<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:56026.wais]
WASTE, FRAUD AND ABUSE AT THE DEFENSE DEPARTMENT, VETERANS AFFAIRS, AND
DEPARTMENT OF STATE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
VETERANS AFFAIRS, AND INTERNATIONAL
RELATIONS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
FEBRUARY 25, 1999
__________
Serial No. 106-2
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
56-026 CC WASHINGTON : 1999
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida GARY A. CONDIT, California
THOMAS M. DAVIS, Virginia PATSY T. MINK, Hawaii
DAVID M. McINTOSH, Indiana CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELEANOR HOLMES NORTON, Washington,
JOE SCARBOROUGH, Florida DC
STEVEN C. LaTOURETTE, Ohio CHAKA FATTAH, Pennsylvania
MARSHALL ``MARK'' SANFORD, South ELIJAH E. CUMMINGS, Maryland
Carolina DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia ROD R. BLAGOJEVICH, Illinois
DAN MILLER, Florida DANNY K. DAVIS, Illinois
ASA HUTCHINSON, Arkansas JOHN F. TIERNEY, Massachusetts
LEE TERRY, Nebraska JIM TURNER, Texas
JUDY BIGGERT, Illinois THOMAS H. ALLEN, Maine
GREG WALDEN, Oregon HAROLD E. FORD, Jr., Tennessee
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
JOHN T. DOOLITTLE, California (Independent)
HELEN CHENOWETH, Idaho
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on National Security, Veterans Affairs, and International
Relations
CHRISTOPHER SHAYS, Connecticut, Chairman
MARK E. SOUDER, Indiana ROD R. BLAGOJEVICH, Illinois
ILEANA ROS-LEHTINEN, Florida TOM LANTOS, California
JOHN M. McHUGH, New York ROBERT E. WISE, Jr., West Virginia
JOHN L. MICA, Florida GARY A. CONDIT, California
DAVID M. McINTOSH, Indiana JOHN F. TIERNEY, Massachusetts
MARSHALL ``MARK'' SANFORD, South THOMAS H. ALLEN, Maine
Carolina EDOLPHUS TOWNS, New York
LEE TERRY, Nebraska BERNARD SANDERS, Vermont
JUDY BIGGERT, Illinois (Independent)
HELEN CHENOWETH, Idaho
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Lawrence Halloran, Staff Director and Counsel
Robert Newman, Professional Staff Member
Jonathan Wharton, Clerk
David Rapallo, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on February 25, 1999................................ 1
Statement of:
Hinton, Henry L., Jr., Assistant Comptroller General,
National Security and International Affairs Division, U.S.
General Accounting Office, accompanied by Steve Backhus,
Director for Veterans' Affairs and Military Health Care
Issues; Lisa G. Jacobson, Director for Defense Financial
Audits; Ben Nelson, Director for International Relations
and Trade; Eleanor Hill, Inspector General, U.S. Department
of Defense, accompanied by Robert J. Lieberman, Assistant
Inspector General; Richard J. Griffin, Inspector General,
U.S. Department of Veterans Affairs, accompanied by Michael
Sullivan, Assistant Inspector General; and Jacquelyn
Williams-Bridgers, Inspector General, U.S. Department of
State...................................................... 3
Letters, statements, etc., submitted for the record by:
Blagojevich, Hon. Rod R., a Representative in Congress from
the State of Illinois, prepared statement of............... 80
Griffin, Richard J., Inspector General, U.S. Department of
Veterans Affairs, prepared statement of.................... 84
Hill, Eleanor, Inspector General, U.S. Department of Defense,
prepared statement of...................................... 42
Hinton, Henry L., Jr., Assistant Comptroller General,
National Security and International Affairs Division, U.S.
General Accounting Office, prepared statement of........... 6
Williams-Bridgers, Jacquelyn, Inspector General, U.S.
Department of State, prepared statement of................. 92
WASTE, FRAUD AND ABUSE AT THE DEFENSE DEPARTMENT, VETERANS AFFAIRS, AND
DEPARTMENT OF STATE
----------
THURSDAY, FEBRUARY 25, 1999
House of Representatives,
Subcommittee on National Security, Veterans
Affairs, and International Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:12 a.m., in
room 2203, Rayburn House Office Building, Hon. Christopher
Shays (chairman of the subcommittee) presiding.
Present: Representatives Shays, Biggert, Blagojevich, and
Tierney.
Staff present: Lawrence Halloran, counsel; J. Vincent
Chase, chief investigator; Robert Newman, professional staff
member; Jonathan Wharton, clerk; David Rapallo, minority
counsel, and Ellen Rayner, minority chief clerk.
Mr. Shays. I am going to call the hearing to order, because
I know you all have busy schedules and Members will be coming
in and out. I welcome all of you here.
Two weeks ago in testimony before the full Government
Reform Committee the Comptroller General, General David Walker,
described programs posing a high risk of waste and abuse and
``the serious challenges that must be confronted to achieve
more efficient, effective and economical Federal operations,
and to build greater public respect for and confidence in their
Government.''
To improve performance and accountability Governmentwide,
he called for greater emphasis on program results, closer
alignment of organizational structures to program missions and
improved coordination of multi-agency or cross-cutting efforts.
Today, we invite our oversight partners, the General Accounting
Office, GAO, and the Inspector Generals [IGs], to help us
answer the Comptroller General's call as we focus on high risk
operation and program vulnerabilities at three crucial
departments: Defense, State, and Veterans Affairs.
At the Department of Defense [DOD], weak financial controls
allowed $1 billion in excess payments to contractors in a
single year. Inventory systems cannot account for another $9
billion. Although GAO acknowledges some recent improvements,
daunting obstacles confront the effort to bring DOD financial
management and financial managers to the level required to
support the Department's vastly complex and enormously costly
mission.
At the Department of Veterans Affairs, both the GAO and IG
note structure and operational issues affecting the quality of
health care and chronic problems with the timeliness and
integrity of data needed by VA managers to measure performance.
At the State Department, GAO points to a number of complex
challenges, most notably the need to enhance embassy security,
upgrade crucial information and financial systems, and improve
goals and measures under the Government Performance and Results
Act.
Our oversight mission is to improve the effectiveness and
efficiency of national defense, international relations,
intelligence and veterans programs. We begin that effort today
by asking the GAO and Inspector Generals to address broad but
fundamental questions about the mission, management and
performance of the departments within their purview, and ours
as well. Next Thursday, witnesses from DOD, VA and State
Department will address the same issue.
Let me at this time welcome our witnesses: Henry Hinton,
Jr., Assistant Comptroller, National Security and Internal
Affairs Division, U.S. General Accounting Office, accompanied
by Steve Backhus, Director for Veterans Affairs and Military
Health, Lisa Jacobson, Director for Defense Financial
Management, and Ben Nelson, Director for Internal Relations and
Trade.
Also we have Eleanor Hill, Inspector General, U.S.
Department of Defense, accompanied by Robert J. Lieberman,
Assistant Inspector General, U.S. Department of Defense. Then
we have Richard Griffin, Inspector General, U.S. Department of
Veterans Affairs, accompanied by Michael Sullivan, Assistant
Inspector General, U.S. Department of Veterans Affairs.
Finally, we have Jacquelyn Williams-Bridgers, Inspector
General, U.S. Department of State.
I know we have a lot of you here. We could have had two
separate panels. This is a general overview. It is really to
acknowledge the fact that you all are the most important part
of this process, and to begin some dialog. Some of what we are
going to do is going to be a bit superficial, since we
obviously are not going to have just one of you here talking in
real depth about the issue. Obviously we are going to have you
speak for more than 5 minutes, because even though there are a
lot of you, we need to, and I know some are accompanying and
not making statements, but it is important to put on the record
some key points.
So we are going to be doing a little bit more listening
today than asking. But I do need to, before we begin, to swear
you in. I will also say to you that, you wonder, do I do the
GAOs first, the Inspector Generals, we are all a family here,
we are partners. Sometimes the Inspector General will go first
and sometimes the GAO will go first and sometimes they will
come separately and all that stuff.
Would all of you please rise, and raise your right hands.
[Witnesses sworn.]
Mr. Shays. Thank you. We will note for the record that
everyone responded in the affirmative. And we are going to go
in the order that I called you. Mr. Hinton, you can begin, then
we will go to Eleanor Hill and then to Richard Griffin, and
then to Jacquelyn Williams-Bridgers.
STATEMENTS OF HENRY L. HINTON, JR., ASSISTANT COMPTROLLER
GENERAL, NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION,
U.S. GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY STEVE BACKHUS,
DIRECTOR FOR VETERANS' AFFAIRS AND MILITARY HEALTH CARE ISSUES;
LISA G. JACOBSON, DIRECTOR FOR DEFENSE FINANCIAL AUDITS; BEN
NELSON, DIRECTOR FOR INTERNATIONAL RELATIONS AND TRADE; ELEANOR
HILL, INSPECTOR GENERAL, U.S. DEPARTMENT OF DEFENSE,
ACCOMPANIED BY ROBERT J. LIEBERMAN, ASSISTANT INSPECTOR
GENERAL; RICHARD J. GRIFFIN, INSPECTOR GENERAL, U.S. DEPARTMENT
OF VETERANS AFFAIRS, ACCOMPANIED BY MICHAEL SULLIVAN, ASSISTANT
INSPECTOR GENERAL; AND JACQUELYN WILLIAMS-BRIDGERS, INSPECTOR
GENERAL, U.S. DEPARTMENT OF STATE
Mr. Hinton. Thank you, Mr. Chairman. I am pleased to be
here today to discuss major management challenges and program
risks confronting the Departments of Defense, State and
Veterans Affairs. As requested, my prepared statement focuses
on one, the management challenges Defense, State and VA must
address to improve the efficiency of their support operations,
and two, whether these departments are meeting performance and
accountability goals and measurements that are required under
the Government Performance and Results Act of 1993.
With your permission, Mr. Chairman, I would like to have my
statement entered into the record and I will summarize.
