If you compare DOD and it's 1,000 staff in the IG
versus another agency that only has 100 people and there's only
3 or 4 people in the IG office, you could understand why this
size is there.
Personally, I'm not sure if there isn't a need for a
critical mass as we've talked about to be effective as an IG
and to carry out all the mandates that are there, particularly
with respect to the new programs and activities that have come
to these agencies, but I think----
Mr. Platts. So there would be some that maybe are so small,
that their ability to fulfill all the requirements is more
challenge----
Mr. Snyder. I'm sure it's more difficult and a challenge
today. But I would ask the question if we're looking at
efficiencies and we're looking at the level of oversight, then
maybe we need to look at whether or not an agency needs the
level of oversight that was contemplated when that particular
agency was designated as a Federal entity for this purpose.
If that's still there, then I think it only makes sense to
have the IG onsite there so they can respond.
There are a number of implementation considerations that
also would make this fairly complex to do. You could have
situations--or you would have situations where the consolidated
IG would be under the, ``general supervision of more than one
agency head.'' Having two bosses is somewhat difficult today
from an IG perspective of the agency head and the Congress.
Giving them three or four bosses--I think in the one scenario
the Department of Commerce got a lot of the DFEs. They might
have 8 or 10 people that the IG would be under the general
supervision of.
Next, I think there's some complexity about the oversight
committees here on Congress. The IG would be subject to
multiple oversight and potentially to multiple appropriation
committee oversight as it relates to the different activities
that it might be dealing with.
So there's some practical implementation considerations
that I think that are out there.
From my perspective, if you want oversight, they should be
onsite.
Mr. Platts. I want to give Mr. Cooper a chance to have some
questions. Just one followup. Conversely with the GAO's
recommendations being that the PCIE membership was more
supportive of consolidation, are there any ones that you would
specifically think should not be consolidated versus opposite
that, you know, should be?
Mr. Gianni. I think my colleagues and I approach this as a
purely theoretical issue, that because we have--we are larger
and tend to have an infrastructure to support both
administrative, statistical perhaps, or technical
infrastructure, that we would be better able to support these
other functions.
Whether we consolidate or not is really a congressional
decision. The issue of whether we can consolidate has been
answered. We did it at Homeland Security. We had four different
IG offices folded into Homeland Security. So it's not an issue
of that it can't be done. It's an issue of do we want to do it.
And if we want to do it for the reasons that the Comptroller
General put forward or for other reasons, such as we're
beginning to streamline our government agencies and refocusing
the mission of our government, I believe that, those are very
large, complex issues. We're not going to solve them by just
merging a couple IG offices.
Mr. Platts. On a specific----
Mr. Snyder. If I could add to that, I think the DFE
community would concur that if the agencies are being
consolidated, then it only makes sense for the IG's offices to
be consolidated. Same would hold true for Treasury and Tax
Administration.
But I think in many of the instances, the agencies were
separated out. For example, NARA was taken out of GSA. Federal
Maritime was taken out of Transportation. And now you're going
to have the IG go back and really supposedly undo what that
separation was all about, and that's where to them it didn't
make a lot of sense.
Mr. Platts. Mr. Gianni, on that theoretical approach of
having the infrastructure, would one of the agencies that you
propose for elevation, is the Postal Service, and their
independence, and Mr. Walker talked about how they really have
independence--to answer to the governing board, not the
postmaster and the type of work and given their size, they have
the significant infrastructure ability out there for their
mission. Would that be one that the PCIE members would maybe
agree should be consolidated, or should it need to be changed
from its existing format in any sense?
Mr. Gianni. Clearly the postal IG is an anomaly as being a
DFE when you look at the rest of the DFE organization. As I
understand it, there was debate at the time that the Postal
Service Inspector General office was created as to where and
how that IG would be appointed.
It was subsequently agreed that the IG would be appointed
by the board of Governors. Whether making that IG a
Presidentially appointed IG would make them more efficient,
more effective, I don't think that's the issue there. There
would be other issues, other considerations that would go into
making that judgment.
Clearly, if one were to say are there agencies as large as
the Postal Service IG that are Presidentially appointed and we
want to have some degree of consistency about which ones are
Presidential and which ones aren't Presidential, then they
would fall in the Presidential category, assuming that both the
board of Governors and the Congress could agree that that's
what they want to occur.
Mr. Platts. I want to give Mr. Cooper a chance for
additional questions.
