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STIMULUS OVERSIGHT: 

AN UPDATE ON ACCOUNTABILITY, 

TRANSPARENCY, AND PERFORMANCE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON INVESTIGATIONS 

AND OVERSIGHT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

WEDNESDAY, NOVEMBER 30, 2011 

Serial No. 112–53 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. RALPH M. HALL, Texas, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

SANDY ADAMS, Florida 

BENJAMIN QUAYLE, Arizona 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

EDDIE BERNICE JOHNSON, Texas 

JERRY F. COSTELLO, Illinois 

LYNN C. WOOLSEY, California 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

DANIEL LIPINSKI, Illinois 

GABRIELLE GIFFORDS, Arizona 

DONNA F. EDWARDS, Maryland 

MARCIA L. FUDGE, Ohio 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

JERRY MCNERNEY, California 

JOHN P. SARBANES, Maryland 

TERRI A. SEWELL, Alabama 

FREDERICA S. WILSON, Florida 

HANSEN CLARKE, Michigan 

SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT

HON. PAUL C. BROUN, Georgia, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

SANDY ADAMS, Florida 

RANDY HULTGREN, Illinois 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

RALPH M. HALL, Texas 

PAUL D. TONKO, New York 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

JERRY MCNERNEY, California 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

Wednesday, November 30, 2011 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Paul C. Broun, Chairman, Subcommittee on 

Investigations and Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives ............................................................... 18 

Written Statement ............................................................................................ 19 

Statement by Representative Paul Tonko, Ranking Minority Member, Subcommittee on Investigations and Oversight, Committee on Science, Space, 

and Technology, U.S. House of Representatives ............................................... 20 

Written Statement ............................................................................................ 21 

Witnesses: 

Dr. Frank Rusco, Director, Natural Resources and Environment Team, Government Accountability Office 

Oral Statement ................................................................................................. 23 

Written Statement ............................................................................................ 25 

Mr. Michael Wood, Executive Director, Recovery Accountability and Transparency Board 

Oral Statement ................................................................................................. 48 

Written Statement ............................................................................................ 50 

Hon. Gregory Friedman, Inspector General, U.S. Department of Energy 

Oral Statement ................................................................................................. 57 

Written Statement ............................................................................................ 59 

Hon. Todd Zinser, Inspector General, U.S. Department of Commerce 

Oral Statement ................................................................................................. 72 

Written Statement ............................................................................................ 73 

Ms. Allison C. Lerner, Inspector General, National Science Foundation 

Oral Statement ................................................................................................. 87 

Written Statement ............................................................................................ 89 

Ms. Gail Robinson, Deputy Inspector General, National Aeronautics and 

Space Administration 

Oral Statement ................................................................................................. 95 

Written Statement ............................................................................................ 96 

Discussion 105 

Appendix: Answers to Post-Hearing Questions 

Dr. Frank Rusco, Director, Natural Resources and Environment Team, Government Accountability Office ............................................................................. 120 

Mr. Michael Wood, Executive Director, Recovery Accountability and Transparency Board ...................................................................................................... 127 

Hon. Gregory Friedman, Inspector General, U.S. Department of Energy .......... 131 

Hon. Todd Zinser, Inspector General, U.S. Department of Commerce ............... 143 

Ms. Allison C. Lerner, Inspector General, National Science Foundation ........... 148 
Page

IV 

Ms. Gail Robinson, Deputy Inspector General, National Aeronautics and 

Space Administration .......................................................................................... 154 
(1) 

STIMULUS OVERSIGHT: AN UPDATE ON 

ACCOUNTABILITY, TRANSPARENCY, AND 

PERFORMANCE 

WEDNESDAY, NOVEMBER 30, 2011 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INVESTIGATIONS AND OVERSIGHT, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:07 a.m., in Room 

2318 of the Rayburn House Office Building, Hon. Paul Broun 

[Chairman of the Subcommittee] presiding. 
2 
3 

HEARING CHARTER

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

SUBCOMMITTEE ON INVESTIGATIONS & OVERSIGHT 

U.S. HOUSE OF REPRESENTATIVES 

Stimulus Oversight: 

An Update on Accountability, 

Transparency, and Performance 

WEDNESDAY, NOVEMBER 30, 2011

10:00 A.M.—12:00 P.M. 

2318 RAYBURN HOUSE OFFICE BUILDING
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Chairman BROUN. Good morning, everyone. The Subcommittee 

on Investigations and Oversight will come to order. 

