<DOC> [109 Senate Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:27027.wais] S. Hrg. 109-634 FEDERAL AGENCIES AND CONFERENCE SPENDING ======================================================================= HEARING before the FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND INTERNATIONAL SECURITY SUBCOMMITTEE of the COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED NINTH CONGRESS SECOND SESSION __________ FEBRUARY 7, 2006 __________ Printed for the use of the Committee on Homeland Security and Governmental Affairs _____ U.S. GOVERNMENT PRINTING OFFICE 27-027 PDF WASHINGTON : 2006 _________________________________________________________________ For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS SUSAN M. COLLINS, Maine, Chairman TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma THOMAS R. CARPER, Delaware LINCOLN D. CHAFEE, Rhode Island MARK DAYTON, Minnesota ROBERT F. BENNETT, Utah FRANK LAUTENBERG, New Jersey PETE V. DOMENICI, New Mexico MARK PRYOR, Arkansas JOHN W. WARNER, Virginia Michael D. Bopp, Staff Director and Chief Counsel Joyce A. Rechtschaffen, Minority Staff Director and Chief Counsel Trina Driessnack Tyrer, Chief Clerk FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, AND INTERNATIONAL SECURITY SUBCOMMITTEE TOM COBURN, Oklahoma, Chairman TED STEVENS, Alaska THOMAS CARPER, Delaware GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan LINCOLN D. CHAFEE, Rhode Island DANIEL K. AKAKA, Hawaii ROBERT F. BENNETT, Utah MARK DAYTON, Minnesota PETE V. DOMENICI, New Mexico FRANK LAUTENBERG, New Jersey JOHN W. WARNER, Virginia Katy French, Staff Director Sheila Murphy, Minority Staff Director John Kilvington, Minority Deputy Staff Director Liz Scranton, Chief Clerk C O N T E N T S ------ Opening statements: Page Senator Coburn............................................... 1 Senator Carper............................................... 4 Senator Akaka................................................ 26 WITNESSES Tuesday, February 7, 2006 Scott H. Evertz, Former Director, White House Office of National AIDS Policy.................................................... 6 Charles Johnson, Assistant Secretary for Budget, Technology and Finance, U.S. Department of Health and Human Services.......... 13 Sid Kaplan, Acting Chief Financial Officer, U.S. Department of State.......................................................... 14 James M. Martin, Acting Chief Financial Officer, U.S. Department of Housing and Urban Development............................... 16 Michael W.S. Ryan, Deputy Chief Financial Officer, U.S. Environmental Protection Agency................................ 18 Alphabetical List of Witnesses Evertz, Scott H.: Testimony.................................................... 6 Prepared statement........................................... 32 Johnson, Charles: Testimony.................................................... 13 Prepared statement with an attachment........................ 37 Kaplan, Sid: Testimony.................................................... 14 Prepared statement........................................... 48 Martin, James M.: Testimony.................................................... 16 Prepared statement with an attachment........................ 53 Ryan, Michael W.S.: Testimony.................................................... 18 Prepared statement with an attachment........................ 60 APPENDIX Charts submitted by Senator Coburn: ``What Federal Employees Spend While Attending A Domestic Conference''............................................... 29 ``What Federal Employees Spend While Attending A Foreign Conference''............................................... 30 ``Federal Agencies and Conference Spending 2000-2005......... 31 Questions and Responses for the Record from: Mr. Johnson.................................................. 65 Mr. Kaplan................................................... 75 Mr. Martin with attachments.................................. 84 Mr. Ryan with attachments.................................... 93 FEDERAL AGENCIES AND CONFERENCE SPENDING ---------- TUESDAY, FEBRUARY 7, 2006 U.S. Senate, Subcommittee on Federal Financial Management, Government Information, and International Security of the Committee on Homeland Security and Governmental Affairs, Washington, DC. The Subcommittee met, pursuant to notice, at 3 p.m., in room SD-342, Dirksen Senate Office Building, Hon. Tom Coburn, Chairman of the Subcommittee, presiding. Present: Senators Coburn, Carper, and Akaka. OPENING STATEMENT OF SENATOR COBURN Senator Coburn. The Federal Financial Management, Government Information and International Security Subcommittee of the Homeland Security Governmental Affairs Committee will come to order. I want to thank all our guests for being here. I've asked Mr. Evertz to go first because I thought it appropriate insight for somebody who's worked within an agency for the agencies to hear what somebody on the ground feels about this. And we've asked him to testify first, and I would appreciate your indulgence as we do that. I know your time is valuable, and it's not meant to take your time from your obligations. One of our key goals is to reestablish accountability and transparency within the Federal Government. And that's what drives the oversight work of this Subcommittee. Unaccountable spending of tax dollars is an abuse of power. It also is an abuse of the heritage of this country, where we've had a heritage of sacrifice for the next generation so their economic opportunities will be appropriate. When Congress exercises its constitutionally-derived power by levying taxes, but then fails to insist upon accountability, we deprive Americans of the checks and balances to which they are entitled. Last summer, I sent a letter to every Federal agency requesting a full accounting of conference spending and participation from 2000 to 2005. Some responses were very thorough. Some were indecipherable. And some didn't show up at all. And that is unacceptable. And it belies a greater problem within the Federal Government, that of a lack of availability of numbers to those who are in charge of making decisions based on those numbers. The reports are astounding. Since the year 2000, we've spent $1.4 billion on conferences, including both underwriting conferences as well as sending Federal employees to conferences. Between 2000 and 2005, the total Federal conference spending increased 70 percent. What amazes me even more is this increase occurred during a challenging time for our country, a time when our priorities should have been dramatically realigned. We are at war. We face tremendous natural disasters. We face unfettered growth in unfunded liabilities for our entitlement programs that are nearly $60 trillion. Historically, presidents have shifted priorities under these conditions. During a time of great challenge and war, President Roosevelt cut non-defense spending by 20 percent. Several years later, President Truman cut non-military spending by 28 percent. Things are different, however, today. For example, HUD increased conference spending a mind-blowing 340 percent over a 4-year period. Every other agency increased their conference spending significantly. I find that the hearing's purpose today is to find out the accountability and the reasons behind that. We're going to hear testimony today arguing that because agency budgets are increasing, spending on meetings and travel must naturally increase proportionately. I would argue just the opposite. As discretionary and mandatory spending increase at a rate that is going to undermine our children and our grandchildren, it's all the more important to rein in spending on anything less than truly essential meetings. Increased budgets make these expenditures less defensible, not moreso. There's a disconnect when conference attendance and spending are increasing at the exact time technology is dramatically reducing the need for travel and conferencing. In the modern telecommunications era, it is unnecessary to spend time and resources to finance so many conferences. Teleconferences and video conferencing, for example, can save money while allowing the same type of interaction and information sharing at a mere fraction of the cost. I'm not here to get into the weeds or details of specific conferences, but here are some examples that caught my eye. In 2004, at least 59 conferences around the world were attended by HHS delegations of greater than 100 Federal employees, including over 1,000 attendees to sunny Orlando. In 2002, HHS sent 236 employees to a conference in Barcelona, Spain, spending $3.6 million on one single conference. Department of Education sent 158 employees to a conference in New Orleans. Many conferences are set in beach, resort, casino, or European tourist destinations, such as Miami, Paris, Palm Springs, Berlin, Atlantic City, Rio, or Las Vegas where hotel rates are likely to be high and extracurricular temptation to skip the so-called vital conference sessions are even higher. HUD participated in the Sacramento Home Ownership Fair, not in Sacramento or even in California, but in Honolulu, Hawaii. HUD also sent three people to Los Cabos, Mexico for the conference about U.S. real estate and urban economics. EPA was the primary sponsor of a national conference in that low-cost destination, Honolulu. One witness today will share his conference experiences as a recent Federal official who worked both at the White House and at HHS. He will demonstrate great courage. He reports that there are few internal controls on conference attendance or spending, and questions the cost-effectiveness of the array of conferences which many deride as ``spring break.'' Ultimately, some of the problems could be avoided simply by increasing transparency. My hope is that this hearing is the beginning of that process. And I'm announcing today we'll have a follow-up hearing 4 months from today to see what process has been done in terms of accountability, transparency, and follow- up from the results of this hearing. There should be a formal vetting and justification process for conference requests. I noted in the testimony that some agencies have put that in. And this is especially true when technology allows for teleconferencing and the use of internet to exchange information. Every department should document conference spending and attendance online in the interest of transparency. One outcome of our investigation was the near-unanimous complaint from all the agencies about how hard it was to answer the very simple questions that we asked. Most responses came back with substantive gaps and missing data. Even these patchy and incomplete responses arrived months after the requested delivery date, which meant you had to do hard work to find the information rather than having the information at your fingertips. The Commerce Department tells my staff that the response is in the mail. We've not received it yet. The Department of Veterans Affairs and the Department of the Interior submitted incomplete reports. Some of you just provided 1 year's worth of conference details, when you were asked for 5 years. This difficulty responding to fairly simple