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71–076 PDF 2011

ACHIEVING TRANSPARENCY AND

ACCOUNTABILITY IN FEDERAL SPENDING

HEARING

BEFORE THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

JUNE 14, 2011

Serial No. 112–63

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.fdsys.gov

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JASON CHAFFETZ, Utah

CONNIE MACK, Florida

TIM WALBERG, Michigan

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

ANN MARIE BUERKLE, New York

PAUL A. GOSAR, Arizona

RAU ́ L R. LABRADOR, Idaho

PATRICK MEEHAN, Pennsylvania

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

TREY GOWDY, South Carolina

DENNIS A. ROSS, Florida

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

MIKE KELLY, Pennsylvania

ELIJAH E. CUMMINGS, Maryland, Ranking

Minority Member

EDOLPHUS TOWNS, New York

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

DANNY K. DAVIS, Illinois

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

CHRISTOPHER S. MURPHY, Connecticut

JACKIE SPEIER, California

LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director

ROBERT BORDEN, General Counsel

LINDA A. GOOD, Chief Clerk

DAVID RAPALLO, Minority Staff Director

(III)

C O N T E N T S

Page

Hearing held on June 14, 2011 ............................................................................... 1

Statement of:

Devaney, Earl, chairman, Recovery Accountability and Transparency

Board .............................................................................................................. 5

Miller, Ellen, executive director, Sunlight Foundation; Patrick Quinlan,

chief executive officer, Rivet Software; Kim Wallin, controller, State

of Nevada; and Craig Jennings, director of Federal fiscal policy, OMB

Watch ............................................................................................................. 32

Jennings, Craig .......................................................................................... 53

Miller, Ellen ............................................................................................... 32

Quinlan, Patrick ........................................................................................ 41

Wallin, Kim ................................................................................................ 48

Letters, statements, etc., submitted for the record by:

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, letter dated June 13, 2011 ..................................................... 79

Devaney, Earl, chairman, Recovery Accountability and Transparency

Board, prepared statement of ...................................................................... 8

Jennings, Craig, director of Federal fiscal policy, OMB Watch, prepared

statement of ................................................................................................... 55

Miller, Ellen, executive director, Sunlight Foundation, prepared statement of ........................................................................................................... 34

Quinlan, Patrick, chief executive officer, Rivet Software, prepared statement of ........................................................................................................... 43

Towns, Hon. Edolphus, a Representative in Congress from the State

of New York, prepared statement of ........................................................... 17

Wallin, Kim, controller, State of Nevada, prepared statement of ................ 50

(1)

ACHIEVING TRANSPARENCY AND

ACCOUNTABILITY IN FEDERAL SPENDING

TUESDAY, JUNE 14, 2011

HOUSE OF REPRESENTATIVES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, DC.

The committee met, pursuant to notice, at 9:35 a.m., in room

2154, Rayburn House Office Building, Hon. Darrell E. Issa (chairman of the committee) presiding.

Present: Representatives Issa, Jordan, Chaffetz, Lankford,

Amash, Labrador, Meehan, DesJarlais, Gowdy, Farenthold, Kelly,

Cummings, Towns, Tierney, Connolly, and Quigley.

Staff present: Ali Ahmad, communications advisor; Robert Borden, general counsel; Will L. Boyington and Drew Colliatie, staff

assistants; Molly Boyl, parliamentarian; Lawrence J. Brady, staff

director; Benjamin Stroud Cole, policy advisor and investigative analyst; John Cuaderes, deputy staff director; Adam P. Fromm, director of Member services and committee operations; Linda Good,

chief clerk; Christopher Hixon, deputy chief counsel, oversight;

Hudson T. Hollister, counsel; Justin LoFranco, deputy director of

digital strategy; Mark D. Marin, senior professional staff member;

Tegan Millspaw, research analyst; Peter Warren, legislative policy

director; Krista Boyd, minority counsel; Ashley Etienne, minority

director of communications; Jennifer Hoffman, minority press secretary; Lucinda Lessley, minority policy director; Amy Miller, minority professional staff member; Dave Rapallo, minority staff director; Mark Stephenson, minority senior policy advisor/legislative

director; and Cecelia Thomas, minority counsel/deputy clerk.

Chairman ISSA. The committee will come to order.

The oversight committee exists to secure two fundamental principles. First, Americans have a right to know that the money

Washington takes from them is well spent. And second, Americans

deserve an efficient, effective government that works for them. Our

duty on the Oversight and Government Reform committee is to

protect these rights. Our solemn responsibility is to hold government accountable to taxpayers, because taxpayers have a right to

know what they get from their government. We will work tirelessly

in partnership with citizen watchdogs to deliver the facts to the

American people and bring genuine reform to the Federal bureaucracy.

And today’s hearing, more than any other hearing of this year,

is, in fact, about delivering on that promise, something that both

parties and the American people know needs to happen. We need

to create more transparency, more accountability in government.

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This week there is a bipartisan consensus forming over a new

way forward in spending transparency. In recent months I have

had numerous conversations with Republicans and Democrats,

with Senate and White House officials about how we can fix this

broken program: data transparency and the bill that I introduced

yesterday, the DATA Act, to establish an independent body to track

Federal spending, including grants, contracts, loans and agencies’

internal expenses on a single platform with a consistent reporting

standard.

Vice President Biden also announced the administration’s intent

to support bipartisan reform efforts to achieve digital accountability. Let me make something clear: There is no difference in

what the Vice President wants to accomplish and what I want to

accomplish and, I believe we’ll hear today, what Chairman

Devaney wants to accomplish. There are differences in how we get

from where we are with a labyrinth of failed or partially successful

programs to one single accountability that is less burdensome and

more effective for all the participants and for the American people.

In a Gallup poll released last month, the vast majority of Americans blamed the problems in government on too much spending for

unneeded or wasteful Federal programs. Seventy-three percent of

American adults are convinced that spending is the problem in

Washington, and I’m part of that 73 percent. In fact, if American

taxpayers knew the whole truth about Federal spending, the number would be much higher than 73 percent.

Let us rest assured that when we get full accountability, when

we reduce waste in government, we still will have a spending problem. However, currently the data that is established on Federal

worksites—Web sites is unreliable, inaccurate, and, most importantly, incompatible and often opaque to those who need it most.

Recent analysis by industry experts reveal that

USASpending.gov has only 35—was only 35 percent accurate in fiscal year 2009, and that is only one Federal spending data base

among many others.

To manage multiple data bases and hope each of them gets better is to assume that the tried and true failures of the past will

be the tried and true successes of the future. And while I oppose

the President’s trillion-dollar stimulus both in my vote and in my

rhetoric, I continue to believe that Chairman Devaney and the efforts he has put into affordable trial technology is, in fact, the way

forward, and revolutionary accountability and transparency can be

achieved on building on top of a model that this committee asked

for as part of our role in that stimulus and, in fact, the RAT Board

has implemented.

Let us not make any mistakes, there have been errors, and there

have been failures that had to be corrected. And yes, of course,

often the figures were figures no one wanted to hear. The cost of

retaining a job might be artificially higher than we thought it was

going to be. But the facts are the facts, and many of those high

costs were real, while many needed adjustment, and Chairman

Devaney got right on that, and we have a record of mistakes that

were made being corrected. But ultimately a single reporting system over time can become more reliable than States and localities

having to report to multiple agencies in different ways.

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Today we will hear from Chairman Devaney and other advocates

of transparency through technology. And although our first and

most important witness today will be Chairman Devaney, I want

to know note that on the second panel we will have individuals

who will talk about the burden that reporting gives them. And they

will talk about it because ultimately our goal of a single transparent system is to reduce the burden. One system throughout government means you only have to learn it once. Multiple systems

today mean that anyone who is accountable for more than one report, and most entities are, have to learn multiple systems. We

want to end that today on a bipartisan, bicameral and, in this case,

bi-branches of government.

And with that I yield to the ranking member.

Mr. CUMMINGS. I want to thank the chairman for calling this

hearing, and I want to thank and welcome our distinguished witnesses today.

I want to begin by congratulating you, Mr. Devaney, 41 years of

service to our Nation, and very distinguished years. You said something when you first appeared before us when you got this new assignment, and I will never forget it as long as I live. You said, you

know, I want to make sure the mechanisms are put in place so that

people—so that we prevent them from doing the wrong things. And

I thought that that was such—I said to myself that makes sense,

and thank you for doing that.

Democrats in Congress created the Board as part of the Recovery

Act in 2009 to put in place some of the strongest transparency and

accountability measures ever enacted. As a result, the ability to

track Federal spending has improved by leaps and bounds. In addition to promoting job creation, economic activity and long-term

growth, the Recovery Act fostered unprecedented accountability

and transparency in government spending.

Under the administration’s implementation and Chairman

Devaney’s oversight, the Recovery Act has had historically low levels of waste, fraud and abuse. Today more than 80 percent of recovery funds have been awarded, and less than half of 1 percent currently have open investigations. I look forward to hearing more

from him on the Board’s successes, lessons learned and best practices that could be applied elsewhere in government.

I would also like to commend President Obama for his unprecedented efforts to increase transparency and accountability in government spending. Yesterday the President signed an Executive

order that takes the model work of the Board and extends it across

the Federal Government. The President’s Executive order establishes a new Government Accountability and Transparency Board

to provide strategic direction for enhancing Federal spending transparency and eliminating waste, fraud and abuse in Federal programs.

The President directed the Board to report on guidelines to integrate systems that collect government spending data, improve reliability, and capitalize on the proven success of fraud-detection technologies. The Executive order also directed the Vice President to

convene Cabinet-level meetings on agency efforts to make government work better, faster and more efficiently under the White

House Accountable Government Initiative.

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We have also seen remarkable improvements in other Federal

transparency efforts over the past several years. Web sites like

USASpending.gov, Recovery.gov and the IT Dashboard have put

more information on line than ever before about how Federal dollars are being spent.

I applaud the President for continuing to advance the goals of

transparency and accountability in government. Unfortunately

budget cuts may force the White House to scale back plans for several open government initiatives. The recently passed fiscal year

2011 continuing funding resolution slashed the Electronic Government Fund from a proposed $35 million down to $8 million, putting

some of those very Web sites I just mentioned at risk.

I noted a number of transparency advocates and good government groups have criticized these cuts, including some of our witnesses here today. I look forward to hearing more from them on the

potential of these cuts on open government and initiatives and efforts to root out waste, fraud and abuse.

Mr. Chairman, I have said it many times already this year, and

I will say it again: Transparency and open government should not

be a partisan issue, and I know you agree with that. But protecting

taxpayers’ hard-earned money from waste, fraud and abuse is one

of the most important issues that we deal with on this committee.

I want to acknowledge the legislation you’ve introduced, and I applaud you for it, which would do many of the same things directed

by the President’s Executive order. I understand the Democratic

staff of the committee had worked cooperatively with your staff in

the last Congress on legislative efforts to improve Federal financial

data standards, and I supported those efforts.

In addition to your bill, every Member on this side of the aisle

joined together in March to introduce H.R. 1144, the Transparency

and Openness in Government Act, a comprehensive compilation of

five component pieces of legislation that passed the House last

Congress with broad bipartisan support, including your own. Since

we introduced this legislation, 17 organizations supporting transparency and openness in government, including some testifying

here today, have endorsed the bill and called for swift bipartisan

action by our committee.

Finally, Mr. Devaney, it is quite a compliment to you to know

that the work you’ve done will serve as a model perhaps not only

for tomorrow, but for generations yet unborn. I look forward to reviewing your proposal and to working together on these issues, Mr.

Chairman, and I yield back.

Chairman ISSA. I thank the gentleman.

Members will have 7 days to submit opening statements and extraneous material for the record.

We now recognize our first panel, it says, of witnesses; I’ll say

of witness. The Honorable Earl Devaney is chairman of the Recovery Accountability and Transparency Board. And to get your title

fully, are you still, in fact, an IG on loan to that position?

Mr. DEVANEY. I am an IG on loan.

Chairman ISSA. An IG on loan and one of our favorite IGs from

his previous work at Interior.

Pursuant to the committee rules, all witnesses will be sworn in.

Mr. Devaney, will you please rise to take the oath.

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[Witness sworn.]

Chairman ISSA. Let the record indicate Mr. Devaney answered in

the affirmative.

Chairman, I won’t even give you the introduction. You know the

drill as well as anyone. You’ve been her many times. If you go over,

no one is going to call the whistle on you, because, in fact, we’re

here to hear what you have to say.

With that, you’re recognized.

STATEMENT OF EARL DEVANEY, CHAIRMAN, RECOVERY

ACCOUNTABILITY AND TRANSPARENCY BOARD

Mr. DEVANEY. Thank you, Mr. Chairman, Ranking Member

Cummings, for those kind remarks, and members of the committee.

I want to thank for the opportunity to appear before you today to

share with you some of the Recovery Board’s lessons learned. I will

be glad to answer any questions you have after I finish my opening

remarks.

Mr. Chairman, I have given considerable thought to lessons

learned from what I sincerely hope will be my last government assignment. What I would like to do today is to share with the committee 10 very specifics lessons learned that I feel could be incorporated into the way our government does business going forward.