In summary, Mr. Chairman, four themes emerge from the
performance and management challenges we have identified that
can adversely affect the operational effectiveness of the
departments if not addressed. First, Defense, State and VA are
struggling like other Federal agencies to implement the basic
results-oriented tenets of performance-based management.
I need to point out right at the start here, Mr. Chairman,
that Defense is second to none in its combat effectiveness. But
what we are really talking about here are business functions
that I think offer a lot of room for improvements in economies
and efficiencies of operations.
Too often we find that the Government's performance is
limited by a failure to manage on the basis of a clear
understanding of the results that agencies are to achieve and
how performance will be gauged. This is true of Defense, State
and VA. For example, our review of Defense's plans disclose
many areas where improvements could be made. The principal
shortcoming in Defense's plan centers on weaknesses; in one,
establishing results-oriented performance goals with explicit
strategies and timeframes for achieving them, and two,
addressing what Defense has done or plans to do to resolve its
performance management problems that you referred to in your
opening statement.
Our review of State and VA's plans identified some strong
points, but generally, they fell short of the expectations in
the Government Performance and Results Act.
Second, Defense, State and VA depend on information
technology to improve their performance and meet mission goals.
The challenge is to ensure that modern information technology
practices are consistently defined and properly implemented.
As we all know, resolving the year 2000 computing problem
is the most pervasive, time-critical risk facing Government
today. For an organization as large as Defense, with over 1.5
million computers, 28,000 systems, 10,000 networks, addressing
the year 2000 problem is a formidable task and progress on the
year 2000 program is slow.
State, too, has been slow. VA has made progress in
addressing its year 2000 challenge, but it still has a number
of associated issues to address. For example, VA faces
significant information system challenges. It does not know the
full extent of its challenges and could face widespread
computer system failures at the turn of the century, if the
systems cannot distinguish the year 2000 from the year 1900.
Thus, veterans who are due to receive benefits and medical care
could appear ineligible.
Third, Defense, State and VA must have reliable and timely
performance in financial information to ensure adequate
accountability, manageable results, and make timely and well-
informed judgments. Widespread financial system weaknesses,
problems with fundamental recordkeeping, incomplete
documentation, and weak internal controls prevented the
Government from adequately reporting a large portion of its
assets, liabilities and costs.
For example, the material deficiencies in Defense's
financial operations represent the single largest obstacle that
must be effectively addressed to obtain an unqualified opinion
on the entire Government's consolidated financial statements.
State received, for the first time, an unqualified opinion on
its 1997 statements, but needs to bring its systems into full
compliance with Federal accounting and information management
requirements.
State also must work on solving related material internal
control weaknesses, if it is to adequately protect its assets
and have timely, reliable data for cost-based decisionmaking,
reporting and performance management.
Fourth, the leading performance-based organizations
understand that effectively managing the organization's
employees or human capital is essential to achieving results.
Only when the right employees are on board and provided with
the training, tools, structure, incentives and accountability
to work effectively, is organizational success possible.
For example, Defense is a department that has experienced
problems in finding and retaining staff with the technical
training it needs. To achieve the wide ranging reforms
necessary to address its longstanding financial management
deficiencies, Defense must upgrade the skills of its financial
personnel. Defense's vast financial operations include a cadre
of about 32,000 financial management personnel. A survey we
completed of over 1,400 key Defense financial managers--
individuals often serving in comptroller, deputy comptroller
and/or budget officer positions--showed that over half of those
folks received no financial training in fiscal years 1995 and
1996.
To summarize, Mr. Chairman, GAO is committed to help the
Congress and Federal agencies better serve the American people
and prepare for the demands of the 21st century. We have
identified, as my statement points out, the critical challenges
facing Defense, State and VA. These challenges, again, if not
addressed, can adversely affect the operational effectiveness
of these departments.
We stand ready, Mr. Chairman, when we get through with the
witnesses, to address your questions.
[The prepared statement of Mr. Hinton follows:]
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Mr. Shays. Thank you, Mr. Hinton.
It is really appropriate, I think, to have the GAO go
first, since you were covering all three, as a nice
introduction. At this time, Eleanor Hill.
Excuse me, Ms. Hill, I really should acknowledge that we
have a Member here from Massachusetts, John Tierney, and it is
wonderful to have him on the committee. It is nice to have him
here. I am going to take advantage of just doing some
bookkeeping, if I could, given that we have a Member on both
sides of the aisle. I would ask unanimous consent that all
members of the subcommittee be permitted to place any opening
statement in the record and that the record remain open for 3
days for that purpose.
Without objection, so ordered.
And I also ask further unanimous consent that all witnesses
be permitted to include their written statement in the record.
Before giving you the floor, I would just ask the gentleman if
he has any comments.
Mr. Tierney. Actually, I do not. I am here prepared to
listen and learn.
Mr. Shays. OK, thank you.
Ms. Hill. Thank you. I am going to briefly summarize my
statement. As you pointed out, Mr. Chairman, we will have the
full statement in the record.
Mr. Shays. It is amazing, this is the first time we do not
have a clock, and all of you are going to be punctual.
[Laughter.]
Ms. Hill. We are trying.
I am pleased to have this opportunity to discuss the
Department of Defense's vulnerabilities to waste, fraud and
abuse, as well as opportunities for continuing the momentum
developed over the past few years toward management reform and
improvement.
There are 10 areas where we in the IG's office believe
further management improvement is particularly important, based
on recent audit and investigative results. About 98 percent of
the audits conducted by my office and most of our approximately
1,700 open criminal investigative cases relate directly or
indirectly to those top 10 high risk areas. In each of those
areas, there are numerous problems that are inter-related,
complex, and involve a wide range of organizations. Many
specific problems are relatively long-standing. Others have
emerged only recently.
Briefly, the 10 problem areas are as follows. No. 1, and
this is something Mr. Hinton has already alluded to, financial
management. The DOD remains unable to comply with the various
laws requiring auditable financial statements for its major
component funds and for the Department as a whole. For fiscal
year 1997, only the Military Retirement Trust Fund financial
statements received a clean audit opinion. We were unable to
provide favorable opinions on any other major statement.
We anticipate similar results when we issue opinions next
week on DOD statements for fiscal year 1998. The inability of
DOD's systems to produce reliable annual financial statements
means that DOD managers and commanders lack much of the timely,
accurate and useful financial information that they need for
program decisionmaking on a day-to-day basis.
The second area we have concerns about is weapons system
acquisition. Increasing the weapons procurement share of the
budget is a high priority DOD budget goal. There are compelling
technological and financial reasons to accelerate the
acquisition cycle and to cut per unit costs, especially
overhead costs. It is by no means certain, however, that
support costs can be cut enough to sustain a robust
modernization effort. In addition, despite many positive
acquisition reform initiatives, we have seen no significant
across the board improvement yet in cycle time and unit cost.
The third area involves other procurement issues. The vast
majority of the several million annual DOD contracting actions
involve equipment, ammunition, supplies and services, rather
than major weapon end items such as ships and missiles. DOD
administers over $800 billion in open contracts and plans to
award $135 billion of new contracts in the current fiscal year.
The sheer volume and great variety of DOD contracting activity
makes this a high risk area.
While the Department has made progress in initiating
acquisition reform initiatives, more needs to be done to ensure
that the DOD acquisition work force is capable of transitioning
to new practices, and that those new practices include
reasonable controls to safeguard against the continuing threat
of procurement fraud and mismanagement.
The fourth area is health care. The Defense health program
serves 8.2 million eligible beneficiaries through a combination
of DOD in-house and outsourced care. Total DOD health care
costs are nearly $16 billion annually. The Defense health
programs cost containment challenges are exacerbated by the
continued lack of good cost information and significant levels
of fraud, particularly by some private sector providers. We
currently have about 500 open criminal investigations on health
care fraud.
I should point out that traditionally, the biggest priority
area in our office in criminal investigations, was procurement
fraud which started back in the early to mid-1980's, the
emphasis on that. In recent years, while the largest category
of our cases are in procurement fraud, the No. 2 priority,
involving a significant amount of our work is in the health
care area. So this, in recent years has become a bigger and
bigger problem for the Department. More of our resources are
now devoted to health care fraud.
The fifth area is supply inventory management. The
Department had reduced wholesale supply stocks by nearly a
third and is pursuing a number of logistics reform initiatives.
However, spare parts shortages are being reported more
frequently by operational units. Audits continue to show that
war reserves are overstocked in some locations, but short of
critical items in others. Fraud and inappropriate disposal
practices remain particular problems in the disposal area,
where we have almost 70 open criminal investigations.
The sixth problem area is the year 2000 conversion. The
Department of Defense depends heavily, as Mr. Hinton has
mentioned, on automated information processing by about 28,000
systems, 2,274 of which are considered mission critical. DOD
faces a $2.5 billion cost and a monumental management challenge
because of the scale of the year 2000 conversion problem, a
belated start in seriously addressing it and the legacy of past
inattention to good information technology and management
practices.
As of January 1999, approximately 77 percent of mission
critical systems have been certified as Y2K compliant. We
believe that the number and severity of the remaining Y2K
issues will not be readily apparent until at least June 1999,
when more testing results become available.
The seventh area we have designated as other information
technology issues, aside from the Y2K problem. As indicated in
21 recent audit reports, the Department faces major problems
related to the acquisition of computer systems, and the
security of both old and new systems. Automated system
development projects have tended to overrun budgets, slip
schedules, evade data standardization and inter-operability
requirements and shortchange use needs.
Audits continue to show lax security measures and
inadequate focus by program managers on the threat to
information systems, despite clear awareness at senior levels
of the need for a very high priority for information assurance.
Estimates of the number of intrusions attempted by hackers into
DOD systems each year run as high as 250,000.
The eighth area is other infrastructure issues. Key
infrastructure areas, such as transportation, maintenance and
facilities, offer many opportunities to cut costs. However,
many logical measures are highly controversial, and it is
important not to create readiness shortfalls when trimming
infrastructure. Difficulty in collecting reliable cost
information with which to make outsourcing or restructuring
decisions is a major infrastructure management problem. There
are continued problems in determining facility requirements,
especially for housing, where estimates of the cost of
modernizing DOD facilities run as high as $30 billion.