Mr. Cooper. Thank you, Mr. Chairman. You have been very
kind. I appreciate that.
Consolidation as a way of achieving independence is not the
only way of achieving independence. Of course, I, in my earlier
remarks, was pushing the idea of terms and dismissal for cause;
and I could understand and I wasn't surprised by the
administration's reaction. They wouldn't mind if everyone could
be reappointed on their watch, all Federal judges, too, I would
imagine. But terms, to me, ensure an insulation and
accountability and also expectation on the part of the
professional employee, as long as he or she does their job,
they are going to have a 7-year term of office. So to me it's
an essential part of professionalism, not the status of being
an at-will employee where you just blow with the wind.
There are so many issues to discuss, I understand from my
staffer, when asked to prioritize the elements of the bill that
I am putting together, that codification of the professional
councils would be the No. 1 priority. Is there a No. 2 priority
in the list of things?
Mr. Gianni. I would think, from my constituency in the
PCIE, that codification and removal for cause would be a high
priority. As was discussed earlier with David Walker and Clay
Johnson, the issue is how do you define what the removal
criteria would be remains.
Again, I don't want to minimize the importance of
compatibility in this position. If personalities aren't
compatible, then what could happen is that you have a
dysfunctional IG office or a dysfunctional relationship that
causes the IG to be less effective than he or she could. So
compatibility is very important to getting the job done. It's
not the only thing, but it is important to making sure that the
job gets done effectively.
Mr. Cooper. I look forward to working with you to sort of
craft the right language there.
Efficiency is the goal of everyone, I believe. What's the
best way to evaluate the quality of an IG's performance? You
have 57 of them out there, some large, some small. How do you
spot a great IG versus someone who may be headed toward
retirement and not as active as perhaps he could be, and he
might have a marvelous personality, but perhaps the job isn't
being done. As I understand, when you are trying to catch
fraud, you never know when it's good news or bad news, but you
catch because it could be an indication there's a lot more to
be found. So what's the best way for really evaluating IG
performance among IGs?
Mr. Gianni. I think that's a very good question that hasn't
been answered.
Now I can attempt to give you some ways of looking at the
performance of an IG. Clearly, I believe that many of my
colleagues, if not all, are trying to operate in accordance
with the spirit and intent of the Results Act, developing
strategic plans, sharing those strategic plans as they develop
them with both the Congress and their agency, coming up with
annual performance plans as to what they expect to accomplish
with their budgets, showing how their funds are being allocated
among the various functions that they are performing and then
reporting on an annual basis back to both their agency and the
Congress about how well they have done. That gives at least
some transparency of what an IG is accomplishing.
The accomplishments between and among IGs vary greatly
depending on their mission, depending on the mission of their
agency. If you have an agency that has a lot of contract money,
you have an opportunity for having high dollar savings or
findings of fraud. On the other hand, if you are a regulatory
agency, you might not have as much of an opportunity.
In my particular institution, when banks fail, oftentimes,
fraud is associated with the banks that fail. My investigators
will work with the Justice Department to pursue the people who
committed the frauds. From a criminal standpoint, we get
judgments, we get restitution orders from the courts. Those are
financial measures that show we are doing something.
Now will all that money return to the government? Probably
not. Some of it has been spent, some of it has been hidden, and
it is very difficult to trace back. But these are the types of
measures.
On the other hand, much of our audit work deals with
improving systems, making recommendations for strengthening
internal controls. It's very difficult to put costs on that.
Even GAO has that as one of their measures, number of
recommendations that an agency acted on; and there may not be
any dollars associated with it or it's difficult to quantify.
So we use that as a measurement for our performance. So there's
a variety of measures out there, and we hope we're doing a good
job.
Mr. Cooper. Perhaps if we are able to codify the
professional council of the IGs themselves maybe they will get
together and vote on those individuals who are considered to be
truly outstanding, and maybe there's an IG hall of fame. I am
sure there's a spot for you in heaven somewhere. But maybe
that's a way of evaluating true quality performance.
Mr. Gianni. We as a community this year have--we have our
annual awards ceremony. This year we developed three new
awards: one, service to the Congress; one was a good
governments award; and the other was service to the
administration. As for the award for service to the
administration, after the nominations were vetted within the IG
community, they were presented to Clay Johnson and the
President's Management Council to review those actions by the
Offices of Inspector General to decide which one, in their
judgment, was the most significant accomplishment. So we're
trying to get other input into our assessments of how well
we're doing.