The first lessons learned is nothing motivates bureaucrats to act

faster than a law with concrete deadlines. The longstanding culture

of Federal agencies has been to take the path of least resistance

and to take the longest time allowed to enact any change. I have

found that agencies continually underestimate their capacities to

get things done pursuing pilot after pilot with few long-lasting developments. In fact, there are so many ongoing pilots that I sometimes think of our government as a giant airline.

The Recovery Act addresses this problem head on, requiring recipients to report the use of recovery funds within 180 days of enactment. This suggests to me that any new law imposing requirements on agencies should include firm and certain deadlines for

implementation.

Second that spending data can be collected directly from recipients with a high degree of accuracy. In the past, data entry about

Federal spending was done solely by agency employees. The Recovery Act in its mandated recipient reporting changed that dynamic,

proving that recipients of Federal funding could report just as accurately. Any future legislation should recognize this potential cost

savings and call for the migration of all spending reporting from

agencies to recipients.

The third lesson learned is that this spending data can be quickly quality controlled, displayed and uniquely arrayed to achieve unprecedented levels of transparency.

In the past, agencies in receipt of recipient-reported data would

have spent excessive amounts of time scrubbing that data in the

basements of buildings all over this town prior to releasing it. By

the time of its release, the information would be outdated and

meaningless. The Recovery Act required real-time reporting with

results made public within 30 days four times a year. And in the

end the data was not merely published as a jumble of numbers in

a hardbound catalogue that sits on a shelf somewhere, but was

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arrayed geospatially on Recovery.gov, making data available and

understandable for all users.

The fourth lesson is that the Federal Government desperately

needs a uniform, governmentwide, alphanumeric numbering system for all awards. Currently each agency uses its own unique

numbering system for contracts and grants. As we found during

the recovery transparency process, these disparate award numbers

make tracking Federal spending unnecessarily arduous and complicated. Every quarter there are mismatches when we try to align

recipient reported award numbers on FederalReporting.gov to what

the agencies have reported to OMB in our efforts to see who did

and who did not report as required.

The award ID numbering process must be simplified and standardized, perhaps akin to the credit card numbering system that we

are all accustomed to.

Fifth lesson is that new technology, particularly cloud computing,

can play a critical role in the delivery and effectiveness of transparency and accountability. In April 2010, the Board made the

move to a cloud computing infrastructure for Recovery.gov, a

groundbreaking event that allowed for more efficient computer operations and reduced costs. Cloud computing is a pay-as-you-go approach to information technology, permitting lower initial investments to start operations. It is also flexible enough to allow IT staff

to add or subtract computing capacity as needs dictate. In an era

of rooting out redundancies and inefficiencies, this condensing of

systems could create an enormous savings to the American taxpayer.

The sixth lesson learned is that transparency can cause embarrassment, which in turn causes self-correcting behavior. In February 2010, we began publishing on Recovery.gov a list of noncompliers, a list of shame if you will. That states the names of recipients who have failed to report as required. Users can see who the

repeat offenders are. I’m happy to report that in the first quarter

of 2011, the number of 2-time nonreporters is down to 17, and the

number of 3-time nonreporters is down to 7. This is out of over

200,000 awards reported for the quarter.

But perhaps the most important lesson learned is that transparency is a force multiplier that drives accountability. It has become abundantly clear to me that transparency is a friend of the

enforcer and the enemy of the fraudster. With less—with more

than 80 percent of the recovery moneys having been awarded, less

than half a percent of all reported recovery contracts, grants and

loans currently have open investigations. After nearly 21⁄2 years,

there have been only 144 convictions, involving a little over $1.9

million. I am often asked why there has been so little fraud. I have

little empirical evidence to prove it, but I believe that it is largely

due to the transparency embedded in the Recovery Act.

Number eight is that the goal—if the goal is prevention instead

of merely detection, agencies and IGs both have a high degree of

incentive to collaborate together. The Board strategy was to focus

our efforts heavily on preventing fraud from occurring in the first

place, not just detecting it after the fact. That is why the IG community has provided training for more than 130,000 people since

February 2009.

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My observation has been that when the goal is fraud detection,

IGs come to the table with a great deal of enthusiasm, while agencies seem less motivated. In overseeing these recovery funds, the

Board has learned that when the common goal is fraud prevention,

agencies and IGs are equally enthusiastic, and a remarkable collaborative effort takes place between the two.

The ninth lesson learned is that the most valuable accountability

module is one that provides equal access to both agencies and enforcers. The new analytical tools and methodologies developed in

our recovery operations center have proven to be as valuable to the

agencies as they have been to the IGs. I believe that a single repository for this accountability data, rather than mini recoverylike

centers sprinkled around the Federal Government, would be a better idea and present a significant cost savings to the American taxpayer.

Finally, there is the lesson that articulating success for prevention is a lot harder to do than for detection. Forty-one years ago

I began my Federal career as a Secret Service agent learning how

to protect our Nation’s leaders. How do you measure success in

that role? Certainly failure is easy enough to see, but how does one

measure the real effect on a potential assassin that the Secret

Service presence has?

Now, toward the end of my government career, I admit I am still

pondering the difficulties of measuring successes or preventing

fraud or waste. How can we know how much fraud has been prevented by what the Board and IG community did during the recovery program? High fraud losses accompanied by front-page stories

and nightly news segments would have clearly signaled failure, but

we may be left to wonder, as many of my former colleagues in the

Secret Service do every day, about what success really looks like.

All I can say for sure is that to date in a government spending program of more than $800 billion, we have witnessed extremely low

levels of fraud.

Mr. Chairman, I have recently written a white paper reflecting

the Board’s successes and some of the lessons learned I have talked

about here today. More importantly, this paper also lays out a template for how those lessons could possibly be embedded in the government’s business practices going forward. I plan to put that

paper up on Recovery.gov today.

And this concludes my oral remarks, and I will now be glad to

answer any questions you have.

Chairman ISSA. Thank you, Chairman.

[The prepared statement of Mr. Devaney follows:]

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Chairman ISSA. In a perfect world the first person to ask questions would probably be Mr. Towns, who, if not for his chairmanship, the embedded role that you played wouldn’t have been in the

law. So I want to take an opportunity to thank him, because it was,

in fact, his leadership that caused the kind of accountability you

have an opportunity to show us.

With that I’m going to waive going first and recognize the gentleman from Tennessee Mr. DesJarlais, if you’re prepared.

Mr. DESJARLAIS. Thank you, Mr. Chairman, and thank you,

Chairman Devaney, for sharing those thoughts and wisdoms with

us.

I would like to start and ask you what some of the key differences between tracking spending using recipient reporting, as

you and the RAT Board have done for stimulus money, and tracking spending using agencies reporting in the way USASpending.gov

does.

Mr. DEVANEY. Well, Congressman, I think we have discerned

that recipient reporting is as accurate or more accurate than agency reporting. I think when recipients report directly, they have a

parochial interest in getting it right.

We built into our systems opportunities for checks and balances

for agencies and recipients to think about what they’ve reported

and change it if they had to. All those changes are totally auditable

so we know what was changed and when it was changed. And we

have a continuous open environment for people to change things,

sometimes quarters after they’ve made a mistake. And our perspective is that citizens do come back, recipients do come back and

change things because they simply don’t want to be embarrassed.

Everybody gets to see what they put in. It has been—I don’t think

I would have imagined that when we first started, but it’s been a

great lesson.

Mr. DESJARLAIS. Do you believe that a permanent universal recipient reporting requirement is necessary to achieve transparency

in Federal spending?

Mr. DEVANEY. Well, I think given what I just said, I think the

migration from recipient reporting to agency reporting with no loss

in accuracy and potential savings costs would be a smart thing to

do.

Mr. DESJARLAIS. It would make it more accurate?

Mr. DEVANEY. More accurate and save money.

Mr. DESJARLAIS. Do you think that this would internally lead to

greater accountability then on the part of Federal agencies?

Mr. DEVANEY. I do. The more accurate the data, the better the

opportunity for those of us who spend their time on accountability

to get it right.

Mr. DESJARLAIS. You’re talking about some of the successes earlier. Can you please address the number of recipients who fail to

report, and explain how the Board has managed to keep it so

small?

Mr. DEVANEY. Well, when we first—the first reporting period

there were a lot of people that failed the report, and I take that

to be a manifestation of a new system, a new idea, and people just

not understanding. Several quarters later those numbers were

down dramatically, and now, as I mentioned earlier, the amount of

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recipients that actually haven’t reported two or more times is rather low, and three or more times is down to seven, and that’s out

of hundreds of thousands of awards. So, you know, it’s 99.9 percent, which is, I think, good.

Mr. DESJARLAIS. Do you believe that if Congress instituted a

board that tracks spending on a larger level and not just stimulus

spending that the rate of failure to report would remain that favorable?

Mr. DEVANEY. I think it would. And I took note of the chairman’s

legislation that it has enforcement teeth in it. Unfortunately the

Recovery Act, when it was created in a very short time period, forgot to put the enforcement pieces in it, and I think the chairman’s

legislation fixes that.

Mr. DESJARLAIS. The Recovery Board has recommended a governmentwide system of award identifiers. Your testimony mentions

uniform award IDs for all Federal agencies. Can you explain how

this would simplify the tracking of Federal spending?

Mr. DEVANEY. Well, it became very obvious to us early on that

that every single agency has their own unique numbering system,

probably some dating back to George Washington. So it was almost

impossible for us to collect data from all of those various agencies,

so we had to design our own data-collectionsite. And then we have

to—every time the reporting takes place, we have to deal with

what we call mismatches. The numbers from what the recipients

report to us differ from the numbers that the agencies tell us that

they gave the money out. So it’s a constant battle of trying to reduce those mismatches. It is very labor intensive, and it doesn’t

have to be that way. If we had a common single alphanumeric

numbering system like a credit card, the transparency would be enhanced tremendously.

Mr. DESJARLAIS. Thank you, Chairman Devaney.

And, Chairman Issa, I yield back the balance of my time.

Chairman ISSA. The gentleman yields back.

We now recognize the gentleman from New York Mr. Towns for

5 minutes.

Mr. TOWNS. Thank very much.

Let me begin by saying to you, Mr. Devaney, thank you for the

outstanding job that you are doing. And, of course, I remember you

saying that transparency is harder to practice than it is to talk

about, and, of course, I recognize that.

You talked about the fact that embarrassing—you know, sometimes it brings about change in behavior. What are the complaints

that you were getting from the ones that did not cooperate? Are

they saying they did not have the resources to do what you’re asking? What are they complaining about, those few that did not comply?

Mr. DEVANEY. Well, the excuses were all over the board, sir.

They ranged from the ridiculous to those that, quite frankly, probably involve some hardships. For instance, we had early on some

tribes and some other recipients who simply didn’t have Internet

and couldn’t comply that way, so we had to devise a system so they

could get their reports in as well.

I think the list of shame that we publish every quarter has

worked well in getting those numbers down. We’re down to seven.

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Some of those folks have filed lawsuits against the government for

the audacity of the government asking them to report about what

they did with the money that the government gave them. So it

ranges from the, you know, absurd to some legitimate excuses.

Mr. TOWNS. Let me ask you this: The enforcement legislation

that is being put forth, do you think that’s going to further help?

Mr. DEVANEY. I do, I do. I think the enforcement piece that’s in

the bill will be very helpful. I think that there are some—as I read

the bill last night, there are some civil remedies. It doesn’t preclude

any criminal remedies. But that’s something that usually motivates

people to comply with the law. And lacking that enforcement mechanism in the Recovery Act, I think some people took advantage of

that.

Mr. TOWNS. All right. Let me just say to the chairman and to the

ranking member that, you know, I really appreciate your leadership in keeping this alive, and to you, Mr. Devaney, for your outstanding work.

I notice you made a comment, I don’t think—maybe some people

didn’t quite hear it, where you said this might be your last government assignment. I heard that, you know, and I want you to know

that I hope that your next assignment will be teaching those to do

what you’ve done so well.

Thank you very much, Mr. Chairman. And on that note I would

be delighted to yield to the ranking member.

[The prepared statement of Hon. Edolphus Towns follows:]

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Chairman ISSA. You second that?

Mr. CUMMINGS. I second that.

Mr. TOWNS. On that note I yield back.

Mr. CUMMINGS. Just two questions, Mr. Devaney. The Democrats

in Congress passed the American Recovery and Investment Act of

2009 to promote job creation, encourage long-term growth, foster

unprecedented accountability and transparency in government. The

Recovery Act establishes and granted broad authorities to the Recovery Accountability and Transparency Board. Among them is the

authority to issue testimonial subpoenas. Section 1524 says, the

Board may issue subpoenas to compel the testimony of persons who

are not Federal officers or employees, and may enforce such subpoenas in the same manner as provided for inspector general subpoenas under section 6 of the Inspector General Act of 1978. You’re

familiar with that; are you not?

Mr. DEVANEY. I am.

Mr. CUMMINGS. And, Mr. Devaney, have you ever exercised that

authority?

Mr. DEVANEY. No, I haven’t.

