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76–062 PDF 2012

S. Hrg. 112–583 

SHOW ME THE MONEY: IMPROVING THE 

TRANSPARENCY OF FEDERAL SPENDING 

HEARING 

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

JULY 18, 2012 

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

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs 

( 

(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

SCOTT P. BROWN, Massachusetts 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JERRY MORAN, Kansas 

MICHAEL L. ALEXANDER, Staff Director 

TROY H. CRIBB, Senior Counsel 

JONATHAN M. KRADEN, Counsel 

KRISTINE V. LAM, Professional Staff Member 

NICHOLAS A. ROSSI, Minority Staff Director 

J. KATHRYN FRENCH, Minority Deputy Staff Director 

JENNIFER L. TARR, Minority Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

PATRICIA R. HOGAN, Publications Clerk 

LAURA W. KILBRIDE, Hearing Clerk 

(III) 

C O N T E N T S 

Opening statements: Page 

Senator Lieberman ........................................................................................... 1 

Senator Coburn ................................................................................................. 3 

Senator Johnson ............................................................................................... 17 

Senator Portman .............................................................................................. 23 

Senator Carper ................................................................................................. 27 

Prepared statements: 

Senator Lieberman ........................................................................................... 39 

WITNESSES 

WEDNESDAY, JULY 18, 2012 

Hon. Mark R. Warner, a U.S. Senator from the State of Virginia ...................... 4 

Hon. Eugene L. Dodaro, Comptroller General of the United States, U.S. 

Government Accountability Office ...................................................................... 8 

Hon. Daniel I. Werfel, Controller, Office of Federal Financial Management, 

Office of Management and Budget ..................................................................... 11 

Richard L. Gregg, Fiscal Assistant Secretary, U.S. Department of the Treasury ......................................................................................................................... 12

ALPHABETICAL LIST OF WITNESSES

Dodaro, Hon. Eugene L.: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 44 

Gregg, Richard L.: 

Testimony .......................................................................................................... 12 

Prepared statement .......................................................................................... 67 

Warner, Hon. Mark R.: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 41 

Werfel, Hon. Daniel I.: 

Testimony .......................................................................................................... 11 

Prepared statement .......................................................................................... 59 

APPENDIX 

On Behalf of the National Conference of State Legislatures (NCSL), International City/County Management Association (ICMA), National Association of State Chief Information Officers (NASCIO), National Association 

of State Auditors, Comptrollers and Treasurers (NASACT), and National 

Association of State Budget Officers (NASBO), prepared statement .............. 70 

Craig Jennings, Director of Federal Fiscal Policy, OMB Watch, prepared 

statement .............................................................................................................. 76 

Response to post-hearing questions for the Record: 

Mr. Dodaro ........................................................................................................ 80 

Mr. Werfel ......................................................................................................... 84 

Mr. Gregg .......................................................................................................... 95 

(1) 

SHOW ME THE MONEY: IMPROVING THE 

TRANSPARENCY OF FEDERAL SPENDING 

WEDNESDAY, JULY 18, 2012 

U.S. SENATE, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 9:31 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Joseph I. Lieberman, Chairman of the Committee, presiding. 

Present: Senators Lieberman, Carper, Coburn, Johnson, and 

Portman. 

OPENING STATEMENT OF CHAIRMAN LIEBERMAN 

Chairman LIEBERMAN. Good morning, and welcome to this morning’s hearing on improving transparency into how the Federal Government spends taxpayers’ money. 

Senator Warner, who is the first witness, is reported to be on his 

way according to his office. 

Senator COBURN. Government Accountability Office (GAO) reports it. 

Chairman LIEBERMAN. GAO are watching us all the time. So we 

will proceed with our opening statements. I want to welcome Senator Coburn, who is sitting in for Senator Collins as Ranking Member, but takes on this role because of his long-time active interest 

in the subject that we are here to talk about, which is transparency 

in how the Federal Government spends taxpayers’ money—a issue 

which is definitely as old as our great Republic. And to validate 

that statement, I will read now from a letter that President Thomas Jefferson wrote to his Treasury Secretary in 1802. ‘‘We might 

hope to see the finances of the Union as clear and intelligible as 

a merchant’s books, so that every Member of Congress and every 

man of any mind in the Union should be able to comprehend them, 

to investigate abuses, and consequently to control them.’’ A statement that has a timeless essence to it. 

Of course, Federal spending in 1802 added up to about $11 mil- lion, and the national debt was about $80 million. For fiscal year 

2012, we are going to spend more than $3 trillion, with a national 

debt closing in on an astounding $16 trillion. 

Now, those numbers really do seem incomprehensible, but, of 

course, that makes it all the more important that Federal spending 

be publicly transparent so that, as Jefferson said, any citizen 

should be able to see where taxpayer dollars are being spent and 

help root out waste in the budget and alert not just elected officials 

2 

but friends, family, and the traditional media—even using new social media tools, like Facebook and Twitter—to spread the message. I mean, the government has become vastly larger, of course, 

but our technological capability has also become vastly better, and, 

therefore, the goal of transparency remains, in my opinion, attainable. 

So this is the subject of today’s hearing: ‘‘Show Me the Money: 

Improving the Transparency of Federal Spending.’’ We are going to 

examine current efforts to make this kind of information available 

electronically. 

In 2006, Senator Coburn and then-Senator Barack Obama—what 

ever happened to him? He is now President, of course. The two of 

them co-sponsored, and the Committee reported out the Federal 

Funding Accountability and Transparency Act (FFATA), and it became law. 

This bill was a very important first step in improving the public’s 

ability to learn more about what the Federal Government was 

spending and a Web site called USASpending.gov whereby was created that could be used to track the trillion dollars the Federal 

Government awards annually in grants, contracts, and loans. 

However, 6 years after passage of this Act, which became known 

as FFATA, the USASpending.gov Web site has not achieved Congress’ goals for it—and let me explain. The site itself has been 

found to be not as user friendly as it should be. The data is not 

stored in a consistent fashion, making it hard to draw comparisons 

between different data sets. And contractors are often listed under 

multiple names, making searches unreliable. But those problems 

do not diminish the validity and importance of the goal and purpose of USASpending.gov. And, therefore, we have asked our witnesses to provide an update on the current state of it and what improvements are either in the works or should be in the works. 

Times have changed since the passage of that legislation, and we 

now have the opportunity to take advantage of another attempt to 

make government transparent through advanced technology, and 

that is with regard to the American Recovery and Reinvestment 

Act of 2009, which aimed to track the nearly half a trillion dollars 

spent on economic stimulus. 

The Act created the Recovery Accountability and Transparency 

Board, an independent body to conduct oversight and audits of Recovery Act funds, which in turn created a public Web site of its 

own—Recovery.gov—which detailed who got the money and what 

they were doing with it. 

Whatever one thinks of the Recovery Act, the Recovery.gov Web 

site has generally received high marks for its reliability, accessibility, and in some sense its simplicity, and obviously that gives us 

something more to build on as we go forward. 

Then last April, the House of Representatives passed the Digital 

Accountability and Transparency Act (DATA Act), which would create a new five-member Commission, modeled after the Recovery 

Act’s Board, to act as the hub to collect spending data, set data 

standards, and analyze the information. 

The goals of the bill, which include transparency of Federal 

spending and consistent data standards, are admirable, and I certainly support them. We have, perhaps not surprisingly, heard conVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
3 

cerns from some State and local officials about the cost of complying with the DATA Act and more generally a concern about the 

creation of another Federal entity. 

Senator Warner has introduced a Senate version of the DATA 

Act, and it is the subject of this hearing, although we expect to 

hear testimony on the other matters I talked about earlier. 

Given the difficult, to put it mildly, budget climate that we are 

going to face in the upcoming years, it is more important than ever 

that we keep Jefferson’s words from 1802 as our ideal and that we 

take advantage of modern technological means to improve transparency and accountability of Federal spending. 

We have a really excellent group of witnesses here to help educate us. I look forward to their testimony, and now I am pleased 

to call on the Acting Ranking Member, Senator Coburn of Oklahoma. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. Thank you, Mr. Chairman, and I welcome our 

witnesses and their testimony today. 

The urgency of the problems before us cannot be overstated. I checked today—we are at $15.875 trillion in debt. The size of the 

Federal Government is twice the size it was 11 years ago. As a 

matter of fact, the deficit we will run this year is greater than our 

total budget was 16 years ago. And part of the problem is that 

there is only one agency in the Federal Government that actually 

knows all their programs, and that is the Department of Education. 

When you ask the Congressional Research Service (CRS) or GAO 

how many programs there are, they cannot tell you. We did put in 

one of the debt limit bills a requirement for GAO to review all the 

government programs, and that is an ongoing process for which I 

appreciate immensely. But what it has shown us that we have hundreds of billions of dollars in duplication every year with no change 

in outcomes. 

The great challenge before us today is to move politics out of the 

realm and put policy back supreme, not because it is good government and not because it makes sense, but because the greatest risk 

facing our Nation right now is our debt. It is greater than any military threat we face. It is greater than any other problem we face. 

And the fact is that the children born today will owe $53,000 each 

of money we have spent that they are going to have to pay back. 

And by the time they are 25, if we stay on the projected course we 

are now, it will be in excess of $1 million. And at historical interest 

rates, that means the first $55,000 they earn will go towards paying interest on the debt before they ever pay taxes, before they ever 

do anything. So the problem before us is great. 

I must say two of my heroes are the GAO and CRS. They do immense service for our country. I agree with the Chairman that Recovery.gov was better than USASpending.gov. But what we were 

promised is when they set up Recovery.gov that they would take 

the lessons from Recovery.gov and utilize them to improve 

USASpending.gov. That has not happened. As a matter of fact, 

even the directions that have gone out from the Office of Management and Budget (OMB) to the agencies have not been enforced in 

terms of compliance with that. 

4 

1The prepared statement of Senator Warner appears in the Appendix on page 41. 

The last thing we should do is create a third one, so the idea behind the DATA Act should be to make everything we are doing now 

consolidated, put together, responsive, available, and easy for the 

American people to know. The American people know what kind of 

trouble we are in. It is only Washington that does not know what 

kind of trouble we are in. And that is proven by the fact that we 

have spent an entire year not addressing the real problems in front 

of the country. We have spent an entire year playing politics for 

the next election, which is the problem. The politicians are more 

interested in their political careers than they are the best interests 

of this country, and it is proven by the fact of our performance this 

year. 

So I look forward to our witnesses. This is something we can do. 

This is something that will make us better. It is something that 

will give us discipline, and it is something that we should not wait 

to do. And then we should put the whole resources of the Office of 

Management and Budget behind getting it done so that we can 

truly have transparency, so that when we steal from the American 

people dollars that are wasted, they can actually see it and change 

Washington on the basis of that. 

I look forward to hearing from Senator Warner. He is a great 

friend. He is a great champion for addressing the real problems in 

front of our country. He understands this is part of the problem. 

And I look forward to hearing from our other witnesses, and I 

thank you, Mr. Chairman. 

Chairman LIEBERMAN. Thank you, Senator Coburn. I could not 

have offered a better introduction of Senator Mark Warner of Virginia, our friend and colleague, sponsor of the DATA Act, and a 

really principled and persistent advocate of transparency in spending. 

Senator COBURN. May I also add, I am participating in a Finance 

Committee markup, so I will be in and out, and I apologize to our 

witnesses for that. 

Chairman LIEBERMAN. Not at all. Understood. Senators do have 

the unique capacity to be in two places at once. 

Senator Warner, good morning. 

TESTIMONY OF HON. MARK R. WARNER,1 A U.S. SENATOR 

FROM THE STATE OF VIRGINIA 

Senator WARNER. Good morning. Thank you, Mr. Chairman, Senator Coburn, and Senator Johnson. I would ask that my full statement be submitted for the record. 

Chairman LIEBERMAN. Without objection. 

Senator WARNER. I also want to apologize to the Committee. You 

have all had to endure at times stories from me of my glory days 

as governor. One of the things I was not able to put on my completed checklist was solving Northern Virginia’s traffic, so I apologize for being a bit late. 

Chairman LIEBERMAN. You also lost those State troopers you 

used to have. 

Senator WARNER. Amen. 