Welcome to today’s hearing entitled ‘‘Stimulus Oversight: An Update on Accountability, Transparency, and Performance.’’ You will 

find in front of you packets containing our witness panel’s written 

testimony, biographies, and truth-in-testimony disclosures. I want 

to welcome our witnesses here today. Thank you all for being here. 

I now recognize myself for five minutes for an opening statement. 

Welcome to the Investigations and Oversight Subcommittee hearing titled ‘‘Stimulus Oversight: An Update on Accountability, 

Transparency, and Performance.’’ This is the Subcommittee’s third 

oversight hearing of the American Recovery and Reinvestment Act 

of 2009. The Subcommittee’s previous hearings focused on monitoring the development of internal agency controls and reviewing 

external oversight mechanisms prior to money going out the door. 

Now that funding has been obligated and recipients are actually 

spending the money, it is important for this Subcommittee to take 

a step back and see if we can develop any lessons learned, any best 

practices, and identify any areas of concern that require additional 

review. With funding available for many more months, the agencies, the IGs, the GAO, the Recovery Board, this Subcommittee, 

and the American people will continue to monitor how this money 

is spent. To put this task into perspective, the Stimulus Bill contained roughly $787 billion, of which approximately $40 billion was 

for science-related activities. This accounts for roughly the amount 

already appropriated for that fiscal year, essentially doubling the 

funding. Monitoring this funding is proving to be a daunting task 

for agencies and watchdogs. 

As we have seen in recent months, efforts by agencies to conduct 

the proper due diligence can be challenging for a number of reasons 

including external deadlines, insufficient training, or inadequate 

staffing or funding levels. A lot of attention has been paid to Section 1705 and the Loan Guarantee Program because of Solyndra 

and Beacon Power. While these certainly garner a lot of press attention, the fact that many of these loan guarantees were made in 

such a rushed fashion before the deadline makes me believe that 

we will see a lot more of the same. 

Separate from the Loan Guarantee Program, issues also exist in 

other areas like ARPA–E, DOE program offices like EERE, and 

Section 1603 payments. Additionally, potential areas of concern include facility construction at NIST and NSF and shipbuilding efforts at NOAA and NSF. 

Although there is certainly enough oversight work to go around, 

I am pleased to hear that a positive theme has developed as well. 

Funding for basic research at the Department of Energy’s Office of 

Science, and NASA appears to have been administered quickly and 

efficiently. This may be because they simply used existing mechanisms to get funding out the door, accelerated existing work, or 

funded projects that were previously found to be meritorious. 

Much of the work done by the IGs, GAO, and the Recovery Board 

has focused on waste, fraud, abuse, mismanagement, transparency, 

and accountability—and rightfully so. A lot of the work done on accountability has focused on being able to track where money is 

going and for what purpose. While this is important, evaluations 
19 

of accountability should also address whether the intended goals of 

the Act have been met using specific metrics. I hope the agencies, 

the IGs, GAO, and the Recovery Board can assist Congress in this 

endeavor as well. 

Regardless of whether you agree with the underlying Act, Congress has an obligation to make sure that if taxpayer money is 

going to be spent, it is done appropriately. Minimizing waste, 

fraud, and abuse is a nonpartisan endeavor, and I am sure we can 

all agree with that. 

Now, I recognize my Ranking Member from New York, Paul 

Tonko. You are recognized for five minutes, sir. 

[The prepared statement of Mr. Broun follows:] 

PREPARED STATEMENT OF SUBCOMMITTEE CHAIRMAN PAUL C. BROUN

Good morning. Welcome to the Investigations and Oversight Subcommittee hearing titled ‘‘Stimulus Oversight: An Update on Accountability, Transparency, and 

Performance.’’ This is the Subcommittee’s third hearing on oversight of the American Recovery and Reinvestment Act of 2009. 

The Subcommittee’s previous hearings focused on monitoring the development of 

internal agency controls, and reviewing external oversight mechanisms prior to 

money going out the door. Now that funding has been obligated, and recipients are 

actually spending the money, it is important for this Subcommittee to take a step 

back and see if we can develop any lessons learned, any best practices, or identify 

any areas of concern that require additional review. With funding available for 

many more months, the agencies, the IGs, the GAO, the Recovery Board, this Subcommittee, and the American people will continue to monitor how this money is 

spent. 

To put this task into perspective, the Stimulus Bill contained roughly $787 billion, 

of which approximately $40 billion was for science-related activities. This accounts 

for roughly the amount appropriated for that fiscal year, essentially doubling the 

funding. Monitoring this funding is proving to be a daunting task for agencies and 

watchdogs. 