questions highlights how poorly we track expenditures down to the dollar. Yet that is exactly the appropriate and reasonable expectation of taxpayers. I do want to commend an exception to the rule. The Department of Energy submitted a highly detailed conference report, and actually tallied individual conference costs from 2001 to 2005. They provided a copy of their regulations regarding conference approval and travel. Every year in their report to Congress, they detail conference participation and support for the previous year and the coming year's estimates. They require personnel to explore off-season travel costs, discourage resort and recreational destinations, and they consider ``the potential for any adverse appearance associated with DOE participation.'' Although DOE, like other agencies, has increased their conference spending in recent years, at least they have internal controls regarding this spending. As we go forward, I would encourage agencies to be sure that every conference attended by Federal employees passes the following tests: Does the conference help further the Department's mission? Could the information be shared through a teleconference or the internet? Is the location appropriate and justified? Is the number of employees attending justified? Does participation in the conference validate or endorse ideas or values harmful to American interests? Does the conference give a platform to ideas and panelists who undermine American interests? Is the conference a wise use of tax dollars when we have an $8.1 trillion debt? Every conference should be readily defensible, on its face, to regular Americans in terms of topic, location, and participants. It also should be available to them online on how we spend that money. It's time to scale back. It's time to make tough decisions. It's time to set priorities. I look forward to our dialogue. I would also say that Senator Carper and I are dedicated to doing the oversight that's necessary to help you accomplish what you want to accomplish. This isn't a beating up session. It's not intended to be--we know that you have great intentions. We also know you're overwhelmed. Our goal is to help you build the process whereby you can make great decisions for the American taxpayer. It gives me great privilege, after hearing his statement on the floor on the asbestos bill, to recognize my contributor in arms in tackling the financial problems of our country, Senator Carper. OPENING STATEMENT OF SENATOR CARPER Senator Carper. Thank you, Mr. Chairman. I'm honored to be here with you, and look forward to this hearing. I thought we had a pretty good one--was it yesterday? Senator Coburn. In Chicago. Senator Carper. A field hearing in Chicago. And I would just add to what the Chairman has said, if I could. When you have a budget deficit as large as the one we have and one that it appears is going to be with us for some time if we continue to do what we've been doing, we need to look at every part of our budget. We need to look at the taxes that were not collected that are owed. We need to look at the improper payments that are being made, especially overpayments. We need to look at entitlement programs to make sure that they're actually going to the people who need the help the most. And we need to look at all parts of our discretionary budgets, defense and non- defense. And yesterday we were looking, in Chicago, at the management of Federal property. One of the questions that we asked of our witnesses was: What do we need to be doing in the Congress, Executive Branch, Legislative Branch? What do we need to be doing on real property management that would enable you to do a better job of managing your property--have fewer vacant buildings, less unused space, less under-utilized space, less land that frankly is serving no useful purpose. And they actually shared with us some ideas of things that we can do to help them. And so we weren't there just to put them on the spot or put a spotlight on them in saying, what you're doing is bad or unlawful or anything like that. What we were looking for was to commend those who were doing a good job--several were--and to say to those that weren't, what can we learn from the people who are doing an especially good job? And so I thought it was most constructive. And my hope is that this will be as well. I would like to say in addition to that, the Chairman is right. I think there's value, frankly, in pulling people together to meet face to face; not all the time, but there's value in doing that. And 10 or 15 years ago, we couldn't do that electronically, but today we can. And I was in a briefing in the White House not too long ago--I think it was last month, Mr. Chairman--and we were meeting with the President and Vice President, Secretary of State, Secretary of Defense, Chairman of the Joint Chiefs of Staff. And we had about 12 of our colleagues around the table. And joining us live in color from Baghdad were Dr. Khalilzad, our Ambassador, and General George Casey, our military leader in Iraq. And the idea of having us all go over to meet or for them to come over here and to meet just makes no sense. But we were able to do it using live video, and that's the sort of thing that we need to be doing more of. The other thing I would say, in addition to finding out what meetings, what conferences, can just as easily be held by video, or some of the stuff we do--I'm sure you do it, too--we do it by speakerphone, something as rudimentary as just doing it on the phone with a bunch of people gathered around these different microphones, and doing it that way. The other thing is we find that we can save a lot of money. And we do some travel that's government-related. We also do travel that's personal, back and forth, maybe to our States. And we do travel that is political, and as we go around the country for different events. And what we've learned to do is to try to figure out how to handle all that travel, to do all that travel, more cost- effectively. I'll just give you a recent example. By booking flights a couple weeks early before the flight as opposed to a couple of days before the flight, you can save more than 50 or 75 percent of the cost of a ticket. People in my neck of the woods, in Delaware, historically went up to Philadelphia to catch flights to go to places. And they found that if they were to either drive to BWI, Baltimore- Washington International, or take the train to BWI, get off at BWI, and take a flight out of BWI, they could save a ton of money, and catch flights to take them where they needed to go by airplane for a lot less dollars. In fact, we found that people could actually pay for their train ticket from Wilmington to BWI, get the airline, fly the airline out of BWI, fly back into BWI, take the train and go home, and save a lot of money, hundreds of dollars, in the meantime. So what I hope that we talk about today is not just is it important to bring people together for a conference, but on those occasions when it is, are there other things that we can be doing when we say that meeting has to take place--maybe not in Mexico, maybe not in Hawaii, maybe not even in Orlando; maybe in Delaware, maybe in Tulsa, where I've been before--that we find a really cost-effective, efficient way to get there and come home. Thank you. Chairman Coburn. Thank you. Just to summarize why we are diligent, this last year we added a half a trillion dollars to the national debt. And I know how numbers are manipulated in Congress, and I know how they're manipulated by the Administration. And the deficit doesn't reflect the true cost of what we're doing to our kids. I also would note that in the year 2000, $88 million was spent on travel and conferences, and in the year 2005, $225 million was spent on travel and conferences. No American in this country has had that kind of increase in their travel budgets or conferencing budgets. You can't find a firm that's done it. You can't find an individual organization. But the government has somehow seen fit that's applicable to us. And the whole purpose of this hearing today is to look at it, to cause you all to look at it, to be better stewards, and for us to make sure you know we're going to continue to look at it. And it's not just travel budgets. As many of you know, this Subcommittee is looking at everything. We're going to have 42 hearings this year on oversighting expenditures within the Federal Government with the hope of sharpening our ability to control the expenses. Every dollar that we spend on a conference that could be spent saving somebody's life with HIV or treating malaria or treating TB or drilling a water well for somebody in Africa is real dollars making a real difference in peoples' lives. So the purpose for us doing this is noble, and it's not to cast aspersions or to say you care. We know you care. What we want to do is help sharpen the focus. Let me introduce to you Scott Evertz. He's the Vice President for International Affairs for OraSure Technologies. Mr. Evertz I know well. I've worked with him in the past when I was out of government. He works with lawmakers and implementing partners of the President's Emergency Plan for AIDS Relief and with the Global Fund to Fight AIDS, Tuberculosis and Malaria in Geneva. He previously served as the Special Assistant to the Secretary of Global AIDS Initiatives, where he developed and implemented HHS strategy to combat HIV/AIDS. He also is the former Director of the White House Office of National AIDS Policy. Your full testimony, Mr. Evertz, will be made a part of the record. You are recognized, and if you would, please let us hear from you. TESTIMONY OF SCOTT H. EVERTZ,\1\ FORMER DIRECTOR, WHITE HOUSE OFFICE OF NATIONAL AIDS POLICY, VICE PRESIDENT FOR INTERNATIONAL AFFAIRS FOR ORASURE TECHNOLOGIES Mr. Evertz. Thank you, Mr. Chairman. Good afternoon, and good afternoon, Senator Carper. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Evertz appears in the Appendix on page 32. --------------------------------------------------------------------------- Senator Ranking Member, you stole my line. I was going to start by suggesting that conferences be held in Dover and Tulsa henceforth and hereafter, to gain favor with the Subcommittee. The perspective I bring here is, as Chairman Coburn suggests, as a former government employee, political appointee in the Bush Administration. Senator Coburn, you mentioned our time together, when you served as co-chair of PACHA, the President's Advisory Council on HIV and AIDS. I enjoyed our work together and want to thank you again for your service in that capacity. As you suggest, from July 2002 to April 2005, I served as Special Assistant to Secretary Thompson on global HIV/AIDS issues. And it was in this context that I observed the issues that your Subcommittee is seeking to address. What I discovered and witnessed was an attitude of entitlement among certain officials in terms of attendance at conferences. And I would suggest a downright arrogance when attendance at those conferences was challenged by higher-ups in the agency. It appeared to me personally that there was a limitless travel budget, and that one could pick and choose which of these conferences to attend. And as you suggest subtly, and I would suggest less subtly, there's a perverse incentive to pick Los Cabos over a conference that may be held in Tulsa, with all due respect. During my tenure in the Administration, I discovered that these conferences and meetings were often a waste of time and money, and that there were other technologies that could enable us to access the good information that was being shared at these conferences. During my tenure at the White House and at HHS, I never attended the International AIDS Conference held in Barcelona and then subsequently in Bangkok, Thailand while I was with the Administration. During that period, though, I would note that I and others in the Administration developed the architecture for the President's Emergency Plan for AIDS Relief and the Global Fund to Fight AIDS, Tuberculosis and Malaria without the benefit of having attended those conferences. We did so, however, in close consultation with multinational organizations and using many of the technologies to which you refer. So clearly, it is possible to address the pandemics that you reference--AIDS, tuberculosis, and malaria-- without attending costly conferences. The individual who became my boss, Secretary Thompson, attended the Barcelona conference in 2002, and as many of you will remember, was not able to engage in the so-called exchange of ideas that occurs at these conferences because he was shouted down. He was shouted down, in fact, sir, by many individuals whose attendance was paid for by the U.S. Government. So when you reference figures around conferences, not only are you talking about Federal Government employees that are attending those conferences, but others who are on scholarships from one of the many agencies, or whose NGO is supported by the United States. I can highlight examples during the question- and-answer session. But it was always truly amazing to me that we were funding nongovernmental organizations and literally enabling them to yell at Federal officials at conferences. I was one of those officials in one of my first appearances in Atlanta at a CDC prevention conference, and it was all grantees in the audience. And we were simply there to talk and to exchange ideas. Even with the United States sending more than 200 attendees to the Bangkok conference which followed the Barcelona conference, critics of our Administration bemoaned the severe restrictions being placed on attendance. And quite frankly, sir, there were many of us, and still are, in the Administration who did not consider 200 individuals severe restrictions. A noted journalist and now Senior Fellow for Global Health at the Council of Foreign Relations first criticized the Administration for limiting attendance at the Bangkok conference, but having attended the conference herself, summarized what she thought to be a less than useful venture by saying, ``To be blunt, top HIV laboratory researchers simply don't come to the international gathering any more, finding it irrelevant.'' The cost of that conference was nearly $17 million, according to organizers. But I would argue there are ancillary costs and expenditures that, beyond the scope of what we're talking about today, are outrageous if you care about fighting HIV/AIDS. The pharmaceutical companies and others who have a vested interest in the HIV/AIDS industry sponsor lavish cocktail parties and events that cost into the millions. So if you truly were to look at the cost of a conference such as that, it's well above the $17 million that's in my testimony and that you've referenced. Now, I see on the poster here, life-saving drugs for 5,000 individuals living with HIV for an entire year is what HHS could have paid for with conference costs. Let me suggest something else. Optimal AIDS combination therapy, which has definitely lowered in price, but optimal therapy costs up to $12,000 per year per patient. That's a very high number, depending upon the regimen and the payor. However, even at the optimal cost, if you take the cost of the Bangkok conference, we could have put 1,500 additional individuals living with HIV/ AIDS on ARVs. Perhaps more alarming is the fact that we could administer about 3.4 million doses of Nevirapine for the cost of this conference, which as you know, sir, prevents the transmission of HIV from mother to child. Now, these conferences have a value, so lest anyone conclude that I'm suggesting they be discontinued, I'm not. But we certainly need to consider, as you suggest, sir, in an era of budget deficits, and in an era when there are waiting lists in this country for the AIDS Drug Assistance Program, which is part of the Ryan White Care Act, and increasingly there are countries, even in the PEPFAR initiative, that are having trouble getting as many individuals on ARVs as the President would like because of budget constraints, that we look at ways to do this differently and we look at what some--and you mentioned in your opening statement, sir, conferencing that's spring break, in essence. Now, I'm happy in the question and answers to provide examples. But let me give you one example of a trip that I went on that would not be captured--so this is illustrative because this would not be captured through any of the numbers that we're talking about today, and that is travel at the invitation of a nongovernmental organization. I would suggest to you that in any given month, I could have chosen one or two opportunities to be the guest of a nongovernmental organization in my capacity at the White House and at HHS. But as you know, it was that Federal agency, the Executive Office of the President or HHS, that had to foot the bill. I attended one of those trips, and if I may digress for just a second, we were in a remote area in the bush in South Africa where they were testing individuals for HIV. These incredible volunteers--at this point they were using the finger prick device, not the oral HIV tests that my company markets and sells--but they were using that device and they were testing individuals for HIV. And so we said, well, walk us through this process. Test one of us and then tell us what you do. And they started by explaining how difficult it was for individuals to get to this testing site because it was--no one lives close to anyone in this part of South Africa. But individuals would take the time. They would go to this testing site which--I loosely refer to as a clinic--be tested, and this was before the era of the rapid test or as many rapid tests, and these individuals had to come back to get their results. Many of them did. And of course, then we said, well, then what do you do? And the young woman who does the counseling and testing said, ``Well, we tell them their results, and if they're positive, we talk about nutrition and ways to protect their partners and their family.'' And she kind of lowered her head. And she said, ``But we can't give them treatment because we have no treatment.'' And it was at that point that the irony of a whole group of us standing there from the United States, most all of us from the U.S. Government, some of your colleagues from the House, and had literally no way to help these individuals. Many of us went back and we worked diligently on the PEPFAR initiative. But my point is that's inexcusable. And it literally reached--it sunk home with me because on this trip, one of our leisure activities was a safari, and that I had been given the opportunity to attend--to participate in a safari and then had to stand here and listen to a woman say, ``We don't have treatment.'' Obviously, there's a whole bunch of logistical issues that would disable her from getting treatment. But it's inexcusable that there's no treatment because of lack of money. I'd like to applaud my former boss, Secretary Thompson, for directing his Special Assistant for International Affairs to try to get a handle on this. Senator Coburn. Let me get you to summarize, if you will. Mr. Evertz. Yes, sir. It looks like we didn't, quite frankly. But they tried. Dr. Bill Steiger, who is that Special Assistant, put an end, basically, to business class travel, which was something that Secretary Thompson didn't appreciate when he started traveling so much, but nonetheless sat in the back of the plane while, again, individuals from NGOs that we're funding sat in the front of the plane. Finally, and I will conclude now with a little anecdote, something that's also not captured, I don't think, in any of the numbers that we're talking about today is attendance at meetings of the Global Fund to Fight AIDS, Tuberculosis and Malaria, and other such multinational organizations. The United States, as are all delegations, allowed to send 10 individuals to these meetings, which are held quarterly. I witnessed the difficulty in paring down the list to 10. And as a good friend of mine, and someone who's still with the government so I'm not going to single her out for fear of reprisal, but suggested, ``So we spend all this money to send government officials to Global Fund board meetings to make sure the Global Fund doesn't waste our money.'' And the answer is yes, because some of those meetings are in very nice places. Thank you, sir. I welcome your questions. Senator Coburn. Just a few questions for you. In terms of abstracts of scientific papers, one of the things that we're going to hear is that NIH needs to travel and needs to be there. And there certainly is some validity to that. On most of these conferences, aren't the abstracts of the papers that are going to be presented available prior to the conference? Mr. Evertz. Yes, sir. As I suggest in my written testimony, when I mentioned that I never attended the International AIDS Conference, my staff and I, however, did access transcripts, manuscripts, and materials that you reference so that we could do our job. And quite frankly, it's a lot easier to do that sometimes in the office setting than it is when there are, as you referred in your statement to, temptations to skip. We all were tempted to skip, and I will tell you right now that I did--not often, but did. It's quite easy. Senator Coburn. You indicated there were numerous conferences on the same topic throughout the year attended by the same people, in your written testimony. From your experience, are multiple conferences useful to fostering new ideas and solutions, or a misuse of funds and employee time that could be better spent? Mr. Evertz. Well, I'm going to answer cautiously. I'm not going to answer just flat-out yes because I think that there are some conferences where there are opportunities that could not be gained otherwise. But there is a conference circuit, sir. And I refer to this in my written testimony as a set, if you will, of individuals that you do see in Geneva or Doha or Siemreab, Cambodia. And there's an expectation--and I will attest to it--an expectation that certain people be there. Guess what happens when President Bush's AIDS czar doesn't show up at something? Well, that's outrageous. Well, criticize me for what I did or didn't do in that position, but don't criticize me for not being at conferences because in my estimation, there would have been no added value, or value