5 

I think building on what Senator Coburn said, the title of today’s 

hearing could not be more perfect: ‘‘Show Me the Money.’’ It is a 

simple message that captures, I think, this important goal if we are 

going to get to the questions about debt and deficit, and all the 

Members of this Committee have been actively involved in this 

issue. You have to be able to follow the money. 

As has been mentioned, as I think the Committee knows, I introduced the Digital Accountability Transparency Act last year, and 

that legislation passed the House in April. The primary goal of the 

DATA bill is to show us—both the taxpayers and the policymakers—the money. 

Now, I have had some evolution in my thinking on the DATA bill 

over the last year, and I want to get to that in a moment. The legislation will, as Senator Coburn said, expand the financial information available online to include agency expenditures. It will identify 

better, I think, contracts and grants within the context of the programs and activities they support. Ultimately, I hope DATA, or 

whatever form it takes, can show us the full cycle of Federal spending. 

Now, I may take exception with Senator Coburn. I think there 

have been areas where there have been some improvement, and 

this effort ought to not be trying to re-create the wheel but build 

upon what is working and what is not working within the Federal 

Government. A lot of this originated back with Senator Coburn and 

then-Senator Obama’s legislation in 2006, the Federal Funding Accountability and Transparency Act, as we mentioned. Then there 

was Recovery.gov that I think built upon that. And you are right, 

I do not think we have taken all the lessons of Recovery.gov. There 

were some areas where in terms of down the line contracts, some 

actual duplication of reporting, which we need to avoid as well. 

And, again, last year, President Obama established the Government Accountability and Transparency Board that I think is also 

a step in the right direction. 

I think you are going to hear, particularly in the second panel, 

some folks from the Treasury Department where I do think there 

has been some good progress made. 

With the enormous debt and deficit and the challenges that we 

have as we try to wrestle with this, those of us who want to try 

to put the long-term fiscal health of the country ahead of politics, 

our abilities are a bit undermined if you do not have transparency. 

If you do not have transparency, it feeds into the public’s distrust 

and cynicism of everything we do. It raises concerns about waste, 

fraud, and abuse in Federal spending. The public deserves to know 

how each Federal dollar is spent, and we have to try to make sure 

we use that information to make sure those dollars are spent more 

efficiently and effectively. 

Now, I came to this issue with prior experience as a business guy 

and governor, and then on the Budget Task Force they gave me a 

little subcommittee to try to work on these issues. And it is why 

I am hoping that this Committee will act upon the legislation that 

I hope to reintroduce shortly. 

This also will go to a question that I know the Chairman, Senator Coburn, and Senator Johnson all have concerns about: Program duplication. If you do not know how the money is being 

6 

spent, you are not going to be able to identify, with the exception 

of the good work that GAO has done, the amount of program duplication that, I agree, runs rampant throughout our whole Federal 

Government. 

I also have done business and looked at business accounting. I 

have learned State government accounting. Trying to learn Federal 

Government accounting is an arcane art in itself, and trying to figure out how much any government program costs and the breakdown of expenses and trying to follow those expenses requires skill, 

and that should not be the case when we are having the kind of 

debt and deficit numbers that confront us. 

For example, how can you really tell if we are getting good value 

for a program if we do not have a detailed explanation of the costs 

and the spend that goes about from that? 

Now, the primary goal of the DATA legislation is to build upon 

the existing law to require that the full cycle of Federal spending 

be publicly disclosed in greater detail. And, again, I think this is 

a bipartisan goal that we can all embrace. How we accomplish this 

goal is to broaden debate. 

I will admit that a year ago I believed we might need a new government entity to oversee transparency. My thinking has evolved 

on that issue. I do not think we need to simply create one more 

entity out there when we have already got existing entities that are 

supposed to work on that goal, and I think we have worked with 

your staff, Mr. Chairman, and others to try to refine the legislation 

to get this in a better spot. Let me go through three or four quick 

points and then allow you to move to the next panel. 

First, I think we need to use existing technology to collect data. 

As I mentioned earlier, I think I have been impressed with technology being implemented at the Department of Treasury. The 

Treasury’s new Payment Information Repository could be expanded 

to consistently collect budget and accounting information that we 

are looking for. Connecting the transparency to the actual funds 

spent, essentially creating an online Quicken for the Federal Government checkbook, makes a lot of sense to me. It is the most accurate way, I think, to show us the money, and it does not require 

a whole new technology or whole new entity. 

Second, we need to develop consistent data standards for this online checkbook so that the data can be compared across agencies. 

We have to be able to compare apples to apples, and this data 

standards issue, while fairly arcane, is one that we really need to 

dig into with the host of different financial accounting systems 

across our whole Federal Government. If you do not have some 

kind of standardized data accounting systems, you are never going 

to have that kind of comparison. If these standards are integrated 

into Treasury’s new data collection technology, we could get this 

data we need at a lower cost and building an entirely new approach. 

Third, we must ensure that this data is accurate and easy to understand. Currently we see so many errors, as Senator Coburn 

mentioned, on USASpending.gov, and that is because there is no 

system in place to monitor the completeness and quality of this 

data. The inspectors general (IGs) and the GAO need to regularly 

7 

review this data every couple of years and maintain a scorecard for 

the quality and completeness of the data provided. 

Fourth, even as we are designing financial data standards, we 

must also stop unnecessary or duplicative financial reporting. I 

have heard a number of concerns, as we had the first version of 

this legislation, that maybe it went a little too far. But when I 

heard from lots of State and local governments and universities 

about the burden of financial reporting that is already required, if 

we simply make information that is already reported, and broke 

down three or four different ways, that does not bring about any 

greater efficiency. It just adds unnecessary marginal costs to all of 

these transactions. So we must, again, make sure that this is focused and comes to ultimately a single source, but if part of the 

Federal Government has got that information, it should not need 

to be reported another way. 

And the final point I will raise today is that we have to make 

sure this data is used. At times we get overwhelmed with the mass 

of information. We keep being additive to our reporting requirements. We never go back and subtract requirements that may have 

outlived their usefulness. And I think in this legislation we start 

down a framework to go about elimination as well as trying to consolidate. 

The Executive Branch could use this data to proactively prevent 

waste, fraud, and abuse because it would allow more transparency 

and analysis before payments are made. Again, I think the Administration has taken a good step, and President Obama has set up 

a system with great potential in the ‘‘Do Not Pay List.’’ That is 

something that should be expanded. The taxpayers could use this 

information to better understand how Federal funds are distributed 

in their local communities. 

Again, we have moved a great way in the year I have been 

digging into this and since we first introduced this legislation. I 

commend the House for their work. I think there may be a better 

product that we could introduce in the Senate. I look forward to reintroducing this legislation shortly. I would love to work with all 

the Members of this Committee on further ways that we might improve it. And echoing what the Chairman and the Ranking Member said, this ought to be something that even in the political ‘‘silly 

season’’ that we can get done. This will be enormous value to whoever takes the oath of office next year, and we ought to give the 

next President that tool, and we ought to make sure that we in 

Congress do our responsibility to make sure we are more able to 

monitor and eliminate the kind of duplication that we see that 

ends up costing us a great deal of trust with the public at large. 

With that, Mr. Chairman, again, I thank you for the courtesy of 

allowing me to testify, and my apologies for being a little bit late. 

Chairman LIEBERMAN. Not at all. Thanks for your thoughtful 

testimony, and we do look forward to working with you on this legislation. 

Senator Coburn and Senator Johnson, any questions for Senator 

Warner? 

Senator COBURN. I just would again like to thank Senator Warner. We are keenly interested in this, but we are also keenly interVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
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1The prepared statement of Mr. Dodaro appears in the Appendix on page 44. 

ested in making sure it does not cost a whole lot more, and it 

should not. 

Chairman LIEBERMAN. Right. 

Senator COBURN. And from cybersecurity all the way down to 

data centers in the Federal Government, there is a lot of money to 

be saved if we do things right and smart by doing the right thing, 

not just trying to pound our chest and say we are right. So I congratulate you on this and look forward to working with you in detail to get this corrected. 

Senator WARNER. Thank you, Senator. And I would just add two 

quick responses. One is I do think one area that we ought to continue to promote is having the Federal Government—and there are 

clearly security concerns—move more quickly into the cloud, which 

can dramatically cut back in terms of data centers. And I think you 

will find that this new version of the legislation is significantly— 

and I underline ‘‘significantly’’—a lower cost burden than what was 

passed in the House. Again, part of that is because we do not need 

to re-create the wheel. If there are parts that are working and we 

build upon the good work that you and then-Senator Obama did, 

take some of the best practices from Recovery.gov, and—— 

Senator COBURN. And Treasury. 

Senator WARNER. I think we can get it done. 

Senator COBURN. Thank you. 

Senator WARNER. Thank you. 

Chairman LIEBERMAN. Thank you very much, Senator Warner. 

Have a good day. 

We will call the second panel: Gene Dodaro, Comptroller General 

of the United States, and head of the U.S. Government Accountability Office; Daniel Werfel, Controller, Office of Federal Financial 

Management at OMB; and Richard Gregg, Fiscal Assistant Secretary at the U.S. Department of the Treasury. 

Mr. Dodaro, welcome. You are, as Senator Coburn said, regarded 

very highly by this Committee, and I would say by most Members 

of Congress. Good morning. 

TESTIMONY OF HON. EUGENE L. DODARO,1 COMPTROLLER 

GENERAL OF THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. DODARO. Good morning, Mr. Chairman, Senator Coburn, and 

Senator Johnson. It is a pleasure to be here this morning. 

Before I start about the subject of today, though, given your impending retirement from the Senate, Senator Lieberman, I wanted 

to just take a minute on behalf of myself and all my colleagues at 

GAO to thank you for your years of dedicated service to our country. It has been a privilege to work with you on many initiatives 

to improve government. Please know that when you leave, you 

leave with the best wishes from myself and our organization. So 

thank you very much. 

Chairman LIEBERMAN. Thanks very much. That was very kind of 

you, and it has been a pleasure to work with you. And based on 

that opening remark, I am probably going to try to arrange for you 

9 

to appear before the Committee at least three or four times more 

before the end of the year. [Laughter.] 

Mr. DODARO. Well, since I thought this might be my last appearance, I cannot guarantee it at every session. But with regard to today’s subject, it is a very important topic. We have been reviewing 

both USASpending.gov and Recovery.gov. We have statutory responsibilities to do that. And I think the USASpending.gov, as has 

been mentioned, including Senator Coburn’s sponsorship, was pioneering legislation. We took a good look at it and issued a report 

in 2010. We found OMB had stood up the Web site, and it was 

searchable, but there were a lot of quality, accuracy, and completeness issues. We took a sample of 100 awards back then and found 

a data problem with each of the 100, and in 70 percent of the cases, 

multiple data quality issues. 

Also, some agencies at that point in time were not reporting, and 

OMB had missed a deadline for including sub-award data, which 

was set for January 2009. 

Now, we made a number of recommendations. OMB has acted on 

some of the recommendations. Sub-award data is now available on 

the site. They have designated accountable officials at each of the 

departments and agencies, and they are to have a quality assurance framework in place. But we still think there ought to be more 

reporting by OMB on the usage of the site. The Act required an annual report, and only once has OMB issued that report to the Congress. 

So we think there is more to do. The Committee has recently 

asked us to look again at the quality of the information on 

USASpending.gov, so we will be launching another review to do 

that carefully, and we will report back to the Committee. 

Now, the Recovery Act introduced novel concepts in addition to 

those introduced by USASpending.gov in that it had the recipients 

of the information reporting the data; whereas USASpending.gov 

had the Federal agencies reporting the award data. And I must say 

the efforts were very impressive to stand that up within the 30-day 

period of time on a national scale with thousands of recipients receiving the money. 

Not surprisingly, we did find, though, at early stages of it, data 

quality problems, and made a number of recommendations. OMB 

and the Recovery Board were quick to implement our recommendations. We had a very good working relationship with them. And the 

information began to improve. But there were some critical lessons 

learned out of that process that I think are really important. 