Mr. CUMMINGS. Given the fact that you never issued a subpoena

for testimony and that you clearly have been very successful in

identifying and eliminating and preventing fraud, waste and abuse,

did you ever feel as though you needed that authority to appropriately achieve your mission?

Mr. DEVANEY. I never personally have felt that way. I’ve been

very fortunate to have in my Federal career rather sizable numbers

of investigators, and we work very closely with the Department of

Justice and always use the grand jury subpoena power. So I’ve

never felt that way. I think there are some IGs who do feel that

way, that it is needed, and I respect their views. I have stated before publicly that I’ve never used it and don’t feel like I would.

Mr. CUMMINGS. Would you support legislative efforts to establish

a permanent board modeled on the RAT Board to lead governmentwide efforts to improve Federal spending transparency and accountability that does not include testimonial subpoena authority?

Mr. DEVANEY. I would probably support it either way. I think it

really doesn’t matter to me. I’ve never used it. It’s in the Recovery

Act. So I’m very anxious to see legislation creating a board that

would do this very thing. And it would be up to the members of

the board to use it or not use it.

Mr. CUMMINGS. Thank you very much. I yield back.

Chairman ISSA. I thank the gentleman.

We now recognize the gentleman from Utah for 5 minutes.

Would the gentleman yield for just a second?

Mr. CHAFFETZ. Yes.

Chairman ISSA. Mr. Devaney, do you know whether or not the

having that has ever been threatened or used? In other words,

have any of your people working for you ever said, you know, we

could compel testimony if you’re not willing to give it voluntarily?

Do you know whether that’s ever occurred on your watch now or

in the past when you have had it?

Mr. DEVANEY. I don’t think so. I think that there are other ways

to get to that goal.

Chairman ISSA. Okay, thank you. I yield back.

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Mr. CHAFFETZ. Thank you for your service. I appreciate your

coming to the committee a number of times and being so available.

Let’s go back for a moment to the award numbering system.

Maybe it’s just my simple way, but things like that just drive me

crazy. That seems like something that could happen within an hour

or two, okay, maybe a week. What is holding back—whose responsibility is this to do that?

Mr. DEVANEY. Well, of course, each agency, as I mentioned earlier, has developed these systems over numbers of years, 30, 40

years, so they have their own unique numbering systems. It means

a lot to them. They are very reluctant to give it up. They would

argue—the agencies would argue that it might cost a lot of money

to retrofit their systems to adapt to a new numbering system.

I think going forward we would like to do a feasibility study to

see exactly what that problem is, whether it’s as big as they think

it is, and try and convince the agencies and OMB that this is an

issue that’s way past its time.

Mr. CHAFFETZ. So the core responsibility for executing that and

putting that in place would be the OMB?

Mr. DEVANEY. OMB in conjunction with the agencies.

Mr. CHAFFETZ. Do you have any—how massive a problem is this?

Mr. DEVANEY. I don’t underestimate the fact that some agencies

are going to be outliers and are going to have to retrofit their systems to adapt to a new numbering system. I just don’t think this

is as big a problem as people try to make it out to be.

Mr. CHAFFETZ. The Sunlight Foundation’s been very good at

clarifying and bringing some things out. This statistic they threw

out, though, is quite stunning. Sunlight—325 programs had no reported information for all of fiscal year 2008, also stating that

USASpending.gov reported accurate information for only 35 percent of Federal programs. Do you find that to be true, and how do

we solve that?

Mr. DEVANEY. Well, I can only speak for our site, and I think our

site is extraordinarily accurate. I know that USASpending has had

problems from the very beginning. I think the day they launched,

they were talking about 50 percent error rate. So they make a good

effort, and I think they’ve improved, but I think as long as they depend on the agencies to send them information that’s been

scrubbed, and changed, and not coming directly from recipients

causes some of that inaccuracy.

Mr. CHAFFETZ. So how do we solve that? Should it be more penalties for noncompliance? How do we solve that?

Mr. DEVANEY. I think enforcement penalties are very helpful. I

think the single alphanumeric numbering system would be helpful.

I think migration from recipient reporting to agency reporting

would be extraordinarily helpful. And I think that the reporting

under the recovery program can be replicated in other spending.

Mr. CHAFFETZ. Thank you, Mr. Chairman. I yield back.

Chairman ISSA. I thank the gentleman.

We now recognize the gentleman from Virginia for 5 minutes.

Mr. Connolly.

Mr. CONNOLLY. Thank you, Mr. Chairman, and welcome, Mr.

Devaney.

20

Mr. Devaney, the chairman’s introduced some legislation sort of

creating a new layer of oversight. What’s your understanding of

what that would do and how it would relate to the current structure you head up?

Mr. DEVANEY. Well, my impression of the legislation is it is

meant to replace—as you probably know, the Recovery Board sunsets in 2013, so I’m assuming that if the legislation were to pass

earlier than that, it would replace the Board that I chair. But it

certainly continues the work of the Recovery Board and makes a

board a permanent—or as of 2018 a permanent board that will

carry on the work that we’ve done.

Mr. CONNOLLY. How well do you think the work you’ve done has

gone?

Mr. DEVANEY. I think it has gone very well. There have been, as

noted earlier, some mistakes along the way, but I think we’ve been

able to correct those right away. And I think we’ve brought transparency and accountability to this money. It’s a huge amount of

money. There are low levels of fraud. I happen to think the transparency is the principal cause of that. And I think when you put

transparency and accountability together, you get a great combination.

We’ve also used new tools. We’ve created what we call a recovery

operations center, which has used sophisticated analytical tools

that heretofore have been used principally in the intelligence and

law enforcement sectors. And the novelty of what we’ve done is

that those tools are now being used on government spending, and

the result has been quite, quite remarkable. It turns out that when

you use those tools, and when you put together a good, competent

analyst, you can actually interrupt fraud and prevent fraud from

happening in the first instance.

Mr. CONNOLLY. The model—I mean, this model is unique; is it

not? I mean, you were in the sense an experimental model, a new

paradigm for transparency and oversight.

Mr. DEVANEY. I think that’s true, I think we were an experiment.

I think if you talk about proof of concept, I think we’ve done it. And

that’s why I think this legislation makes an awful lot of sense. I

also think that Vice President’s—the President’s Executive order

yesterday makes sense as well.

Mr. CONNOLLY. Does your group also—you’re tracking to make

sure money is not misspent and there isn’t fraud or waste. But do

you also look at the other side of the equation, effectiveness, efficacy?

Mr. DEVANEY. Well, we’re certainly trying to make sure that

waste doesn’t occur as well fraud. I mean, we don’t concentrate

solely on fraud. A lot of the information that we develop in the recovery operations center, for instance, makes for good audits.

Mr. CONNOLLY. But do you also look at milestones in terms of

achievement? So, in other words, if X number of dollars are meant

to buy three locomotives in some kind of timeframe, that as a matter of fact that goal is met?

Mr. DEVANEY. No, but my sense is that the individual IGs in

those agencies do that job, but we don’t as a board take that on.

Mr. CONNOLLY. You talked a little bit in your testimony I think

about cloud computing and how it could actually lead to some savVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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ings for the Federal Government, including, I think, rental space

and other kinds of savings and more efficiencies. Could you just expand a little bit on that and how cloud computing could help the

government be more effective and to enhance transparency?

Mr. DEVANEY. Well, there is obvious money savings to be had. I

think when we first looked at it, we thought our little operation

could save about three-fourths of a million dollars right away, and

we could repurpose some of that equipment that we had into other

areas. So there is a savings.

The other thing I would say about cloud computing is it allows

you to be more flexible and to expand almost like an accordion. If

you need to do more, you can do more readily; you don’t have to

go out and buy more equipment, rent space and hire more people.

So it’s a technology that I think its time has come, and I think the

government ought to move there. We were the first government enterprise to actually move to the cloud. That was heralded by the

folks at OMB, and I think other agencies have followed.

Mr. CONNOLLY. And real quickly in the 10 seconds I’ve got, do

you believe the private sector can do this more efficiently maybe

than we can in the public sector?

Mr. DEVANEY. Oh, I don’t know. I think they certainly have been

a leader there, but I think the government is slowly recognizing

that we ought to be there.

Mr. CONNOLLY. Thank you, Mr. Chairman.

Chairman ISSA. You’re most welcome.

The gentleman from Pennsylvania Mr. Kelly.

Mr. KELLY. Thank you, Mr. Chairman.

I’m only going to take a minute, Mr. Devaney. I wanted to thank

you. I’ve only been here 5 months—I’m over here, by the way. I’m

the guy with the sunburn. It’s really refreshing. And I look at your

background. I love the fact that you’re in a leadership coaching program. For someone who has only been here 5 months, it is really

a pleasure to sit and listen to somebody who has used great common sense and understands what a stewardship truly is.

In our business there is an old saying, you have to inspect what

you expect. And what you’ve been able to shed light on today in

both your written testimony and your verbal, I just want to thank

you. This is great value to the American taxpayers, which is why

we’re all here. So I want to thank you for that. And I just want

to tell you it is really one of the most refreshing testimonies I’ve

had since I’ve been here. I thank you for your service.

And I heard what you said earlier the other gentleman had mentioned, that hopefully this is your last tour. I understand that.

There is something to be said for that. But thank you so much for

your leadership.

And having said that I want to yield back my time to the chairman. Thank you, sir.

Mr. DEVANEY. Thank you.

Chairman ISSA. I thank the gentleman for yielding.

Chairman, I think to make the record straight I want to go

through a line of thought. You said that what the Vice President

is proposing—and you and I have both had meetings with the Vice

President—you approve of. The President’s Executive order you apVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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prove of. I appreciate that you like all or most of what’s in our

draft—or our legislation now.

How do you envision that we get from the President’s Executive

order, which, if I understand it correctly, is a study to do X over

the next 6 months; our legislation, which is intended to be pushed

toward a particular set of goals with some specificity; Vice President Biden’s history and oversight of your role; how do we bring

that all together so that we get a permanent—Executive orders are

not permanent—and well-defined and bipartisan solution in that,

let’s say, 6 months time that the President has put out there——

Mr. DEVANEY. I think both efforts move the ball down the field,

and that’s what I’m really excited about. I think the goal is common between the two. I think we’re talking about eliminating redundancy, saving money, and doing it in the most transparent and

accountable way we possibly can. So as I look at both things, I

came away thinking they’re both good.

I think the—as I mentioned earlier today, I think that nothing

works better than legislation with very firm dates in it. I really

truly believe that. That’s an observation not just from my time at

the Recovery Board, but throughout my Federal career. I’ve seen

bureaucrats change their mind about change and agree to do it

once there’s a law and they had firm dates.

So I’m very excited about your legislation. I think the Vice President is trying to get the ball moving. And I think in large part the

President’s Executive order establishing this board is so we can do

some things now, so we can take some lessons learned, so we can

adopt some of the ideas I have and others have about trying to export what we’ve done throughout government, because it really

would make things more efficient, and it really would save money,

and I think the country needs that right now.

Chairman ISSA. Thank you.

I was at Sears this past weekend, and, like you, I’m old enough—

not that you’re old—but I’m old enough to remember how Sears

used to work, how Macy’s, all of them, used to work. You used to

have a tag either pinned or hanging from every piece of clothing

and everything else you bought, and it had a now nomenclature,

it said something, and sometimes it had a number. And every department had tags. And when you bought something, you had to

put it—take it to a department where the person was knowledgeable of how to add that item up and price it. And you couldn’t

check out in one place, because ultimately each department had

the expertise, they knew when was on special and so on.

Last weekend I went through, and like we all have come to expect, there’s a standard bar code on every product, you can go to

any checkout, you scan that bar code, they know what the price is,

they know what the discount is, they know all the aspects, it relieves it from inventory, and you leave the store with one credit

card receipt. Isn’t that really what you’re asking for all of us who

are ultimately customers and vendors of the government is that we

get to that level of uniformity so that, in fact, everything gets to

be easier to do with the government, whether you are, if you will,

a vendor or a customer?

Mr. DEVANEY. Yes.

Chairman ISSA. I’ll take that as a yes.

23

And with that I go to the ranking member for 5 minutes.

Mr. CUMMINGS. Thank you very much, Mr. Chairman.

You know, Mr. Devaney, I’ve told my staff at some point we

move from student to teacher. And in listening to your testimony,

I find it interesting that you didn’t go where I thought you were

going to go, but I saw you going there, when you talked about the

Secret Service and prevention, making sure that the President, the

others are safe. It is one thing to read a headline the day after and

talk about what happened if harm came. It’s another thing—and

you don’t get a headline for this—to make sure the same.

And I was thinking—I was wondering how did you get there? In

other words—I also tell my staff that there comes a point in time

when you begin to face your own mortality—not you, just talking

in general—and you begin to ask yourself, how do I make sure that

I’m most effective and efficient in what I do? And I guess what I’m

trying to figure out is how do we—it sounds like you have arrived

at a point of effectiveness and efficiency. And I think you said it

seems as if—I don’t know what you were referring to, accountability in agencies, you said sometimes it’s like a big plane or something like that. And it seems like so often we don’t think we can

get our arms around this because there are so many moving parts.