added, if I attended everything on the circuit. I wouldn't have done anything in Washington. We would not have passed the PEPFAR initiative. Senator Coburn. One final question. If you were to look at your time in HHS and the White House and look at the number of conferences, what percentage of those could have been done through teleconferencing or, in your opinion, were absolutely necessary? Mr. Evertz. I would say--given again the technology that you mentioned, I would say at least 75 percent of those conferences, at the very least, could have their attendance pared way down. I mean, there is a value in face-to-face, and I'm sure that the airline industry would quarrel with some of the technologies that we're talking about because there is a value in being face-to-face and there is valuable hallway discussions, as it's referred to. But let me kind of qualify my answer again. I would say of all those conferences that--and I've got a calendar here for 2006. There's one every month somewhere, Orlando or Montreal. Oh, here's three: Jacksonville, Quebec, and Arlington. I'm not going to the Arlington one. It's right across the river. Dallas, Miami, Amsterdam, or Hollywood, Florida. That's cool. Versailles. I don't think--and I don't see how anyone ever unpacks if they attend all of these things. And the answer is, maybe they don't. Pardon the cynicism. But there would be ways. I mean, for instance, the conference in Versailles is the 22nd Conference on Sexually Transmitted Infections. I would be willing to bet that you in your practice, sir, could access all of the information that would be discussed at this conference without traveling to Versailles, and better serving your patients in Oklahoma. Senator Coburn. Senator Carper. Senator Carper. Thank you so much for being with us today and for your presentation and responding to our questions. I just want to return to something you said. There is value in some cases to being there, not just to be a participant in the formal program of a conference, but to have the opportunity to meet some people, to talk to them, maybe outside of the conference, maybe over breakfast or dinner, and to create-- actually to form some relationships that can later on pay real dividends for the people that we're trying to serve. So there's value that sometimes is a bit hard to measure. But I agree with what you said there. I just have one question, and it's a question I ask from time to time of folks that appear before us. Knowing what you know, having seen what you've seen in this regard, what advice would you have to us as to how to reduce the incidence of travel that's not well thought out, and frankly, not especially fruitful? Mr. Evertz. That's a good question, Senator. And it sounds like DOE, the Department of Energy, has been doing some of that. I suggested to you some of that which was implemented at HHS. And I would argue those numbers would look worse, perhaps, if what Secretary Thompson initiated was not--did not happen, for instance, the banning of business class travel. The other thing or aspect that was changed is tacking on a personal vacation to official government travel. And this was disallowed. And actually, it's my understanding that this was disallowed even electronically at HHS by looking at someone's travel orders and determining if in fact a conference ends on such-and-such a date and their return date is 5 days later, guess what? The conference was in Cabo and they're not returning for 5 days? Again, I say cynically, but guess what they're doing? And you and I have paid for their flight there and tacked on a vacation. So practically speaking, get rid of that kind of stuff. Practically speaking, you get rid of business class travel and you're talking thousands of dollars per ticket. You referenced cost savings in the airline industry. The other thing that I would suggest is a more robust, rationed process of identifying the rationale for attending. I suggested to you that 10 individuals from the U.S. Government attend the Global Fund board meeting every time the board meeting is held, and that it's usually difficult to limit it to 10. Now, I work closely with those individuals, and so, Senator, I thank you for suggesting that I'm courageous in speaking before you because I wouldn't want to tell you who of the 10 I wouldn't want attending. But guess what? Ten people do not need to attend the Global Fund board meeting. But there's no process by which the rationale for travel is determined, at least in my experience at HHS. Now, at the White House, which has no money, I didn't travel much at all. Senator Carper. Again, my question is: What advice would you have for us? Mr. Evertz. The advice--yes. Senator Carper. Concrete things that we can do to reduce the amount of travel that's just poorly thought through. Mr. Evertz. Well, I think one thing is to have the agencies do what HHS has tried, which is to limit number of attendees. I think that's a little simplistic because that doesn't entirely get at the issue of cost. But really, the agencies need to be held accountable for these numbers, and those responsible for signing off on travel need to be held accountable if the numbers are increasing at a time of budget deficits. Senator Carper. OK. The other thing I would add to that, and I thank you for that response, Mr. Evertz, I would say to my staff, when you're thinking of doing something and the question of cost is a consideration, you're not sure that it's the right expenditure that actually helps us do our job better and to serve better, just imagine a newspaper article--and we only have one statewide newspaper in Delaware--just imagine a story on the front page of the newspaper above the fold that talks about the particular event we're going to travel to or the meeting or convention we're going to participate in. And if it meets that test and you feel like you'd be happy to see that story, then let's go ahead and do it. If not, let's find another way to skin that cat. Thank you. Chairman Coburn. Mr. Evertz, thank you very much. We'll start with our second panel now, and I will introduce them. Michael Ryan is the Deputy Chief Financial Officer of the EPA, Environmental Protection Agency. He's served as the EPA's Deputy CFO since 2000. He is responsible for managing strategic planning, budgeting, financial management, performance measurement, analysis, and accountability functions. He previously served as the agency's controller, and has held positions in the State Department and Department of Defense. James Martin, Assistant Chief Financial Officer for Financial Management, Department of Housing and Urban Development. Mr. Martin joined the HUD CFO office in 2000. He works on eliminating the Department's high risk and material weakness issues, improving the content of the annual performance and accountability report, the PART report, and he coordinates HUD's efforts to implement President Bush's management agenda. Mr. Martin has served in a variety of capacities at HUD since joining the Department in 1983. Sid Kaplan, Deputy Assistant Secretary for Strategic Performance and Planning, Bureau of Resource Management, at the Department of State. Mr. Kaplan serves as the Acting Assistant Secretary for Resource Management and Chief Financial Officer. He's a member of the Senior Foreign Service and has held numerous positions within the State Department. He's the former Managing Director of the International Financial Services Directorate. Charles Johnson, Assistant Secretary of the Budget in the Department of Health and Human Services. He is the Assistant Secretary for Budget, Technology, and Finance at HHS. He previously served as the Chief Financial Officer of the EPA. He's the former President of the Huntsman Cancer Foundation, and he has held a number of positions in Utah State government. He also has considerable experience in the private sector. Thank you all for being here today. You each will be recognized. We won't stay tight within the 5-minute rule, and your entire statement will be made a part of the record. And Mr. Johnson, I'll recognize you first. TESTIMONY OF CHARLES JOHNSON,\1\ ASSISTANT SECRETARY FOR BUDGET, TECHNOLOGY AND FINANCE, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Mr. Johnson. Thank you. Thank you, Chairman Coburn, Senator Carper. Thank you for the opportunity to appear before you today on the topic of Federal agencies and conference spending. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Johnson with an attachment appears in the Appendix on page 37. --------------------------------------------------------------------------- HHS is the principal Federal agency responsible for protecting the health of all Americans and providing essential human services, especially for those who are least able to help themselves. We have more than 300 grant programs. We are the Nation's largest health insurer and the largest government grant-making agency. I'm not here to defend any specific conferences, but I can tell you that good communication to disseminate and share information is a key to our success. Appropriate conferences play a major role in facilitating this communication both with grantees and between grantees on policies, goals, best practices, and new discoveries. HHS's participation in conferences can be a cost-efficient way for the Department to communicate with as many stakeholders as it deals with. Last year, in response to your request, Mr. Chairman, HHS compiled information on the total amount spent on conference activities in fiscal years 2000 through 2004, and provided you an estimate of the expenditures for 2005. We have now updated our 2005 information. This updated information on conference spending shows that we are up about a third from fiscal 2000, but we have been relatively constant since 2003 and actually decreased our conference spending from fiscal 2004 to 2005. Conference spending increases are in two major agencies, National Institutes of Health and Administration for Children and Families. Sharing scientific information, as has been pointed out, is an important form of leveraging research activities and hopefully results in a decrease in those research expenditures. ACF, the Administration for Children and Families, has had a lot of new programs over the last 5 years. But despite the fact that they've had these programs, in the year 2004, they had a higher expenditure than in 2005. I think this brings out an important management principle. That is as follows. With launching a new program, we may incur startup costs. However, when information has been shared with the relevant parties, a reduction in conference spending will be expected. That's an important stewardship matter, and I think the ACF has followed that. Having said that, I agree that additional oversight can improve our stewardship. As I reviewed the current policies, I felt that we must tighten our conference policies in two areas: First, in the selection of the conferences, and the programs and policies being presented at those conferences; and second, in the financial areas surrounding conferences. To that end, in coordination with the Assistant Secretary for Administration and Management, we have issued a memorandum to all HHS operating division heads that strengthen the Department's current policy on conferences. This memorandum places additional responsibility on operating division heads in determining content and sponsorship of conferences and in controlling costs. It emphasizes the need to more actively engage with grantees to assure that they are aware of our policies and procedures. It adds additional approvals on travel. In summary, we have strengthened our oversight on conferences, which in turn will help us contain costs. As evidenced by our most recent clean audit, the seventh in a row, HHS has a commitment to strong and transparent financial management. We are continuously monitoring our internal controls and strengthening our Departmental policies. I personally have a strong belief in accountability and transparency, and pledge to you that we will do better. Mr. Chairman, Senator Carper, this concludes my testimony. But I stand ready to answer any questions that you or any other Members of the Committee may have on this topic. Chairman Coburn. Thank you, Mr. Johnson. Mr. Kaplan. TESTIMONY OF SID KAPLAN,\1\ ACTING CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF STATE Mr. Kaplan. Chairman Coburn and Senator Carper, thank you for the invitation to testify today. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Kaplan appears in the Appendix on page 48. --------------------------------------------------------------------------- As you well know, the conduct of diplomacy frequently requires face-to-face interactions, venues for the exchange of ideas, and meetings that foster personal relationships which are critical to the success of our mission. Conferences are an integral means by which the Department of State conducts our Nation's international affairs. The Department conducts diplomatic relations with 188 countries through over 260 posts around the world, and participation in conferences is an effective means to promote advancement of issues across a wide array of operational and policy areas. For some international organizations, conferences are the primary means by which business is conducted. The United States also advances and protects hemispheric interests through participation in the meetings of the Organization of American States and related organizations. The United States realizes similar goals reflecting key regional relationships through participation in meetings of the Asia Pacific Economic Cooperation Forum, or APEC, the North Atlantic Treaty Organization, or NATO, the United Nations regional commissions, and other signatories to major treaties. Active State Department participation in international conferences ensures that the United States maintains our influence, and promotes and protects key U.S. interests in the formulation of policy, the management of the Department's operations, and the deliberations of multilateral international organizations in which the United States has membership. The Department's participation in conferences is often essential to achieving a desired outcome, and cost of attendance is justified by what was or was not accomplished due to U.S. engagement. For example, failure to attend a conference that results in action not supported by our policies could require a greater expenditure of resources to address the action in retrospect than it would have cost to participate in the conference. The Department has taken steps to institute controls over conference participation and to stem the increase in conference costs. The Department is also continuously exploring and making use of ways to leverage technology and resources so that the Department's participation in meaningful conferences is facilitated in the most cost-effective way possible. The funding used to support conferences is managed within each of the Department's bureaus. Therefore, bureaus and, consequently, U.S. missions overseas must prioritize funding for conferences against other competing requirements. In 2004, the State Department instituted a policy requiring advance approval from the office of the Under Secretary for Management in order to attend or host conferences. Under the policy, requests to host or hold conferences, workshops, or other meetings to which travel is required and where 25 or more Department personnel will participate must be submitted 120 days in advance. The request must be justified by demonstrating the benefit to the Department, the outcome or results expected, security risks, cost, and how the conference advances the Department's strategic priorities. The Department is also using technology to increase efficiency and cut conference costs. The use of digital video conferencing, or DVC, is on the rise. As an example, rather than attending regional management or budget conferences, I and in most cases a small panel of management colleagues have frequently opted to deliver our presentations using DVC. Also, while not conferences per se, the Bureau of Resource Management regularly uses DVC to conduct our mission performance plan reviews with embassy teams, substantially reducing international travel and costs. In short, as DVC technology has improved, this practice is becoming more prevalent, and I expect it to only grow in the future, which will contribute to greater cost-effectiveness. The conference spending data reported covers a 5-year period. The report includes information on conferences with a variety of purposes, including policy issues related to Afghanistan, Iraq, the Global War on Terror, and the fight against AIDS, as well as management and professional development conferences. Most recently, conference spending has decreased from $30.9 million in fiscal year 2004 to $26.5 million in fiscal year 2005, primarily due to non-recurring conferences such as the hosting of the OAS General Assembly and the increased use of technology. As the Acting Chief Financial Officer, I can assure you that the Department will continue to avoid unnecessary conference expenditures and, where appropriate, to vigorously pursue more cost-effective methods of participating. Thank you for this opportunity to speak before the Subcommittee, and I look forward to answering any questions that you might have. Chairman Coburn. Mr. Kaplan, thank you. Mr. Martin. TESTIMONY OF JAMES M. MARTIN,\1\ ACTING CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Mr. Martin. Chairman Coburn, Ranking Member Carper, thank you for the opportunity to testify before you today on the topic of Federal agencies and conference spending. My testimony focuses on the nature, extent, and benefits of conference spending at the U.S. Department of Housing and Urban Development. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Martin with an attachment appears in the Appendix on page 53. --------------------------------------------------------------------------- Given the current Federal budget climate, I agree with you both that it is more important than ever that every Federal dollar be properly spent with a clear mission-related purpose and benefit. HUD sponsors, cosponsors, or approves staff to participate in conferences for a variety of mission-related purposes. HUD's significant and diverse program activities serve millions of American households and most communities. These programs are delivered through thousands of third party program administrators, including units of State and local government, public housing agencies, private mortgage lenders, nonprofit and for-profit housing sponsors, developers, and managers, and various faith-based and community-based service organizations. Effective communication of program goals and requirements to program beneficiaries and our third party program administrators is a critical component of HUD's program control environment. Such communications are in keeping with the Government Accountability Office's standards for effective internal control in the Federal Government. Most of HUD's third party program administrators and program beneficiaries are represented by national and/or local associations or interest groups. HUD's participation in conferences sponsored by or for these associations or interest groups is often a cost-efficient and effective way for the Department to communicate with its many program stakeholders. Another factor in an effective system of internal control is management's commitment to competence in its own workforce. Some conference participation is to enhance the knowledge, skills, and abilities of HUD staff to better enable them to perform their jobs and to support HUD's mission. Mr. Chairman, in response to your request, HUD compiled information on the total amount of conference spending in fiscal years 2001 through 2005. Our queries for that period indicate that HUD's conference spending ranged from a low of $3.2 million in 2001 to a high of $13.9 million in fiscal year 2005. In analyzing that spending trend over the 5-year period, 2001 was found to be an uncharacteristically low period for conference spending due to the change in Administrations and leadership during that period. The increased conference spending between fiscal years 2002 and 2005 was largely due to a greater focus on promoting the Department's revised strategic coals and program changes designed to increase performance results. HUD's mission is to increase home ownership, support community development, and increase access to affordable housing free from discrimination. The list of 989 conferences supported by HUD in fiscal year 2005 conforms to HUD's mission and goals. Although there is no specific limit on how much HUD can spend on conference support or participation, spending is limited by HUD's normal budget constraints. Nearly 31 percent of HUD's total fiscal year 2005 conference spending was from the public housing technical assistance program funds that were appropriated for such purposes. In the case of program technical assistance funds, HUD is required to submit an annual spending plan for Congressional approval before these funds can be used for conferences or other planned purposes. Conference activities not funded by program technical assistance funds must be funded out of HUD's limited salaries and expense fund. The S&E fund has little discretionary funding available for conference participation after covering the cost of HUD's salaries and other normal operating expenses. The total $13.9 million spent on conferences in fiscal year 2005 represented a very small percentage of HUD's total enacted budget of $33.7 billion that year. Supervisory approval of conference participation is required in all cases, along with separate processing and approval of any associated funding required for travel expense, conference facility or equipment rental, or materials development, or printing costs associated with conference participation. My written testimony provides several examples where HUD's conference participation is believed to be a contributing factor to increasing program performance results. Those examples include HUD's efforts to increase home ownership, record home ownership levels today. And we particularly focus on minority home ownership. Minority home ownership is also at record levels. Our efforts to promote