No. 9, readiness. We have assessed how readiness posture is
affected by the changing threat environment, which now includes
bona fide information warfare threats and concerns about
weapons of mass destruction in the hands of terrorists.
Accurate reporting of unit level readiness status remains a
major concern. Units have indicated weaknesses related to
chemical and biological defense preparedness and communications
capability.
Last, we have designated as area No. 10, turbulence from
change. For most of the past decade, all functional areas
within the Department of Defense have been engaged in
fundamental reform and process re-engineering efforts at the
same time. Conflicting priorities, downsizing, outsourcing,
dependence on new and unproven systems or processes, de-
emphasis on management controls and oversight, reorganization,
sustained requirements growth, despite resource constraints,
and the continued unexpectedly intensive need for frequent U.S.
military deployments are putting considerable strain on the
Department's human resources. This turbulent period is one of
increased vulnerability to waste, fraud and mismanagement.
In sum, as the largest and most complex government agency
in the world, the Department of Defense faces huge management
challenges. In all of the areas that I have discussed, there is
a mix of significant recent progress toward reform and
continuing major problems. Department managers have agreed with
about 96 percent of our audit recommendations, and have
completed action on over 5,200 audit recommendations over the
past 5 years, realizing estimated monetary benefits of $18.6
billion. We will continue to do our best to highlight the
Department's high risk areas, both in our audit and
investigative work, and in the semi-annual reports from my
office to the Congress.
Thank you, Mr. Chairman.
[The prepared statement of Ms. Hill follows:]
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Mr. Shays. Thank you. Ms. Hill.
Richard Griffin, who is the Inspector General, U.S.
Department of Veterans Affairs.
We've been joined by the ranking member of this committee,
really a partner in this whole process, Mr. Blagojevich. I
welcome you here. I do not know if you'd just like to make a
statement for the record.
Mr. Blagojevich. Thank you very much, Mr. Chairman. I will
be very brief. Let me first of all say good morning to our
distinguished witnesses on the panel, and just say, this is the
subcommittee's first hearing of the new Congress. It is also my
first hearing as a ranking member. If I could say a couple of
things, No. 1, I want to extend my special appreciation to our
very able chairman, Mr. Shays, and say how much I am looking
forward to working with you over the next 2 years.
And second--what do I do next? This is my first hearing as
ranking member.
I have a statement for the record. In the interest of time
and brevity, I will just allow the rest of it to be entered
into the record, then allow the witnesses to testify. Thank
you.
[The prepared statement of Hon. Rod R. Blagojevich
follows:]
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Mr. Shays. Thank you very much. I didn't read the third
page of my statement, and I would just like to read this
paragraph, now that you are here, and just say, as we proceed
to narrow our focus further in the weeks and months ahead, I
want our oversight to be constructive and I want it to be
bipartisan. I view our work as a zero-sum proposition, with the
benefits of increased efficiency and reduced waste accusing to
existing underfunded priorities like force readiness at DOD,
health care quality at the VA, and embassy security
enhancements, for example.
It really is a joy to have you as the ranking member, and I
know that we will work well together. I know we will be working
with our colleagues at GAO and the Inspectors General. I know
that they know what the ranking member wants from you all, as
if we were asking it for the committee. DOD is responsible to
both sides of the aisle, as you always have been.
Thank you. I am sorry for that slight interruption.
Mr. Griffin. Mr. Chairman and members of the subcommittee,
I am pleased to be here today to discuss major performance and
management challenges facing the Department of Veterans Affairs
and the Department's progress in meeting performance and
accountability measurements and goals under the Government
Performance and Results Act. I will also highlight
contributions of the Office of Inspector General in combating
waste, fraud and abuse in VA programs and administrative
activities.
Last November, I responded at length to Chairman Burton's
request for the Office of Inspector General's views on the 10
most serious management problems facing the Department. These
issues appear in an abbreviated form in my full statement which
is being submitted for the record for this hearing. While most
of these challenges are long term in nature, I am pleased to
report that the Department has made great strides in addressing
the Y2K issue and expects to complete the implementation of all
applications into production next month.
I will briefly highlight recent activities of my office
that focus on some of the other top 10 issues. Monitoring the
quality of health care is a top priority for my organization.
This year, I directed that my Office of Audit, Office of Health
Care Inspections and Office of Investigations initiate a
Combined Assessment Program to conduct recurring reviews of VA
medical centers. These collaborative assessments of medical
center operations will focus on key indicators or ``pulse
points'' if you will, to provide medical centers and veterans
integrated service network management with timely feedback on
the status of local operations and program effectiveness.
In the area of workers' compensation, a collaborative pilot
project, involving OIG investigators and VHA, was initiated to
identify VA employees who were fraudulently receiving workers'
compensation benefits. Indictments were obtained against 14
individuals, all were convicted. Fines and restitution exceeded
$550,000, and savings to VA resulting from this pilot project
amounted to $4.4 million.
In 1998, we audited the workers' compensation program at
the request of the Department and concluded the program was not
effectively managed, and that by returning current claimants to
work who were no longer disabled, VA could reduce future
payments by $247 million. To help ensure the integrity of VA's
workers' compensation program, we are developing a protocol
package for VA managers for enhanced case management and fraud
detection.
In the area of improper payments, we recently conducted an
audit to determine if the disability benefit payments to
incarcerated veterans were appropriately adjusted as required
by Public Law 96-385. We reviewed a sample of veterans
incarcerated in State and Federal prisons, and found that 72
percent of the cases were not adjusted as required. We
estimated that nationwide, about 13,700 incarcerated veterans
have been or will be overpaid by $100 million.
Additionally, overpayments to newly incarcerated veterans
totaling approximately $70 million will occur over the next 4
years if VA does not establish appropriate controls.
Prior reviews of the implementation of GPRA in VA showed
that while VA had made progress implementing strategic plans,
the Department required additional efforts to achieve the
ultimate goal of using performance measurement as a tool for
improving the efficiency, effectiveness and economy of VA
operations. We recommended establishing more specific and
quantifiable performance measurements and holding managers
accountable for the development and implementation of the
Department's strategic plan.
During fiscal year 1998, the Office of Inspector General
made significant contributions to the economy, efficiency and
effectiveness of the Department's programs and operations.
Audits, investigations and other reviews identified over $734
million in monetary benefits, including $31 million in
recoveries. These monetary results constituted a return on
investment of $21 for every dollar expended on OIG operations.
Additionally, our oversight of Departmental operations
identified opportunities to improve benefit services and the
quality of health care provided to VA patients. Finally, our
criminal investigations and special inquiries resulted in 111
criminal convictions and 223 administrative sanctions involving
patient homicide and assault, drug diversion, theft of
Government property, bribery, kickbacks and benefits fraud.
This concludes my oral statement. I will be pleased to
respond to any questions the Members may have.
[The prepared statement of Mr. Griffin follows:]
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Mr. Shays. Thank you, Mr. Griffin.
We will now go to Jacquelyn Williams-Bridgers.
Ms. Williams-Bridgers. Mr. Chairman, members of the
subcommittee, thank you for the opportunity to testify before
you today on the major management challenges facing the
Department of State.
The Office of Inspector has identified several significant
challenges facing the agencies that we oversee, including the
need to strengthen border security, consolidate the foreign
affairs agencies, correct weaknesses in financial management
and improve management and maintenance of real property
overseas. I discuss each of these in more detail in the
statement which I appreciate being submitted into the record.
I would like to focus my short statement on the
Department's progress in addressing security vulnerabilities,
especially overseas, the Y2K compliance and implementation of
GPRA. No greater challenge exists for the Department today than
that of providing safety and security for our people, our
facilities and our information. The scope and gravity of this
challenge was brought into clear focus by the attacks on our
embassies in Africa late last year.
The Department faces an immediate need to address physical
security vulnerabilities and to enhance emergency planning at
our overseas posts. For several years, my office has reported
that the Department faced the challenge of managing and funding
the security of personnel, data and our buildings. The
devastation caused by the terrorist strikes on our embassies in
Nairobi and Dar Es Salaam fundamentally changed the approach to
security at our missions.
The Department now assesses the vulnerability of mission
buildings, the actual buildings, to terrorist attack, coming
across national borders, in addition to the threat levels
emanating from the cities in which our embassies are located.
My office has made corresponding changes in our oversight to
security.
The State Department Office of Inspector General provides
the only regularized security oversight of all U.S. Government
non-military facilities overseas. I have recently taken a
number of steps to significantly enhance the security oversight
component of OIG.
First, we have expanded our security oversight by including
experienced security officers on our routine post-management
inspection teams. The security officer's attention focuses on
physical security and the emergency preparedness of personnel
at the post in times of crisis. This year, we plan to complete
inspections of 31 posts.
In addition, we will complete security audits of our card
access control programs at our missions, protective details,
handling of classified information and overseas
telecommunications security.
Second, we will provide oversight of the $1.4 billion in
emergency security funds recently appropriated to the
Department. A large portion of the emergency supplemental funds
will go to procuring goods and services and construction of new
facilities. Our office plans to perform pre-award contract
audits to ensure that costs are reasonable.
We will also evaluate the adequacy of physical and
technical security being built into our new buildings in
Nairobi and Dar Es Salaam. In addition, we will examine the
security for construction personnel, onsite construction and
logistics for transporting and installing items to be used in
controlled access areas.
We also are pressing the Department for improvements in
emergency preparedness. As a result of our recent audit in
emergency evacuations, the Department reinstated its crisis
management exercise program, which trains emergency action
committees at posts on how to manage crises more effectively.
The Department also faces challenges in information systems
security. Our own work has pointed to deficiencies in the
Department's mainframe and communications systems security,
including incomplete and unreliable security administration,
inadequate training of information systems security officers,
and the lack of controls over who accesses our information
systems. GAO, as was mentioned earlier, reiterated our findings
on the need for improved management of information security.