Mr. Cooper. That sounds very helpful.
Mr. Johnson mentioned that Federal acquisition officers
have no codified council, and he implied at least that might be
something we could look at or a step we could take. I'm not
even sure this committee has jurisdiction over those folks--we
do. Are you familiar with their professional group?
Mr. Gianni. They were just recently reorganized, and I
haven't--I think they were reorganized for a reason, and their
effectiveness goes in peaks and valleys. The CFO, I believe, is
codified. The CIO may not be codified as far as the three
councils, and I know that the President's Management Council is
not a codified council. But I think--and I said this
previously--the reason why we are seeking codification is
because of our dual role both with the administration and with
the Congress, and we want to bring that congressional element
as a part of our council activities.
Mr. Cooper. To me it's an essential part of preserving your
independence not as individuals but as a professional group so
that you are not subject to the whim of an administration who
may find fault with one of your members or may have a political
vendetta. I think this administration has been very fair. It's
good to have things set.
Mr. Gianni. I agree with you, and I would like to take this
opportunity to again thank you for your interest in the
community and your interest in fostering some legislation to
help us as a community. We certainly look forward to working
with you, sir.
Mr. Cooper. I am honored by your hard work. To find $72
billion in a year for taxpayers in potential savings is
amazing; and to catch over 10,000 bad guys, I wish some of our
other agencies could be as effective.
Thank you, Mr. Chairman.
Mr. Platts. Thank you, Mr. Cooper.
I think your earlier point, that it's kind of a good news,
bad news story, it's good we are catching them but bad that
there are many out there that have to be caught.
I want to maybe just touch on two more areas before we wrap
things up here. One is, I didn't get to ask the Comptroller
General about a recommendation that was made 5 years ago. Given
I have been here 3 years and it was prior to my time on this
subcommittee, but GAO recommended that the IGs be more thorough
in developing their strategic plans for each of their
individual offices. I wonder if you could tell us your
respective offices, where you are with strategic plans and what
your mission is and how you are pursuing that mission and your
evaluation of the effectiveness of your efforts.
Mr. Snyder. It's one that we do. We have a 4-year horizon.
We update it every year. We even use it to report in our semi-
annual report our goals and objectives so both the board and
the Congress can see what our plan is, where our objectives
are, and what we are doing under each one.
Mr. Platts. Do you share that with GAO as you are
developing it to get their comments?
Mr. Snyder. We seek their input in various forms in terms
of where their priorities are going to be, what things you may
be asking them to do. The IG Act requires us to coordinate with
them, so it's part of that coordination that we do. It is
somewhat informal.
As part of the working group that Gaston alluded to
earlier, the IGs or the regulatory agencies get together I
think every quarter or so. We invite the gentleman from GAO who
has responsibility for this area to meet with us, and we talk
about what's going on and the future direction and what the
congressional interest is, and we share what we're doing.
So I think there's a dialog that goes on. It's not that
formal, but I think there is a dialog that's there.
Mr. Gianni. Mr. Chairman, I would like to take perhaps a
different approach on this. Clearly, we are mandated to
coordinate with GAO; and many of my colleagues do that. I would
classify our coordination as passive coordination, that we make
our decisions and we share our decisions with GAO for
informational purposes.
What the Comptroller General was talking about in his
testimony was having some more active participation and dialog
before decisions are made so when GAO and the IG, as
accountability officials, decide what needs to be addressed
from an auditing standpoint that we have, at least from our
decisional basis, the same knowledge and understanding of the
issues. The idea being that the dialog occurs before decisions
are made. Then after you have that common understanding and
that discussion of what the issues are, what the risks are
within the respective areas, then GAO will make their decisions
and the IGs will make their decisions as to what they're going
to do, and certainly those decisions should be complementary.
I agree that coordination is occurring. I would be the
first to say that we, as a community and GAO working together,
can improve the level of communication; and I think the
community will respond to the CG's request that we work
together to try to decide how best to accomplish this. We might
not get 100 percent buy-in, but we're going to move in that
direction because I think it makes good sense.
Mr. Platts. I didn't think at the time to ask the
Comptroller General, but I would be interested, has he come
before your respective councils and kind of made that direct
request or, you know, plea to have more communication; and, if
not, would you be interested in extending invitations to him?