There was two-way communication with the Federal Government 

and the State and local government community. Shortly after the 

Act was passed, actually a number of State officials sent a letter 

to myself and the Director of OMB at the time, Peter Orszag, about 

trying to have a working arrangement on the reporting requirements. So I talked to him. We set up weekly meetings with OMB, 

Treasury, and other stakeholders so that these issues could be discussed. 

There was training provided to the recipients so they knew how 

to report, particularly those that had not reported previously to the 

Federal Government. And there was also, after a period of time, a 

need for the Federal agencies to review the quality of the informaVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
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tion being reported. In some cases early on recipients information 

conflicted with the Federal agencies’ information, and once Federal 

agencies started reviewing the quality of the data and there was 

ability to make changes to the data, the quality improved after that 

period of time. And, also, there were other lessons learned where 

the Federal agencies could actually pre-populate some of the information to reduce the burden on the recipients going forward. 

So I think there are a lot of opportunities here to build upon the 

lessons learned from the Recovery Act and USASpending.gov to 

broaden the amount of information that is made available and the 

transparency of that information to the American public, to build 

upon both of those efforts, to learn from them, and to expand that 

so that there is more information made available in better formats 

that could be accessible to the American people and that a premium be placed on the quality and the reliability of the information. That is pivotal. We could make a lot of information available, 

but if it is not reliable and accurate, it does not really serve the 

American people well and it does not serve policymakers and other 

decisionmakers well. So we are going to be continuing to focus on 

the efforts to ensure the quality of the information. 

I would say that legislation is absolutely essential here going forward, and I commend the House as well for starting the legislative 

ball rolling on this process. I say that for several reasons. I think 

it is really important to get consensus on what information is required to be reported. I think legislation is needed to ensure continuity over time; and that there are data standards that are set 

in place in order to make sure that the information is comparable 

and can be consistent over time; and that there is proper stakeholder involvement. I think there are legitimate issues on reporting 

burden that could be worked through appropriately so that this 

could be done in an efficient manner and that we could take advantage of the latest technology in order to not only be more efficient 

but also to allow for more searchability. I think some of the features of the Recovery.gov, particularly the geographic distribution 

of the information, were very helpful, and there are a lot of lessons 

that could be learned there. 

So with the legislation that has moved through the House and 

new legislative initiatives in the Senate, hopefully something can 

be done here to provide a proper foundation for this going forward 

so it can be successful, done well, and be enduring over a period 

of time. 

Thank you very much for your time and attention this morning. 

I would be happy to answer questions at the appropriate time. 

Chairman LIEBERMAN. Thank you, Mr. Dodaro. That is a good 

beginning. 

Next we have Daniel Werfel, also known as ‘‘Danny.’’ 

Mr. WERFEL. That is right. 

Chairman LIEBERMAN. He is the Controller at the Office of Federal Financial Management at the OMB. Good morning and welcome, Mr. Werfel. 

11 

1The prepared statement of Mr. Werfel appears in the Appendix on page 59. 

TESTIMONY OF HON. DANIEL I. WERFEL,1 CONTROLLER, OFFICE OF FEDERAL FINANCIAL MANAGEMENT, OFFICE OF 

MANAGEMENT AND BUDGET 

Mr. WERFEL. Good morning, Chairman Lieberman, Senators 

Coburn, Johnson, and Carper. Thank you for the invitation to discuss Federal spending transparency and how the Federal Government can best provide important information to the public about 

how Federal dollars are spent. 

In response to the President’s call for a 21st Century government 

that is both open and competent, this Administration has initiated 

substantial reforms and improvements in the three areas most critical to meeting this objective: Government accountability, performance, and transparency. In each of these areas, the partnership between the Administration and Congress—and this Committee in 

particular—has been critical to our success. 

Improvements to performance achieved under the Government 

Performance and Results Act (GPRA) Modernization Act and to accountability under the Improper Payments Elimination and Recovery Act are inexorably linked to our focus today: Improving transparency in how Federal dollars are spent. By holding ourselves to 

a high standard in each of these areas, we allow program managers 

to focus on better outcomes and help overseers and the public hold 

agencies accountable for the government’s stewardship of Federal 

dollars. 

The landmark Federal Funding Accountability and Transparency 

Act of 2006, sponsored by then-Senator Obama and Senator 

Coburn, dramatically changed the way we approach Federal spending transparency. Through the implementation of FFATA, as well 

as the bold transparency and accountability requirements included 

the Recovery Act, we have made marked progress in making Federal spending information publicly available by initiating web-enabled and user-friendly tools for tracking who receives awards and 

how they are used. 

Our challenge now is to leverage these achievements in order to 

realize the President’s vision for a 21st Century that is open, highperforming, and accountable. And that means not just collecting 

and displaying more information, but focusing on better quality 

and more reliable information. Reliable, understandable, and consistent data is essential to creating a transparent government, and 

that is the primary focus of our efforts going forward. 

We see two key ways to enhance the quality and reliability of our 

Federal spending data. The first is through better integration and 

reconciliation of data. To drive this effort, we are working closely 

with agencies and the audit community to integrate the quality assurance framework that is in place today for audited financial 

statements with Federal spending data and reporting. 

For instance, OMB has developed a new Schedule of Spending 

that will include information in agencies’ annual audited financial 

statements about how dollars are spent. In addition, agencies and 

OMB are working together to shore up internal controls to create 

data that is internally consistent and externally understandable. 

We are providing enhanced validation tools for the data, providing 

12 

1The prepared statement of Mr. Gregg appears in the Appendix on page 67. 

data quality reports, and working to share best practices among 

the Federal community. And as Mr. Gregg will be discussing today, 

the Department of Treasury has developed a Payment Information 

Repository to improve the way that information on payments remitted by the government is compiled, rationalized, and displayed 

to the public. 

The second path to enhanced quality and reliability of our Federal spending information is through improved data standardization. As the President’s Government Accountability and Transparency Board has noted, standardization provides the key to 

unlocking transparency and accountability. 

Accordingly, we are working across the government to build the 

common linkages between data. Along with Treasury, we are developing strategies to link specific awards and payments to other pertinent financial information. As required by the GPRA Modernization Act, we are developing a Federal Program Inventory, a single 

list of all government programs that can and will be linked with 

our financial data. We are developing governmentwide solutions for 

system consolidation and rationalization to link systems and eliminate duplication, redundancies, and inefficiencies that have built 

up over time. And we are developing a common uniform award 

framework to tie all of these efforts together to build standardized, 

consistent, and comprehensive tracking of Federal dollars. 

As I said, the common thread across all these efforts is making 

our data on Federal spending reliable, high quality, and consistent, 

and in doing so, our goal is to maximize transparency and accountability in a targeted and cost-effective manner. 

The Federal Government possesses the ability and the authority 

to execute these strategies today through existing legislative vehicles and instrumentalities of government. Our challenge now is delivering results, and that is where we need the help of Congress to 

ensure that we achieve a 21st Century government that is even 

more open, higher performing, and more accountable. 

Thank you, and I look forward to your questions. 

Chairman LIEBERMAN. Thanks very much, Mr. Werfel. We appreciate the testimony. Now we will hear from Richard Gregg from the 

Department of the Treasury. 

TESTIMONY OF RICHARD L. GREGG,1 FISCAL ASSISTANT 

SECRETARY, U.S. DEPARTMENT OF THE TREASURY 

Mr. GREGG. Chairman Lieberman, Ranking Member Coburn, and 

Members of the Committee, thank you for inviting me to discuss 

the Department of Treasury’s initiatives to increase Federal financial transparency and accountability. 

Each year, Treasury processes billions of financial transactions 

on behalf of Federal agencies, including payments, revenue and 

debt collections, and intra-governmental transfers. Over the past 

several years, Treasury has launched a number of initiatives to 

modernize its financial systems, improve transparency, and 

streamline its transaction execution and reporting processes. 

Treasury makes 1 billion payments every year, and historically, 

Treasury’s goal has been to make sure that every payment was 

13 

made accurately and on time, and that continues to be the goal. 

However, more recently, Treasury recognized that we need to make 

more payment information available to the public and have that information available quickly and presented in a way that is meaningful. 

To achieve greater transparency, Treasury is developing a robust 

business intelligence and data analytics system. This new system, 

called the Payment Information Repository (PIR) will allow information from payment systems to be viewed and analyzed in a single application that consolidates data from all Federal spending, including grants, contracts, loans, and agency expenses, thereby increasing Federal payment transparency. The PIR payment transaction data can be linked to other government databases, such as 

USASpending.gov, to enable the public to follow a payment through 

the complete spending cycle—from appropriations to the time the 

payment is disbursed. 

In support of this effort to streamline the payment process, we 

have already developed the Payment Automation Manager (PAM), 

which replaces over 30 mainframe-based software applications previously used by Treasury into a single, standardized application. 

A key component of PAM is that it requires agencies for the first 

time to submit data in a standard format. Beginning in August of 

this year, agencies will be able to submit payment data along with 

the related appropriation data in this standard format, and all 

agencies will be required to use this new format no later than October 2014. 

The flow of this information from PAM into the PIR will begin 

in the third quarter of 2013, and standard reports will be available 

to the public by July 2013, and more robust inquiries will be available by December. And we will keep building on this as we add 

more data elements. 

This information will allow taxpayers, agencies, and policymakers to more easily track Federal spending. Users will be able 

to chart which areas of the country the government is spending the 

most on contracts, grants, benefit payments, and administrative 

spending. And Personally Identifiable Information will be highly 

protected and not available to the public, such as Social Security 

numbers. 

Let me now turn quickly to accountability. Following the President’s June 2010 memorandum directing agencies to improve payment accuracy by using a ‘‘Do Not Pay List,’’ Treasury, in collaboration with OMB, began developing the ‘‘Do Not Pay’’ Business 

Center. The Business Center is comprised of the Do Not Pay Portal 

and the Data Analytics Service. 

The portal is a one-stop shop for agencies to check several key 

databases to verify eligibility before making a payment or award. 

The Data Analytics Service provides customized analysis allowing 

agencies to compare program, payment, and vendor data with secondary sources to find patterns that might suggest fraud, waste, or 

abuse. In April 2012, the Do Not Pay Business Center developed 

a partnership with Treasury’s Financial Crimes Enforcement Network, or FinCEN. This partnership will leverage FinCEN’s investment in data analytics tools and their existing relationships with 

14 

the law enforcement community. I should add we are also working 

closely with our Inspector General in this area. 

Treasury expects this financial accountability to increase even 

further with the release of OMB guidance that directs agencies to 

develop a plan for using a ‘‘centralized solution’’ to reduce improper 

payments. The Do Not Pay program is already assisting 27 programs in preventing improper payments, and this number continues to grow in response to OMB’s directive. 

I would just like to say a word on data standards. Really, to 

achieve the transparency and accountability we all want, it is necessary to move forward on developing governmentwide standards. 

Data standardization or the consistent use of common formats and 

definitions for key data elements supports sound financial management and decisionmaking by improving the consistency and accuracy of the government’s financial data. 

In addition to the payment modernization efforts I just mentioned, Treasury has in the past worked closely with OMB to implement a Common Government-wide Accounting Classification 

structure. 

Treasury, OMB, the General Services Administration (GSA), and 

other agencies are moving, I would say with vigor, to bring more 

data standardization to financial management. 

In conclusion, I would like to thank Senator Warner for his statement on the progress that there is making to increase data transparency. I also appreciate his statement on rethinking the DATA 

Act as a result of the progress we have made, and I would welcome 

any questions that the Committee might have on the DATA Act. 

I want to thank you, Mr. Chairman and Members of the Committee, for holding this hearing, and I look forward to answering 

any questions you might have. 

Chairman LIEBERMAN. Thank you, Mr. Gregg. Thanks for the 

work that all of you are doing in this area. 

We are going to have 7-minute rounds of questions. I am going 

to yield to Senator Coburn to go first because he has got a conflicting hearing before the Finance Committee. 

Senator COBURN. I have to go right now. 

Chairman LIEBERMAN. See, I had the best of all worlds. I yielded 

to you and you yield back to me. Thanks, Senator Coburn. Come 

back soon. [Laughter.] 

Senator Coburn has been a real leader in this regard, and I hope 

he is able to come back to ask some questions. 