Another critical challenge facing the foreign affairs
agencies is our vulnerability to the Y2K problem. Despite the
Department's steady progress to prepare systems for the year
2000 date change, we are concerned that the Department's Y2K
certification process is proceeding much too slowly. Failure to
meet the Y2K challenge could create havoc in our community,
including disruption of messaging systems, impediments to
embassy operations, such as visa and passport processing, and
failures in the administrative functions, such as payroll and
personnel processing in the year 2000.
Embassies and consulates rely on their respective host
country government's infrastructures to provide essential day
to day services, such as water, power, and telecommunications.
In some countries, these services could be disrupted if
critical infrastructure components and control systems are not
made Y2K compliant. Many Americans living, traveling, working
overseas will certainly seek the services from our embassies
should there be massive, sustained outages in a country.
My office has been actively engaged in Y2K efforts in three
major areas. First, we helped the Department establish a
process to certify Y2K compliance of its mission critical
systems. We helped them write the guidelines that the bureaus
now use to document that every necessary step has been taken to
ensure that their most critical business processes will
continue after January 1. In addition, we are reviewing the
adequacy of the documentation they provide.
Clearly, for the certification process to work, the
Department must speed up its processes to ensure that there is
sufficient time to make any changes if they should be necessary
before December 31st.
The second area of our focus in Y2K is in reviewing the
Department and USIA efforts overseas to prepare for the
millennium change. We have conducted assessments in 25 posts in
20 countries within the past 6 months to determine if our
embassies are prepared. Early on, we found very little
contingency planning in the event of failure of basic
infrastructure services. The Department is aware of this
problem and has sent a contingency planning tool kit, if you
will, to all embassies.
Finally, because our U.S. embassies and Americans abroad
might be vulnerable to Y2K failures, we are assessing the Y2K
readiness of host countries where the U.S. Government maintains
a presence.
In conclusion, I would like to make some observations on
the Department's planning process, and its progress in
implementing GPRA. As you know, the Results Act requires
Federal agencies to set measurable goals for program
performance and to annually report on their results in
achieving those goals. Over the past 3 years, strategic
planning efforts as required by GPRA have prompted notable
improvements in the Department's planning process.
For example, at posts overseas, there is increased focus on
and discussion by U.S. Government entities at posts about their
collective sense of U.S. policy goals in a country. Also, there
is a much improved collective assessment of all U.S. Government
resources available at each post to be dedicated toward
specific U.S. foreign policy goals. Prior to the GPRA mandate,
our chief submissions could not readily identify the total U.S.
Government resource commitment to U.S. foreign policy goals in
a country.
The challenge that exists for the Department and its
partners in the foreign affairs community is to define the
goals stated in mission, bureau and Department plans in
measurable terms and in terms of outcome. For example, what
does the U.S. Government hope to achieve within countries and
within regions?
Also, the Department needs to establish a credible system
that will reallocate resources across geographic boundaries as
changes in priorities and resource requirements are dictated by
strategic decisionmaking.
This concludes my statement, Mr. Chairman. I would be happy
to answer any questions that you or members of the subcommittee
may have.
[The prepared statement of Ms. Williams-Bridgers follows:]
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Mr. Shays. Thank you very much.
I am going to recognize Mr. Tierney from Massachusetts
first. But I am going to make a request of all of you for the
question I am going to ask, and I wanted to give you some time
to think about it. I want each of you--and I would like, when I
say each of you, not just those of you who have testified, but
all of you at this table--to give me your top two priorities,
if you were the chairman or ranking member of this committee,
as to what you would look at if you were on this committee.
Mr. Lieberman, I am going to be asking you to do the same
thing, and Ms. Hill, and I know you have the kind of
relationship that you may come up with two different answers.
That is all right. Because it will be more helpful that way. I
hope we have that independence. So I am going to ask each of
you here, and you will not tell me right this second, because
Mr. Tierney will be asking you some questions, then we will go
to the ranking member. Then we will go back and forth.
I thank you for all of your testimony.
Mr. Tierney. I thank you. I would almost rather hear that
answer first than ask questions.
Mr. Shays. We have to give them time to think of it.
Mr. Tierney. Ms. Hill, you indicated in your testimony that
some estimated monetary benefits of the number of audits that
were done in compliance was about $18.6 billion. Can we
anticipate savings in that ball park as we go forward, if we
continue the processing of auditing and cooperation?
Ms. Hill. You cannot guarantee that you will have the same
amount of savings. But I can say that we have consistently come
up with high savings figures not only in terms of audits, but
also in terms of our recoveries from civil and criminal cases.
Recovery figures have been consistently high. I would echo what
Mr. Griffin said about VA. Historically, at the OIG's office in
Defense, there has been a substantial return on costs. In other
words, the cost of operating the Inspector General's office is
far outweighed by the dollar we are able to return to the
Department.
Mr. Tierney. Thank you. You also testified that there were
barriers, in your remarks on that. Would you expand on that a
little bit, what effect does that have on this?
Ms. Hill. I think there are a couple of things to consider.
One thing that strikes me about the Department is that it is
simply huge to start with. It is a massive task for anybody to
manage the Department. And that is compounded by the fact that
within the Department, because it is so huge, you have the
services and you have all sorts of other, I call them fiefdoms,
out there, whether they are agencies or commands or services.
Historically, it has been a stovepiped organization.
Everybody has had a separate chain of command. So it is very
difficult to break down that historical culture, if you will,
and try and integrate the Department and get, not only the
services, but all the different parts and the components of the
civilian side of the Department to focus on these common
problems. It is very, very difficult.
An example is in the financial management area, where the
Department has had to combine systems, financial systems and
accounting systems, that historically were developed among the
services. They have tried to bring those together. One of the
big problems now is to get good financial information into
DOD's finance and accounting systems, which need to be vastly
improved to get clean audit opinions. Part of the problem is
that the information that comes into those systems comes from
all sorts of what we call ``feeder systems'' throughout the
Department that are run by separate entities. So you have to
get them integrated with the finance and accounting systems to
try to get a smooth transition and accurate information.
So, it is still very fragmented, there are a lot of walls,
and barriers and there is a lot of parochialism. One of the
biggest challenges is simply to get so many different
organizations or different components to work together on
common problems.
Mr. Tierney. Mr. Hinton, did you want to make a remark on
that?
Mr. Hinton. We have the same concerns that Ms. Hill does
across this whole area, where you have the individual
components that are very difficult to cut across. That is one
of the cultural issues that we see within the Department in
trying to move to achieve efficiency across all the issues I
think we have been talking about, particularly Ms. Hill and
myself, as it relates to the business activities, whether it be
financial management, logistics, or acquisitions. We have that
phenomenon that is out there, and we have to find ways to find
more jointness across those business activities to get the
efficiencies that we need.
Mr. Tierney. Let's talk about that for a second. When we
look at recommendations from the different branches to those of
the F-22, the FA-18, the joint strike fighter or whatever,
those recommendations to build simultaneously all of those,
moving in the direction, are those likely to be affected by
this kind of parochialism and culture?
Mr. Hinton. I think that is an ultimate issue for the
Congress and the administration, because it is one of
affordability. As we look at all the priority needs for the
Department, we have to ask ourselves the question that Congress
has to ask, where do we have the highest priority needs, do we
need three separate tactical aircraft programs working at one
time. That is a judgment that has to be made in part up here.
Our work has looked at the individual systems to try to
keep the facts and analyses up here around the individual
systems on cost, schedule and where they are against
performance for the individual systems. But the ultimate
question is going to be, can we afford all three, and will that
meet the top needs that we have going into the next century?
Mr. Tierney. In view of the larger amounts we are now
talking about in the national defense system on this, the
missile defense system on that, are you of a mind that the
Department of Defense is being overly optimistic with regard to
the maturity of this particular system?
Mr. Hinton. I think that what we have seen over our work
has been mixed across the various programs, whether they are
aircraft, national missile defense and those things. A lot of
this evolves around technology, where are we and how ready are
we to launch programs. Do we have the knowledge that the
technology will work? Where we have seen some of the concerns
that we've had in the past was, we would move too quick to
launch programs, hence you come up with a lot of the concerns
that we've raised in the acquisition programs that we've
exceeded costs, it has taken longer to produce the systems, and
we did not get what we started out to get for those systems to
do. That was because of technology, unit costs rose as we did
not have all those answers at the beginning.
National missile defense, I think that is a tremendous
challenge. The counsel that we would offer is that we need to
move slowly to make sure that we have a good system that works.
I think that is part of the debate that has to occur as DOD
comes up for its funding to support the programs for that.
Mr. Tierney. Ms. Hill, do you have a comment on that?
Ms. Hill. We have not looked specifically at that proposal.
But I would share what Mr. Hinton just said, that historically
there have been problems in starting out down the road to get
something, and then we find out it has either slipped the
schedule, or it is not what we really wanted in the first
place. Those sorts of things happen repeatedly.
I would think if they are going to embark on something like
that, it needs to be done very carefully. Hopefully all the
lessons learned from the past mistakes, will be considered.
Mr. Tierney. Thank you.
Mr. Shays. Mr. Blagojevich, you have the floor.
Mr. Blagojevich. Thank you.
Mr. Hinton, I would like to talk a little bit about the
discrepancy between the administration's request of $3 billion
over 5 years to bring the U.S. embassies into compliance with
security standards and a group headed by Admiral Crowe, which
recommends the spending of $14 billion over 10 years to meet
those security needs. I am hopeful, first of all, that you saw
the reports, and second, rather than tell us who you think is
right, could you give us your assessment with regard to the
financial and management processes used by the two groups,
Admiral Crowe's group and the administration, to determine
these estimates?
Mr. Hinton. Congressman, we have not looked specifically
behind the estimates on these programs. I think as Ms. Bridgers
mentioned in her statement, and I kind of reinforced across the
three agencies here, our concern at the Federal level has been
over whether or not the systems give you good data in terms of
the cost of the programs. That is one issue I think that is
very important as we think through the cost of these programs.
That is a key issue we really have to define, what are the
requirements and what are the true costs.