Mr. Gianni. Barry and I both have served and a number of
our colleagues have served with GAO in a number of capacities.
We have served on the Comptroller General's advisory board for
the audit standards, and a number of our colleagues serve on
that panel. The intergovernmental audit form that was initiated
by GAO has many of our members from our respective IG community
participating in it.
Now it might not be the Inspector General. It might be the
head of their audit organization that participates in that
organization. But there is that dialog within the audit
community.
As far as this strategic area that the Comptroller General
put forward before, he has come before us and talked about
conceptually the need for us to work better together. Because
we--GAO and the IG community--have limited resources and the
challenges are great, we need to work together and work smarter
so our resources are better used. He has put that forward. We
need together, GAO and the IG community, to begin to work that
through.
One of the observations that I made was that GAO has a
protocol for working with the agencies and they have a protocol
for working with the Congress. I believe that we need a
protocol for the IGs and GAO for working together. So that's
going to be one of the things that we're going to be working on
in the coming year, to develop with GAO to get that formalized
and as a best practice.
Mr. Platts. Glad to hear that. As in so many of the
hearings we have had, having those more regular and open
communications occurring I think benefits all parties and
ultimately the public at large.
The last question I have relates to--from proposed
statutory changes is whether there should be additional
specific qualification requirements for IGs put in statute as
far as minimum qualifications. Your thoughts on such a
proposal.
Mr. Gianni. Right now, the law says that it is based on
someone of integrity that has a legal background or an auditing
background or an investigative background or a management
background; and that's pretty much it.
Mr. Platts. Should there be more specifics to those?
Mr. Gianni. Let me address this another way. I am an
auditor by training, by education and by career before I got my
position. I spent 33 years in GAO. When I assumed the position
of Inspector General for the FDIC, I also had to have
investigative responsibilities. The fact that I'm not an
investigator doesn't mean that I can't have oversight over an
investigative function. What you do is you hire people on your
team that know what the responsibilities are, and then you
allow them to do their job.
So an Inspector General doesn't have to be all those
things. I have lawyers on my team who can assist me where I
might not have the legal background. Clearly, I have CPAs on my
team that can amplify my expertise. One person is not going to
have all of the expertise most likely, most likely will not
have all of the expertise that's needed to be an Inspector
General. What is necessary, in my opinion, is a person who is a
good manager and a good leader and a person that has integrity.
Mr. Cooper. Mr. Chairman, may I ask a question?
Mr. Platts. That concludes mine, so if you have any
followups that you would like to ask.
Mr. Cooper. When you say they have to have legal,
accounting, investigative or management background, does that
mean graduate degrees in any of these fields?
Mr. Gianni. There are no professional certification
requirements. It's educational background. It is not degree
oriented. So it could be undergraduate, graduate or doctorate.
There are no specific requirements.
Mr. Cooper. Would I have a legal background having taken
one course in Constitutional law as an undergraduate?
Mr. Gianni. I don't believe that would qualify from a legal
standpoint.
Mr. Cooper. Does it take a JD?
Mr. Gianni. That would be an actual practicing lawyer.
Mr. Platts. It's not spelled out and subject to
interpretation.
Mr. Gianni. That's correct. Generally, the community--at
least the Presidentially appointed IGs--is generally made up of
lawyers, accountants, auditors and investigators and some
management-type IGs.
Mr. Cooper. I have no more questions, Mr. Chairman. Thank
you.
Mr. Gianni. One point on that is healthy. The community has
the different disciplines in the leadership roles.
Collectively, when we get together, it does provide a synergy
that you wouldn't get if just one discipline was being
represented at the table.
Mr. Platts. Well, to our witnesses, I again want to thank
you for your preparation for today and the written statements
you submitted as well as your testimony here today, your
patience while we had our votes. I know that Mr. Cooper and
myself, Ms. Blackburn, Mr. Towns, all of us who are here today
look forward to working with you and both councils and the
administration as we try to move forward, what, if any,
statutory changes we are going to change, move not just through
this subcommittee but through Chairman Davis' full committee
and ultimately to the House floor. So look forward to
continuing to work with you.
I also want to thank majority and minority staff for their
work regarding today's hearing.
We'll keep the record open, I guess, 2 weeks as any
material to be submitted from our witnesses and followup
questions to our first panel that we have to ask them to
followup in writing to us.
This hearing stands adjourned.
[Whereupon, at 5 p.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record
follows:]
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