This is a hearing that is not just about the DATA Act, but that 

is the legislation that is before the Committee, so I appreciate what 

the witnesses have had to say about USASpending.gov and about 

Recovery.gov. But let me now ask each of you to give us some of 

your thoughts about the DATA Act, and let me just fill that out by 

saying, as you heard, Senator Warner said that he is responding 

to some of the feedback he has received already. The DATA Act in 

its initial iteration creates a new commission to serve as the central hub to collect spending data, set standards, and analyze spending information. I would ask you whether you think it is necessary 

to have that. It is pretty clear to me that Senator Warner is moving back from that. 

15 

We have also heard complaints from award recipients about the 

cost of complying, and, finally, I would say the other concern generally, which I also think Senator Warner in responding to, is the 

cost in the House bill to the Federal Government to set up the new 

procedures. 

Those are all topics on which I would welcome your input, and, 

Mr. Dodaro, we will begin with you. 

Mr. DODARO. First, I would say that when you look back on 

USASpending.gov and Recovery.gov, without legislation neither of 

those initiatives would have been started. 

Chairman LIEBERMAN. That is an important point. 

Mr. DODARO. In fact, I would underscore the point that legislative initiative in this regard has really led to the improvements 

that have been in place, along with the implementation, obviously, 

of the legislation. And one of the reasons, in my opinion, that Recovery.gov was more successful with data quality issues than 

USASpending.gov is Congress dedicated a group of people full-time 

to implementing that site. I think, off the top of my head—and I 

may be wrong—about $80 million was to go into developing that 

site. And the President selected a great person in Earl Devaney to 

lead that, and there were people dedicated on the Board, and they 

had staff, and so it was properly resourced. And with that dedication, they were able to achieve, I think, a better outcome. 

So from a standpoint of why you need legislation and some dedicated resources, as I mentioned in my opening statement, there 

was a lot of dialogue with the State and local communities and the 

people who were reporting so that the reporting could ultimately 

be as efficient as possible. That needs to be embedded in the new 

legislation as well. 

Now, the legislation that have been discussed this morning, the 

House bill, and the bill introduced in the Senate, have a lot of very 

good attributes. It expanded the information, because right now the 

award data on USASpending.gov just tells you how much was 

awarded. It does not really tell you how much has been spent, and 

what result was achieved out of that program. You have more of 

that type of information available on Recovery.gov. 

So trying to have a broader range of information available of not 

only what was spent but what was received by the Federal Government and the benefit as a result of that and what the status of it 

is, is very important. The DATA Act sets up an advisory committee 

to have stakeholders and recipients, who are involved, discuss 

those issues. It emphasizes data standards, the importance of that 

and common data elements. And it emphasizes the use of technologies that need to be put in place in order to effectively display 

the information and make it searchable and usable, more user 

friendly by the public. 

Now, how you achieve that and whether you need a new entity 

and whether you can use existing entities I think is a policy question appropriately resolved by the Congress. But I think at the end 

of the day there needs to be clear, dedicated resources to this 

project with clear milestones, and clear expectations that people 

can be held accountable for. If that does not happen and there is 

not a legislative framework for that, my belief is that everyone will 

16 

be disappointed with the level of progress that would occur without 

that. 

Chairman LIEBERMAN. That is very helpful. Thanks. 

Mr. Werfel, what do you think of DATA? 

Mr. WERFEL. Senator, I think I am going to respectfully disagree 

with a few of the points made by my colleague, although I think 

all of his perspectives are valuable and valid. 

Let me start with the governance structure of this new commission in the House bill. Actually, before that, let me state that as 

a general matter—and I do not think it should be a surprise to 

anyone—that we fundamentally agree with the objective of greater 

transparency and the relentless pursuit of such transparency. The 

disagreements I am about to outline are in the strategy of how we 

get there. 

The governance model in the DATA Act that passed, the House 

bill, has significant concerns and problems that we think would actually potentially diminish transparency overall to the government, 

and it has to do with the manner in which the commission is set 

up. It is set up as an independent commission. There is not, apparently, a way to disagree with that commission. There is no builtin mechanism, for example, for the Executive Branch to object or 

veto the standards in any way. In fact, it is very clear in the bill 

that Treasury and OMB must adopt whatever standards are issued 

by this commission and move forward with them. It is not clear 

how we give feedback into the mechanism. 

It is also not clear in the bill how the public gives feedback. For 

example, it is not clear whether the decrees of this commission are 

rules under the Administrative Procedures Act or not, and, therefore, it is not clear whether these standards have to go out for public comment or not, or any kind of public vetting. If it was a Federal Advisory Committee Act (FACA) committee, for example, the 

meetings would be open to the public. It is not a FACA committee, 

so how the public gets engaged in the deliberations and the proposals is not clearly outlined. 

In fact, there is language in the House bill that specifically exempts the commission from the Paperwork Reduction Act, which, 

as you know, establishes a period of time for notice and comment 

for information collection. So we see everything with this governance model going in the wrong direction in terms of public input, 

at least a lack of clarity that we think is needed. 

We believe a critical lesson learned of the Recovery Act was that, 

when needed, OMB and Treasury rose to the occasion, initiated the 

types of data definitions, the types of regulations, and the types of 

input that was needed to be successful. And what the DATA Act 

essentially does is it positions OMB and Treasury to not be directly 

involved in those key decisions and brings a whole new entity, 

which is going to have to be completely staffed up with new sets 

of individuals. They are going to have their own lawyers, their own 

human resources department, all their own infrastructure, and we 

think that is missing a key lesson learned of the Recovery Act, is 

when given the opportunity, OMB, Treasury, and the Federal agencies can certainly deliver. 

17 

Let me make a point about the legislation itself, getting away 

from the governance structure, which obviously we think should be 

fixed and addressed in any bill going forward. 

A concern that we have about new legislation in this area generally is we are currently executing on a series of different statutes. We are still executing on the Transparency Act that was enacted in 2006, and we are making progress. I mean, the world looks 

very different today than it did in 2005 before that bill was ever 

penned in terms of what is available. And that is a really important foundation of progress, and in no way has it, in my opinion 

been a failure. It has been a success in terms of if you look at the 

world in 2005 versus the world today. 

We are not finished. We are still executing on that bill, and it 

has taken longer than we would have liked, but we are still executing. In the interim, other legislation has been enacted that is related and impacts our work, including the GPRA Modernization 

Act, which is a very recently enacted bill, and the Improper Payments Elimination and Recovery Act (IPERA), which also relates to 

more transparency on payments, this time on where our payments 

are improper. And the question that we have to ask is: How will 

new legislation impact these efforts? Does it enhance and reinforce 

what I think we all can agree are important objectives? Or does it 

move us in new directions that would require us to have some costs 

in terms of the investments and the training that we have already 

made? Are our systems that we have been building up over time 

to address the Transparency Act now going to have to be re-engineered once again for a new nuanced set of requirements and 

standards? And if so, we need to have a real compelling case for 

why these additional data elements or additional changes are important because they could necessitate a diversion of resources 

from where we are currently executing against a set of statutes. 

So from our bottom-line perspective, we prefer an approach 

where we are targeting a particular problem that has occurred. So 

if we look at the landscape of what is going on in terms of the Federal Government’s execution of USASpending.gov, Recovery.gov, 

and Performance.gov through the GPRA Modernization Act, and 

PaymentAccuracy.gov through IPERA—as we are doing all those 

things, can we identify specific problems that are occurring and figuring out what the specific legislative solution that is needed 

versus a DATA Act approach, which is really wiping the slate clean 

and saying we are starting over with a whole new set of standards 

and requirements that are global throughout government, which 

architecturally, if you draw it up, might make sense, but it is very 

expensive, and I worry that we will lose a lot of time in tackling 

the specific challenges we have right now while we rebuild this 

building from the foundation. 

Chairman LIEBERMAN. I apologize, Mr. Gregg, because I am way 

over my time, so I am going to yield to Senator Johnson, and then 

we will come back with a second round. 

Senator Johnson. 

OPENING STATEMENT OF SENATOR JOHNSON 

Senator JOHNSON. Thank you, Mr. Chairman, and I want to 

thank the witnesses for your time and testimony. 

18 

Senator Warner’s testimony basically talked about the goal of his 

bill was to basically show the taxpayer the money. And I want to 

come at this from a slightly different perspective, from an agency 

head, a manager, the kind of position I am in here is now as a new 

Senator. 

How do you manage this $3.8 trillion a year beast? And so we 

are talking about information, and we are talking about how to utilize the information to manage things. 

As a new agency head, what would be the No. 1 complaint a new 

agency head would come into the agency with in terms of trying 

to get information to effectively manage their agency? I would like 

to start with Mr. Dodaro. 

Mr. DODARO. I think, first of all, it is getting timely, accurate information. Years ago, before the passage of the Chief Financial Officers Act, there was not a reliable set of financial statements that 

somebody could look at. If you were a new head of an agency, you 

would want to know what the resources were—— 

Senator JOHNSON. How long ago was that? 

Mr. DODARO. That act effectively required in 1996—for the first 

time, after 200 years of operating our government—that there be 

financial statements prepared and independent audits made across 

the 24 largest departments and agencies, and then the governmentwide consolidated financial statements were required beginning in fiscal year 1997. 

Now, most of the individual agencies now have audited financial 

statements that receive unqualified opinions except for the Department of Defense and Homeland Security, and we have not yet been 

able to give an opinion on the government’s consolidated statements. 

Senator JOHNSON. So up until 1996, agency heads did not have 

accurate or timely financial information, by and large? 

Mr. DODARO. Not that was independently validated by anyone, 

and there is still difficulty getting timely information. 

Now, things are a lot better than they were before this started, 

so I do not want to imply that there has not been great progress 

made during that period of time. But that is still a challenge, particularly in some departments and agencies that are large departments and agencies like the Department of Defense and the Department of Homeland Security that have not passed that test yet. 

Senator JOHNSON. Would both of you agree with that, or do you 

have a different perspective on that? 

Mr. WERFEL. I agree. I had the benefit of meeting and having 

first impressions from all the new Chief Financial Officers (CFOs) 

that came into government at the beginning of this Administration, 

and one of the reflections we learned in the first 100 days from 

those CFOs was a sense of how much data is available within their 

agency, just enormous quantities of data. 

Senator JOHNSON. But no information. 

Mr. WERFEL. There is no way to basically pull that information 

in a cost-effective way into presentations and business intelligence 

that can allow them to make the decision. As Mr. Dodaro was describing, we have built a very robust framework for audited financial statements that is pulling a lot of this data into balance sheets 

and income statements. And, unfortunately, the way it is working 

19 

out is those statements, while they are important in a corporate environment, are not necessarily driving to clear decisions. We do not 

have Deputy Secretaries reading balance sheets and saying, ‘‘Aha, 

this is how I am going to make a smarter decision.’’ 

So the issue is how do we pull that information into more userfriendly financial reports and program reports. To me that is the 

No. 1 challenge. And there have been pockets of success across government, but it is not systemic across government, and that is 

what we really need to do. 

Senator JOHNSON. Mr. Gregg, what is your perspective? 

Mr. GREGG. I agree with my colleagues. The only thing I would 

add is that maybe not at the Secretary level but at the Deputy Secretary level, not having any real full cost accounting for programs. 

By and large, many programs do not know what the real cost, the 

full cost of the program is. We have lived so long in a budget world 

that being able to make judgments on whether to spend more 

money in one area or another and what the return on it is, is not 

something the Federal Government, I think, generally does very 

well. 

Senator JOHNSON. Coming from a business background, with the 

age of mini computers and micro—I mean, this is actually pretty 

easy stuff from a business standpoint. How many different accounting systems do we have in the Federal Government? Just a clue, 

off the top of your head, is it—— 

Mr. GREGG. There are hundreds. 

Mr. WERFEL. There are a lot, particularly at the Defense Department, hundreds of systems just within the Defense Department. 

This is part of our challenge, and over the last decade, we have 

worked to consolidate those financial systems into centers of excellence or shared service providers. But a lot more work is needed. 

Senator JOHNSON. You can have different modular systems at 

the lower level, and then as we bring the information up to summary level, do we have common templates? Do we have common 

systems from that standpoint? I would tell you, as a new Senator, 

it drives me nuts. I am an accountant. It drives me nuts that I cannot get information. 