As we have seen in recent months, efforts by agencies to conduct the proper due 

diligence can be challenging for a number of reasons including external deadlines, 

insufficient training, or inadequate staffing or funding levels. A lot of attention has 

been paid to Section 1705 and the Loan Guarantee Program because of Solyndra 

and Beacon Power. While these certainly garner a lot of press attention, the fact 

that many of these loan guarantees were made in such a rushed fashion before the 

deadline makes me believe that we will see a lot more of the same. Separate from 

the Loan Guarantee Program, issues also exist in other areas like ARPA–E, DOE 

program offices like EERE, and Section 1603 payments. Additionally, potential 

areas of concern surround NIST’s research facility construction account and NOAA’s 

procurement, acquisition, and construction account. 

Although there is certainly enough oversight work to go around, I am pleased to 

hear that a positive theme has developed as well. Funding for basic research at the 

Department of Energy’s Office of Science and NASA programs appear to have been 

administered quickly and efficiently. This may be because they simply used existing 

mechanisms to get funding out the door, accelerated existing work, or funded 

projects that were previously found to be meritorious. 

Much of the work done by the IGs, GAO, and the Recovery Board has focused on 

waste, fraud, abuse, mismanagement, transparency, and accountability—and rightfully so. A lot of the work done on accountability has focused on being able to track 

where money is going and for what purpose. While this is important, evaluations 

of accountability should also address whether the intended goals of the Act have 

been met using specific metrics. I hope the agencies, the IGs, GAO, and the Recovery Board can assist Congress in this endeavor as well. 

Regardless of whether you agree with the underlying Act, Congress has an obligation to make sure that if taxpayer money is going to be spent, that it is done appropriately. Minimizing waste, fraud, and abuse is a nonpartisan endeavor that I am 

sure we can all agree with. 
20 

Mr. TONKO. Thank you, Mr. Chairman. Thank you to our distinguished witnesses. You are all busy people and thank you for sharing your time with us. 

Public investment in innovative technologies and infrastructure 

not only creates jobs; it lays the foundation for further private sector job creation. The American Recovery and Reinvestment Act 

made a significant difference in stopping the precipitous loss of 

nearly 800,000 jobs per month that occurred prior to its enactment. 

Without the Recovery Act, millions more Americans would be facing unemployment and we would indeed be months further behind 

in the admittedly sluggish economic recovery. 

According to the Congressional Budget Office’s August 2011 report, the Recovery Act increased real GDP by .8 percent to 2.5 percent, and it increased the number of full-time equivalent jobs by 

between 1.4 million and 4 million compared to no Recovery Act effort for the second quarter of calendar year 2011. That is positive 

news. But the American economy is not out of danger yet. Economic growth is still weak, and job creation is still far below what 

is required to provide employment for all who need a job. 

Recovery Act funding was significant but it is not realistic to expect some $840 billion to compensate for the loss of over $10 trillion worth in wealth that we experienced at the end of 2008. Because of the huge disparity of these figures, it is imperative that 

Recovery Act dollars be spent efficiently and effectively. That is 

why we are here today. 

I have several concerns about the Recovery Act funds, and I hope 

our witnesses can shed some light on these matters. First, it looks 

as if too much of the money has still not been invested. Federal 

agencies have distributed it; yet it remains uncommitted by the recipients. We need to create at least seven million jobs to get back 

to full employment. If these funds are not being spent, they cannot 

fuel the job creation that we need. I am looking for a solution. We 

all are looking for a solution. And I hope that our witnesses today 

have some advice about how to get that uncommitted money moving to create more jobs and to fuel a more robust level of economic 

growth. 

Second, I worry about the size of public exposure in some of the 

loan programs that are operated at the Department of Energy. 

Grants and contracts that lead to direct expenditures carry with 

them risks limited by the value of the award, risks that can be 

minimized through sound management by experienced staff, and 

DOE has a long history of managing grants and contracts. 

In contrast, the Department of Energy’s Loan Guarantee Program is relatively new. Loan guarantees are for much greater 

amounts of money than an average grant or contract and therefore 

carry billions of dollars in risk. DOE’s relative lack of experience 

with this authority and limited experience with assessing market 

conditions and commercial risks should increase our scrutiny of 

awards provided under this program. All investments carry some 

risks and we should be willing to take them where there is opportunity for significant benefits or advances, but the Department 

should do all it can to ensure these awards will result in successful 

outcomes. 
21 

While the press is focused on the loan to the solar company 

Solyndra, the fact is that other DOE loans may be just as risky. 