So I’m trying to figure out with the Executive order, with the

chairman’s legislation, how do we get folks actually moving in that

direction of effectiveness and efficiency and getting away from ‘‘itcan’t-be-doneness’’ attitude or cultural mediocrity. I know that’s

kind of a broad question, but can you help us with it? How did you

get there?

Mr. DEVANEY. Well, I don’t know if I’m there.

Mr. CUMMINGS. Oh, you’re there.

Mr. DEVANEY. I’ve made observations over the years that change

in government is a difficult proposition. People don’t normally embrace change in government. I’ve never been afraid of change. I

don’t believe in change just for change sake, but when it makes

sense, when you can save money or eliminate redundancy, it

strikes me that you have to change, and particularly in the circumstances we currently live in.

So I think that both the Executive order and the legislation are

going to cause people to understand the changes at hand, and we

are moving in this direction smartly. So I’m encouraged by that. I

had wondered whether or not the lessons learned in the Recovery

Board would have been thought well enough to have been embedded in legislation and also in the Executive order, and I think I’m

pleased that they seemingly have been. And I’m excited about the

opportunity to see some of those things spread out in all government spending.

Mr. CUMMINGS. The issues of lesson learned, you talked about

concrete deadlines, and I want you to tell us how significant that

is, because I agree with you on that.

The other thing that you talked about was technology. Do you

think that we—do you think there’s a technology that can even go

further and be even more effective than what we now have? And

what suggestions would you have to us for improving—I mean, if

you had to make some suggestions for improving the bill or improving the Executive order?

24

Mr. DEVANEY. I don’t think I’m ready to start making suggestions about improving either one of them just yet. I probably will

have some thoughts later on.

I think the technology opportunities are profound right now, and

taking advantage of things like cloud computing or the geospatial

technologies that we are using in Recovery.gov opens opportunities

for the American public to actually, for instance, in the recovery

program to drill down into their own ZIP codes or their own congressional districts and see exactly how that money is being used.

I don’t think that’s ever been possible before for the American public.

As an IG, if I want to understand where the money went, for instance, at the Department of Interior, I could have gone to the CFO

and asked, but I doubt very seriously whether that person could

have responded, certainly quickly.

So the new technologies have enabled the government to begin

to show the public of how their money’s being spent. Now, they

may not like what they see, but they have a right to see it.

Mr. CUMMINGS. Thank you very much, Mr. Chairman.

Chairman ISSA. Thank you.

The gentleman from Oklahoma Mr. Lankford.

Mr. LANKFORD. Mr. Devaney, welcome. Glad you’re here, and

thank for your testimony and your wisdom that you bring and your

experience and background in this.

Talk with you about a couple things here. The differences or the

problems that you would see associated with trying to transition

this from a one-time specific set of events, that is stimulus—as

rapid as that was to ramp up, to learn quickly how to do it, and

figure out how to do it and do it, but it is still a one-time event—

and an ongoing, every year-type program. What do you see as the

differences between those two in the reporting process?

Mr. DEVANEY. Well, I think maybe I’ll answer it this way. I think

the—and it is a partial answer to the ranking member’s question

as well. The fact that we had a deadline—the Recovery Act called

for these Web sites and the reporting all be done in 6 months. The

fact that we had that deadline drove us to accomplish it. Getting

the agencies, OMB and the Recovery Board to be marching toward

that goal probably would have not been accomplished had that

deadline not been in the act. So I see legislation with concrete

deadlines as they are embedded in the chairman’s legislation as

being a very good thing, because it leaves the discussion about

whether we want to change out of the picture. Change is going to

happen, and you only have a certain amount of time to do it.

Mr. LANKFORD. Do you see an issue, though, with a one-time

event like a stimulus versus an ongoing, year-after-year-type program; anything that you would be able to say to us, I think it

works well, and regardless if it’s year-after-year programs or onetime grant, it works the same?

Mr. DEVANEY. Well, I think, as I mentioned earlier, I think the

recovery program was a proof of concept. I think for those that had

doubted that it could be done, we’ve now shown that it has been

done, and it probably bodes well for future efforts.

Mr. LANKFORD. Okay. Burden on recipients. Obviously this is a

new layer of something that they have to be able to take on. My—

25

while I desperately want more transparency, I agree completely

with your statements about fraud, that the more you allow people

to be able to look in and be able to look over someone else’s shoulder and say, why exactly is that grant funded that way and what

is that, that helps tremendously.

I also don’t want to reduce the number of people competing for

a competitive grant nor reduce the number of bidders in a contract

situation. Talking about the burden on those recipients having to

self-report, I do think that’s going to drive away competition. Is it

a reasonable amount of burden?

Mr. DEVANEY. I think it is a reasonable amount of burden. I

think it was a giant question when we first started, when we first

were talking about recipient reporting versus agency reporting. I

think the burden on recipients was the number one issue. It was

an issue for the States. It was an issue for the recipients. It certainly was an issue for the OMB and for the Board, and we were

very worried about that. As a result we stood up a very robust help

desk so that when recipients came in to report for the very first

time and several reporting periods after that, they had a lot of

help.

But after two or three reporting periods, we began to see that

our help desk wasn’t being used anymore, and anecdotally we hear

from States and from recipients that they like reporting on

FederalReporting.gov. I think what they would like best would only

be to report to one place instead of multiple places. So I think if

we get down to one place where they can report, and we use some

of the technologies we used when we built FederalReporting.gov, or

use that infrastructure, we won’t have much of a burden on recipients.

Mr. LANKFORD. Terrific.

What other data would you suggest could be reported on that?

For instance, if you complete a grant, the final research, the finished product, is that something that could be reported there as

well so they’re not only tracking how much was spent, but what

the final product is that the Federal taxpayers paid for? Or the

progress, as is mentioned before, is there a way to be able to track

not only how much has been allotted to this, but what’s happened

so far so people can see this much has been allotted, this is what

has been accomplished so far?

Mr. DEVANEY. Absolutely. We do something like that right now.

We ask recipients to tell us what stage the project’s in. We could

certainly collect almost any data you wanted to collect.

You do get to a point where how much is too much, but on the

other hand, if that’s an important feature, we can build it in. We

have the flexibility on the infrastructure we have right now to scale

up to almost any amount of data to be collected.

Mr. LANKFORD. So if we’re doing a grant for a certain project that

denotes some research to something out there, at the end of it we

can also say, this was allotted, here is how it was spent, and here’s

the final paper that was presented at the end of it, and when the

research was done, here it is. It wouldn’t be an issue to be able to

collect it all together.

Mr. DEVANEY. Correct.

26

Mr. LANKFORD. Terrific. Thank you very much. And with that I

yield back.

Chairman ISSA. As you compare the grant application process

with your reporting, which one’s harder to do, the applications for

competitive grants that you’ve seen over the years or your reporting?

Mr. DEVANEY. Application for grants.

Chairman ISSA. Thank you. I kind of knew the answer to that

one.

We now recognize the gentleman from Pennsylvania Mr. Meehan

for 5 minutes.

Mr. MEEHAN. Thank you, Mr. Chairman.

And thank you, Mr. Devaney, not just for your presence here

today and the great work you are doing for the Recovery Board but

for the great work you have done for a number of years as inspector general. I had the good fortune to work as a U.S. attorney and

spent much time with some of your colleagues and appreciate the

significance of their efforts, but oftentimes, as well, struggled with

the reality that we would be oft just touching the corners sometimes of what we believed was out there.

And I have been intrigued by your testimony about some of the

tools you have been discussing that can greatly enhance our ability

to search not just where we have been but in realtime, because

your words, I think, to focus on preventing fraud from occurring in

the first time, rather than detecting it after the fact.

So can you tell me a little bit about the recovery explorer tool

that you have been implementing and how that works?

Mr. DEVANEY. Well, the Recovery Operations Center, which we

established fairly early on, after about 6 months, utilizes analytical

tools that, as I mentioned earlier, have been used heretofore in the

intelligence world and in some law enforcement settings and applying them to spending.

And if you think of fraud on a continuum where on one end of

the timeline the fraudster is thinking about stealing money and the

other end is sort of when he has it and he is running down the

street, what we are trying to do is we are trying to push the ball

further up toward the front end so that we are either preventing

fraud in the first instance or at least interrupting it in the middle.

Countless times we have been able to detect a company or an individual that has gotten money that probably shouldn’t have been.

It doesn’t mean that they have committed a crime; it just means

that we need to stop and look. So we have asked the agencies to

stop the flow of money so that it all doesn’t go out the door before

we are able to prevent it.

Now, as I mentioned earlier, it is difficult to articulate success

in this area, how much you have prevented from happening. It is

a lot easier for me to stand here and talk about the number of arrests or number of referrals to the Department of Justice. And that

is what I have done for most of my career, played that, sort of, stat

game. It is harder to articulate success in the prevention business.

I struggle with it myself, but I know that—I know that I think we

have prevented fraud in this instance.

And I think transparency has a lot to do about it, but it is also

about sort of a mind shift that IGs and other enforcement entities

27

are having about not just detecting it but preventing it from happening.

Mr. MEEHAN. What kind of data does it display when you are

talking about the broad spectrum of information that is out there?

Is there an intelligent aspect to this, in which it is looking for particular indicators or it makes available data that then somebody

can mine with a specific purpose?

Mr. DEVANEY. Well, we do have formulas and algorithms that we

use to run against the data base, the 1512 data base, the recovery

data base, if you will, that identifies anomalies for us. Once again,

this doesn’t mean necessarily that a crime has been committed or

even that fraud has happened. It might mean, for instance, this

would be a good candidate to audit, to have an IG do an audit on—

not an investigation, but an audit. On the other hand, it might

identify, as we do countless times, money going to somebody who

is on the excluded parties list, because we have that data base inhouse.

I happen to think that one of the issues that is under way in government right now, being managed by OMB, is the do-not-pay list.

I happen to think that our platform could do the do-not-pay list

fairly soon. I think we have three of the data bases, of the five,

right now. If we got the other two, we could probably stand that

up maybe in a month or 2.

So there are great opportunities here to have it centralized in

one place so that both agency personnel can come into the Recovery

Operations Center before they give the money out and that enforcers like IGs or the FBI or GAO can access information. And maybe

on top of some of the other data bases, we have the law enforcement data bases that they would have access to.

Mr. MEEHAN. And so you are talking right now about work that

is done within your data system and monitoring the dollars that

have been part of the Recovery Act. But my assumption here is this

has tremendous applicability across the various agencies where we

would be able to look at somebody that is on a do-not-pay list that

might be doing work with two different kinds of agencies.

Mr. DEVANEY. I think it does have that application, and that is

what I am excited about, that we would take what we have done

here and apply it to all government spending. We will be preventing billions of dollars of fraud, and we may be putting investigative bodies and U.S. attorneys out of business.

Mr. MEEHAN. Well, there is plenty of work for all of us to do.

When you talk billions of dollars, that makes a big difference.

Thank you for your service and your forward thinking.

Mr. Chairman, I yield back my time. Thank you.

Chairman ISSA. I thank the gentleman.

We now recognize the gentleman from Illinois, Mr. Quigley, for

5 minutes.

Mr. QUIGLEY. Thank you, Mr. Chairman.

Thank you for being here.

Let me raise the issue of tax expenditures as it applies to these

issues, if that is all right with you. Your thoughts on whether tax

expenditures should be incorporated into this sort of executive

order or into the new bill that the chairman is proposing or perVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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haps a separate bill, such as a transparency in government act?

Your sense of the best way to move forward on that?

Mr. DEVANEY. Well, I am reminded of a recent event where we

had an IG, I believe, or GAO came out with a report that basically

said that taxpayers who owed a lot of money were actually getting

some of these awards. And the first question asked of us was, well,

why didn’t you detect that? And that is because, you know, there

are prohibitions from the IRS of sharing with us taxpayer information.

So I think perhaps the time has come for some waivers from that

act. And I would love to see that, the ability for us to have a data

base that had the individuals that owed tax money. We could keep

that in a very secure environment, and we would have prevented

money from going to tax recipients that owed tax money.

Mr. QUIGLEY. And the best way to do that, in terms of your sense

of this bill or an executive order?

Mr. DEVANEY. Well, I think it could be—it probably would be better done in legislation, because I think it is a law that causes the

IRS to be prevented from sharing it with law enforcement.

There is a proviso that that kind of information can be shared

with GAO. And I, quite frankly, think, you know, even GAO would

say that the IGs are just as responsible enough to have that kind

of information.

Mr. QUIGLEY. Thank you.

Thank you, Mr. Chairman.

Chairman ISSA. Would the gentleman yield?

Mr. QUIGLEY. Yes.

Chairman ISSA. Perhaps you can clear something up I am unclear on. There are tax expenditures, and then there are tax cheats,

or detected tax cheats. If I understood correctly, the data base that

potentially legislation would give you would be access to tax cheats,

people who—not tax expenditures per se. It is a more narrow definition?

Mr. DEVANEY. Right.

Chairman ISSA. Thank you.

Mr. QUIGLEY. Mr. Chairman.

Chairman ISSA. Oh. The gentleman reclaims his time.

Mr. QUIGLEY. Yes. And if I could yield to the ranking member.

Mr. CUMMINGS. I thank the gentleman for yielding.