I would also echo something that Ms. Bridgers raised, too,
is a challenge in this area and that is knowing what the
Government's full presence is overseas. Not just State, but
look at the other agencies over the years where there has been
growth in the overseas deployment of their resources. So you
have to factor that into the total picture and determine your
requirements. Then you have to come up with good methodology to
assess the cost.
Then I think the true challenge that is out there, and it
goes back to some work that we have done in the early 1990's,
where we had issues around the capacity to carry out and
actually do the programs that we set up for enhancing the
security of our overseas missions and folks that we had
deployed overseas. We found issues of not having adequate
resources, both on the human side, questions around contract
management issues, site selection issues, and a host of those
programmatic issues that have to be carefully looked at as we
advance into this area.
Mr. Blagojevich. Mr. Hinton, some of those deficiencies,
can you give us an illustration of what you are talking about?
Mr. Hinton. Well, I think that you have to look at the data
behind cost estimates. And you have to look at the assumptions
and see whether or not we agree with the assumptions upon which
the estimates are made. That is going to be very key to the
members of this committee and also the appropriations
committees, as we decide the amount of money to go forward to
support the estimates. I think that remains to be seen in terms
of the total costs.
We have the varying estimates out there, and I think we
have to look carefully at them, and we have to ask ourselves
the capacity question. Do we have a good program to launch, do
we have the right people, do we have the right designs, do we
have the right location for the security issues that Jackie
brought up to you. I think they are the fundamental types of
questions we need to ask.
Mr. Blagojevich. OK. Ms. Williams-Bridgers, are you
familiar with the report by Admiral Crowe and the
administration's position?
Ms. Williams-Bridgers. Yes, I am generally familiar with
the findings.
Mr. Blagojevich. Could you just kind of free flow and tell
us what you think?
Ms. Williams-Bridgers. I would be glad to. I would like to
make three points about Admiral Crowe's report. First, I would
like to say he provided invaluable information to the
community. Some of the recommendations, in fact, reiterated
some of the same types of recommendations OIG had made about
the need for emergency preparedness, the need for duck and
cover drills. When you hear the indications of a bomb going
off, do not go to the windows and look out and see what is
happening. Find some place to hide under and prevent the glass
from injuring your body, which so often occurred in the two
attacks last August.
Three points about the Crowe report. One is the $1.4
billion that he estimated for annualized costs of embassy
security. It is just an estimate. It was based on his review,
the panel's review of what happened in Africa. The $1.4 billion
may not be enough. Because Africa is not representative of all
the types of threats in security vulnerabilities that we have
throughout the world, first point.
A couple of years ago, OIG looked at what is the security
posture of DS given its current levels, then-current levels of
funding. What we found was that security resources for
diplomatic security had declined by 12 percent between 1991 and
1996. They were providing minimal levels of safety to personnel
overseas, minimal levels of security to our buildings overseas,
at that point in time.
So I think we need to look behind the $1.4 billion. We did
not look at all the methodology used to come up with that
estimate.
No. 2, we must go beyond the Crowe report. As I mentioned,
the Crowe report looked at Africa, looked at what happened in
Africa as any accountability review board should do. But what
it did not take into account as adequately as we think should
be taken into account is the trans-national threat. In Africa
what happened was, we had embassies where we never suspected
there would be a terrorist strike. Because those were low
terrorist posts.
The threat came across the borders, from places that we
least suspected. So we have to take that into account now, and
we are taking that into account now, with the revised
methodology, to analyze the integrity of our buildings to
sustain any attack, regardless of where that attack comes from.
A third point, some of our posts will never be secure,
given where they are now. Are we going to move London? Are we
going to move Paris? Can we afford to relocate to places to
provide adequate setback? It would be tantamount to buying a
Manhattan city block, the investment that we would have to
make.
Another point I would like to make, though, about the cost
estimates of the Department, one of the things we are most
concerned about in the representation of the budget is that
there is no allowance for recurring costs, the maintenance, the
operating, the life cycle costs associated with equipment that
the Department intends to procure. The costs that we see as
represented in the budget are for procurement only. So we have
to look long term, what is the investment going to be.
Mr. Blagojevich. Thank you.
Mr. Shays. What I'd like to do is, Mr. Backhus, I will
start with you. Basically you have the VA responsibilities.
What would be the first two priorities?
Mr. Backhus. May I have a third as it relates to the DOD?
Mr. Shays. You may have a third. Let me just say, the
purpose for this is that this committee has the resource of 11
members on the majority side and 2 on the minority, but they
also have other responsibilities as well. So our resources are
limited, and we want to really make sure we are spending them
well.
And I also will say, you may give us a very important
issue, all of you, to look at. But we may determine that
another committee is going to be doing that extensively. But
yes, you may have three.
Mr. Backhus. Obviously, limiting issues to two probably
puts this in the realm of those that are the most difficult to
deal with. Understand that.
The two issues I would really concentrate on working on in
VA are first, as far as the health care side of VA goes, the
infrastructure of that system. If you were going to build a
health care system today, it would not look like the current VA
health care delivery system. They are not structures that are
built to provide health care in the next century. They were
built to provide health care a long, long time ago.
The future for health care is not in that kind of a
delivery system. Consequently, they have hundreds of facilities
that are not well suited for that mission. Roughly, we are
talking about approximately 25 percent of the health care
budget is consumed by the cost of keeping those buildings
maintained.
If there was a way to potentially close hospitals and open
more ambulatory kinds of health care facilities that can do
outpatient surgeries on a more efficient basis, that could be
located closer to veterans, I think care would improve, access
would improve and costs would probably be less.
Mr. Shays. An excellent suggestion. I am going to suggest
that that is going to be Mr. Blagojevich's suggestion, to have
a VA BRAC.
Mr. Backhus. Good luck.
Mr. Tierney. How does that play into your community based
outpatient clinic? Is that the alternative?
Mr. Backhus. That is the step in the right direction, that
is correct. And it is great to open up those community based
outpatient clinics. But there is a limit to how many there are
going to be that they can open, given that VA is burdened and
saddled with this huge infrastructure that they have to
continue to fund and maintain.
So if that money from those huge over-built, inefficient
facilities could be transferred into these community based
outpatient clinics, you have a much more efficient and
effective health care delivery.
Mr. Shays. Kind of like a base closing bill, though. But it
is very significant. What is No. 2?
Mr. Backhus. Switching over now to the benefits side, the
VA pays some $20 billion a year in compensation to veterans
with disabilities. They have struggled for years to do and
adjudicate claims in a timely fashion. In fact, there was an
article in the paper the day before yesterday about this, and
their re-engineering attempts to reduce that backlog and the
timeframe; they have just been unsuccessful.
So we are talking about a need to really re-engineer and to
restructure this whole benefits area to be more responsive to
the veterans. In some cases, appeals to the initial
adjudication take 2 years to resolve. So we have veterans who
are waiting upwards of 3 years for a determination as to
whether their claim will be approved.
Mr. Shays. One thing this committee could do would be to
look at how long it takes claims to be resolved and decide how
that process could be sped up.
Mr. Backhus. Yes, I think we are really talking about a
technology infusion here that is going to be needed. This is a
paper-intensive kind of activity.
Mr. Shays. You asked for three.
Mr. Backhus. I did, because I also have responsibility for
evaluating the military health care system.
Mr. Shays. That is wonderful that you are connected to the
two. That is the advantage GAO has.
Mr. Backhus. There is an opportunity here, I think, for a
lot more jointness between the DOD and the VA. I heard these
folks talk about the stovepiping that occurs within the
Department of Defense. Well, there has also been historically a
lack of cooperation and collaboration between the VA and the
military health care systems.
They do a lot of things alike, health care is health care
in many respects. They have facilities that they could share
considerably more. There is purchasing they could share
considerably more. There are personnel that they could share
significantly more. And it goes on and on and on.
I have to say there is progress that has been made over the
years to get the two departments to work together more
collaboratively. It is, however, probably just a pittance of
what the potential really is though.
Mr. Shays. One of the advantages GAO has is that you can
cross different departments. I know Inspector Generals speak
with one another and so on, and there is coordination. But you
can do it more directly. But the committee can do the same
thing.
In my former life as chairman of the Human Resources
Subcommittee in Government Reform, we oversaw all of HHS and
VA. So we brought in one of the employees we had then, and we
thought to ask her to do just particularly your third
recommendation. How we can coordinate the two? I can see
coordinating and having some impact with No. 2 as well--the
benefits side.
Mr. Backhus. Is that Marcia? Yes, we have been working with
her.
Mr. Shays. Did she put this idea in your bonnet? Because
this is--I was going to change her responsibilities, now I am
going to say, OK, we are going to go back to plan A.
That is very helpful, thank you. I think, Ms. Williams-
Bridgers, if we could come to you, if you would give me your
suggestions. You are not accompanied at the desk by anyone
formally introduced. So you get to jump right in. What would
they be?
Ms. Williams-Bridgers. I would have two. One is security.
Security of the U.S. Government's----
Mr. Shays. I am sorry, I meant VA. I apologize. We are
going to start with you, Mr. Sullivan.
Mr. Sullivan. Thank you. With Steve here, as often comes
about in these situations, Mr. Backhus over at GAO, we are very
consistent in our view of the VA.
Mr. Shays. I like consistency.
Mr. Sullivan. VA, just in their purpose for being part of
the Government, is to serve the veteran. Service is their No. 1
priority. And he picked the absolute two things that the VA is
here for.
Mr. Shays. Would you just pick your two issues, though?
Mr. Sullivan. The two issues are, one, to provide good
quality health care to the veterans, first the disabled vets
and then the other veterans who may not be disabled on a space
available basis. Steve is right on target, it is the structure
of those facilities, the movement from inpatient to outpatient
needs to be looked at, and how VA can move construction money
and any of their operating moneys to do so, to allow these
large, vacant structures that have been built over the years to
be converted to outpatient clinics. And then the further
establishment of these CBOCs, these community based outpatient
clinics.
The second issue, of course, is the benefit aspects. The VA
provides compensation, pension and education benefits to all
veterans. Our concern over the years has been the timeliness in
which claims are processed, as well as when one does try to
speed up those claims, what are the vulnerabilities to fraud
and misuse of that money if you go too far in those system
changes, by eliminating some of the controls established, did
we look at that.