Particularly in the nuclear sector, taxpayers’ financial exposure 

dwarfs that of the Solyndra loan. Just one of these nuclear energy 

loans is 16 times the size of the award made to Solyndra. Markets 

can shift against these mega-projects just as easily as they shifted 

against the far more modest solar project that went bankrupt. I 

hope that the Department is taking steps to reevaluate the size of 

its commitments in the Loan Guarantee Program and the challenges that face those investments. 

Finally, I look forward to hearing whether there are meaningful 

lessons about managing the public’s money that should be applied 

to all federal spending based on the experiences of our Recovery 

Act. The effort to bring an unprecedented level of transparency to 

spending may suggest new expectations for all governments—all 

government funding rather—in the future. We do not want to cripple agencies in their ability to make awards and manage them 

through burdensome requirements; nor do we want to discourage 

companies and individuals from working with our government. If 

we can build on the best of the Recovery Act’s lessons, it would 

make our government more accountable and transparent to the 

public. 

Mr. Chair, I believe you have brought the right people before us 

today to address these issues, and I look forward to their testimony. Thank you. 

[The prepared statement of Mr. Tonko follows:] 

PREPARED STATEMENT OF RANKING MEMBER PAUL TONKO

Thank you, Mr. Chairman. 

Public investment in innovative technologies and infrastructure not only creates 

jobs, it lays the foundation for private sector job creation. The American Recovery 

and Reinvestment Act made a significant difference in stopping the precipitous loss 

of nearly 800,000 jobs per month that occurred prior to its enactment. Without the 

Recovery Act, millions more Americans would be facing unemployment, and we 

would be months further behind in the admittedly sluggish economic recovery. 

According to the Congressional Budget Office’s August 2011 report, the Recovery 

Act increased real GDP by between .8 percent and 2.5 percent and it increased the 

number of full-time equivalent jobs by between 1.4 million and 4.0 million compared 

to no Recovery Act effort for the second quarter of calendar year 2011. 

That is positive news, but the American economy is not out of danger yet. Economic growth is still weak and job creation is still far below what is required to 

provide employment for all who need a job. Recovery Act funding was significant, 

but it is not realistic to expect $840 billion to compensate for the loss of over $10 

trillion in wealth we experienced at the end of 2008. Because of the huge disparity 

in these figures, it is imperative that Recovery Act dollars be spent efficiently and 

effectively. That is why we are here today. 

I have several concerns about the Recovery Act funds, and I hope our witnesses 

can shed some light on these matters. 

First, it looks as if too much of the money has still not been invested. Federal 

agencies have distributed it, yet it remains uncommitted by the recipients. We need 

to create at least seven million jobs to get back to full employment. If these funds 

are not being spent, they cannot fuel the job creation we need. I am looking for a 

solution. I hope that our witnesses today have some advice about how to get that 

uncommitted money moving to create more jobs and to fuel a more robust level of 

economic growth. 

Second, I worry about the size of public exposure in some of the loan programs 

that are operated at the Department of Energy. Grants and contracts that lead to 

direct expenditures carry with them risks limited by the value of the award—risks 

that can be minimized through sound mangement by experienced staff, and DOE 

has a long history of managing grants and contracts. 
22 

In contrast, the Department of Energy’s loan guarantee program is relatively new. 

Loan guarantees are for much greater amounts of money than an average grant or 

contract and therefore carry billions of dollars in risk. DOE’s relative lack of experience with this authority and limited experience with assessing market conditions 

and commercial risks should increase our scrutiny of awards provided under this 

program. All investments carry some risks and we should be willing to take them 

where there is opportunity for significant benefits or advances, but the Department 

should do all it can to ensure these awards will result in successful outcomes. 

While the press has focused on the loan to the solar company Solyndra, the fact 

is that other DOE loans may be just as risky. Particularly in the nuclear sector, 

taxpayers’ financial exposure dwarfs that of the Solyndra loan. Just one of these nuclear energy loans is 16 times the size of the award made to Solyndra. Markets can 

shift against these mega-projects just as easily as they shifted against the far more 

modest solar project that went bankrupt. I hope that the Department is taking steps 

to reevaluate the size of their commitments in the loan guarantee program and the 

challenges that face those investments. 

Finally, I look forward to hearing whether there are meaningful lessons about 

managing the public’s money that should be applied to all federal spending based 

on the experiences of the Recovery Act. 