Mr. GREGG. It depends. Mr. Werfel mentioned centers of excellence. There is an Administrative Resource Center that Public 

Debt, one of the Treasury offices, has that services for accounting 

and some other functions for 60 or 70 government agencies, and 

they have followed the credo of everyone has to come in and use 

the same format. They are not going to specially design a basic accounting system for agency X or Y. And so they have been able to 

keep their costs down. They are very effective at what they do. I 

think to me that is the model that we need to expand across government on how we do accounting and other basic services. 

Senator JOHNSON. Mr. Dodaro. 

Mr. DODARO. Senator, we have a twin problem here that is very 

much impeding the ability to make effective decisions. On the one 

hand, you have this problem that Mr. Gregg and Mr. Werfel are 

outlining in terms of the accuracy and timely information on costs. 

Additionally, in the work we have been doing on overlap and duplication among Federal programs, what struck me is how few programs have effectiveness studies done. So you not only do not know 

20 

the cost, but you also do not know the effectiveness of many of 

these programs’ activities. And lacking those fundamental building 

blocks, it is difficult to make decisions, and to make things more 

effective. So both of those areas are in need of attention. 

Senator JOHNSON. Well, I was going to go exactly to that point 

in terms of basic metrics. When we start talking about duplicated 

programs, how do you evaluate those things so that you can actually manage? And then the next step would be: How do you, as 

Senator Warner was talking about—everything is additive in this 

town. Let us pass a new bill. What about subtracting? What is the 

process? Do we need legislation, do we need a specific process to 

start eliminating things that are obsolete, that are not effective? 

Mr. DODARO. We have pointed out many areas that try to point 

the Congress in the direction of where there is a lot of overlap and 

fragmentation, which are real indicative indicators of duplication, 

and some areas where we found duplication. So we have provided 

a pretty effective road map to dig in, and then I think the burden 

should be on the agencies to demonstrate the value of those programs and why those programs are unique based upon looking at 

other programs and why they could not be consolidated. At a minimum, you could save a lot of administrative savings and in many 

cases use the program dollars more effectively. 

Senator JOHNSON. Thank you. 

Mr. GREGG. Senator, if I might just add one quick comment, I 

think my own view is that there are many opportunities to consolidate. In the office that I run, we are in the process of consolidating 

two bureaus—the Bureau of Public Debt and the Financial Management Service. And both of those are well-performing organizations, but when we looked at it, we said there is a lot of overlap 

in accounting, there is overlap in administrative areas, and there 

is overlap in information technology (IT). And we are going to have, 

I think, tremendous benefits from the speed with which we can deliver services and cost reductions. So I think the opportunities are 

there. 

Senator JOHNSON. Thank you. 

Chairman LIEBERMAN. Thanks. 

Senator Coburn, welcome back. It is all yours. 

Senator COBURN. Thank you, sir. 

First of all, let me congratulate the Treasury Department and 

Secretary Tim Geithner for what you all have done. It is phenomenal. I think you are making progress, probably better than 

anywhere else that we are in the Federal Government. 

To go back to some of what Senator Johnson was talking about, 

the GAO has given us tons of information on duplication, and they 

have written glaring reports that there is no measurement of what 

you are accomplishing. One of their first reports to come out 2 

years ago showed we had 47 job training programs; all but three 

of them overlap. But we discovered 3 weeks ago that there is another 45 job training programs for disabled. We spend $27 billion 

a year, and we have no metric on any program whatsoever. 

Now, I want to contrast that with you to the Division of Library 

Sciences and Museums, the most well run agency in the Federal 

Government. There is not a grant that they issue that does not 

have a metric on it. There is not a time they issue a grant that 

21 

they do not go and check and audit the grant while it is in process. 

And if they are violating the deal of the grant, they withdraw the 

grant. 

Now, that is not hard. If every agency would follow what they 

are doing, we would save hundreds of billions of dollars. 

So the frustration is what we hear in Washington is why we cannot change this, and those reasons have us bankrupt. I mean, we 

are literally bankrupt. If you think about the generally accepted accounting principles in this country, if you were to use them, we 

have somewhere between $113 and $131 trillion worth of unfunded 

liabilities, plus $16 trillion worth of debt. 

Time is of the essence for us. And it does not matter which Administration. Whether it is Republican or Democrat, it does not 

matter who controls Congress. We have fallen down on the job of 

demanding accountability and transparency. And, Mr. Werfel, you 

have been a hero of mine in OMB all the time I have been here. 

You slave every day to try to fix these problems. But you need 

some help from Congress, and we have not given it to you. 

I once had a reporter tell me—I look at the press table over 

there, and it is essentially almost empty. I had a reporter tell me 

nobody in the country cares about waste, fraud, and abuse. I want 

to tell you, how many people do you think in America care about 

waste, fraud, and abuse right now? Tons. Of the 8.2 percent that 

are unemployed and the 15 percent that are unemployed and underemployed, they care about the waste, fraud, and abuse. And 

there is anywhere from $250 to $350 billion worth of stuff that is 

just junk. A good portion of it is in the Pentagon. We have all the 

Republicans saying you cannot cut the Pentagon, but everywhere 

you go and you ask somebody that works in the Pentagon, can you 

cut money, they say yes. 

So it does not compute, and nobody is any more frustrated than 

Senator Johnson, but I am a pretty close second. 

Mr. Werfel, I was really excited to hear what you said. Have you 

mandated that each agency will give you a list of the government 

programs? Because I could not get the Senate to vote for that. The 

Senate turned down a proposal to require an agency actually to 

know the programs that they have. They voted it down. Now, have 

you mandated that? 

Mr. WERFEL. Yes, we are on track. We are going to be able to 

deliver that. 

Senator COBURN. When are we going to see that? 

Mr. WERFEL. Well, probably some time in the fall. We work with 

the Department of Commerce and the Department of Education— 

the Department of Education, an agency that could do it; the Department of Commerce, an agency that could not—and try to figure 

out where the gaps are. And in the coming weeks, we are going to 

be issuing guidance based on that learning to the agencies to make 

sure that we hit this time frame where we can deliver this comprehensive program inventory. 

It is not only important to signal that we know where our money 

is going. One of the major lessons learned of where we are in transparency is that we do have a lack of standardization. We cannot 

give you a program list today, but, for example, we could give you 

a list of every dollar that goes out the government by Treasury acVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
22 

count symbol, which is how our accounting is set up. The reason 

why we have 23 agencies with an audit opinion today is because 

we developed systems. So we can take these accounts and give 

them to you. 

The question is: Can we translate that into the program list? 

And that is the difference between starting over again and redoing 

all those Treasury accounts, which we think would be expensive, 

versus leveraging technology that exists today that is better than 

it has ever been and taking these different types of data lines, 

translating them, and structuring a framework around them. And 

that is where the ‘‘can’’ is. The ‘‘can’’ is not going back and replowing the earth and changing every account that we have, because that is expensive. The ‘‘can’’ is leveraging technology to pull 

together unstructured data in ways that we could not do 10 years 

ago, and that is the direction we are taking. 

Senator COBURN. I sure hope you plan on staying at OMB. 

The other thing that we have that Mr. Dodaro has put forward 

for us is the fact of duplications. I guess the third report will be 

coming this next February—finally, I think, whether the rest of the 

government does or not, the GAO will have a handle on where we 

are. 

I want to tell you a story. I am not going to tell you which committees, but in the past year, we have had bills offered in committees that are identical to laws that we are already doing. And I 

very quietly went to the Senator and said, ‘‘Has your staff checked 

out this?’’ And, of course, they were spared embarrasment, they did 

not offer the bills, but the fact is the Senate also voted down a requirement for CRS to tell us if we are already doing something 

about which we are getting ready to vote on. 

So the problem is competency in Congress. It is competency in 

Congress. And we do not have one problem in front of us we cannot 

solve. You would not still be there if you did not think we could 

solve these problems. The question is: Where is the leadership to 

get it done? And I am talking Republican and Democrat alike. And 

we need to give you the tools, and we need to empower you to make 

the changes. 

The problem in the Pentagon right now is they are going to a lot 

of off-the-shelf programs, but then they are spending cost-plus contracts trying to make those off-the-shelf programs fit into old systems. And they are never going to make their 2017 accounting 

deadline if they continue to do it the way they are doing it. So 

there is just no leadership in terms of accomplishing the things. 

Do you think that if you were to compare USASpending.gov and 

Recovery.gov, there is no question Recovery.gov is a better system, 

correct? 

Mr. DODARO. I think in terms of what we have seen both from 

accuracy and searchability, I would say yes. But that does not 

mean that USASpending.gov should not be built upon as well. 

Senator COBURN. No. 

Mr. DODARO. OK. 

Senator COBURN. The point I am wanting to make is you had 

real leadership to get the Recovery.gov up. Somebody took ownership of that, and somebody implemented it. Like you said, you were 

meeting once a week. 

23 

Mr. DODARO. Right. 

Senator COBURN. In other words, action was applied to the real 

problem, not the symptoms of the problem, and we actually got 

something done. And that is what the American people need to 

know. 

Mr. DODARO. I agree with you, Senator. In fact, when you had 

to step away, I made that very point to Senator Lieberman, that 

that was one of the reasons why Recovery.gov was effective, is we 

set a leadership structure, we dedicated some resources to it, and 

we selected good people to go in there and implement it, and they 

did a good job. 

Senator COBURN. So here are some positive things that are happening in the government today you all are telling us about— 

Treasury, what Mr. Werfel is doing, and what you are doing at 

GAO—and we have no press covering this. So no wonder we look 

like buffoons to the American public. It is because we pick and 

choose what is important to the American public when, in fact, this 

is the core that is going to change the outcome for our kids and 

our grandkids, getting a handle on all of this. 

Enough with my statements, Mr. Chairman. I yield back. 

Chairman LIEBERMAN. Thank you, Senator Coburn. I agree with 

your statements, and I hope we can continue to try to realize them 

in some ways. 

Senator Portman, welcome. You bring a lot of personal experience in these areas to this hearing, and I thank you for being here. 

OPENING STATEMENT OF SENATOR PORTMAN 

Senator PORTMAN. Thank you, Chairman Lieberman, and thanks 

for holding this hearing. And as my colleague just said, this may 

not be the most exciting topic, financial transparency, judging from 

some of the media coverage. But what could be more important, 

and particularly at a time when we have a $16 trillion debt and, 

as Senator Coburn said, really tens of trillions of dollars in unfunded obligations beyond that? 

I wanted to come here in part to thank Senator Coburn and to 

thank Mr. Werfel, because when I was at OMB, Senator Coburn 

worked on some legislation that I was able to support and then 

help implement, and Mr. Werfel was the one I turned to to help 

put it in place, so Mr. Werfel, thank you for the hard work you did 

when I was working with you and what you continue to do. You 

were Deputy Controller at the time. And as you recall, we launched 

this effort which we called FederalSpending.gov, in January 2007, 

on a real shoestring budget. We did not have any money basically 

to do it. As I recall, we had to go into some existing accounts to 

try to put something together. We had an interagency group that 

helped us. We actually used an outside watchdog’s platform for the 

Web site because we did not have the resources to do it internally. 

And that was the original database, and then after that the Web 

site platform became more sophisticated with USASpending.gov. 

But it is a critical accountability tool. I strongly support it. I 

have some concerns about some of the data, and that is what I 

want to focus on today, is how can we be sure that this data really 

is coming from the agencies in a way that is useful, that is accurate. 

24 

GAO did a study in 2010, as you know, that said that out of a 

sample of 100 awards from the site—and, remember, this is putting 

all grants and contracts online for folks that do not follow this 

closely. But out of 100 awards they looked at, each one had at least 

one data error in the required field. And I know since then OMB 

has taken some steps to improve the data quality, though my understanding is there are still some serious concerns about standardization of data and just quality of the data. 

The memo that OMB put out in April 2010 requires incremental 

improvement from each agency, culminating in 100 percent of 

awards being reported on time, completely and accurately by the 

fourth quarter of fiscal year 2011. So I would ask you, Mr. Werfel, 

have all the major agencies submitted a plan to improve the quality of their data? And can you comment on their progress in adhering to the data quality framework you laid out and, more broadly, 

the approach OMB is currently taking to track and evaluating that 

data, in other words, the auditing and the follow-through on the 

performance of each agency? 