program participation or increase program participation by faith-based and community service organizations and to reduce improper rental housing assistance payments are all areas where we believe performance has improved as a result of our participation in conferences to communicate program requirements and goals with our program stakeholders. Mr. Chairman, I hope that I've been able to shed some light on the controlled nature of HUD's participation in conference activities and the benefits derived from those activities. That concludes my testimony, and I stand ready to answer any questions either of you may have. Thank you. Chairman Coburn. Thank you very much. Mr. Ryan. TESTIMONY OF MICHAEL W.S. RYAN,\1\ DEPUTY CHIEF FINANCIAL OFFICER, U.S. ENVIRONMENTAL PROTECTION AGENCY Mr. Ryan. Good afternoon, Chairman Coburn, Senator Carper. On behalf of the Environmental Protection Agency, I'd like to thank you and the Members of the Subcommittee for the opportunity to testify today on the subject Federal agencies and conference spending. --------------------------------------------------------------------------- \1\ The prepared statement of Mr. Ryan appears with an attachment in the Appendix on page 60. --------------------------------------------------------------------------- EPA appreciates your interest in this topic. We share your concern for efficient, effective, and appropriate use of taxpayers' dollars, whether for conferences or for any other purpose. Conference must promote EPA's mission to promote human health and the environment. We carry out this mission through the work of some 17,500 employees located in Washington, DC, 10 major regional offices, and other facilities across the country. Our work is organized in terms of five long-term strategic goals. These goals shape the way we plan, budget, and account for our work. We organize our budget in terms of results and annual goals that relate to these strategic goals. We also account for spending by these goals with reference to specific programs and projects that may or may not involve conferences. In this way, we aim to account for spending in terms of the results of our work. Our cost accounting system follows the structure of our strategic and annual goals. And for this reason, we had to do further analysis to produce the kind of information you requested and to identify trends in spending on conferences. Based on analysis of the detailed data submitted to the Subcommittee, I would estimate that EPA's spending on formal conferences is in the range of $16 to $19 million annually. EPA has broad authority under civil statutes to conduct formal conferences to deliver useful environmental information to the public and to other Federal agencies. These statutes include the Clean Air Act, the Clean Water Act, Solid Waste Disposal Act, National Environmental Policy Act, the Superfund and Brownfields statutes, and the Government Employees Training Act. A number of EPA programs rely on close coordination with community groups, intergovernmental organizations, and members of the regulated community. EPA generally supports conferences that bring together different constituencies to promote collaboration and partnerships for the Nation's environmental programs. Many EPA conferences are designed to inform a non-Federal audience about important developments in environmental policy. Other conferences promote technology transfer, research, cooperation between stakeholders with different perspectives, voluntary actions, and other non-regulatory approaches to protecting the environment and public health. Decisions on conference attendance and support are not made centrally for the agency. Generally, these decisions are made at the appropriate management level within individual program and regional offices. For example, Assistant Administrators or Regional Administrators may make decisions on whether to hold conferences on mission-related topics. Individuals' attendance must be approved by their supervisors. Mr. Chairman and Members of the Subcommittee, in the current budget climate, it is incumbent on all of us to take a hard look at spending to identify greater efficiencies, reduce costs, and produce meaningful results. We get better results when our work brings together the perspectives of many groups that make up the American community. Congress has recognized this by creating laws that provide for conferences to support coordination and information sharing. At the same time, we also need to be careful stewards to ensure that costs for a conference are appropriate and contained. I would like to thank you for this opportunity to examine how we manage conference spending, and to make sure that we are using these resources for the greatest benefit. And if I can depart from my text for a moment, Mr. Chairman, I'd like to thank you also for your statement in which you declared the intention to help us work on this issue. And I hope in that spirit we can enter into this conversation. And that concludes my oral testimony, and I would be pleased to answer any of your questions. Chairman Coburn. Well, thank each of you. I have a few questions just to kind of get down to some detail First, Mr. Martin, in 2001 you all had a $3.2 million expenditure for conferences. And I think your statement was that's because of a change in administration. It leads me to ask: Did HUD carry out its responsibilities that year? Mr. Martin. Absolutely. Senator Coburn. But they did it with $3.2 million worth of conference spending, and yet they carried out their responsibilities? So it begs the further question, is if in 2001 they could carry out their responsibilities with $3.2 million, why are we at $13.9 million now? Mr. Martin. I think my statement was that during that change in administration and leadership, the following year there was a focus on revised strategic goals, increased emphasis on home ownership, increasing faith-based and community organization participation in our programs, and just a new direction. It just was a lull period in 2001 compared to prior periods. Senator Coburn. It's true you all are having trouble with improper payments because so much of what you do goes through to other agencies. One of the things we've been working on is the Improper Payments Act, and I know you all are having trouble getting your hands around that. And I'm going to give you all deference to try to do that this year. But the fact is, as an agency, you don't know what you're improperly paying for. How do you know that the expenditures for travel and conferencing accurately reflects the needs of the agency? Mr. Martin. And that's all budgeted for and planned within the Department, and our execution of our salaries and expense fund. And clearly, one of the goals that was focused on in 2002 was the reduction of improper payments. And that required us to issue updated and approved program guidance and disseminate that guidance to our program administrators, public housing authorities, and private owners, to provide training to their staff and our staff on that new guidance. Those were all contributing factors to reducing those improper payment levels over that period of time. Senator Coburn. But you all are out of compliance right now with improper payments, right, under the law? Mr. Martin. No. We believe we're in full compliance with IPIA. Senator Coburn. We believe you're not. And we'll have that discussion at a later time. Mr. Martin. Right. We owe you a response on February 14. Yes. Senator Coburn. OK. I also would note that the Senate is on record for limiting your conference numbers, an amendment that I offered when I saw it. And it was stripped in conference. But nevertheless, the Senate is on record to try to limit that. The whole goal was to raise the awareness--it wasn't to tell you how to run your organization. It was to raise the awareness that this is going to a faster level. And I'm going to ask each of you this: What percentage of the conferences that you're doing now are teleconferences or digital video conferencing? And what percentage that are planned for the future could be done that way? And then the third part of the question: Do you have a line item budgeted in your total budget for conferences and travel related to those conferences? Mr. Martin, you can answer first, and then the others can answer. Mr. Martin. OK. Our use of satellite broadcasts and webcasts is on the rise. The preponderance of our internal staff training and information dissemination is all done through satellite broadcasts and webcasts. And we're using it more frequently to communicate with our program stakeholders externally. That's definitely on the rise. HUD has a satellite broadcast center in its headquarters. We have downlink capability to all 86 HUD offices. We recently expanded what we call HUD TV to our public housing authorities, which administer the preponderance of our program dollars. So that's been a great benefit to provide training and information to them through those means. So it's definitely on the rise. We do not have a separate line item budget for it. I think it's probably a good idea for us to try to provide that kind of focus and oversight on it, as you suggest, going forward. Senator Coburn. OK. Do you actually have a budget that says, here's how much we're going to spend? Mr. Martin. It's somewhat limited by--the services are largely contracted. The satellite broadcast center has---- Senator Coburn. No, I'm talking about for overall the conferences. In other words, how do lower level managers make a decision about which conference is most effective for us, if we've got all these conferences and we don't have a fixed budget? How do they make a decision to prioritize those? In other words, if they're just saying, this can come out of our fund and we think this is fine, we'll use it for budget rather than having a fixed amount for conferences and travel? There is not a fixed amount for conference and travel in HUD. Is that what you're telling me? Mr. Martin. Not specifically, no. Just a general budget constraint limit. Senator Coburn. OK. As a financial manager, do you not see a problem with that, that you won't force good decisionmaking unless you have a budget line item which you're addressing up against? Mr. Martin. There's a ``general other services'' line item which forces them to make decisions within that limited funding for that category of expenses. And that's competing with staff training and contract services as well that are in that object class. But it's not specifically for conferences. Senator Coburn. OK. Mr. Johnson. Mr. Johnson. With respect to technology, I can tell you that we're using technology a great deal within the organization. But the extent of our use with conferences and with grantees, I don't have a feel for that. I can tell you that with the way we do it internally, there is a--you put people in two categories. The need to go to a conference, or the need to know. And if you have a need to go, then your responsibility is then to disseminate the information among those who have a need to know. But I think we probably can use technology to a greater extent. But you do have a rather diverse group of grantees, and