The effort to bring an unprecedented level of transparency to spending may suggest new expectations for all government funding in the future. We do not want to 

cripple agencies in their ability to make awards and manage them through burdensome requirements, nor do we want to discourage companies and individuals from 

working with the government. If we can build on the best of the Recovery Act’s lessons, it would make our government more accountable and transparent to the public. 

Mr. Chairman, I believe you have brought the right people before us to address 

these issues, and I look forward to their testimony. 

Chairman BROUN. Thank you, Mr. Tonko. I appreciate the accolades. That is the nice thing about this Committee. We are working 

in a bipartisan manner. 

If there are Members who wish to submit additional opening 

statements, your statements will be added to the record at this 

point. 

At this time, I would like to introduce our panel of witnesses. 

First is Dr. Frank Rusco, the Director of Natural Resources and 

Environment Team at the U.S. Government Accountability Office; 

Mr. Michael Wood, the Executive Director of the Recovery Accountability and Transparency Board; the Honorable Gregory H. Friedman, the Inspector General, the U.S. Department of Energy; the 

Honorable Todd Zinser, the Inspector General of the U.S. Department of Commerce; Ms. Allison Lerner, the Inspector General of 

the National Science Foundation; and finally, Ms. Gail Robinson, 

the Deputy Inspector General of NASA. 

As our witnesses should know, spoken testimony is limited to 

five minutes each—if you would please try to contain your remarks 

to that five minutes—after which the Members of the Committee 

will each have five minutes to ask questions. Your written testimony will be included in the record of the hearing. It is the practice of this Subcommittee on Investigations and Oversight to receive testimony under oath. Do any of you have any objections to 

taking an oath? 

Let the record reflect that all witnesses shook their head from 

side to side indicating in a common way that they do not have an 

objection. 

Also, you may be represented by counsel. Do any of you have 

counsel here today? 

Mr. Wood? Okay. Hon. Zinser, do you have—no. Ms. Lerner? 

Ms. LERNER. I have an attorney with me. 
23 

Chairman BROUN. Okay. Let the record reflect that all except for 

Ms. Lerner and Mr. Wood have no counsel and that those two individuals do indeed. 

If all of you would now please stand and raise your right hand. 

Do you solemnly swear or affirm to tell the whole truth and nothing but the truth, so help you God? 

Nodding, okay. I didn’t hear the female voices, though. Okay. 

Good. Let the record reflect that all the witnesses participating 

have taken the oath. 

I now recognize our first witness, Dr. Rusco. You are recognized 

for five minutes. 

STATEMENT OF DR. FRANK RUSCO, DIRECTOR, 

NATURAL RESOURCES AND ENVIRONMENT TEAM, 

GOVERNMENT ACCOUNTABILITY OFFICE 

Dr. RUSCO. Thank you. Chairman Broun, Ranking Member 

Tonko, and Members of the Committee, I am pleased to be here 

today along with my colleagues in the oversight community to discuss GAO’s oversight of Recovery Act spending on science-related 

programs. 

This year, the Congressional Budget Office estimated that the 

Recovery Act’s combined spending and tax provisions would cost 

approximately $840 billion. More than $40 billion was targeted for 

science-related programs, and the bulk of that went to DOE. In 

March 2009, GAO testified before this Committee about GAO’s approach to conducting Recovery Act oversight, and we highlighted 

several research and development programs that deserve special 

attention from the relevant Inspectors General. 

Under the Recovery Act, GAO was tasked with the responsibility 

to conduct bimonthly reviews and other reports on the use of Recovery Act funds, and we have so far—well, including this testimony—issued 132 reports and testimonies on Recovery Act-related 

issues. 

My statement today will provide a brief update of the science-related funds that have been obligated and spent by DOE, Commerce, NASA, and NSF. I will also provide several examples of the 

kinds of challenges that science-related programs faced in implementing the goals of the Recovery Act. 

According to Agency officials, the majority of science-related Recovery Act funding has been obligated. Specifically, as of September 

30, 2011, DOE had obligated about 98 percent of its $35 billion. 

DOE reported that it had spent about $19 billion, or 54 percent, 

of this funding. Commerce received $1.4 billion in science-related 

funding, obligated almost all of it and had spent about $900 million, or 64 percent. NASA received $1 billion, obligated it all, and 

had spent 95 percent. And lastly, NSF received $3 billion, obligated 

it all, and had spent about 46 percent as of September 30. 