Mr. Devaney, as part of the continuing resolution for fiscal year

2011, budget negotiators slashed the Electronic Government Fund

from a proposed $35 million down to $8 million, putting Web sites

such as Data.gov, USAspending.gov, Performance.gov, and the IT

Dashboard at risk of being shut down.

Are you aware of those cuts?

Mr. DEVANEY. I am.

Mr. CUMMINGS. Just yesterday, a coalition of transparency and

open government groups wrote to the leadership of the House Appropriations Committee’s Financial Services Subcommittee urging

them to restore funding for the Electronic Government Fund. Their

letter said this, ‘‘Cuts to the E-Government Fund in fiscal year

2011 have already hurt successful projects. Needed upgrades to increase transparency and improve data quality have been delayed or

abandoned, and two projects have already been terminated. These

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cuts are pennywise and pound-foolish. The E-Gov Fund supports

powerful tools for reducing waste, fraud, and abuse and for creating private-sector jobs. And given appropriate funding, these

projects result in benefits far in excess of their cost.’’

Mr. Devaney, you have some practical experience with the technological tools for routing out waste, fraud, and abuse. You just

talked about it, when you talk about the cloud system. Recovery.gov is one of our best examples of transparency-enabled accountability. Do you agree on the importance of these Web sites for

generating accountability?

Mr. DEVANEY. I do. I have become a very aggressive advocate of

transparency if you believe, as I do, that transparency drives accountability. Ultimately, you save money, and that money is far in

excess of whatever we are talking about here.

Mr. CUMMINGS. And how big of a role do you believe resources

should be? In other words, how important was it that the RAT

Board had the kind of resources it did to start from scratch, build

out a good system, and then continue to enhance and improve it?

Mr. DEVANEY. Well, I think it was—I think it was a guess as to

how much money we would have needed, and I think it was a very

on-the-spot guess. And I think we are going to come in under our

budget for 21⁄2 years. But having said that, I think the pennywise,

dollar-foolish might be apropos in this particular instance.

Mr. CUMMINGS. And looking back at the Recovery.gov, what are

the resource limitations, if any, in extending this kind of system

governmentwide, and how tall an order is that?

Mr. DEVANEY. Well, with respect to money, I don’t think it is actually much money. It is far below what people might imagine it

to be. I think with a little extra money, the board would be able

to use its existing infrastructure and sit some of these other systems on top of that and create a one platform, as the chairman

mentioned earlier, that would do essentially the same thing that

countless Web sites, collection display Web sites, across the government do now.

Mr. CUMMINGS. Thank you.

Chairman ISSA. Thank you.

I will recognize myself. I guess I am what is left.

Chairman Devaney, I am assuming that your—you will never

forget this chart, nor will I.

Mr. DEVANEY. It is memorable.

Chairman ISSA. Well, as I look at this chart—and not to be

counter to the ranking member, because I share with him the frustration that, in this basket of cuts, we seem to be cutting before

we, in fact, fill, if you will.

But your proposal and what is intended out of our legislation

and, quite frankly, what is intended out of the President’s Executive order will ultimately save money on two fronts, won’t it? One

is, if you move to cloud computing, if you tell essentially all the

agencies that we are going to have this single checkout place that

is really good at checking out, that sets it up, that relieves that

burden, other than transition costs, no matter what that cost is—

and you are right, we shouldn’t sit here and try to say it is $51

million or it is $5.1 million—isn’t it inevitable that that cost, postVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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transition, is less than we spend on this labyrinth of information

today?

Mr. DEVANEY. Absolutely.

Chairman ISSA. Let me go through a couple of quick questions

just in closing, because I think we should make the record clear on

where we are today as government.

Oh, okay. We may have one more questioner.

Some years ago—and you have been in government for 40-plus

years. Well, this was about 30 of those years ago. If you remember

the scandal when they found out that the Federal Government, the

largest purchaser of IBM Selectric typewriters in the world, paid

more than the State of California paid for IBM’s Selectric’s contract—Selectric II or Selectric I. And there was no fraud. They simply bid two separate times, and California apparently was just a

little better in the bid and IBM came in less. And the government

didn’t know about it until a whistleblower found out that, in a combined agency, that the State paid less for the same typewriter and

that person tried to buy through the State to save money.

It is now 30 years later. If we are paying for a Dell computer,

if we are paying 20 different amounts, hypothetically, based on

bids—and Dell computers would be a bad example. But if we do

have these discrepancies between hundreds of different purchase

prices on substantially or identically the same thing, do you have

the resources in government or do you know of those resources that

would call that out so that we could get the best and lowest price?

Mr. DEVANEY. Well, offhand, I would say that, you know, the

buying power is enhanced when you do things—when you centralize your buying. And so, if we take that map that you have up

there and we reduce it to a reasonable picture with one platform,

it would strike me that we could do it a lot cheaper, because we

would eliminate all of the myriad of buying opportunities that are

going on right now across the government and centralize it in one

place and achieve the leverage that we would need over the vendors.

Chairman ISSA. So even though that is not the first generation

of what you are doing, the idea that when people roll up what they

are paying, that you can look and say, where are the anomalies

and how much we are paying, where are the best values, that is

pretty easy to do over the entire government but only if you collect

it in one place?

Mr. DEVANEY. Right.

Chairman ISSA. Well, let me ask one last question, and it is—I

want a long answer. I am not setting you up for the ‘‘yes, sir.’’

Mr. DEVANEY. Okay.

Chairman ISSA. Historically, these reportings have been done by

essentially Cabinet positions and sub-Cabinet positions. Both the

President and we are talking about a single point.

Are we talking in the best case about a single point that is independent? Or is there any other conceivable way that would be as

good as an agency that did one and only one thing, which was to

run this collection, enforcement, and analysis?

Mr. DEVANEY. I think if you are referring to the membership of

the board or what that would look like, I think that one of the observations I made as I look back on the 21⁄2 years is, the all-IG

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board clearly indicates the independence that we all strive for and

probably raises the public’s perception tremendously that they are

getting, you know, an honest shot here.

I think, however, that to make things work, to actually get the

job done, you have to have a synergy between a board and the Federal agencies and OMB. And a board that has that kind of mix on

it I think would be a good idea. I think that if a majority or at least

half of the members are IGs, it presents that, sort of, optics of independence that I think is important, as well.

So I think the board that is contemplated in the law that you

have proffered and also my understanding is the Vice President’s—

the President’s Executive order, the Vice President’s intention is to

try to achieve that balance on that board, as well.

Chairman ISSA. So what you are saying is, no matter how we

achieve the board, as long as it is independent and perceived legitimately to be independent, it can work. If it becomes captured by

any one agency or entity, it loses its effectiveness.

Mr. DEVANEY. I would be very careful about it being captured by

any particular interest group.

Chairman ISSA. Thank you.

The gentleman from Idaho, Mr. Labrador.

Mr. LABRADOR. Mr. Chairman, I yield back the time.

Chairman ISSA. Okay.

He meant to me.

I am going to use this because I have asked my questions—and

I appreciate the gentleman yielding.

This is not the last time you are coming before this committee.

You may be out of office, but we will use our subpoena power to

bring you back to get educated. You know, there are just some

things we can’t live without, and one of them is your advice and

counsel. I know we would never have to use that. You have been

very generous with your time, both at these hearings and anytime

we have called on you for advice. So I want to thank you publicly

for that.

I want to pledge, on behalf of the ranking member and myself

both, you are one of the few people that we agree on. We don’t have

arguments about the job you are doing. We want to see you succeed, and we want to see you have a legacy. So on behalf of the

committee, thank you for your service, and we look forward to continuing to work with you in the future.

And, with that, we stand adjourned—no, I am sorry—stand in recess. I was really getting choked up. We stand in recess as we set

up for the second panel.

[Recess.]

Chairman ISSA. We now recognize our second panel of witnesses.

The Honorable Kim Wallin is the controller of the State of Nevada. And Nevada is one that I always have to get right because

I want to say ‘‘Nevada,’’ and then I get yelled at.

Mr. Patrick Quinlan is the chief executive officer of Rivet Software.

Ms. Ellen Miller, a returning guest, is the executive director of

the Sunlight Foundation.

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And Craig Jennings is the director of Federal fiscal policy but

was not on my list here. But thank you, and welcome. And thank

you for your work on OMB Watch.

Pursuant to the committee rules, would all witnesses please rise

to take the oath and raise your right hands?

[Witnesses sworn.]

Chairman ISSA. Let the record indicate all witnesses answered in

the affirmative.

This panel is every bit as important as the first panel, but there

are four of you, so we would ask that you very much summarize

your entire statement to keep it within 5 minutes and allow time

for questioning. Your entire written statement will be entered into

the record.

Ms. Miller.

STATEMENTS OF ELLEN MILLER, EXECUTIVE DIRECTOR, SUNLIGHT FOUNDATION; PATRICK QUINLAN, CHIEF EXECUTIVE

OFFICER, RIVET SOFTWARE; KIM WALLIN, CONTROLLER,

STATE OF NEVADA; AND CRAIG JENNINGS, DIRECTOR OF

FEDERAL FISCAL POLICY, OMB WATCH

STATEMENT OF ELLEN MILLER

Ms. MILLER. Thank you, Mr. Chairman. Thank you for inviting

me to attend the hearing today. And I thank all the members of

the committee also.

My name is Ellen Miller, and I am co-founder and executive director of the Sunlight Foundation, a nonpartisan nonprofit dedicated to using the power of the Internet to catalyze greater government openness and transparency. We take our inspiration from

Justice Brandeis’ famous adage that sunlight is said to be the best

of disinfectants.

The Sunlight Foundation focuses on transparency and accountability for government by developing data bases, tools, and policies

that eliminate the influence behind decisionmaking. We want citizens to understand the outcomes of government decisions. We want

them to be able to hold government accountable for its work.

We have long been involved in improving Federal spending

transparency. We funded the first publicly available data base of

government spending, FedSpending.org, that was developed by the

nonprofit organization and my colleague on this panel’s organization, OMB Watch. We have followed earmarks, analyzed grants

and contracts, scraped the House disbursements, identified Federal

subsidies, and dug into tax expenditures. Recently, we have spoken

out against Congress’ deep cuts in funding for E-government programs.

Yesterday was quite the day for government transparency. The

chairman introduced a sweeping transparency bill, the DATA Act,

that would transform how we track Federal spending, establishing

an independent body to track it all on a single Web site requiring

the use of consistent, governmentwide standards. This new Federal

Accountability and Spending Transparency Board would oversee a

successor site to USAspending.gov.

While the creation of the FAST Board will garner the lion’s share

of attention, the effort to create governmentwide financial data reVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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porting standards should not be overlooked. Indeed, the Sunlight

Foundation supports another piece of legislation, the Public Online

Information Act, that promotes the creation of governmentwide

data standards and sets up an entity with similar responsibilities.

And here is more good news. Apparently the White House agrees

with the President—agrees with the chairman—sorry—and vice

versa. Yesterday, the White House announced an Executive order

that appears to contain some of the same elements as the chairman’s legislation. Because of these recent developments, we would

like to submit additional written testimony on the chairman’s bill

for the record, if that is agreeable.

Chairman ISSA. Without objection, so ordered.

Ms. MILLER. We all agree on a few basic principles: Government

spending must be transparent. As citizens engage with government

online, they must be met step by step with tools that empower

them to track every dollar the government spends. We are cautiously optimistic that technology makes this dream obtainable.

And we all appear to agree that we need an independent board to

do that, one such as the DATA Act and the White House Executive

order have outlined.

We need this because of the structure of government. OMB, for

example, has multiple and sometimes conflicting responsibilities. It

has the nonpolitical task of enforcing Federal financial reporting

requirements, but it also must strive to avoid creating political

problems for the President. And this is true whether we are talking

about a Republican or a Democratic administration. These responsibilities clash when it comes to publicly criticizing agencies for

their failings, such as when they do not fully report their spending.

I have previously testified before this committee about our analysis of grants reported in USAspending.gov. We had identified almost $1.3 trillion in spending that failed to meet one of the three

basic metrics we use: timeliness, completeness, and accuracy. But

OMB has done little to correct the problems that we uncovered.

When we recently revisited this analysis for 2010, the problems

had not abated. And although much of the fault lies with the agencies, it is OMB’s responsibility to publicly identify data quality

problems and work to resolve them.

In providing genuine accountability for government spending, the

government must keep in mind three principles: First, transparency is government’s responsibility. Second, public information

must be online. Third, data quality and presentation matter. Data

should be made available online in a timely fashion so that it can

be easily found and reused by anyone, subject only to commonsense

limitations.

I applaud the committee’s attention to these matters and thank

you for the opportunity to discuss them with you today. And I am

looking forward to your questions. Thank you.

[The prepared statement of Ms. Miller follows:]

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Chairman ISSA. Thank you.

Mr. Quinlan.

STATEMENT OF PATRICK QUINLAN

Mr. QUINLAN. Chairman Issa, Ranking Member Cummings, and

distinguished members of the committee, my name is Patrick Quinlan. I am the CEO of Rivet Software in Denver, Colorado. To date,

our company has helped over 1,300 of the top public companies in

the United States transform the way they communicate their financial information to the public via the SEC. Thank you for the opportunity to give testimony today on how to better leverage technology to achieve transparency and accountability in Federal

spending.