Mr. WERFEL. Absolutely, Senator Portman. Thank you. And let 

me just say it is an honor and a first for me to be able to testify 

before a former boss of mine, and I continue to be blessed by my 

experience in my career in the Federal Government and serving 

the Federal Government. 

We do have the data quality plans from the agencies, and they 

reveal a tremendous amount of difference that each agency has 

used to approach the problem. As an example, I think the Education Department is doing it right. They are looking to integrate 

the spend file that they are sending out to USASpending.gov back 

to their core accounting system, which is the audited and trusted 

source of their financial information. That is not an easy thing to 

do, as we have been discussing, because the information that is in 

our core accounting system is aligned by certain account structures 

that just does not translate to a program recipient, how much 

money went out for this award on December 1, 2010. We have trouble translating those two databases. But the Department of Education has figured it out, and we are going to try to figure it out 

across government. 

There are a couple of things we need to do—and they are in various stages of development—leading to increased reliability of the 

information. The first is we have to get a better handle on what 

our control totals are. So if you go to USASpending.gov right now 

and it tells you that the Department of Energy issued $1 million 

worth of awards in the month of April, how do we know that is a 

full and complete list? We have to be able to take and tie it back 

to the audited, trusted source that is our core accounting system. 

How do we do that? Well, there are some details in terms of linking data, but for us, the most important thing we can do is bring 

the power of the audit framework to bear in terms of that accountability. When you were Director, we were making progress and we 

have continued that progress in getting the number of agencies 

that have clean audit opinions for their traditional financial statements. 

Why has that been so successful? It is because you have the pressure of the independent audit looking over your shoulder and sayVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
25 

ing, ‘‘Did you pass the test or not?’’ We do not have that for the 

USASpending.gov file. There is no auditor, there is no moment of 

truth where the auditor says you pass, you fail. 

So how do we bring those two things together? OMB has developed something called the ‘‘Statement of Spend.’’ It is a new financial statement. It does not exist. We have five basic financial statements in the Federal Government. We think we need six. The 

Statement of Spend would need to be audited, the auditor would 

only pass it if the underlying information is trustworthy and reliable. And so what we are trying to do and what we think is one 

of the most important things we can do is integrate this very powerful and robust audited financial statement with the independent 

mechanism with the spend file delivery that is going to USASpending.gov which does not have that audit framework. I really 

think that could be a game changer, and that is why we have been 

piloting the Statement of Spend for the past few years. This year, 

for the first time, every agency will do a Statement of Spend, and 

so we are moving down a path where I think we are going to get 

more audit accountability and, therefore, more reliability. 

Senator PORTMAN. Mr. Werfel, GAO seems to be saying that you 

all have backed off a little bit after 2010 on your analysis of the 

thoroughness of the data, accuracy of data, the auditing function. 

Is that because you are going down this Statement of Spend track 

instead? Has OMB backed off? Are they inaccurate about that? And 

then the final question I have—and I see my time is expiring—is 

about resources. As you know from working with me, I am one of 

those skinflints, and I am the last guy to talk about spending more 

Federal money. On the other hand, we have probably spent, since 

2006, on this whole project $14 or $15 million. Compare that to 

what has been spent on the stimulus alone, the auditing there, I 

think it is about $84 million, if I am not mistaken. To me, this is 

a critical area because we are going to save a lot of money if we 

do this right. 

So those are my two questions. One, have you backed off on some 

of this auditing and evaluation of the thoroughness of the data? 

And have you done it because you are going down another track 

to set up essentially a new measurement, a new metric that you 

think will be more effective in holding people’s feet to the fire? And 

are the Inspectors General involved in that as well? Because that 

is something that we always tried, to get the IGs more involved to 

provide some of that action forcing and accountability within the 

agencies. And then, finally if you could just comment on the resource front. Are we doing this on a shoestring because it does not 

fit well into any other area? And, in effect, are we, therefore, not 

taking advantage of some of the cost savings we could get if we did 

it in a more expedited and comprehensive way? 

Mr. WERFEL. Senator I will start with your first question about 

whether we are backing off. We are certainly not backing off. I 

mentioned earlier that we see a lot of heterogeneity in what agencies are doing. Accordingly, we had to make a strategic judgment 

call in terms layering on top of that heterogeneity a data metrics 

framework that we anticipated would not provide good information 

to rely on, and we did not want to do it just to do it. We wanted 

to make sure that we were doing it right. So we took it in different 

26 

segments. In particular, in the contracting realm, we saw a much 

bigger opportunity to apply a more robust set of metrics and requirements than we did in all other awards, and that is a credit 

to the Federal Acquisition Regulatory Council, the Chief Acquisition Council, and all the work that has been happening within acquisition to drive standardizations. 

So we are in a place right now where we have a robust set of 

tools in place to evaluate the reliability of the contract information 

on USASpending.gov. We actually recently just shared a report 

with GAO staff on some of the metrics, and GAO’s staff reaction 

was, ‘‘Why is this not public?’’ And it is a really good point. So we 

committed to putting it online in the very near future. 

Senator PORTMAN. That has been part of their concern. 

Mr. WERFEL. Yes. 

Senator PORTMAN. There has not been public data on the followthrough. 

Mr. WERFEL. Yes, and it was a very good point. And so we are 

going to move that into the public sphere. But they also raise a 

good point that we do not have similar metrics in grants and other 

types of awards that show up on USASpending.gov. But for us, it 

is kind of like building towards success rather than doing everything at once. 

For example, Recovery.gov and the whole recovery framework 

had many successful elements to it that now we want to build into 

USASpending.gov. We have to try to figure out which are some of 

the first segments of that success to build in. 

On your question on resources, it is absolutely true, as I think 

one of the reasons I have survived at OMB so long is because I am 

one of the most frugal people I know, and I fit in there like a glove. 

I am proud, that for a long time in my office the lamp still said, 

‘‘Bureau of the Budget’’ on it. That is how old it was—and I did 

not need a new lamp. And that frugality makes it hard for me to 

ever say that we need more money. But in this situation, in particular USASpending.gov is financed through the E-Government 

fund. I think we asked for $32 million for the E-Government fund. 

I think we received in the range of $2 to $4 million, which really 

hampers the ability to make enhancements to USASpending.gov to 

make it more user friendly, to use some of the geospatialing that 

would enable citizens to understand where the money is going in 

their neighborhoods more effectively, but also to put in the quality 

control mechanisms that Recovery.gov has to make sure that we 

are not making errors. For example, you cannot submit information 

if it bounces up against a mistake and we are not going to let you 

submit that information. We have not been able to initiate that in 

USASpending.gov in large measure because of budget issues. If it 

is a smaller amount of money that is necessary than the $32 million, let us sit down and roll up our sleeves and figure out what 

the right amount of money is. But we certainly need a resource 

boost in this area to make some progress. 

Senator PORTMAN. Thank you. And, Mr. Chairman, sorry to take 

so much time. Again, just to say at the outset, I mentioned Senator 

Coburn. Sometimes things do get done around here, and when I 

was at OMB, Senator Coburn and I had some very honest conversations, and it ended up, thanks to his efforts and efforts of othVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
27 

ers, in putting together this database that our taxpayers can look 

at now and see where grants and contracts are going. So congratulations to Senator Coburn on that. 

Chairman LIEBERMAN. Thanks, Senator Portman. I agree that 

one does not always have pleasant conversations with Senator 

Coburn, though almost all of mine have been. But they are always 

honest. That was the adjective you used. 

Senator PORTMAN. Spirited. 

Chairman LIEBERMAN. Spirited and honest. Senator Carper, welcome back. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Thanks very much. I apologize for being in and 

out. We have a simultaneous markup in the Finance Committee, 

so I am trying to bounce back and forth between each of them. 

Speaking of honest, I am going to ask Mr. Werfel to be honest 

with me. Whenever Mr. Dodaro comes here to testify as our Comptroller General, I always like to note whether or not he is using 

notes when he speaks. And all the times I have ever heard him testify, I have never seen him use any notes. And I just want to know, 

while I was out of this hearing, did he use any notes? 

Mr. WERFEL. He never uses notes. I am afraid I use notes. 

Senator CARPER. How do you think he does it? 

Mr. WERFEL. He is smarter than me. [Laughter.] 

Senator CARPER. The only other person I have ever seen testify 

before a congressional committee for any length of time and never 

use any notes—this was a guy who testified I think for 3 days, and 

his name is John Roberts. He never used any notes either. Mr. 

Dodaro, I do not know if you are aiming to get on the Supreme 

Court or not. But I am impressed. [Laughter.] 

Let me ask a serious question, if I could, of the three of you. 

There has been some discussion about the 2006 law which Senator 

Coburn and former Senator Obama did great work on. I was happy 

to, as we say in NASCAR, ‘‘draft’’ on them. We worked with a number of people in this room on the Committee and also with Senator 

Warner on the GPRA Modernization Act, and there are efforts underway on Do Not Pay List. Senator Coburn and I have done a lot 

of work—and others as well—on improper payments, several 

versions of that legislation. Now we have the DATA Act proposed 

by Congressman Darrell Issa and Senator Warner among others. 

We have all these different pieces that are out there, how do we 

make them work cohesively and coherently? I am always reminded 

that one of the things we are trying to do in health care reform is 

to move from fee-for-service to a coordinated delivery of health 

care. We are actually coordinating the delivery of health care. We 

are not all a bunch of stovepipes where we just spend money on 

people when they get sick rather than spending money on people 

to try to make sure they stay healthy, and prevention and wellness 

in the first place. I want to make sure that we have a coherent, 

cohesive approach here using all these different tools. 

Let me just ask, and we will start with Mr. Dodaro: How do we 

make sure we get some synergy out of this and that we do not end 

up with just the opposite effect? 

28 

Mr. DODARO. I think there are a couple keys to that, and I mentioned this briefly in my opening comments. But one is there needs 

to be consensus on what needs to be reported. It is just like any 

system development effort. You need to know what your requirements are, what exactly people want to be reported, and to try to 

get consensus on that information. Right now USASpending.gov 

gives you award data but does not tell you what happened to the 

money after that. Recovery.gov follows the money a little bit more 

to conclusion. If people want the full picture in order to be able to 

see what was allocated and appropriated by the Congress, what 

was spent, what was received for that money, did we get value out 

of it, and how did the American people benefit? That can be done 

through consolidation of the systems. 

What do we want to display to the public and have transparency? 

We cannot just take all the data that is collected by the Federal 

Government and have a data dump to the American public. It will 

not be comprehensive, and it will not be helpful to them in that regard. 

So getting consensus on that is key—and the DATA Act goes 

somewhat toward that. But I think that concensus is what needs 

to be clarified in further discussions, and the need to consolidate 

and build on existing systems. And I think that is pivotal. 

So those two things are, in my opinion, really central to being 

able to answer your question. 

Senator CARPER. Let me ask you, Mr. Werfel, for your reaction 

to that, but add to that your own ideas, please? Thanks. 

Mr. WERFEL. It is a very difficult question, and there are a lot 

of tradeoffs involved. One concern is that if you are not thinking 

about synthesizing these things, you could create a longer timeline 

for when we are going to cross the finish line and be successful. So 

we have been working at USASpending.gov and FFATA for quite 

some time. We are just ramping up on the GPRA Modernization 

Act. We have been working at improper payments transparency for 

quite some time. And to me the synthesization comes from understanding where are the highest-priority failures that are going on 

and how do we close those gaps. And some have reacted to these 

failures and said the whole underlying structure is broken. It was 

not designed to give us the transparency that the American people 

deserve. And they are not wrong about that. The issue is that if 

you try to clean all of that up, it is expensive and it takes a long 

time. But it might be the right way to do it if you were hiring an 

architect and saying design me the perfect system. 

My approach, I tend to take a more practical approach and say 

I am going to live with the deficiencies that are in that foundation 

and that infrastructure and just try to find some practical solutions 

in the short term. 