So the two areas are very consistent with Mr. Backhus.
Mr. Shays. I know we are talking about third rail issues in
some cases, but what we are dealing with is honesty before the
committee. We may decide that there are only so many real heavy
lifting issues. But it is really important to establish what
you think are the crucial issues. It is really very
interesting. I am fascinated with this.
Mr. Griffin.
Mr. Griffin. The No. 1 issue in the eyes of my senior
management team, which came out of a retreat that we had, is
quality of care in the VA. Notwithstanding the fact that Mr.
Backhus put that on the table, that is our No. 1 priority. That
is why we created this new combined assessment program, to get
out to VA facilities, to satisfy ourselves that the right
quality controls are in place, that the right level of service
exists, waiting times are not excessive, that the right medical
professionals are in place at that facility.
All of these things are issues that when Dr. Kaiser came
into VA and started this movement, which parallels the movement
in the private sector of moving from inpatient care to primary
care, that creates a whole host of issues. Previously maybe
your staff is loaded up with specialists as opposed to
physicians that are primary care physicians.
In addition to caring for patients, VA has a number of
veterans under their stewardship in nursing homes. There are a
lot of post-traumatic stress syndrome vets who are in long term
care facilities. What they are trying to do to address that is,
if we have excess capacity, which clearly exists in some of the
173 originally constructed hospitals, they are trying to
convert some of that capacity into long term care facilities.
That requires budget money.
In the past 3 or 4 years, they have opened over 500
outpatient clinics. That requires budget money also. So it is a
balancing act as to, where you cut your losses on that excess
space? Is it most prudent from a business standpoint to convert
that space for long term care, or do you pour the money into
the outpatient clinics?
Their perspective has been that health care is not about
buildings, it is about access to medical professionals, which
is why they have moved in the direction of outpatient clinics.
But it takes a long time to turn that aircraft carrier around,
to get things up and running in an efficient----
Mr. Shays. And your second issue?
Mr. Griffin. The second issue is a combination of things.
The Department got a qualified opinion this year on their
financial statements. I think stewardship over this $43 billion
or $44 billion in a broad is the issue. If you do not have
systems in place to address some of these items that I raised
in my opening remarks, like workers compensation, incarcerated
veterans, where you cannot show where those tax dollars that
you were given are being spent, then that is a major problem. I
think that is an umbrella issue which speaks to a lot of the
shortcomings that are outlined in the financial statement
audit.
Mr. Shays. I am happy to jump back to my cause, but I would
like to finish, we've done State. Mr. Hinton, we left you out a
little bit on State. We've done VA. I am sorry. Now what I
would like to do is State. Mr. Nelson.
Mr. Nelson. With respect to the State Department, I think
there will not be much disagreement that the primary challenge
to the Department is enhancing security over U.S. buildings and
staff overseas. The caution, however, is that as the Department
receives funds to deal with this issue that oversight must be
vigilant. It is important to have a clear game plan for how
those funds will be spent.
In the past, programs have been affected by lack of
agreement on design, construction problems, locations that
changed from time to time, resulting in increased costs. I
believe for the last major building program in the mid 1980's,
very few of the projects actually came in on time and at cost.
So I believe that is a critical area for the committee to focus
on, as it is very important to have a strong, capable overseas
presence to carry out our foreign policy objectives, but to
have those people be as safe and secure as possible. I think
that would rate No. 1.
I will be surprised if my colleagues here were to disagree
on that. That is a possibility, but I will be surprised.
The second area is the area of strategic planning and
performance. I think the Department will not be able to address
some of the sub-issues or challenges absent some greater
statement of what the critical missions are and how the funds
will be applied to these missions are adequately funded, and
there is a clear sense of where the Department is trying to go.
Their performance plans have been good in some respects, but
they have not been clear on performance goals or on performance
measures.
Now, I know we are limited to two. But I think in order for
the Department to address the second one, it has to deal with
two other items that are included in the statement.
Mr. Shays. A and B?
Mr. Nelson. Yes, A and B. You need better information in
order to make decisions about what it is you are going to do or
not do, because you need to understand what things really cost.
In the past, the Department has not had a good handle on what
things cost. We have had some difficulty when trying to make
recommendations for the adoption of best practices, because of
limited, very limited financial information.
The other challenge facing the Department is the
consolidation of the Arms Control and Disarmament Agency and
the USIA.
Mr. Shays. That is really three. In other words, the
strategic planning and performance, what's its critical
mission. One way they have to deal with is better information.
Do you have anything else related to that, No. 2?
Mr. Nelson. Do you mean an example?
Mr. Shays. No. In other words, is there any other part to
that? You said, you had two things. So this really is a third
issue you want us to look at it?
Mr. Nelson. Yes, it is a third issue. And maybe I misspoke
when I said A and B. But you cannot accomplish either goal
without good financial information. With respect to the
consolidation, you need good information to make good decisions
about what functions and roles and missions you have to pursue.
Mr. Shays. Right, I've got you.
Mr. Nelson. So they are all tied together.
Mr. Shays. Ms. Williams-Bridgers.
Ms. Williams-Bridgers. I certainly agree with Ben Nelson on
his assessment of security being the No. 1 area of focus, and
the need of congressional oversight and attention, for a couple
of additional reasons, though. One is State Department, while
it serves as the platform for all U.S. Government entities
overseas, it represents only 25 percent of our presence
overseas. State Department, USIA and ACDA, sum total of those
organizations is about 20,000 people, Americans.
Then we have, triple that number and you get the total U.S.
Government effort, if you will, if you include FSNs, for whom
we have some liability.
Mr. Shays. What are FSNs?
Ms. Williams-Bridgers. Foreign service national employees.
In Africa, we absorb the cost not only of the loss of life
of Americans, but the loss of life of foreign service nationals
as well. There was a financial liability associated with our
employees there. And the foreign service nationals represent
the largest part of our work force overseas.
I think also that the reason it is important for this
committee to pay attention to security is that the Department
cannot attend to security alone. It needs the help of the
Congress. We talked about the costs of providing security
facilities and secure networks for our information overseas. We
are going to need the help of Congress, the commitment of
resources, over a sustained period of time, in order to fully
address those security needs.
While I agree with Mr. Nelson that strategic planning is
extremely important, and the lack of good information,
financial systems, information systems, have been an impediment
to good resource planning and goals, setting of goals, I think
the more immediate problem is the failure of those information
systems and financial systems to provide you the information
after January 1, 2000. So in terms of a short term goal, I
would say the Y2K problem is something that warrants this
committee's attention. Not only because of Department of
State's precarious position, although I think they are making
progress. But Department of State is taking a lead in many ways
in the rest of the world's attention to Y2K. From work that we
have done with host country governments, we know that there are
varying levels of attention being paid to the Y2K problem.
For the tens of millions of Americans that are traveling
overseas, in Rome alone they are celebrating a jubilee, January
1, 2000 millions of Americans are expected to attend this
jubilee. There is a lot of question of whether or not that
country will be prepared on January 1. So I think the Y2K is
more of a short term need that warrants this committee's
attention.
Mr. Shays. Thank you very much.
We have a vote, and I think what we will do is end with
Defense. Ms. Jacobson, you are in one area of the Defense area,
but I still want you to give me your two, even if one goes
beyond your area. And Mr. Hinton, I will ask you to comment on
Defense.
Then we will ask the Inspector Generals, then come to you,
Mr. Lieberman. I think that is what we will do--do we only have
one vote? Sometimes we leave and we find out there is another
vote, and that we should keep going. Why don't we start with
you, Ms. Jacobson, and we will make sure there is only one
vote.
Ms. Jacobson. Mine is financial management and you are all
pretty aware of the issues in financial management at DOD. They
are not denying them. There are serious difficulties, both in
the stewardship of the assets, and in cost, and accumulating
cost information and data.
Mr. Shays. When you all told me that in 1 year alone,
vendors returned $1 billion of overpayment, I was shocked. And
you all had probably quite frankly become desensitized to it.
That is not a criticism. It just tells me the challenge. For
me, I thought, wow. At one time, you all probably did, too.
Ms. Williams-Bridgers. When I first started, I did, too.
When you first come out of the private sector, and $1 million
is a big number, $1 billion kind of shocks you.
Mr. Shays. How much more is out there? All we need to do is
find out if we have more than one vote. OK.
Ms. Williams-Bridgers. I think one of the most serious
issues facing us, and challenges for GAO right now, in working
with the Department to try to help them address their financial
management problems, is getting them to view financial
management in the broadest perspective.
We just issued a report on their biennial financial
management plan. In that report, they eliminate from the
discussion of financial management the budget side of the
equation. That is a basic element of financial management.
Until you look at financial management in a broad perspective,
including how information is shared not only upwards to the
financial systems, but also between financial program systems
that need that information to control the assets and provide
stewardship over the assets, and you do not have an adequate
plan going forward to address the serious problems that we've
seen with financial management.
Mr. Shays. We are going to go vote. The bottom line I am
hearing you say is, we have to connect the budget to financial
management, that is one issue we need to look at. Give me
another one as well.
Ms. Williams-Bridgers. Connecting, providing the control
element of the functional areas, feeding information to each
other at the same time as the financial management systems as
well. For example, when you acquire something, acquisition,
provide that information to logistics, it is coming in, at the
same time they provided it to accounting, pay for it. Then at
the end of the day, accounting and logistics look and see if we
got everything that we paid for. That is a basic element of the
financial management control system that is totally lacking in
DOD, and not planned for right now as far as we can tell.
Mr. Shays. Thank you very much.
We have been joined by Judy Biggert, and I do not know if
Judy is going to be able to come back afterward. I want to
welcome you to the committee. The purpose today is just to get
a sense of where we are going to begin our travels here.
Welcome.
Ms. Biggert. Thank you. Unfortunately, I will not be able
to come back. But I have just been traveling in six countries
in South America, Latin America. I have visited so many of the
embassies there, and the problems they are having, particularly
those that are street levels, four sides exposed, and how
concerned they are about the security there.