their ability to connect and to deal with us on that basis will also have some limitations. But I think it's an area that we have to do more on. With respect to a line item on travel and conferences, we don't have that. I think, from what I can gather, for the first time we have really focused in on the amount of spending on travel and conferences as a result of your request. I think we now have a base, and I think we have everyone's attention with that base, and I think we'll see some improvements just by the mere fact that we have that. We're installing a new accounting system. As we install that and get that throughout the system, throughout our entire Department, we definitely will have a line item and an ability to capture conferences and travel. Senator Coburn. Let me just follow up with you before I go to our other two witnesses. Congress recently spent $62.5 million for a high-tech communications center at the CDC, $62.5 million. Has the availability of this communications center had any impact on the number of CDC employees that travel to or the amount spent on conferences at CDC? What's the response to that? Mr. Johnson. Well, I can tell you, again, from an internal standpoint, we have a lot of meetings with CDC, and they're all through teleconference and video. I don't know the extent beyond that, the extent that it would be used with respect to conferences, other conferences outside. But certainly within, virtually every meeting that I go to that involves all the operating division heads, there is a video connection to CDC in Atlanta. Senator Coburn. Yes. All right. Mr. Kaplan. Mr. Kaplan. Yes, sir. Regarding technology, the State Department has a global reach, of course. And to the extent possible, we are focusing more on trying to use technology more and more. In some locations, however, technology is just not possible. It's very difficult. I was at a conference last year in Africa where we were trying to use video conferencing to pull people together, and it just didn't work. On the other hand, just a couple of weeks ago, rather than make a trip out to our Asia region to address a gathering there on budget issues, I was able to use video conferencing from back here in Washington, resulting in considerable savings not only in my time but in cost as well. So we are trying to use this technology more and more. Our bureaus and our embassies who make these decisions on funding for this equipment realize the value of it, and it is increasing. Regarding the line item, in our budget we do not have a separate line item. But within the limited discretionary funding within our embassies and our bureaus, there's a great deal of sensitivity on conferences and travel, and we're trying to limit it as much as possible and ensure that the right prioritization is taking place. Senator Coburn. I would note, it's ironic to me that HHS spends two and a half times what the State Department does on conferences and travel. Two and a half times at HHS--we've got to address that imbalance, think about that for a minute. Mr. Ryan. Mr. Ryan. Chairman Coburn, as far as the technology, I'm afraid I'm going to sound a lot like the others. We've had video conferencing capability at EPA, if my memory serves me, just for the last couple of years. We use it more and more for internal meetings so that people don't have to come in from San Francisco, and it's very useful. There are a number of conferences, if you look at our detail. Some of the conferences that we do I think you'd probably want us to continue to do because the citizens want to get a piece of us, frankly. Senator Coburn. Sure. Mr. Ryan. They want to see us in person and ask us some hard questions. I think in other areas--and I was talking to our guys in the research area, where you'd expect people to be high tech--I think that would be a great idea, to use that technology for that. And I would probably be looking into that more. I know we have some problems with bandwidth in some of the labs. Senator Coburn. We're going to try to fix that by 2009. Mr. Ryan. I'll be with you. Line item budget, no, we don't have it. To echo what I think Mr. Johnson said, I learned a lot more about what we do on conferences when you asked the question, frankly. We gather the information because it's decentralized. I looked at it and concluded, I think, some of the things you concluded. And I think we're going to be looking at that much harder. I think that having a line item per se possibly could produce counter-intuitive results. However, having to report the first bullet on your accountability chart of transparency, I think that goes a long way. If you simply flush out all these costs by putting a code in the accounting code, making people use it, and then report so that people at a level in the agency can actually see what's going on, I think that goes a long way to help control this. And would probably be more important than an item. Senator Coburn. Let me ask each of you, do you all have the authority within your organizations to essentially demand e- conferencing or to hold accountable--in other words, to try to force this down the line? Is there any ability that you all have to say, this is how we're going to--other than to say, you're going to have to account. Here's a new number. You're going to have to put it in. But is there anything that you can do in your positions of authority as the financial managers of these organizations to force this down the line that would cause that, other than a budgeted line item or greater sunshine on it? Anybody want to answer? Mr. Ryan. Well, I'd start out by saying that to answer your question directly, I don't have the authority--the CFO doesn't have the authority to force it. That's not to mean that we can't--in order to, say, direct it. What we'd have to do is rely on persuasion and a bully pulpit kind of thing, and other tools that you have because you have the leverage of the budget. But I can't direct it at the current time, to answer your question. Senator Coburn. Any other comments on that? Mr. Kaplan. Sure. Personally, the CFO does not have the authority in the State Department, either. But that decision is made at the Under Secretary level. Of course we have a close working relationship, and the Under Secretary is always looking to make the most efficient, budget-wise decisions. So I think there's an influencing and a relationship there that we can work further in this direction. Senator Coburn. Mr. Johnson. Mr. Johnson. I can tell you as we discussed this issue with our operating division heads, and the Secretary was there, he indicated a very large interest in this area, and basically said that he would like to see transparency and he would like to see controls, and gave us basically the authority and the charce to work together to accomplish that. So I think having the Secretary in that camp is pretty good authority. Senator Coburn. I also would note in one of your comments, we've spent a ton of money wiring universities, colleges, libraries, and schools. And so you have stakeholders out there that we often assume don't have availability for some of this, but they really do. They have it at community centers and other areas throughout the country where we could utilize that. I want you to look at these two charts because one of the things that is growing is we pay per diems.\1\ And as I've talked to Federal employees, the best thing about a trip is you can make cash off of it. And I'm wondering if you have any comments to maybe change this policy to a cost-plus max and have them turn it in. --------------------------------------------------------------------------- \1\ The charts referred to appears in the Appendix on page 29 and 30. --------------------------------------------------------------------------- I know you don't want to deal with the paperwork associated with travel vouchers and all that other. But when you pay somebody $390 a day per diem and they spend $200 or $250, and most of the conferences they go to have the food there, they're taking home $100 a day. And the same is true with Members of Congress when they travel. The American public needs to know that. What it ought to be is reasonable and customary expenses ought to be paid for rather than somebody gaming the system. Any comments on that? Think we ought to change that? It may not apply as much to the State Department because of where they travel, but certainly for the rest of it--and I've traveled once as a Congressman, and I was amazed that I turned in $1,600 back to the Treasury, whereas most people keep it. Mr. Ryan. Actually, I think that would be a great idea. And I think as the Federal Government goes to electronic travel vouchers, the paperwork burden will be reduced. If what I understand you're saying is simply allow for a cost, and basically everybody goes back to their computer, as they do now, and puts in what they spent, and has the vouchers and beyond that they don't get anything beyond that for reimbursement, I have no problem with that. That sounds like you're paying for the cost of the travel. Senator Coburn. Right. Any other comments on that? Mr. Kaplan. Sir, as you mentioned, the State Department is a little bit different. In many overseas locations where we are, it's often cost-effective to hold a conference rather than fund the air travel to bring people back. So we have a slightly different formula. Senator Coburn. Right. Yes. I agree with that. Mr. Kaplan. But I think the more scrutiny and the more light that is shed on this issue, working closely with GSA who does set the per diem rates, there might be some improvements that could be made in the system. Senator Coburn. All right. Mr. Ryan, I have one other question for you, and then I have one final question for all of you. From 2000 to 2004, your conference spending jumped 107 percent, doubled. Last year, though, your agency spent less, actually brought it down several million dollars. The actual amount was--you brought it down $7 million, $6.5 million dollars. Mr. Ryan. Right. Senator Coburn. Did it compromise your mission? Mr. Ryan. No. Not at all. In fact, I have to confess to you, I think some of the difference in the 2 years is probably somewhat artificial by the simple fact that our most expensive conference, which is the Brownfields conference, which is about $3 million a year---- Senator Coburn. Yes. Mr. Ryan. It's a fall issue. And it just happened to fall within two fiscal years. It was October, one year and September, the other. And that inflated it. And that's why in my oral statement I said, $16 and $19 million. But to answer your question without answering it exactly the way you asked it, if we were to reduce our conference spending, do I think we would not achieve our goals? No. I think I would echo what the administrator said when he talked about our budget, that we're stewards of the environment as well as stewards of the taxpayer dollar. And we could spend a lot less on conferences and still accomplish what we're doing. Senator Coburn. OK. One final question for all of you, and then I'll--actually, two final questions. I'll be more straightforward than that. If you're out on the street, not in the job you're in today, and