So just to give you one example, I sat in this chair about a year 

ago, I think it was Earl Devaney’s last testimony, and he was 

asked the question: What is the number one thing that frustrated 

you most or the one thing that you would change from your experience? And he surprised everyone because he went to something 

very detailed. He said that we need a uniform award identification. 

Senator CARPER. What did he say, we need a uniform? 

29 

Mr. WERFEL. A uniform award identification across government, 

and the reason why he picked that above all else is because he was 

continuously frustrated during the recovery that information was 

coming in from recipients and subrecipients into 

FederalReporting.gov, and we as a Federal Government could not 

effectively link that information straight across back to the accounting system. And one of the reasons was because we could not 

build those family trees of here is your award, here is your subaward, it goes to there; that award goes to this payment; and this 

payment goes to this account. And his reflection—and he was mostly right about that—was that it was the fact that the information 

is not tagged effectively down to that last recipient to give you that 

audit trail. 

So he said, ‘‘The one thing I would do is build that tagging system of a uniform award identification.’’ I think that is the type of 

solution that can help you synchronize all these various efforts because we have the legislation out there, we are executing it, we are 

making progress—clearly in not all cases the progress we need to 

be making. I think a pragmatic way of looking at it or a practical 

way of looking at it is as we see these deficiencies emerge, what 

is the change that we can make in the short term that is going to 

have the highest return on investment? To me that is the approach 

that we are trying to take at OMB and really leveraging the Treasury Department, which is fantastic at execution, at helping us close 

some of these gaps. 

Senator CARPER. All right. Thanks very much. Mr. Gregg, would 

you have something you would like to add on this? 

Mr. GREGG. I said in my opening statement that Treasury has 

traditionally just focused on making sure our payments are right 

and on time, and about 2 years ago, we recognized that we needed 

to do more in providing payment information. And so the repository 

that I talked about is going to have information for all the payments—85 percent that Treasury makes and all the payments that 

non-Treasury disbursing offices make, and then being able to get 

data into that data warehouse that links a contract or a grant, and 

then be able to verify with the USASpending.gov and other data 

sources. I think that is something that we have well underway. I 

think the information repository will be up and operational—well, 

actually it is now, as soon as we start getting data sources in from 

the agencies. So I think that is something that we had not done 

before, and we recognized we needed to do more in this area. 

The second thing I would say is that I do not think we need the 

DATA Act to do this. I think what Senator Coburn said, what we 

need is leadership, and I think the partnership that we have had 

with OMB and Treasury the last couple of years since Mr. Werfel 

and I have been working together has been a great partnership, 

and we need to move on these things. We need to show leadership, 

and we need to hold agencies accountable for compliance. And I 

think it is as hard and as simple as that. 

Senator CARPER. Do you think of Mr. Werfel as an ‘‘old-timer’’? 

He was talking earlier—— 

Mr. GREGG. Yes. Very old. 

Senator CARPER. Just checking. [Laughter.] 

30 

I will just say in closing, colleagues, in terms of actually making 

some progress, Senator Coburn and I and a number of folks on this 

Committee have worked with the folks in the Executive Branch, 

OMB, and GAO on improper payments, and we thank GAO for 

bringing this to our attention. In the Navy, one of the things that 

is really hard to do, you always talk about changing the course of 

an aircraft carrier. If you stick with it, you can change the course. 

And in naval aviation, we would say if you are doing something 

really hard, you are trying to change an aircraft engine in flight. 

That was a hard thing to do. And one of the things we have been 

trying to do here is to begin reining in improper payments. And as 

GAO each year tracks them up, up, up, higher and higher and 

higher, I think we peaked about a year ago at about $119 billion. 

And my understanding is that we are down most recently I think 

by about $4 billion, and I think we are heading in the right direction. We have just got to keep turning that aircraft carrier, so 

thank you. 

Chairman LIEBERMAN. Thanks very much, Senator Carper. 

We will each ask a question or two more as the Members want 

and your time allows. 

Mr. Gregg, I said I would come back to you on your reaction to 

the DATA Act. But based on what you just said and what Mr. 

Werfel said earlier, has the Administration taken a position 

against the DATA Act yet? Mr. Werfel. 

Mr. WERFEL. I think OMB should probably speak to that. I will 

take Mr. Gregg off the hot seat on that one. We have not issued 

a formal statement of an Administration position, but I have articulated these concerns in hearings before Chairman Issa and in 

other venues that we do have very significant concerns with the 

structure of the DATA Act, in particular the governance elements 

that I described earlier. So in its current form, the strongest statement I can say is very serious concerns, but we have not yet formulated a formal statement. 

Chairman LIEBERMAN. So you are not against any follow-on legislation here, but you are raising some serious concerns about the 

DATA Act as it was introduced in the House and the Senate? 

Mr. WERFEL. I think the way I would word it is—I think Mr. 

Gregg just said it well. He said in terms of executing, we do not 

need legislation, and I think that is the attitude that we have and 

the approach we have right now, is that we have a foundation in 

a lot of different legislation, all of it bipartisan, some of it very recent, for example, the GPRA Modernization Act. And as the Chief 

Operating Officers of this large Federal Government, we are very 

busy executing on these various statutes. And the notion that another statute would come into play and change the nature of our 

work and the priorities of our work we have concerns with, but it 

would depend on the details, and we would want to roll up our 

sleeves. 

And I think Senator Carper’s point was a good one, which is we 

have all this legislation, how do we synthesize it. To me, the devil 

would be in the details of what the legislation is and if it is going 

to advance our work or divert our work. And if it is going to advance, I think we would be supportive. If it is going to divert, I 

think we are going to raise concerns because we think the current 

31 

legislative framework that we have, if we achieve it, it is going to 

be very transformational and very beneficial to taxpayers. 

Chairman LIEBERMAN. Fair enough. 

So, Mr. Gregg, let me give you an opportunity to add anything 

you want to the DATA Act but also respond—and I will ask Mr. 

Werfel and Mr. Dodaro if they want to respond also—you will not 

be surprised to hear that, apart from the questions that you have 

raised on behalf of OMB about the DATA Act, the most significant 

opposition the Committee has heard is from State and local governments. And it is not just to the DATA Act, but to some extent, it 

is to the cost of having complied with FFATA and the Recovery.gov. 

And I wonder if you would respond to that. I must say some of it 

is just this is really costing us a lot of money, and some of it is 

that it is costing us more than it should because different agencies 

are asking us for different kinds of information; sometimes in the 

same Federal department, different components are asking us to 

fill out entirely different kinds of forms. 

So do you want to begin to respond to that? 

Mr. GREGG. Yes. There is no reason why we should require recipients to report back to the Federal Government of what has been 

sent out. It does not make any sense. If we have the right kind of 

controls and linkages across the Federal Government, we absolutely should know what is out there, when it got there, and how 

much it was. So there is no reason for it, in my view. It suggests 

that, we know within Treasury what the payments were because 

we make them, and we know how much they are. But being able 

to link that back to a contractor grant is the area that we need to 

do, and we should not be asking recipients to do our work for us, 

in my opinion. 

Not only do I think the DATA Act is unnecessary, I think it 

would set us back a long ways. The work that we are doing with 

OMB on moving ahead on data standardization and transparency 

is—we are a long ways down the road in Treasury, and we have 

the Payment Application Modernization done, which is a huge step 

forward, because agencies have to report to us in a specific format 

now, and they had not done that before. And unless you have 

standards, it is hard to track information from one system to another. And the repository is actually open for business as soon as 

agencies can start reporting. The issue on the cost is not only the $400 million that was identified in the DATA Act that it would cost over 8 years, but the additional cost that was not identified on agencies changing systems 

to comply with the DATA Act. And in the meantime, if they were 

doing that, they would not be providing Treasury the data that we 

need to enrich the payment repository, which is built. So I think 

in my view, again, what is needed here is not more legislation. 

What is needed in leadership from OMB and Treasury and agencies and the continuing holding of hearings by this Committee to 

hold us accountable. 

Chairman LIEBERMAN. Thanks. That was a very clear statement. 

Mr. Dodaro, do you have a comment on the cost to recipients? 

Mr. DODARO. Yes. First of all, if you want to have timely information—and that was critical in the Recovery Act. That was realtime information quarter by quarter from the time funds went out. 

32 

The only way to do that is to involve the recipients. You cannot 

wait until they report back to the agencies and then have the agencies accumulate the information and report it out at the end. It just 

will not be timely. So if Congress is interested in timely information, recipients have to be involved. 

Now, how you involve them I think needs to be worked through 

appropriately so that you can reduce the burden. You can pre-populate the information that the Federal Government already has, so, 

as Mr. Gregg is saying, they do not have to report that information 

again. You only get the information from them that they are the 

only ones that have it in a timely manner, and it could be linked 

back appropriately to the systems. That is why the DATA Act has 

an advisory committee. I think there needs to be more regular ongoing dialogue between the Federal, State, and local communities. 

The Recovery Act prompted that because of the urgency and the 

amount of money and issues, but there are no regular forums underway for having this dialogue and working through solutions to 

the problems. And so I would encourage that. 

The reason I think legislation would be enormously helpful in 

this area is that you have to have a statement from the users of 

the data of what they want. It is like having the system built by 

the IT professionals without knowing what the users want at the 

end and there are clear statements about that. By passing legislation, Congress is acting on its behalf as policymakers and on behalf 

of the American public as representing the people about what information they want and need. 

So I think there has to be that dialogue and agreement. Otherwise, what you are going to see, I believe, is a proliferation of individual efforts that are going to continue, which is an extension of 

what Mr. Werfel and Mr. Gregg are talking about and why we 

have a situation now is that people were not satisfied, so they want 

this information and that information. I think there is an opportunity to rationalize that now, which would be enormously helpful. 

Chairman LIEBERMAN. Thanks, Mr. Dodaro. Thanks to all of you. 

Senator Coburn, I am going to pass the gavel to you because, unfortunately, I have to leave now, and when you have to leave, I authorize you to pass it to Senator Johnson. He can keep asking questions until at least he is finished or the three of you have left. 

[Laughter.] 

So this has been very helpful testimony. The three of you really 

give public service a good and honorable name. Thank you. 

Senator Coburn. 

Senator COBURN [presiding]. Thank you, Mr. Chairman. 

Mr. Werfel, part of the requirements of FFATA was an annual 

report to Congress. I note that you are 2 years behind on that annual report. Is that an oversight, or is it not a priority or part of 

the synthesis? Or where do we stand? 

The other thing you used to have on the Web site was a link that 

could track the agencies’ compliance. That link is now dead, so I 

cannot track agencies’ compliance with it. What is the story there? 

Mr. WERFEL. So I think on the first question of the annual report, I am actually not 100 percent sure what the issue is, and I 

need to go back and look. 

Senator COBURN. Fair enough. 

33 

Mr. WERFEL. If you need an annual report, we will certainly get 

you a report in quick order. 

The challenge, as I mentioned earlier, was the compliance 

metrics that were up there. We did not have a lot of confidence 

that they were providing valid information. You see a green. I only 

want to publish an agency a green if I have confidence that there 

is infrastructure there. So we pull things down sometimes if we do 

not have a sufficient confidence that it is reliable, and that is unfortunate that we have been at that place for some time. We need 

to fix the issue. We need to drive some homogeny across the agencies in terms of how they are establishing control totals so that 

these metrics are more trusting. And part of the problem is we 

talked about resources. I keep emphasizing this. Without an independent mechanism to validate, it becomes more difficult to keep 

our eyes on everything. And I know you know how small in size 

OMB is in terms of our ability to be into all these things, and that 

is why I keep on trying to lean on the audit framework. But that 

is the answer. 

So bottom line, let me go back and figure out what issues—— 

Senator COBURN. I am not looking for a long report. As a matter 

of fact, you have actually reported today. But the point is here is 

another problem in our government. We put a statute down. It has 

a requirement, and 80 percent of the time, the agencies, as far as 

metrics for us, ignore it. And unless the Administration wants to 

comply, oftentimes we do not—I am not questioning your motives 

at all on this. Please do not take it that way. 