The legislation that Chairman Issa has introduced and has been

supported by the Vice President and the President in their own Executive order requires the board to designate consistent data standards for Federal spending information. Data standards are nonproprietary and a way of creating efficiency across data bases for

true transparency, similar to the barcodes that you mentioned earlier.

In essence, a demand for transparency is also a demand for accountability. To accomplish this goal, we must start with a data

standardization, as was discussed by the honorable Mr. Devaney

and by you, Congressman Issa, such as XBRL, which is eXtensible

Business Reporting Language. It is governed by an international

nonprofit consortium and similar to HTML. XBRL makes documents’ content machine-readable and instantly available for research. It is an open standard owned by no one but used by over

44 countries to manage data efficiently and accurately.

Our government operates one of the largest data warehouses in

the world but fails to turn that data into real information. In effect,

we are constraining innovation, wasting funds, and obscuring information, all in the name of data transparency.

Noble initiatives such as Data.gov and USAspending.gov look

good but are nonfunctional. They claim data is available and accessible, but if you cannot get an accurate answer, then it is not real

information. On the other hand, Recovery.org’s data is incredibly

powerful once converted into XBRL.

At Rivet, we have developed a taxonomy creator to impose a new

data structure on the Recovery.gov data set. We can instantly determine, as an example, grant spending as distinct from loans and

contracts by quarter and disbursed from the Department of the Interior to my State of Colorado, a search that would have required

multiple manual steps using the current XML format. The point

being, we must find more opportunities to mandate data standards,

and XBRL is the data standard to help us get there.

So what can this committee do to create true transparency in

Federal spending? First, look at the SEC for best practices. They

have set and enforced the data standard using XBRL, which has

developed a self-funded industry. The SEC’s 2008 visionary mandate for XBRL has created at least 15 companies and roughly 1,500

jobs.

Finally, here is an extra bonus. By passing this legislation, you

will be creating jobs. With access to this tagged, accurate data, enVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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trepreneurs will create tools with uses we cannot even imagine

today. You will form a new, self-funded industry, creating thousands of high-tech jobs, and achieve true transparency and accountability. XBRL has the potential to become a tool as effective

as the military’s GPS technology. Now look at the myriad of applications, businesses, jobs, and tax dollars generated that have been

created by leveraging this data.

The benefits of this new technology are lower costs, increased

sharing, and enhanced communication. Federal fund recipients already spend too much time and money on compliance and reporting. Early XBRL adopters know that standardization makes compliance easier and reduces work. Many public companies have already saved money in both their internal and external reporting

systems thanks to this technology.

In conclusion, for us to move forward as a country, grow hightech, and reduce the massive deficit, we must stop dealing with

fuzzy numbers and start tracking where and how our money is

spent. We stand ready to use the public government data to help

people make better decisions as soon as the data is using the right

technologies. But I hope it will not be just us doing that; the field

will be wide open for new tech companies to make this data and

make this more valuable.

On behalf of my company in Denver, the thousands employed by

our industry, and the millions of Americans we serve, I thank you

for the opportunity to be a part of this discussion. We wholeheartedly endorse Chairman Issa’s bill, and I will be happy to answer questions.

[The prepared statement of Mr. Quinlan follows:]

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Chairman ISSA. Thank you, although you can go longer. As long

as you are talking like that, it is okay.

Ms. Wallin.

STATEMENT OF KIM WALLIN

Ms. WALLIN. Good morning, Mr. Chair, ranking member, members of the committee. For the record, I am Kim Wallin, Nevada’s

State controller. I am also the former global chair of the Institute

of Management Accountants, who was one of the early adopters

and founders of XBRL.

This morning, I want to talk to you about how grant reporting

can be improved through standardization and using a widely used,

freely available, interactive data standard.

Standardization is an important piece for improving transparency and accountability. In order to be able to compare apples

to apples, the Federal Government needs to standardize what is

being reported from agency to agency. To give you an example, the

Department of Agriculture classifies fuel in lawnmowers as a ‘‘supply’’ and fuel in trucks as ‘‘fuel’’ or ‘‘travel.’’ Other agencies call fuel

‘‘fuel’’ or ‘‘supplies.’’

In 2004, there was a document that started the framework for

standardization across agencies. It is called, ‘‘Uniform Data Elements and Definitions for Grant Budgeting and Financial Reporting, Version 1.’’ So we won’t be starting from scratch.

XBRL is a standard that I recommend for using for grant and

contract reporting and other reporting requirements under the proposed bill. XBRL is nonproprietary and widely accepted. It complies

with accounting principles and can be easily updated as new requirements come along. XBRL is about using good business best

practices.

XBRL is not a software or a product; it is a format for data that

gives it structure and meaning. It is a standard that can be incorporated into software tools, much like how the HTML standard is

used for building Web pages.

Let me share with you Nevada’s experience with XBRL. A few

years ago, the Department of Agriculture in our State was testifying and asked if they could have standardized reporting. Immediately I looked at XBRL because it is about standardized reporting. We conducted a case study where we took their two larger

EPA grants and used XBRL to do the grant reporting. Before

XBRL, it was taking 2 weeks to prepare the report. Under XBRL,

the report preparation was reduced to a day or even an hour.

XBRL helped meet the goals of the Department of Agriculture,

which were timely and accurate data, stronger internal controls, reduced costs, standardization, and seamless data exchange. Additional benefits were that it was scalable and adaptable.

A big concern from the State’s perspective to implement this new

proposed legislation is the cost of compliance. I haven’t had an opportunity to talk to my peers in NASACT on what they think the

additional cost would be.

Besides asking for money to help the States comply with the additional reporting and oversight, we need to find a way to streamline and eliminate redundant reporting and standardize the grant

reporting requirements between all agencies. One way we could reVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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duce the cost of compliance, the reporting burden, at the same time

improve transparency and accountability, would be to have a single

repository where States would report.

I envision this being similar to a white paper I wrote on using

XBRL for the Nevada Business Portal. With the Business Portal,

businesses only have to register in one place, and all their business

registrations and tax reporting requirements can be fulfilled at

that one site.

Many countries around the world are going to these very efficient

portals. Australia now has a governmentwide portal, and they estimate filers are saving an estimated $800 million annually on compliance costs. If States could report through a similar single repository, the Federal agencies could go to that repository and generate

the reports that they need. This would eliminate the redundant reporting and multiple formats that States are currently required to

do. This will save millions of dollars in compliance costs for the

States, as well as freeing up resources to allow for more time to

do analytics and reduce improper payments.

By using XBRL, the Federal agencies would be able to generate

the reports that they need and not have to spend millions of dollars

buying rigid proprietary systems. They would have more time to

spend on analytics, to look for fraud, waste, and abuse.

Had XBRL been used for ARRA reporting, it would have reduced

compliance costs for the States, improved data integrity, and provided for more transparency. When States began reporting under

the ARRA requirements, the Recovery Board was still making

changes to the template an hour after the reporting site opened.

This caused errors to be made on the State side. Had they been

using XBRL, they could have made changes behind the scenes,

which would not have impacted the States.

To give you an example of what I mean, the FDIC has been

using XBRL for their bank call reports for many years. When the

FDIC decides to change what they want to see in the call report,

they change it on their reporting site. Banks don’t have to go in

and change their systems, and oftentimes they don’t know anything

has even been changed. The FDIC saw the error rate go from having 30 percent errors to zero and data quality improving from a low

of 66 percent to now 95 percent, and reporting time decreased from

weeks to a day.

XBRL goes beyond reporting and provides the mechanism to sort

through mountains of information and to help governments to

make informed decisions. Using XBRL will improve transparency,

accountability, and give citizens and government officials alike better access to how we are spending taxpayer dollars and what we

are doing with it.

Thank you very much for the opportunity.

[The prepared statement of Ms. Wallin follows:]

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Chairman ISSA. Thank you.

Mr. Jennings.

STATEMENT OF CRAIG JENNINGS

Mr. JENNINGS. Chairman Issa, Ranking Member Cummings,

members of the committee, my name is Craig Jennings, and I am

the director of Federal fiscal policy at OMB Watch, an independent,

nonpartisan watchdog organization. Thank you for inviting me to

testify today on this important topic on spending transparency and

ways to improve it. We want to commend this committee for holding today’s hearing and for efforts to increase access to accurate

spending data.

In general, we are very supportive of proposals to strengthen

public access to government spending information. And such transparency is a nonpartisan issue, as demonstrated by the bipartisan

co-sponsorship of the Federal Funding Accountability and Transparency Act of 2006, the unfortunately acronymed ‘‘FFATA,’’ where

two Senators with different ideological backgrounds worked closely

together to draft and advocate for the bill. We hope a similar approach is taken with the Digital Accountability and Transparency

Act [DATA Act].

On June 9th, we were given a summary and section-by-section

of the DATA Act, along with a briefing by committee staff. However, we did not receive a copy of the legislative language during

that briefing and, therefore, cannot comment about the DATA Act

with any specificity. As with all legislation, the devil is in the details. Accordingly, we look forward to reviewing the legislative language and working with Chairman Issa as the bill moves through

the House.

Since it was formed in 1983, OMB Watch has focused on bringing greater accountability to our Nation’s spending. We played a

leadership role in the passage of FFATA. We also developed

FedSpending.org, a Web site that implemented many of the goals

of FFATA by providing online searchable and downloadable tools to

monitor much of the Federal Government’s spending. Because of its

success, FedSpending was licensed to the Federal Government and

came USAspending.gov.

In other words, OMB Watch has nearly 30 years of policy and

practical experience with bringing greater accountability to Federal

spending. And based on our experience, OMB Watch can recommend the following to drastically improve Federal spending

transparency.

First, improve data quality by publishing Treasury data. Agencyreported obligation information is not the most accurate when it

comes to how much was actually spent—that is, outlays. The best

spending data comes from the Department of Treasury, the Nation’s checkbook. That data should be made available online and

compared to recipient reports.

I should also note that USAspending.gov per se does not have

data quality issues. Rather, the Federal Assistance Awards Data

System [FAADS], one of the two data sources that are displayed on

USAspending.gov, is what is at issue here. Replacing

USAspending.gov with something else will do nothing to fix the

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Federal spending data quality unless the problems inherent in

FAADS are addressed.

Two, establish a unique entity identification system. Each recipient of Federal funds should be uniquely identified across all data

systems in government. We need to know if the Acme, Inc., that

received a contract from the Pentagon is the same Acme, Inc., that

received a ‘‘poor contractor’’ review by State, is the same Acme,

Inc., that appears in EPA’s Toxics Release Inventory.

It seems obvious, but there is no unique identifier system

throughout government, and the current system used within

USAspending.gov is deeply flawed. Without a comprehensive, universal unique identification system, Federal spending transparency

will be hamstrung. This unique ID must include, at a minimum,

the parent company ID, headquarters, and facility.

Third, shine a light on the shadow budget of tax expenditures. In 2009, the Federal Government spent $556 billion in grants and

$538 billion in contracts, as reflected in USAspending.gov. By comparison, the government spent an estimated $1 trillion in fiscal

year 2009 through tax expenditures, which is not monitored by

USAspending.gov.

To see why tax expenditure transparency is necessary, consider

that the home mortgage interest deduction and Section 8 housing

vouchers are both designed to help Americans afford homes. From

a housing policy standpoint, there is little difference between these

two policies. But from a reporting and performance measurement

standpoint, there is a world of difference.

And, finally, with respect to the preliminary information that we

received on the DATA Act, I would say that the success of the Recovery Board was largely related to the funding it received from

Congress. USAspending.gov has never received dedicated funds.

Congress needs to provide funds sufficient for the Federal Accountability and Spending Transparency Board to do its important work,

and Congress should view this appropriation as an investment.

We are generally supportive of the creation of a separate, independent agency charged with supporting Federal spending transparency. OMB Watch believes that the Recovery Board has been

exemplary in overseeing the Recovery Act transparency, and we

would be pleased if a successor to it carried on its powers and its

work for all of Federal spending.

We are concerned, however, that the FAST Board would be sunset. Additionally, USAspending would, under the act, also—or

would go away. And we think that millions of dollars shouldn’t be

used to reinvent the wheel.

Thank you, and I look forward to your questions.

[The prepared statement of Mr. Jennings follows:]

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Chairman ISSA. Thank you.

I recognize myself for the first round of questioning.

You know, Mr. Jennings, hopefully, as we negotiate with the administration on bringing together all these plans, expenditures,

particularly Treasury expenditures, will, in fact, be part of a manager’s amendment in a final bill. As you can imagine—and I think

this is not a surprise to any of you—we can only go so far in proposing. We need to make sure that we keep the President and his

administration where they mostly are now, which is on board in

concept.

But having said that, Ms. Miller, I am going to ask you a particular question. One of the conceptual differences that has existed

that we are trying to narrow is this whole question of OMB and

our belief—and I think you share this with us—that they have an

inherent conflict, that they will never, in fact, be the bad guys in

the room insisting on enforcement.

Do you want to elaborate any more on what the other—I mean,

if we don’t get an independent board, what do you see happening

if OMB were to take this over under the present structure of their

multiple missions?