somebody came up to you and said, the Federal Government over the last 5 years increased their conference spending 70 percent, what would you think about that? That's 13 percent per year. What would you think about that? Mr. Johnson. Mr. Johnson. I think I talk with more people outside government than I talk within government, and I can tell you that they would be horrified. Any business, any large corporation, would say, that's not the way we've had to operate over the last 5 years. And so they would not take kindly to it. Senator Coburn. Mr. Kaplan? You all, by the way, have not increased it that much, but---- Mr. Kaplan. I think people would be upset to hear that high percentage of increase, and would logically ask the question, could business be done differently? Could we look at the technology and newer tools and controls, as we ought to be continually looking at how to improve our business practices? Senator Coburn. Mr. Martin. Mr. Martin. Well, I think I'd want to know why did it go up and what did you get for it. But I know in HUD's case, looking back at 2001 when we were in that lull period between administrations, shortly after the new administration came in, there were a lot of change proposals that needed to be processed. And it was communicating those changes and to do things like reducing improper payments and things that had a benefit. Senator Coburn. Well, I said 70 percent. HUD went up 340 percent. Mr. Martin. Right. Senator Coburn. So let's use 340 percent in your case. You don't think they'd question that? Mr. Martin. Absolutely question it. But again, it's relative. And again, going back to the question of why did it go up and what did you get for it, and---- Senator Coburn. OK. Mr. Ryan. Mr. Ryan. Chairman Coburn, I think to answer your question, I had to think of what I would say to my mother-in-law about this. [Laughter.] And I would think that I wouldn't want to talk to her very long about because she pretty much would tell me, ``I think you boys better get this stuff under control.'' So I think, again, to echo Mr. Johnson's comment of horrified at the jump, that would be probably where I'd be and where most people would be. Senator Coburn. One final question, and then I'll introduce Senator Akaka. Welcome. Senator Akaka. Good to be here with you. Senator Coburn. You all have indicated a willingness, or at least a desire, to try to get a handle on this. And I'm extremely thankful to you. Would you each be willing to work with my office this year to write some parameters? Not specific rules; I don't want the Congress micro-managing you. I want us doing our proper job of oversight. But there are things that we can do to limit some of the excesses. And all I would ask is: Would you be willing to work with us to help give you more tools to help control some of these costs better? [Panelists nod affirmatively.] Senator Coburn. We're just about to finish up. Senator Akaka, I'm glad you came. OPENING STATEMENT OF SENATOR AKAKA Senator Akaka. Well, thank you, Mr. Chairman. I want you to know I look forward to working with you. I enjoy working with you. And I must tell you that as Chairman of this Subcommittee, you have been--maybe this is too strong--that you have focused in dealing---- Senator Coburn. I don't need any help in getting a bad reputation. [Laughter.] Senator Akaka [continuing]. With the problems that are in management. And I really commend the Chairman for that. I regret I was unable to be here earlier, but I was serving as a ranking member of the Armed Services readiness hearing on contracting in Iraq and the problems that we have there. However, I consider this hearing very important, and I appreciate the Chairman's interest in making sure that Federal agencies are spending funds wisely when it comes to sending Federal employees to conferences. I'm proud to represent the beautiful State of Hawaii, which is one of the Nation's premier conference and convention destinations. We in Hawaii are sometimes frustrated by the assumption that a Federal employee who attends a conference in Honolulu, for example, is wasting taxpayers' dollars. No Federal employee should be discouraged from participating in a conference as long as there is a legitimate reason to do it. I know our Chairman's focus on government efficiency is sincere, and I want to assure him that my constituents share that value, too. We cannot forget, however, that Hawaii, our 50th State, is home to nearly 25,000 Federal employees, 16,500 of whom are DOD civilian workers and about 45,000 active duty members of the Armed Services. Hawaii is headquarters for the U.S. Pacific Command, and serves as the operational heart of the world's largest naval command, the Pacific Fleet, whose reach extends all the way to Africa. PACCOM's operational responsibility covers 105 million square miles, more than 60 percent of the world's population, and $548 billion in U.S. trade. We don't want to unfairly refuse participation in a conference in Hawaii to any Federal employee. My constituents should not be denied access to the exchange of ideas and expertise of agencies such as HUD or HHS or EPA or State Department. There are unique issues that face the people of Hawaii, but by working with the Federal Government, we can fund solutions. Conferences, conventions, and forums all offer important venues for such critical personnel interactions. We in Hawaii have long understood the importance of visitors to our State and the State's economic vitality. Given the crucial standing that Hawaii and its capital, Honolulu, hold in this Nation, once again I strongly urge that the Federal employees neither be denied nor discouraged from attending conventions or conferences in the 50th State. And that's my statement that I'd like to put in the Record. Thank you, Mr. Chairman. [The prepared statement of Senator Akaka follows:] PREPARED STATEMENT OF SENATOR AKAKA Thank you, Chairman Coburn. I consider this hearing very important, and I appreciate your interest in making sure that Federal agencies are spending funds wisely when it comes to sending Federal employees to conferences. I am proud to represent the beautiful State of Hawaii, which is one of the Nation's premier conference and convention destinations. We in Hawaii are sometimes frustrated by the assumption that a Federal employee who attends a conference in Honolulu--for example--is wasting taxpayer dollars. No Federal employee should be discouraged from participating in a conference as long as there is a legitimate reason to do so. I know our Chairman's focus on government efficiency is sincere, and I want to assure him that my constituents share that value too. We should never forget that Hawaii, our 50th State, is home to nearly 25,000 Federal employees--16,500 of whom are DOD civilian workers--as well as 45,000 active duty members of the Armed Services. Hawaii is headquarters to the U.S. Pacific Command (PACOM) and serves as the operational heart of the world's largest naval command--the Pacific Fleet--whose reach extends to Africa. PACOM's operational responsibility covers 105 million square miles--more than 60 percent of the world's population and $548 billion in U.S. trade. We don't want to unfairly refuse participation in a conference in Hawaii to any Federal employee. My constituents should not be denied access to the exchange of ideas and expertise of agencies such as the Departments of Health and Human Services, Housing and Urban Development, and State, as well the Environmental Protection Agency. There are unique issues that face the people of Hawaii, but by working with the Federal Government, we can find solutions. Conferences, conventions, and forums all offer important venues for such critical personal interactions. We in Hawaii have long understood the importance of visitors to our State's economic vitality. Given the crucial standing that Hawaii and its capitol--Honolulu--hold in this Nation, once again I strongly urge that Federal employees neither be denied nor discouraged from attending conventions or conferences in the 50th State. Senator Coburn. You've been heard, the junior Senator from Hawaii. We have heard you. Senator Akaka. Thank you. Senator Coburn. I would note for the record, however, the Defense Department's expenditures on travel and conferences has only risen 8 percent since 2002. They've been pretty good stewards in terms of the increases. And most of the conference that goes on in Hawaii are related to the Department of Defense. So they've been good. Your statement, however, does not reflect the fact that the HUD had a conference on Sacramento home ownership in Honolulu. The American people are going to ask a question about why do we do that. We're for Honolulu and Hawaii. I want to go there for a conference, too. I've just not been invited yet. And I may not be after one of these hearings. [Laughter.] Did you have a question for our guests? Senator Akaka. Yes. I have one question. Senator Coburn. Thank you. Senator Akaka. Mr. Ryan, you mentioned the use of shared costs for conferences. You also note that if EPA had greater authority to retain and use fees, that more costs could be offset. What authority does EPA need to do this? Mr. Ryan. This was an idea that if we had authority in law, which we don't have, to charge a fee and retain it to pay for a conference, the marketplace--for certain types of conferences. I'm not talking about a conference that we have with citizens about a Superfund site. No. I'm talking about a conference where we're giving information primarily to people who want to do business with the EPA or get grants. And we might soon find out--the marketplace might determine whether or not that was valuable information or not because if it wasn't, they wouldn't pay for it. And if they do pay for it, then the American taxpayer is not. And so that was a suggestion. We don't have the authority to do that now. Senator Coburn. That's a good idea. Senator Akaka. Thank you. Thank you, Mr. Chairman. Senator Coburn. Once again, let me thank each of you for coming. I know you've got tough jobs. And I appreciate your spending the time. Our grandchildren are worth us doing the right thing every time, and working hard to make sure not one penny is spent in an improper way. We will ask you for information in May. I hope that from October 1st to May, that you will have that available for us. We'll go back and look at--we're going to look at individual conferencing and the decisions that you're making. We're going to highlight ones that we think the American people might not agree with. And so I would just ask you to be discerning, and follow up--what I find is if we have a good discussion, we're going to learn about what you are doing more, which means we're going to be better stewards to get you what you need. And the American people can see it. And transparency and accountability are the things they're going to have to count on. And we've got about 6 years to turn things around before the real crunch hits us. And you all know what I'm talking about. And we need to be serious about doing it. We thank you for your attendance and your time. The hearing is adjourned. 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