All the programs we audited in the course of our Recovery Act 

work faced challenges, especially in the early months. For example, 

DOE’s Weatherization Program received almost $5 billion, a 20-fold 

increase over the program’s typical annual appropriation. The 

Weatherization Program faced problems adjusting to this greatly 

increased scale of funding. Specifically, it took the program time to 
24 

issue guidance and force recipient States and territories to establish market wages for weatherization workers as required under 

the Davis-Bacon Act. This delayed the first large dispersal of funds 

to States and territories. DOE, the States, and territories also faced 

challenges in scaling up the workforce and providing training for 

workers new to the weatherization work. 

In some cases, the Recovery Act represented the first time a program received funding. For example, EERE’s Energy Efficiency and 

Conservation Block Grant Program, which received $3.2 billion in 

Recovery Act funds, was essentially starting from scratch, and 

some of the challenges it faced reflected this. Specifically, we found 

in our April 2011 report that the EECBG program was not always 

collecting needed information from recipients to verify that these 

recipients were in compliance with federal oversight and reporting 

requirements. This program also faced challenges in measuring the 

outcomes of EECBG funding, including measures of reduced energy 

use. 

DOE has also wrestled with calculating and reporting jobs created, a requirement of the Recovery Act. For example, DOE’s Environmental Management Office, which received almost $6 billion in 

Recovery Act funding, has publicly reported three vastly different 

job creation figures ranging from 5,700 to 20,200 jobs, depending 

on what methodology was used. Measuring job creation is inherently difficult from a methodological perspective because it is not 

possible to observe what would have happened in the absence of 

the Recovery Act. However, Environmental Management was initially unable to follow Recovery Act requirements and OMB guidance for reporting job creation, and it is still unclear if DOE has 

fixed this problem. 

Overall, the science-related programs we have audited have responded at least partially to the challenges we identified. These 

programs have implemented some of our recommendations and 

have improved in their ability to monitor the use of Recovery Act 

money. 

GAO continues to conduct oversight of science-related programs 

that received Recovery Act funding. Within the next several 

months, we will issue reports on DOE’s Loan Guarantee, Weatherization, and ARPA–E programs. We also have ongoing evaluations 

of federal renewable energy initiatives and of R&D efforts in areas 

of solar energy and battery storage technologies. 

This concludes my statement. I will be happy to answer any 

questions the Committee may have. 

[The prepared statement of Dr. Rusco follows:] 
25 

PREPARED STATEMENT OF DR. FRANK RUSCO, DIRECTOR, 

NATURAL RESOURCES AND ENVIRONMENT TEAM, 

GOVERNMENT ACCOUNTABILITY OFFICE
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Chairman BROUN. Thank you, Dr. Rusco. 

Now, Mr. Wood, you are recognized for five minutes. 

STATEMENT OF MR. MICHAEL WOOD, 

EXECUTIVE DIRECTOR, 

RECOVERY ACCOUNTABILITY AND TRANSPARENCY BOARD 

Mr. WOOD. Mr. Chairman and Members of the Subcommittee, I 

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

As the Executive Director of the Recovery Accountability and 

Transparency Board, I will be speaking to you about our role in ensuring the transparency and accountability of the Recovery funds 

and also activities that are underway to extend lessons learned by 

the Recovery Board to all federal spending. 

As you know, the Recovery Board was created in 2009 as a part 

of the Recovery Act. It is composed of Inspectors General, two of 

whom appear beside me today, Gregory Friedman and Todd Zinser. 

The primary mission of the Board is two-fold—first, to provide 

transparency for the funds that were expended; and second, to prevent or detect waste, fraud, and abuse for the Recovery money. 

The Recovery Board achieves transparency of Recovery Act 

spending through reporting on the use of funds. Specifically, the 

Recovery Act requires recipients of Recovery funds to report on how 

they are using those funds and require agencies to report on spending as well. Every quarter, recipients of Recovery funds must report centrally into the Board’s reporting Web site, 

FederalReporting.gov. In addition, on a weekly basis, agencies provide financial and activity reports, which include the amounts 

awarded and paid out. 

Recovery.gov is a Web site that was developed to provide transparency for the spending that was occurring. It is an attractive, 

award-winning Web site. It has essentially a complex technological 

infrastructure, but it allows us to very quickly display quality-controlled data in unique ways to achieve unprecedented levels of 

transparency. 