Ms. MILLER. Well, I think proceeding without an independent

agency would be a waste of time.

And I think, also, the good news is, the administration does appear to agree with you that these kinds of responsibilities with respect to monitoring spending, putting it online, making it accessible for everyone, must be created in an independent agency.

And I would certainly agree with Chairman Devaney’s comment

earlier this morning, that the most effective way to make this happen is to pass a law to make it happen.

Chairman ISSA. Yes, he was very supportive of the body he was

before, and I am glad to hear that. I need to be with him with the

President one time as he says that, too.

Mr. Quinlan, you mentioned fuel, or it was mentioned, the multiple reporting of fuel. But with your software and particularly

using something like XBRL, wouldn’t it be true that people could

report fuel for automotive use, truck use, bus use, lawnmower use,

and it could be aggregated so that one report would say, I just

want to look at all fuel; another one could actually break it down?

Isn’t that one of the advantages of that kind of strength the

metadata gives you to build tools so that you can look at, for example, fuel reported multiple different ways but, ultimately, the user

could determine what they wanted to see in a way that was meaningful to them?

Mr. QUINLAN. That is correct, Mr. Chairman. And it goes back

to the conversation that Chairman Devaney had, as well as Ms.

Wallin, that it all starts with a common taxonomy. You need to create one accounting structure across the Federal Government to ensure that fuel is fuel.

But this is where XBRL can be helpful in the transition process.

By going in and mapping against that initial common taxonomy,

we don’t have to wait for everybody to make the change. We can

start by mapping each individual Cabinet’s accounting structure or

reporting structure directly into the newly created government

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structure, and we can start that reporting immediately. So XBRL

and mapping allow that transition to happen seamlessly.

Chairman ISSA. Now, Ms. Wallin, I agreed with everything you

said, but I was concerned at one part of your statement where you

talked in terms of increased costs of reporting. Is it possible that

if we do this right, other than transition costs, that we are actually

driving down costs for your State? Don’t you see your vendors, your

customers, your constituents reporting to you and reporting to us

often?

And, additionally, don’t you see yourself reporting as a State to

multiple agencies? If we could reduce your reporting to one unified

report or at least any given activity only being reported one time,

wouldn’t that save you money?

Ms. WALLIN. Mr. Chairman, yes, it definitely would save us

money. It would reduce the redundancy that we have. It would reduce the confusion that you have. And it would give you the transparency that we need because all the information would be in one

site. So I agree with that. So we just have the incremental costs

of the transition.

Chairman ISSA. Now, I am going to ask a closing question to all

of you, and it is deliberately off of what we are all talking about,

government vendors and so on. But I am a Californian. So, unlike

Nevadans, I file a big income tax return to the State of California.

And I have always wondered why I have to file two separate reports, why I don’t report one time and let the Feds and the State

that have to, in fact, verify each other’s figures and deductions for

us as Californians, do their work. I understand separations.

If we were to have a common platform for Nevada, doesn’t that

give you the ability in any aspect of your work to form compacts

with the other States and gain access to information that might be

proprietary to them but ultimately of interest to you reciprocally?

Isn’t that one of the values of a single reporting, is that, assuming

you are given access, you can get information that, today, you

would have to go to your adjacent States, go through disparate

data bases to try to get information that you both may need in

common?

Ms. WALLIN. Mr. Chairman, yes, I agree. If you take Australia,

with their governmentwide business portal, that is what they have

done. An individual goes to file their taxes there, and it takes—actually, their software system has XBRL built into it, and they go

and file with their unique identifier, and that takes care of all their

filing: their payroll reports, their local prefecture reports, everything. And it is the sharing of data.

We are using XBRL in our debt collection area here in the State,

and we are actually going to start sharing the information with cities and counties to collect.

So the more commonality we can get, the more powerful we can

be. And it reduces the cost of compliance. You would only have to

file one return one time.

Chairman ISSA. Thank you.

Mr. Quigley.

Mr. QUIGLEY. Thank you, Mr. Chairman.

Mr. Jennings, you brought up the issue I did with the first panelists, and that was tax expenditures. Obviously, you support putting

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this information online. But I guess the bigger issue is, I am not

sure most of the American public understands what tax expenditures are, their significance in policy, the fact that they are not

even within the budget.

So I am not sure just putting them online is enough. For you and

other panelists, including Ms. Miller, your recommendations to elevate the awareness and understanding of the tax policy issues that

go with tax expenditures, the lack of transparency, and how else

can we let the world know about them?

Mr. JENNINGS. Well, I think the first thing about tax expenditures is just putting them alongside and making them analogous,

as they are, to Federal spending programs that are often debated

within Congress, that come up in news reports. When they are put

on equal footing in terms of reporting and by considered by Congress as doing the same thing—one just happens to be a check

written to an individual, one just happens to be done through the

Tax Code—I think that would put them on the same footing as

spending and make them equally well-known as spending.

And the way it is done right now is that the IRS is running a

massive subsidy program, and all the information stays within IRS

by law, some of it totally appropriate—personal identifiable information, etc. But the vast majority of it could be moved outside of

the IRS and under the jurisdictions of committees that are responsible for their analog spending programs. And as we move that debate into broader budget discussion, I think it will become equally

well-known.

Mr. QUIGLEY. Ms. Miller.

Ms. MILLER. I would certainly agree with Mr. Jennings’ remarks.

I mean, I think for the Sunlight Foundation, transparency for tax

expenditures is very important, for the obvious reasons. We are focused on transparency for government data across the—you know,

beyond the spending arena, which is the subject of this hearing.

And we think the more information that is put online, the more

that Members themselves and, certainly, members of the public can

begin to understand the very nature of what government looks like,

what it costs to run government, what government’s priorities are,

as shown through tax expenditures. And so this is a general public

education effort.

But I also agree with Mr. Quinlan, that the more of this information that is put online in parsable formats, also creates new businesses, things that we cannot even imagine. So there is a multiple

purpose in moving all public information to being made available

online in parsable formats.

Mr. QUIGLEY. But you don’t just think it should be online. You

believe that information like this should be within the Federal

budget as well?

Ms. MILLER. Yes, we do think it should also be available as part

of the Federal budget.

Mr. QUIGLEY. Mr. Quinlan.

Mr. QUINLAN. I agree with Ms. Miller. And you can’t just have

reporting be the last mile. Reporting has to start at the beginning

of the process. So, again, by creating a common taxonomy that all

areas of government report against and ensuring at the beginning

of the budgeting process that that process is available actually

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would allow the American taxpayer to become a part of that discussion.

The importance of financial communication begins with who understands the discussion that is happening. And I think right now

it is very much the American Government hears the rhetoric—

sorry—the American people hear the rhetoric that comes out of it,

but they are not able to go in and see for themselves what the rhetoric is about. And, again, that is what a common taxonomy and

XBRL can do for the discussion and for the outcome of that.

Mr. QUIGLEY. How do you address this enormous quantity of information, though? I mean, there is sometimes just too much. How

do you, given what you are trying to accomplish here as panelists

and in your everyday lives, bring that down to a workable amount

of information that folks can grasp and understand?

Ms. MILLER. Well, the Sunlight Foundation spends quite a bit of

time both advocating for data to be put online in raw, machinereadable formats, but we also spend a huge amount of our time and

effort in creating tools for people to have access together. And some

of those tools actually mash data sets together to make it more understandable for citizens.

And so that is the job, in many cases, of the private sector. It

happens to be the heart of Sunlight Foundation’s mission as well,

which is to build tools to take different data sets and to enable citizens or journalists to make sense of them as well. But if you don’t

have the raw data, then you have nothing to start with.

Ms. WALLIN. Congressman, actually, with using XBRL, the beauty of it is, Google just became a member of the XBRL International

consortium. And they are going to be putting together tools so people can use it to parse the data how they want to see it.

When the Recovery Board did their report and put it online, they

determined how they thought the U.S. citizens wanted to see the

data, and that is the only way you could see it. With XBRL, people

can go and extract that data and put it into any type of format that

makes sense for them. That is the true power of it.

So it is put into a format that, there is lots of information out

there, but XBRL gets it into the format that you want to see it in

and how you want to look at it.

Mr. QUINLAN. And if I could add one last comment to that?

Mr. QUIGLEY. Of course.

Mr. QUINLAN. I think to argue that it shouldn’t be done because

it may be too big is I do not believe the correct approach. When

you look at what HTML has done for the searching of words on the

Internet—so all of the information, or a great deal of the information that is in the Internet today was available pre-1995. The difference is, HTML allowed you to come in and tag a word and define

what it is so people could search on it. And the amount of information available on the Internet is probably the one thing in the

world that is actually larger than the Federal budget.

Mr. QUINLAN. Thank you.

Chairman ISSA. Yeah, we are only talking trillions. You are talking peta.

Mr. QUINLAN. Huge.

Chairman ISSA. Mr. Labrador.

Mr. LABRADOR. Good morning.

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Ms. Wallin, can you please give us some detail about the current

burden of Federal reporting that State and local governments are

dealing with?

Ms. WALLIN. Well, part of the thing when we started with the

stimulus, we had to go and report a lot of the same information to

the agencies as well as to the Recovery Board. So you have the duplicative reporting. And then they started asking us to do the subrecipient monitoring. Some of the smaller agencies, they didn’t

have the resources to try to do that. And I will admit that, in our

State, we are doing the best we can. Could we do better? Yes.

And when we started out with the stimulus dollars with the additional reporting, we were really not given any additional resources to do that. The money to recover our costs for doing the

compliance was to be recovered through the SWCAP, the Statewide

Cost Allocation Plan. In many cases, a lot of the agencies were already at their ceiling of the amount of money that could be charged

for overhead. And so you just have to try to absorb it. Well, with

States’ budgets being—our State is struggling. We really didn’t

have the money there, and it took away money from other programs and what have you.

I think the biggest problem is the duplication, the redundancy of

the reporting. If we could just go into one site and do it one time,

I think it would make a lot more sense. And then, also, the confusion—this agency wants this, this one wants this—have that standardization. Because when you have the laws and you have people

changing from one place to another, people are like, oh, they want

this, they want that. And sometimes we ask our questions, why do

you even need this, what do you do with it? Nothing. So——

Mr. LABRADOR. Okay. So do you think this will change under a

standardized system if the DATA Act were enacted?

Ms. WALLIN. Congressman, yes, I do believe that it will change

if we have a single portal, a single repository where we report, if

we use standardization, if we use interactive data standards such

as XBRL.

The nice thing is, when the government, if you change the laws

on what you want to see or how you want to see things, the States

don’t have to go in and reprogram their systems. You guys just do

it on your reporting site. And so that would be a huge savings for

the States.

Mr. LABRADOR. All right. Thank you.

Ms. Miller, as you know, President Obama signed an Executive

order establishing a government accountability and transparency

board. Do you think there are significant differences between the

proposed DATA Act, which would establish the FAST Board, and

President Obama’s new Executive order? And if you do, what are

those differences?

Ms. MILLER. We have not yet had a chance to review either the

chairman’s legislation or the White House Executive order in detail. But I had asked earlier if I could submit some additional remarks, and we will include those comparisons in those additional

remarks.

Mr. LABRADOR. You said in your testimony that transparency is

the government’s responsibility. How do you believe the governVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00080 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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ment has fulfilled this responsibility, especially with such efforts as

USAspending.gov?

Ms. MILLER. I think there have been significant—really, truly

significant strides in this administration’s efforts at creating a

transparent and open government. I believe it could be done faster.

I think it could be done better.

I think one of the reasons that Sunlight supports the creation of

an independent agency, the expansion of the RAT Board is because

we think it could be done better if you have this independent entity, particularly on the spending side of things.

You know, the new technology is really quite a marvel. The number of people who are going online to receive information, the numbers are increasing astronomically. So, while I think the administration has taken significant steps, we need to go much further

much faster. And this legislation, of course, would put many of the

reporting responsibilities into law with enforcement mechanisms

that we think are very important.

Mr. LABRADOR. All right. Thank you.

Mr. Chairman, I yield back my time.

Chairman ISSA. If the gentleman would yield?

Mr. LABRADOR. Yes.

Chairman ISSA. Going back, because we have an unusually great

amount of expertise on XBRL here, just a quick question. If all the

States—we will take Nevada for example. If all of your data was

in XBRL format, and multiple agencies wanted multiple information, isn’t it essentially true that if you had all the information in

a data base, even if you had extraneous information, under XBRL

if you did a complete dump, they are still only going to get what

they asked for because the rest of it is simply not going to be—they

are not going to see it because they are not looking for it.

So isn’t that one of the strengths of this kind of data base, where

you have the wealth of metadata, that as long as you give them

what they want, whether you give them a little extra, or one agency is looking for only a part of what another agency is looking for,

isn’t that what the beauty of it is, that Mr. Quinlan and your State

can easily get what they want without having to—one dump does

it all?

Mr. QUINLAN. That is absolutely correct, Chairman Issa. And, actually, there are two parts to that answer.

One is, if the data is all there, you are then able to ask the question that you want of the data and be able to identify what you are

looking for.