[Recess.]
Mr. Shays. Are we all done? You have given me your two
points, and I will go to Mr. Hinton. We are taking Defense,
first focus on Defense. I did not want you to use up all your
good ideas on the other two.
Mr. Hinton. That is OK. My jurisdiction runs both to the
international side, too. I will echo where they have been on
that. I want to spend my time right now on Defense.
When I got your invitation to testify, I was really
thinking how I would spread together all three departments in
my statement. I want to come back to one of my key points right
at the beginning, because I think it rises to Defense in a very
important way. In the last page of my prepared statement, you
will see a list of high risk areas which are about six or seven
that we have had in DOD for many years.
Ms. Hill touched on those as she went through. Our work
parallels each other. I think the issue I would have, Mr.
Chairman, is GPRA implementation, to try to push the Department
around to try and identify measures, goals, that will move
forward trying to get some metrics out there that we can see
progress going against these high risk areas.
Those high risk areas form the basis of the challenges that
we have laid out in our reports here. I think that is very key,
and as more knowledge becomes available, and the Department is
starting to embrace that legislation more, I think you will see
more measures, more metrics, and you will be in a position to
look at the progress.
The other important part that comes on is that at some
point, we tie the budget to some of these areas, so that we can
see where the dollars are going and what we are getting for the
execution and expenditure of those dollars against those goals
and objectives. I think your committee is in a very good
position to kind of watch that evolution of that and challenge
the Department, are we getting where we want to go against
these high risk areas?
I always think about these, I think that $1 that is not
well spent in these areas is $1 less that we have to devote to
readiness and modernization and those types of priority needs
that the Department has been seeking additional moneys for.
My second one in DOD truly goes to the issue of financial
management. The issues that Ms. Hill and I both talked about
and Ms. Jacobson raised here really has at its heart the
execution of the budget. Unless you have real good information,
decisionmakers are not in a very good position to make informed
judgments. That ties to the data itself and the systems we have
in DOD. We are not in good shape. I would put that right there
second to the first one that I mentioned.
Mr. Shays. Thank you very much.
Mr. Lieberman.
Mr. Lieberman. I have a list of stuff written down on this
paper, and I have been trying to find some innovative way to
squeeze it all into two things.
Mr. Shays. I am all up for creativity.
Mr. Lieberman. I think the No. 1 priority for the
Department is military readiness. I believe that we cannot do
too much oversight in terms of looking for readiness
inhibitors. I think there are plenty of them out there.
Mr. Shays. I like the way you say that, readiness
inhibitors.
Mr. Lieberman. Questions arise such as, we spend $83
billion a year, approximately, on logistics. Yet we have the
operating forces complaining, vehemently nowadays, about spare
part shortages. How can this be? Are we really ready to deal
with weapons of mass destruction, either in a war environment
or in terms of counteracting terrorism, abroad or at home?
There are others; it is certainly a long list. But I think, as
a genre, that readiness is terribly important.
Mr. Shays. In regard to readiness, a good chunk was dealt
with in your statement, Ms. Hill. You say accurate reporting of
unit level readiness status remains a concern. In addition,
audits have indicated weakness related to chemical and
biological defense preparedness and communications capability.
So did you inject that into her report?
Mr. Lieberman. Yes. [Laughter.]
Mr. Shays. It caught my attention.
Mr. Lieberman. I trust it is OK to let the secret out here.
Mr. Shays. When you say communications capability, can you
elaborate a little more on that, Ms. Hill?
Ms. Hill. I think the one on communication, both of those
are very critical areas. I was going to say that----
Mr. Shays. I am going to come back to you, Mr. Lieberman.
Ms. Hill. My first problem would also be readiness. My
biggest concern is particularly in the chemical and biological
area, where we have done a series of reports, some of which are
classified. We cannot go into all the details here, but it is
an area that I think is worth looking at.
Mr. Shays. Not all of the 12 are in regard to chemical and
biological?
Ms. Hill. No.
Mr. Shays. The 12 are readiness overall?
Ms. Hill. The communications one, I believe, is the audit
report on the frequency issue overseas, where we are using
communications equipment where, and I am not a technical
expert, and Bob can correct me if I am wrong, they are not
using approved frequencies and not complying with all the
requirements of the host nation. Therefore, the efficiency of
the whole program or of the equipment is seriously in doubt.
Mr. Shays. Let me have you give me your second one, or if
you wanted to elaborate more. I interrupted you.
Mr. Lieberman. I think the second one relates to
acquisition. Acquisition is the area of the Department where
there is the most money. Last September, the Under Secretary of
Defense for Acquisition and Technology made a statement, a
public statement, in which he said the entire modernization
program was in a death spiral due to underfunding. We are
spending approximately $60 billion a year on weapons
acquisition. So again, the question is, how can that be?
There are a lot of different facets to that. It leads you
into the question of where do we go with acquisition reform.
How have the reforms so far worked, and what kinds of further
changes, if any, are necessary?
If I could impose and have a third?
Mr. Shays. Sure. For Defense, I think a third would be
appropriate.
Mr. Lieberman. Thank you. Information systems are really at
the heart of everything that the Department does. All of our
processes are completely automated. All of us, as managers, are
dependent on information coming out of automated systems. There
is a chronic lack of accurate day to day management
information, as has been mentioned earlier. I think that
pervades every single part of the Department's operation.
It leads you into areas like Y2K and security, as well as
systems design. So how we can have 20 some thousand information
systems and still have bad information, is my third question.
Mr. Shays. Does Mr. Horn tend to get into those issues as
well into his committee, Ms. Jacobson? One of the things we
have to decide is what we do in that regard.
Mr. Hinton. He is real key into the Y2K right now, but also
in the broader picture around some of the information
technology and systems development side.
Mr. Shays. Is it fair to say that GAO would tend to focus
more on management because you tend to get into less--let me
preface it by, I would think the Inspector Generals on occasion
are going to get into some very specific programs, sometimes
fairly narrow in focus, more micro. You can also get into macro
issues as well. But it would seem to me that GAO would tend to
get into more macro issues.
Mr. Hinton. Both. But largely on the macros. If we are
going to have, if you could give Bob a third one, I would like
to come back after Ms. Hill, because I have a couple at a
broader national security level that go beyond Defense.
Mr. Shays. Great. I am going to ask Ms. Hill to give me her
first two, then I am going to ask each of you to tell me the
question you wish we had gotten into, the issue we wished, and
each of you comment. And then I am going to let you get on your
way, because this is just kind of a general introduction for me
and the committee.
Ms. Hill. I preface it by saying that the problem with
Defense, obviously, is there are so many important issues. Not
only are there so many, but they are so interrelated. If you
pick one issue, some other issue feeds right into it.
Mr. Shays. Fair enough.
Ms. Hill. But great minds must think alike, because Bob's
list and mine are very similar here. My first would also be
readiness, and particularly from what I have seen in our
audits, it would be in the biological and chemical weapons
area. Obviously, I would put readiness first, because to me,
that involves the safety of our men and women in uniform.
Although everything else, including financial management, is
very important; readiness is a critical area with obviously a
huge potential for disaster if it is not the way it should be.
Second, I would suggest the general area of acquisition
procurement, because the amount of dollars that is at risk in
that area is huge given the extent of the Department's
activity. There is also a lot of reform going on in acquisition
in the Department, some of which is very good and some of which
we have supported, not only in the Department, but in the
Congress, in the last few years.
There are some concerns that we have in that area. As the
reform moves forward, there is a tendency to move more and more
toward commercial practices. My own concern is that we are
talking about the largest acquisition system in the world here,
where a huge amount of taxpayers' dollars are at stake. We need
to make very sure of what we are doing, before we implement
commercial processes.
Not only understand what the practice is, but also that it
makes sense in the Department of Defense, and that we do not
just automatically implement something because its
``commercial'' before we have the evidence to support doing so.
Second, there is a lot of concern about going so
``commercial'' that we eliminate any of the traditional
safeguards that we have had in the acquisition area, such as
the False Claims Act, the Truth in Negotiations Act, cost
accounting standards, and other internal controls. I am not
saying those are sacrosanct, because certainly you can change
things and moderate them where reasonable.
But I do not think we should throw everything out without
looking at the risks there and making sure that whatever it is
we put in place in the new system, it is done carefully and
with evidence that it is going to work. So that would be my
second area, and that of course feeds into every part of the
Department in terms of acquisition and systems.
If I had a third, it would also be in the information area,
but it would probably be more focused on information security.
Everything we have seen and all the data and estimates suggest
that there is a huge vulnerability in the Department as to the
security of its information systems. Given the way the country
and the world are going in the way of computers and information
systems, I do not see that problem shrinking. I see that threat
getting bigger.
The Department needs to be prepared to handle it again,
because the potential for disaster there, if the worst
happened, would be a terrible thing for the country and for the
Department. That would be my third area, if I had a third area.
Mr. Shays. Mr. Hinton, I am going to ask you and I will ask
John Tierney if he has any other questions before I go to that
last quick question.
Mr. Hinton. I too would associate myself with the issues
Mr. Lieberman and Ms. Hill had just brought up on readiness and
the other. Our body of work is the same as theirs in terms of
coordination.
There are a couple others I would like to bring up for you,
Mr. Chairman, and one is broader than Defense. It is combating
terrorism. It cuts across Government, it is a large effort. We
have been heavily involved, largely with this committee,
looking at that and identifying who the players were and
combating the issue and working the issue, what the funding
trail has been and trying to assess the level of coordination
amongst the Government team to combat terrorism and the
effectiveness of our efforts as a Government to deal with the
issues. That is one.
The second is, I think, the issue of human capital. As we
look across all the issues, there are a lot of people working
the issues within the agencies. Whether or not we have the
right number, the right training, the right skills, good
strategies as a Government to deal with these many important
issues that you are hearing, I think, in itself, is a very key
issue that we cannot lose sight of.
It is where we are today, because the public servants who
work these issues, and I think we have to look at it from one,
making sure we have a pipeline of people who are coming behind
the ones who are working them now that have the skills and the
tools as well as the focus for a lot of that. So I would add
those two to the list we've already discussed.