I have another question. You mentioned in our back-and-forth— 

and I do not know whether it was the Do Not Pay List or what 

it was, but I have a great concern with the Social Security Master 

Death File. And I am wondering, on Treasury’s number, where 

they are looking at where it is paid out, does that include Internal 

Revenue Service (IRS) payments as well, Mr. Gregg? And where 

are we on all this? We have paid out billions of dollars to dead 

farmers. We paid out $8 billion last year for kids, for the tax credit, 

that were not there from the IRS. Is the IRS part of that? Are you 

including that in terms of payments? And I am not talking identifiers, but are you including that? 

Mr. GREGG. Well, we do make all of the IRS tax refund payments. Right now, the tax payments are not part of the Do Not Pay 

List, and, in fact, my Deputy Secretary asked me the other day 

why that was not the case. 

As you know, the sensitivity with the 1603 Statute is one that 

we take very seriously. 

Senator COBURN. I understand. 

Mr. GREGG. But we are going to look at that, and I am not sure 

it is all within Treasury, so I am not sure why we could not include 

tax payments as part of the Do Not Pay group of payments that 

we have, but we have virtually everything else. 

Senator COBURN. And I also noted that our staff came up, I 

think, with the help of GAO or the CRS, we have done all these 

grants and contract payments to people that owe us tons of money, 

$16 billion they owe us, and yet they still received a government 

grant or they still received contracts, even though they did not 

have a settled agreement on how to pay their back taxes. So we 

34 

have to figure that out to get some better compliance out of those 

people who owe us and who are not paying their fair share. 

Mr. GREGG. We have within the Do Not Pay database a number 

of databases including the Excluded Party List, the Death Master 

File, and a number of others. We would like to expand it somewhat. We got that up and running in a matter of 6 or 7 months, 

and agencies are now complying with the OMB directive to make 

sure they come to the Do Not Pay List to check before payments 

go out. 

Senator COBURN. But if the Death Master List is missing 1.2 million people, it is not of great value because that means there are 

1.2 million Social Security numbers that can still be collecting 

money or Medicare payments through fraud or other illicit means 

when we do not have an accurate Death Master File. 

Mr. GREGG. Yes, we recognize that it is not complete, and we are 

looking at different ways to address that. In some cases, we might 

be able to get information directly from funeral homes. But we are 

looking at all avenues as to how to make sure that is a complete 

and up-to-date list all the time. 

Senator COBURN. One final question, and, Mr. Werfel, if you 

want to comment on that, that is fine, too. Who is doing great and 

who is not in terms of compliance with the intent of 

USASpending.gov? Can you tell us that? We do not have a link to 

know compliance. Who do you think is doing best and who is 

doing—I know who is doing worst. It is the Pentagon. But who is 

doing the best? 

Mr. WERFEL. Well, I often point to the Departments of Health 

and Human Services (HHS), Agriculture (USDA), and Education as 

examples of agencies that are taking their responsibilities to 

produce reliable information most seriously in terms of developing 

best practices. So, for example, USDA does a reconciliation of their 

USASpending.gov information with their budgetary accounting and 

can tell us that 75 percent of their award data is 95 percent reconciled. And that is not a great score, it is not a perfect score, but 

the fact that they have that type of measurement in place is very 

useful to us. Of course, we are now investigating if that measurement can take place across the board at the right metric. And HHS 

has an internal tool to identify quality issues as well. So the agencies that are taking their efforts seriously to ensure reliability, 

even without the independent auditor breathing over their necks, 

are the ones that are most effective. 

You point to the Defense Department. The Defense Department 

is challenging in a lot of different realms with respect to financial 

management, but actually let me answer the question a little bit 

differently. As I mentioned earlier, procurement and contracts are 

ahead of the game; grants and loans are behind the game. And as 

you know, almost all of the Defense Department’s outlays are contracts. So on this front, they are actually not that bad because of 

two reasons: Their involvement in the contract community, they 

put in standard elements and quality control frameworks that they 

are all utilizing, and then they feed this information into a system 

called Federal Procurement Data System (FPDS) that feeds 

USASpending.gov. And the contract community is doing global 

data quality reviews of FPDS, and, therefore, they are having reVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
35 

sidual effects on the Defense Department’s accuracy and reliability. 

So they are benefiting from a robust contract community around 

this issue. 

On the grants side, that is not happening, and we need to start 

bringing the level of performance up so that they are matched. 

Senator COBURN. Would you agree that the more money a State 

matches with a grant, the more likely they are to be responsible 

with the grant money? For example, a 50-percent grant versus a 

10-percent match, I guarantee you my State is going to watch that 

money a whole lot more because 50 percent of that money is Oklahoma taxpayer money. 

Mr. WERFEL. I would say as a general matter, if you have more 

skin in the game, then you tend to be more accountable for everything, for program delivery, and for program integrity. So, for example, in the unemployment insurance program (UI), which is the 

one program where the error rate is actually increasing over the 

past few years. Medicare, Medicaid, public housing, food stamps, 

all of it, error rates are trending down, and we are really proud of 

that trend. 

The thing in UI that is interesting is that it is a shared responsibility. There are State funds and there are Federal funds that are 

driving this. And even with that shared responsibility—and, recently, the Department of Labor, in an effort to improve transparency, listed State by State every error rate, and there are some 

very high error rates for certain States. And even with that shared 

responsibility, we still do not see that error rate coming down. 

So I say as a general principle, yes, but, I see examples in my 

own review of data and that raises concerns where, even with that 

shared impact, we are not seeing the results we want to see. So it 

is more complicated than that, but I agree with your general 

premise. 

Senator COBURN. Well, I think GAO has just released a report 

on the Social Security Disability Insurance (SSDI), and the Permanent Subcommittee on Investigations has been investigating this 

for 2 years. We will have a report out very soon on the fraud, the 

malfeasance, and the violation of statutory guidelines through the 

administration of the Social Security Administration on that. 

America is going to be surprised at the fraud and incompetence 

and dollars that are going to people who are not truly disabled. 

And that is not to say we do not really want those dollars to go 

to people who truly are, but this is going to be a blockbuster when 

it is released in terms of certain administrative law judges going 

to jail for taking payments from lawyers. I mean, anything you can 

imagine is out there right now in that system, and that is because 

there has not been good management, there has not been good following, and there has not been a representative of the taxpayer in 

front of the decisionmaking. 

Senator Johnson. 

Senator JOHNSON. Thank you—I guess ‘‘Mr. Chairman.’’ That 

sounds kind of good. I have to be somewhere at 11:30, so this will 

be pretty quick. 

Senator COBURN. You can take the gavel. 

Senator JOHNSON [presiding]. Mr. Werfel, you were talking about 

synthesizing information I think at a micro level. As an accountant, 

36 

I am always trying to tie things out on a macro level, trying to understand this $3.8 trillion a year entity here. 

When you take a look at the Congressional Budget Office (CBO) 

different baselines, when you take a look—and I actually used the 

budget documents from OMB because to me, with all the historical 

tables, that gives me the best information. I am trying to tie out 

between the appropriation accounts, to the budget accounts, budgetary authority versus outlays. Is there a key, or is there a trick? 

I am still trying to figure it out. 

Mr. WERFEL. Well, I certainly think that one thing that we can 

offer is, one of technical assistance in understanding the budget tables that are in OMB’s budget each year, understanding how they 

are derived. But you are zeroing in on the issue that we have been 

discussing, which is in some places that ticking and tying can be 

done and can be done very effectively, and in other cases, there are 

definitional challenges in linking things. 

So as an example, you take every line of every appropriation accounts, we convert that information into our accounting system, 

and for a variety of reasons—and we probably do not have time to 

go through them all there—it is not a one-for-one proposition. I 

cannot take an appropriations bill and show you exactly in perfect 

harmony how that aligns up into the central accounting system 

that Treasury runs. What I can do is produce information to you 

out of that central accounting system, and it is highly relevant. But 

it might answer nine out of 10 of your questions, but if one of your 

questions is I want to know exactly what the outlay rate is for this 

line item in the appropriations bill, we might have to do some work 

in terms of figuring out which accounts this money went into and 

then do some more work to figure out where the outlays are on 

that account. And so it comes back to there not being a one-to-one. 

But one thing I think that is important here and that has been 

my reflection—maybe nine out of ten is a little bit of an exaggeration. Maybe it is more like eight out of ten. Very often our systems, 

as heterogeneous as they are, can answer the question, sometimes 

instantly, sometimes with some work. There were moments during 

the Recovery Act where there were no answers to questions, and 

that was because the reconciliation was just too challenging. And 

that is where we really have to figure out what the key is to close 

the gap. But I do not think you are alone in being challenged by 

this framework. It is very complex, and, again, if there is a particular set of questions that you have, we probably have experts at 

OMB and Treasury that could at least offer some help there. 

Senator JOHNSON. Well, I appreciate that. We are working with 

CRS right now trying to—I am trying to get my head around the 

problem. But at least it is comforting to know that it is a problem 

not just with me, but it is just a problem. 

Mr. WERFEL. Yes. It is not you. 

Senator JOHNSON. Senator Carper, did you want to grab the 

gavel? Because I have to be somewhere. I am turning it over to 

you. Thank you very much. 

Senator CARPER [presiding]. You are good to do that. 

I just want to say, Senator Johnson, I do not always get to come 

to these hearings, but you are, as the Chairman has noted, a faithVerDate Nov 24 2008 12:11 Nov 14, 2012 Jkt 076062 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 P:\DOCS\76062.TXT SAFFAIRS PsN: PAT
37 

ful attender and a faithful participant, and I certainly commend 

you for that. 

Senator JOHNSON. I have a lot to learn. 

Senator CARPER. We all do. Thanks very much. 

Senator Collins has asked me to raise a question, and I am 

pleased to be able to do that. OMB Watch was one of the key partners in setting up USASpending.gov early in the process, as I think 

maybe you mentioned, Mr. Werfel. They are a major user of the 

site today and have a lot of feedback to offer, I am told. Would you 

agree to meet with them and our staff to work through a demo of 

some of their feedback? That is the question that I have been asked 

to ask of you, and if you can answer here today, that is fine. If you 

want to answer it for the record, that would be OK as well. If you 

want to answer now, go ahead. 

Mr. WERFEL. I will give an answer now and an answer for the 

record later because I want to make sure that, with respect to a 

particular commitment for a particular meeting, that I run that 

through the various channels. 

But as a general matter, we have engagement over the period of 

time with OMB Watch. I never turn down a phone call from them 

and have had very good discussions with them. They have provided 

important input. They were, as you said, the parents of the first 

ever solution for USASpending.gov, which, as Senator Portman referenced, we purchased from them on a shoestring budget back in 

the latter part of the 2000s. And they are doing their job. It is 

never perfect, and they are driving us towards continuous improvement, and it is interesting to see where the improvements that can 

be made on our current budget versus where the improvements are 

going to require a greater budget. 

Senator CARPER. I appreciate that. If Senator Collins would like 

for you to work with them, I am inclined certainly to agree with 

that. And if it is your inclination, let us just do it. 

Mr. DODARO. Senator Carper, I might add, our staff has already 

met with the OMB Watch people on this subject, and we would be 

happy to give Senator Collins and your staff our views on it. 

Senator CARPER. And you may want to share them with OMB, 

too. Thank you. 

They are asking me to come back to my other hearing, so I am 

going to leave—normally I like to ask you to give a closing word, 

but I do not have time to do that. If I do, I am going to miss this 

next vote. 

Let me just say thank you. I appreciate very much your preparation, your responses to our questions, and your work and the work 

of a lot of your colleagues on these issues. They are important 

issues. But these are not the kind of issues that get a lot of headlines, but these are issues that save a whole lot of money. And I 

like to say that one of the things we need to do is to look in every 

nook and cranny of the Federal Government and try to find ways 

to do everything we do, to ask the question, is there a way to get 

a better result for less money? And we also like to say transparency is the best disinfectant, and the idea of exposing as much 

of what we do, good and bad, will help us, I think for the most 

part, do a better job. 

38 

The hearing record is going to remain open, I believe for 15 days, 

for additional statements and questions for the record. Once you receive those questions, we would just ask that you respond to them 

in a prompt way. But, again, it is great to see you all. Thank you 

for your good work and for your leadership. 

With that, we are adjourned. 

[Whereupon, at 11:33 a.m., the Committee was adjourned.] 

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