FederalReporting.gov and Recovery.gov allow a continuing quality-assurance process that involves the agencies, the Recovery 

Board, the Office of Management and Budget, and recipients. Innovative mapping on our Web site, Recovery.gov, allows us to display 

data with an unprecedented level of transparency, including the 

ability to search by ZIP codes so citizens can see what projects are 

occurring in their local community. You can also search by Congressional District to see what is happening in individual Congressional Districts. 

In addition to ensuring the transparency of tax dollars, the Recovery Board also conducts and coordinates oversight of Recovery 

funds to prevent and detect fraud, waste, and mismanagement of 

those funds. The Recovery Board’s accountability staff uses a suite 

of analytical tools in our Recovery Operations Center, or ROC, to 

find indicators of fraud among Recovery recipients and sub-recipients. 

The Recovery Board’s work in promoting transparency and accountability has garnered much positive attention. On June 13 of 

this year, both the Executive and Legislative branches took ex-
49 

traordinary measures to extend the work of the Recovery Board to 

the rest of the Federal Government. The President issued an Executive Order calling for the creation of a new Government Accountability and Transparency Board, or GAT Board, which is tasked 

with ‘‘building on the lessons learned from the successful implementation of the Recovery Act’’ and working with the Recovery 

Board to apply those approaches developed by the Board across 

government spending. 

And in Congress, Congressman Darrell Issa and Senator Mark 

Warner have both introduced legislation that, among other things, 

would create a new federal agency, the Federal Accountability and 

Spending Transparency Board—or FAST Board—to provide accountability and transparency for all contracts, grants, and loans 

funded with federal dollars. We look forward to working with these 

officials and other stakeholders to ensure that the work of the Recovery Board can serve as a template for tracking all government 

spending. 

Even before the creation of the GAT Board and the pending legislation, the Recovery Board devoted time to enumerating our lessons learned and our experiences with transparency and accountability. One of the key lessons learned over the past two years has 

been ‘‘transparency drives accountability.’’ The Board’s accountability and transparency tools comprise two halves of the same 

fraud-detection operation, reinforcing and enhancing each other. 

Accountability works best when you have transparency; transparency works best when you have accountability. 

A related lesson is that the interrelated transparency and accountability tools are so useful from both a program and an oversight perspective that agencies and the IG community should have 

equal access to both these pieces. While both pieces can clearly assist the investigatory and auditing functions of the IGs, the accountability and transparency data can also help agencies improve 

Agency functions and administration. Typically, when the goal of 

an initiative is fraud detection, IGs come to the table with a great 

deal of enthusiasm while agencies appear less motivated. 

One valuable lesson we have learned is that when the common 

goal is fraud prevention, agencies and IGs are equally enthusiastic, 

and a remarkable collaborative effort takes place between the two. 

As a result of this lesson learned, the Recovery Board is piloting 

fraud prevention tools with agency personnel as well as with IGs. 

We believe this program, called FederalAccountability.gov, will assist agencies in performing their own risk evaluations for those 

seeking Recovery funds, just as it will help enforcement officials 

conduct reviews of Recovery funds in order to prevent and detect 

waste, fraud, and abuse. 

Another lesson has been the tremendous inefficiencies caused by 

the government’s lack of a uniform award ID. Currently, there is 

no requirement that awards be standardized across government, 

and we are working towards this goal. 

Finally, rather than dismantle the Board’s dual Web sites or systems established by the ROC, these three critical components can 

be combined into a ‘‘universal one-stop shop’’ applied more broadly 

across the whole spectrum of federal spending. Such a model is actually put forth by the DATA Act legislation. 
50 

Mr. Chairman, I will submit my full testimony for the record, 

and I would be happy to answer any questions you may have. 

[The prepared statement of Mr. Wood follows:] 

PREPARED STATEMENT OF MR. MICHAEL WOOD, 

EXECUTIVE DIRECTOR, 

RECOVERY ACCOUNTABILITY AND TRANSPARENCY BOARD
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Chairman BROUN. Thank you, Mr. Wood. 

Mr. Friedman, you are recognized for five minutes. 

STATEMENT OF HON. GREGORY FRIEDMAN, 

INSPECTOR GENERAL, 

U.S. DEPARTMENT OF ENERGY 

Mr. FRIEDMAN. Thank you, Mr. Chairman. And to you and Members of the Subcommittee, I appreciate the opportunity to testify 

today in response to your request on the work of the Office of Inspector General concerning the Department of Energy’s activities 

under the American Recovery and Reinvestment Act. 