And that also then goes to the private sector. What will happen

is, when that data is available, just like Google was the window

into all this HTML data that existed, there will be entrepreneurs

throughout this great country that will create tools that will enable

the media, will enable regulatory agencies, will enable State agencies to go in and take the questions that they have and ask it of

that metadata.

Ms. WALLIN. Mr. Chair, that is correct. And one of the things

that you have is you have your taxonomy, which defines the definition of your data. So Agency X over here can have their taxonomy

for education, you can have a taxonomy for Department of Agriculture, and they can pull what they need from it.

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Chairman ISSA. Thank you.

Mr. Cummings.

Mr. CUMMINGS. Thank you very much, Mr. Chairman.

Mr. Jennings and Ms. Miller, as you know, budget negotiators recently slashed funding for the Electronic Government Fund in the

continuing resolution of fiscal year 2011 from a proposed $35 million down to $8 million. It’s been reported that these cuts are putting Web sites such as Data.gov, USASpending.gov, Performance.gov and the IT Dashboard at risk of being shut down.

I know that both of your organizations joined a coalition of transparency and open government groups on a letter sent just yesterday to the leadership of the House Appropriations Committee Financial Services Subcommittee urging them to restore funding for

the Electronic Government Fund. The letter said in part, ‘‘The EGovernment Fund has a proven track record of successful transparency, projects that have delivered efficiency improvements and

increased government accountability. For instance,

USASpending.gov and the IT Dashboard have helped to root out

government waste and inefficiency and recently led to the elimination of some $3 billion in failing technology projects.’’

Your letter goes on to list several other Web sites aimed at improving transparency and accountability and promoting public participation and collaboration.

I ask unanimous consent, Mr. Chairman, that their letter be

placed in the record.

Chairman ISSA. Without objection, so ordered.

[The information referred to follows:]

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Mr. CUMMINGS. Mr. Jennings and Ms. Miller, can you elaborate

on the impact of the dramatic cuts to the E-Gov Fund for fiscal

year 2011 and talk about the impact of potentially maintaining

those cuts for fiscal year 2011?

Mr. JENNINGS. Certainly. I think one of the things that the Nation’s chief information officer highlighted in a letter to Congress

is the fact that needed improvements to data quality are going to

have to be foregone because they don’t have the money to do it.

There is, again, also other Web sites that were coming up that

were intended to help employees within the Federal Government

share and exchange information and come up with better ideas on

how to do things, and that sort of collaborative element with a pilot

won’t be continued.

So I think we are already kind of seeing as a reduction of funds

happens that these efforts are really hindering progress that was

being made, and now it has just stopped.

Mr. CUMMINGS. And the two things that you just mentioned,

what are the significance of those? You just mentioned two things

there, that lack of money might cause two problems you just mentioned. And how significant is that, those problems?

Mr. JENNINGS. Well, certainly the data quality issue is hugely

important, and I think it’s one of the main reasons for this hearing

and for the DATA Act. It’s really hard to understate the importance of getting the right information to the public. I mean, that’s

how we base our decisions on multiple things, policy, who to fine

for fraud, what kinds of programs should be extended or ended,

however that may be.

Mr. CUMMINGS. Ms. Miller.

Ms. MILLER. I want to remind everyone of one thing that Chairman Devaney said about the establishment of his board. He said

you guessed at the right number, and having the resources at hand

enabled him to really lift that agency into being an effective agency

within 6 months. It was actually rather remarkable.

Knowing what that right number is is a bit of a guess, although

we now have more experience with that. But there is no question

that the figure is somewhere between $8 million that causes the

administration to begin to reduce what it puts on line or freeze

what’s on line and $32 million that they proposed. I’m not—I don’t

know the answer to that, it’s really hard to estimate it, but I think

the committee must dig deeply into that to make sure that, if it is

indeed serious about creating this new board and be serious about

government transparency, that there is adequate money to make

that happen.

Mr. CUMMINGS. So in other words, we have to be careful, because

if you put too little money in it, you don’t—you lose your effectiveness and efficiency, and you spent money—I’m not trying to put

words in your mouth, but that sounds like what you’re trying to

say. You spent money—in other words, you had to spend enough

to get—sort of like a bicycle. The old bicycles, you have to catch the

chain and priming the pump, but if you don’t prime it enough, you

don’t get anything, but you’ve expended a lot of energy.

Ms. MILLER. That’s precisely correct. And again, we’ve all heard

the stories of the $3 billion that have been saved because of the IT

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Dashboard. We know we don’t have to spend $21⁄2 billion building

these Web sites.

So again, figuring out—taking the time to figure out what it does

cost, recognizing the enormous potential for cost savings on the

other side once the information is standardized, the Web sites are

built, the citizen access is provided. And lawmakers as well as citizens themselves will have access to this and demand the accountability that’s necessary.

Mr. CUMMINGS. Well, certainly I’m sure we all, I think all of us,

want to make sure that we spend the appropriate amount of money

so that we can have the effectiveness and efficiency that we want.

We understand that there will be savings and whatever. But we

definitely don’t want to spend too little and at the same time don’t

want to spend too much. So I guess you have a good point there.

Some kind of way we’ve got to find the right point.

Ms. MILLER. Right. Well, we do have some experience now in

terms of the cost of building some of these Web sites from which

we can learn, and I think the estimates can be within a reasonable

range.

Mr. CUMMINGS. Thank you very much.

Chairman ISSA. I’m going to recognize myself for a quick second

round. Because the ranking member and I have agreed on a great

deal here today and probably would agree on almost everything,

but I want to ask a question that is not intended to be

confrontational, but just because I voted for an overall package

that did make those cuts. And it wasn’t that I didn’t—that I wanted to make the cuts, to be honest. I would have preferred we just

leave those numbers where they were. But everyone was having

cuts made that they wanted to make as a sacred cow, and that was

one that we were very upset about on our committee.

But, Ms. Miller, if I asked you to find enough Web sites that

you’ve seen over the years that look good, but provide no real effective data, in other words they are mostly puff data sites, wouldn’t

you be able to find more than enough that, in your opinion, if you

had to make a priority, you could shut down to grab that money?

That’s asking you as someone who looks for meaningful data and

sometimes finds it and sometimes doesn’t.

Ms. MILLER. Well, I think the problem with the data sites that

are out there that make your eyes hurt, and you arrive at a Web

site and you think, heavens, what am I supposed to do with this,

how do I search anything, those are Web sites from the last century. Just because——

Chairman ISSA. Last millennium perhaps.

Ms. MILLER. The last millennium perhaps, the last century not

being so long ago.

But I wouldn’t suggest shutting those down, I would suggest improving them, because the data—there is a lot of data that is available on line which is practically unusable. So the real challenge, I

think, for us is to figure out what is our priority for fixing these,

because this data set that took our staff 4 days to find on mining

safety—there was such a data set, but it took us 2 or 3 days to

find—what are the priorities for fixing these sites so they’re actually usable? So I might actually end up actually going in the other

direction, spending more money to identify these data sites, estabVerDate 17-JUN-2003 17:27 Nov 30, 2011 Jkt 000000 PO 00000 Frm 00086 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\71076.TXT KATIE PsN: KATIE
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lishing some priorities, particularly with respect to accountability

data.

Chairman ISSA. Sure.

Let me go one more, and I’m going to stay with Ms. Miller if I

could. You have the challenge that you have to work with what we

bring you. I have the challenge that I have to figure out how not

to start by simply saying, whatever it takes, I’ll pay. Chairman

Devaney did not have whatever it took; he had a very small budget, he had a very small amount of time. In 6 months, with less

money than the other Web sites that we’re talking about, and with

less time than they’ve had since they knew that they were probably

going to deal with budget cuts, he was able to prove things could

be done, including cost savings that I personally watched and gone

through with their people how they found the particular wrongdoing and stealing of Federal funds.

So in a sense wouldn’t you agree that if we’re going to get the

additional funding back to pay for the transition and the ultimate

better working sites that you want, wouldn’t you say that it has to

be part of a grand bargain where you say, and, oh, by the way, we

want you to use best practices so we know it’s the minimum

amount of dollars? That includes XBRL, cloud computing and some

of the other givens.

Ms. MILLER. Yes, I would certainly agree with that. In fact, if my

memory serves me correctly, we were quite critical of the contract

that was let to build the RAT Board. It seemed like an enormously

expensive contract. In fact, maybe compared to other government

contracts it wasn’t that expensive. But there also has to be—I

mean, there has to be a leader like Chairman Devaney at the head

of these agencies who understands what it does cost and what the

time implications are.

But we would certainly agree with you. There are cost savings.

We don’t want to spend too much, but we have to figure out how

much is enough to stand these sites up and have the data available

that we think is most important.

Chairman ISSA. Well, with that, Mr. Ranking Member, I’ll recognize you in a second, but I want to tell you that I agree with you

that we need to get that money back, and I would hope that we

both work on a strategy to get that money back by having a plan

that the President signs on to, the Vice President endorses, you

and I work on, we get a few Senators, and we show where this

transition money gets us where Chairman Devaney wants us and

where I know you want to be.

With that, you’re recognized.

Mr. CUMMINGS. Thank you, Mr. Chairman.

First of all, in answering—in responding to what you just said,

I’m in total agreement. I’ll join with you in trying to make sure we

get the funds to keep those funds. It is just so very, very important.

In our mission statement one of the major lines is that we want

to make sure that the people’s money is spent effectively and efficiently. And this just seems to be a case that just cries out for

striking the right balance so that we have sufficient funds. So I’m

in total agreement, and I pledge today to work very closely with

you to accomplish that.

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I want to just pick up on something that—going back to what the

chairman was talking about, just all this technology and how it all

plays here. The Federal Government spends nearly $80 billion annually on information technology, including software, computer

equipment and network devices that help the government run more

effectively and efficiently. Earlier this year Federal Chief Information Officer Kundra, Administrator for Federal Procurement Policy

Daniel Gordon, U.S. Intellectual Property Enforcement Coordinator

Victoria Espinel issued a memorandum for chief information officers and senior procurement executives on technology neutral. The

memorandum sought to remind agencies of the government’s policy

of selecting and acquiring information technology that best fits the

needs of Federal Government, including being technologically and

vendor neutral. I think this is an important principle not just for

the Federal acquisition community, but for Congress to keep in

mind when crafting legislation as well.

And this I’m getting to, this is what I want to ask. I ask all the

panelists if they agree and why or why not. And it’s my belief that

in general the Federal Government lags far behind the private sector in technological development and advancement. I could imagine

a scenario where we believe we’re on the cutting edge of something,

and as much time as it usually takes to thoughtfully craft legislation, negotiate with colleagues and the administration, see the bill

become law and then be enacted over time, this is a long process,

the cutting-edge technology has already been surpassed by something newer and better. Technology that we have today, this morning, is outdated this evening. So I hope that any efforts to improve

Federal spending transparency and accountability through governmentwide data standards keep that in mind. I would just like for

you to comment on that, Mr. Quinlan, and any others of you, and

how do we keep up?

Mr. QUINLAN. So again, I’m going to use the HTML example because it is one, and technology does change very rapidly. HTML

has been at the core of word search for over 20 years now. XBRL

does for numbers what HTML does for words and, most importantly, is a completely open standard. Nobody owns it. Any company, whether a small entrepreneurial organization like ours or the

largest technology companies in the world such as Google, anybody

can work on that. And so it is a standard that will stand the test

of time. It is a standard that, as Ms. Wallin spoke to, has been

used by 44 countries around the world because it does allow for

true transparency without ownership. That is why our founder

Mike Rohan chose that as the technology 10 years ago, and we very

much agree about that, and I appreciate your question.

Mr. CUMMINGS. Anybody else?

Yes. Mr. Jennings.

Mr. JENNINGS. With respect to technology and the comparison to

the private sector, it’s a little hard to deal with the Federal Government. There’s different things going on both in terms of mission

and the kind of information they deal with.

First off I would just say that some agencies are much better

than other agencies in the technology that they use, and I think

it would be good to look at those agencies to see why it is they are

able to harness such technology.

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The second point is that technology is not the problem for a lot

of the issues when he talk about Federal spending transparency.

There are cultural issues that agencies have to get around to being

open.

The second thing is there are conceptual issues in terms of when

we talk about spending, what are we spending on. I know to get

a little philosophical for you, it’s what is a program? A program is

different when it’s appropriated than when an obligation is made

than when it appears in the Treasury statements. There are different things that money gets attached to, and that has to be wrestled with.

As I mentioned before, there’s also the issue of the unique identifier problem, that there isn’t a unique identifier for entities much

less anything else in the Federal Government that extends not just

within the executive branch, although that is a big problem, but

also reaching back into the legislative branch in which decisions

are made on how to fund things. So do we want to fund childhood

nutrition? What are those programs within childhood nutrition? We

need to understand all of that and how they relate and be able to

see that within the data.

Mr. CUMMINGS. Thank you very much.

Chairman ISSA. I thank the gentleman, and I thank our witnesses for being very helpful. It’s always hard to follow Chairman

Devaney, but you showed very well that you were up to the task.

Once again, thank you.

We stand adjourned.

[Whereupon, at 11:56 a.m., the committee was adjourned.]

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