Mr. Shays. Thank you very much.
Mr. Tierney.
Mr. Tierney. I only had one question, and I hope I am not
repeating. Ms. Hill, I missed your first one.
Ms. Hill. It was readiness, particularly in the chemical
and biological area.
Mr. Tierney. Do we have a real definition that is common
right across the board of what people are talking about in each
of the branches when they talk about readiness, or might they
all be talking about different things and measuring it in
different ways?
Ms. Hill. I do not know if there is an official definition.
To me it is a common sense thing, and obviously----
Mr. Tierney. You would think so, except sometimes in
listening to the different services, I wonder if we all have
the same common sense. [Laughter.]
Ms. Hill. Certainly there is some standardization, since
they look at readiness in terms of what they would be prepared
to confront in a warfare situation. In that sense, I think they
are pretty much on the same wave length. But I do not know if
we could guarantee it is identical.
Bob, would you care to add to that?
Mr. Lieberman. I think there is a tendency to miscategorize
a lot of things as either related to readiness or not related
to readiness. Many times that gets inconsistent.
Frankly, it is a real plus for someone's budget request to
be able to say, we need this for readiness purposes. So it is
more a case of everyone trying to jump on that bandwagon,
rather than saying what they do is not related to readiness. I
think we have had problems in ascertaining the ability of
individual units to perform various kinds of missions.
That is not so much a definitional thing, as it is making
it clear to people exactly what they are reporting and then
being assured that what they are reporting is really accurate.
There is still a lot of subjectivity in the process, which
makes it difficult to accurately measure force capability.
Mr. Shays. Let me do this. If I could, we will end with
this, and then I will just have a closing comment. Is there
anything you wish we had asked you to talk about? Obviously
there may have been a few, but any one particular thing you
feel you would have liked to have addressed? I am not looking
for a long comment, but an explanation.
Mr. Sullivan. I have just one thing. Knowing the overall
responsibility the subcommittee has over all three of these
activities, I could see further discussions of why VA and DOD
cannot work closer together. The portability of a veteran
leaving the health care system of Defense and moving into the
VA system, the use of common records as a serviceman leaves his
service and moves into the VA, that sort of thing.
Mr. Shays. Great. Thank you.
Mr. Griffin. I would say that in the area of workers
compensation, which I identified as $140 million a year budget
item for VA, and a $1.8 billion item Governmentwide.
Mr. Shays. Let me be clear. Why is that so large?
Mr. Griffin. There are over 200,000 employees in the
Department. Once someone gets placed on workers compensation--
--
Mr. Shays. These are the employees? What is the number
again?
Mr. Griffin. The dollar value for the chargeback, year of
1996, because you pay it in arrears, was $140 million, roughly.
Governmentwide, it is $1.8 billion.
Those of us who are involved in investigating these things
are handcuffed somewhat by some of the existing rules. One of
those rules makes it very difficult to get access to income
data. Part of the deal, when you go on workers compensation, is
you sign a claim form wherein you say that you are unable to
work or you are only able to work and earn a certain amount of
income. There is not an easy way right now to do a data match
with IRS records or Social Security records in order to
determine whether or not an employee who is on workers
compensation is in fact getting additional income on the side.
This is something that we are going to be working through the
system and seeking proposed legislation to fix.
Mr. Shays. I think we will also be encouraging the Civil
Service Subcommittee to take a look at that in Government
Reform. It is truly a very important issue. I got involved in
the State. It is a big problem sometimes.
Ms. Williams-Bridgers. One area I think that was touched on
briefly but I think warrants more attention is our overseas
presence, the size of the U.S. Government's presence overseas.
Our overseas presence has grown tremendously over the past
several years, and it has come at tremendous cost. Security
increases, and our vulnerability increases, with each American
that establishes a presence overseas. I think there needs to be
some general oversight over the reasons for increasing the
numbers of Americans overseas, and whether we are in the right
places for the right reason.
Mr. Shays. What I am surprised about is the number of what
I call nontraditional State Department employees, like
Commerce, Agriculture and so on. But you are talking about
private citizens just being there?
Ms. Williams-Bridgers. No, I am talking about official U.S.
Government presence.
Mr. Shays. OK, just like what I was mentioning?
Ms. Williams-Bridgers. Yes, Commerce, State, Justice,
Transportation, Agriculture. The list goes on, 34 different
U.S. Federal agencies.
Mr. Shays. I would like to say to the committee that I do
believe that is something that would be logical for us to look
at, and not all that difficult. How could we do it with our
limited resources? That is something I think we can look at
fairly easily. It is a fascinating issue.
Mr. Lieberman. We mentioned human resources, and
specifically, training people in financial management oriented
jobs. I would agree wholeheartedly that that is an important
thing to do. But I think the training in the acquisition area
is even more critical. Also, the difficulty the Government has
in retaining highly skilled information technology experts is a
major problem that cuts across the whole Government.
So training tends to get short shrift. It sounds boring,
but it really is critical, also.
Mr. Shays. Thank you.
Ms. Hill. The only one that I would mention fits into part
of the acquisition process, namely the requirements process,
the method by which the services, the components, whoever, set
forth what their requirements are. The issue is the basis on
what they're basing those requirements on, whether or not they
are valid, whether the method they used to arrive at those
requirements was a legitimate method, and how convincing the
ultimate requirement is if you look at what is backing it up.
We have certainly seen some problems in that area. And that is
an important area, because it feeds right into the spending of
dollars in the acquisition area.
Mr. Hinton. Two things, Mr. Chairman. One would be theft of
inventory due to weak controls. I think it is probably broader
than DOD, but particularly in DOD.
Mr. Shays. Do we see it in VA? Do we see it in State as
much?
Ms. Williams-Bridgers. No. State Department, our largest
assets are our real property. If you can walk off with the
embassy--[laughter]----
Mr. Hinton. The second issue I would put is the incentives
to effect change in behavior to address the many issues that
are on the table here, particularly as they relate to the high
risk programs in DOD.
Mr. Shays. Which programs?
Mr. Hinton. The high risk programs that are in DOD that we
have identified cut across acquisition and information
management and those things. I think also as it relates to the
challenges that cuts across all the issues. There have to be
incentives to motivate and to do things differently. You cannot
operate the same way in the future that we have in the past.
Ms. Jacobson. I guess I would just answer a question you
asked earlier about other subcommittees' interests. You asked
if Congressman Horn gets involved in financial management. He
certainly does, and in the security area as well.
Financial management in DOD is a very broad issue. It does
cut across national security and other areas of readiness and
those kinds of issues as well. No one committee can cover all
of those issues. I would be glad to work with you and your
staff on identifying the specific aspects of financial
management that might be of interest to the committee.
Mr. Shays. Something that we could get a handle on. I do
not know if I would be chairman of the committee. One, be back
here; two, be the chairman--would Republicans be in the
majority or Democrats? But I kind of think we almost have to
have a 4-year plan, and that is something I would talk to Rod
about, so whoever is there, we could continue. There is just a
lot to deal with.
Mr. Backhus. This next decade, the VA is going to be faced
with the largest number of deaths of veterans it has ever had
to confront. The peak years I think are projected to be 2007
and 2008, World War II veterans and Vietnam veterans, and
Korean War veterans.
The question is, will they have the capacity through the
National Cemetery Administration to meet that demand. There are
efforts underway to try to involve States in contributing to
constructing and maintaining cemeteries to meet this demand.
But it is uncertain at this time whether they will be able to.
One last comment if I could make it, in terms of, if there
was another question that you had asked. I have taken a quick
look at the fiscal year 2000 performance plan for VA. I have
seen where they are making a substantial amount of progress in
terms of being responsive to the criticisms we have made in the
past.
While we are not through reviewing it, we will be
concentrating on it the next month, it appears that VA is
really doing a lot more in the way of trying to identify more
results-oriented measures to which to track their progress, and
engaging folks like the IG's office in trying to improve the
data reliability upon which they are going to report. If they
can do those two things, then I think next year at this time,
we might have a better report to give.
Mr. Shays. Mr. Tierney, do you have anything else?
Mr. Tierney. Nothing else, thank you, except to thank
everybody very much.
Mr. Shays. We are going to close, and I will make a few
observations. One, I truly found this very interesting. My
motivation was primarily to get you here to make sure we
develop a nice relationship. We have met privately, and one
thing I would like to say on the record is, all of you do very
important reports. We want to make sure that they do not just
lie on the shelf and not get noticed.
You triggered, as you did in the beginning, Mr. Backhus,
some ideas that I want to just comment on. One of them is for
instance, for you to look at this issue of what will be there
for our veterans and their families, primarily, obviously, in
terms of cemetery space. That seems to be kind of this all
encompassing forever kind of study. I think we could get a
pretty good handle on it and make some suggestions and write a
report that hopefully could be helpful to other committees, and
then pursue it in legislation.
That can be done with not as much of our time, maybe some
of yours. Then we could highlight it and make sure the public
knew, and make sure our colleagues knew and move forward.
Obviously, the one that becomes the most daunting would be this
whole financial management.
I would ask, Ms. Jacobson, that maybe you can just get out
some niches of that. I do know that we are going to focus in on
terrorism in a big way and use more than one of our personnel
for that from our staff. That really cuts across two in
particular, and to some measure the health care system of VA
and DOD.
We are going to look at how we coordinate DOD and VA health
care. It is a natural for us, because we have 4 years of
experience in health care, so we come with a knowledge base. We
are going to obviously look at the public safety issue of
embassies--and that does get involved with the whole issue of
terrorism.
All the suggestions that were made I think have tremendous
merit. Some of them we will not look at, simply, we will not
have the resources. I will conclude by saying that this truly
is a partnership. Some of you all may be doing more of the
work, we may do some really concentrated effort, we will pool
our resources, and we will make sure the public knows about it
and our colleagues know about it, and that we make some
intelligent recommendations.
This has been helpful, very helpful. Thank you, and we will
cause the hearing to adjourn, and we thank our recorder.
[Whereupon, at 12:19 p.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]
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