Not to be outdone by at least two of my colleagues, I should point 

out in response to your earlier question that my attorney is here 

with me today, but I do not expect to have him testify unless I collapse in place. But I do want to clarify in my response to your earlier question. 

Chairman BROUN. The record will reflect that. Thank you. 

Mr. FRIEDMAN. Thank you. 

As you know, the intent of the Recovery Act was to quickly stimulate the economy, create jobs, and transform the Department’s 

mission while fostering an unprecedented level of accountability 

and transparency. The Department received over $35 billion in Recovery Act funding for various initiatives, eclipsing its normal annual budget of approximately $26 billion. 

The Department’s implementation of the Recovery Act has been 

a priority for my office. I have testified on several occasions as to 

the Department’s progress, including before this Subcommittee in 

March of 2009. Most recently, on November 2, 2011, I testified before the House Committee on Oversight and Government Reform’s 

Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending. Since enactment, my office has issued 70 reports covering all major program activities, initiated a number of 

Recovery Act-related criminal investigations, and conducted 300 

fraud awareness briefings for nearly 16,000 federal contracts, 

State, and other officials. 

As I have previously testified, while there has been significant 

progress, the Department’s efforts to use Recovery Act funds to 

stimulate the economy has been more challenging than many had 

originally envisioned. We found the Department’s programs required extensive advanced planning, organizational enhancements, 

and additional staffing and training at federal, State, and local levels. 

A fairly consistent pattern of delays existed in the pace at which 

funds have been spent by grantees and other recipients. According 

to the Department’s records, as of November 18 of 2011, about 43 

percent of its Recovery Act funds had not been spent, largely by recipients such as State and local governments. 

In addition, our reviews have identified performance issues that 

affected the Department’s ability to meet its Recovery Act goals. 

Specific examples are provided in my full testimony. 

In contrast, we found that the Department’s Office of Science and 

its laboratory system generally complied with Recovery Act requirements, expended funds in a timely manner, and employed sound 
58 

project management practices. The Office of Science received approximately $1.6 billion in Recovery Act funds, most of which were 

used to accelerate ongoing work by purchasing equipment and completing construction projects which had already begun. 

The Recovery Act established challenging goals. There was what 

we considered to be an intense effort to implement and execute the 

various aspects of the Department’s responsibilities. These efforts 

notwithstanding, we had a number of observations about the Department’s implementation and execution of the Recovery Act. 

These observations, which I have described in prior testimony, are: 

• First, the pressure of achieving expeditious program implementation and execution placed an enormous strain on the Department’s personnel and infrastructure. 

• Second, dealing with a diverse and complex set of departmental stakeholders complicated Recovery Act startup and administration. 

• Third, in general, the concept of shovel-ready projects was not 

realized. 

• Fourth, federal, State, and local government infrastructures 

were, simply put, overwhelmed. In several States, the very personnel who were charged with implementing the Recovery 

Act’s provisions had been furloughed due to local economic conditions. 

• Fifth, the pace of actual expenditures was significantly slowed 

because of the time needed to understand and address specific 

requirements of the Recovery Act. 

• Sixth, recipients expressed their concern with what they perceived to be or they described to us as overly complex and burdensome reporting requirements. 

In summary, a combination of massive funding, high expectations, and inadequate infrastructure resulted at times in less-thanoptimal performance. Given the significant amount of Recovery Act 

funds that remain to be spent, we have reviews planned in a number of high-risk areas. Additionally, we have identified a series of 

cost-reduction and efficiency-enhancement actions for consideration 

by Department management. These are provided in our recently 

issued report on ‘‘Management Challenges at the Department of 

Energy.’’ 

Finally, we are drafting a summary report to highlight other lessons learned and best practices related to the Recovery Act in the 

areas of risk management, financial management, accounting and 

reporting, human capital management, regulatory compliance, and 

delivery of public services. 

Mr. Chairman, this concludes my statement and I look forward 

to your questions and those of the Subcommittee. 

[The prepared statement of Mr. Friedman follows:] 
59 

PREPARED STATEMENT OF HON. GREGORY FRIEDMAN, 

INSPECTOR GENERAL, 

U.S. DEPARTMENT OF ENERGY
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Chairman BROUN. Thank you, Mr. Friedman. 

I now recognize Mr. Zinser for five minutes. 

STATEMENT OF HON. TODD ZINSER, 

INSPECTOR GENERAL, 

U.S. DEPARTMENT OF COMMERCE 

Mr. ZINSER. Thank you, Chairman Broun, Ranking Member 

Tonko, Members of the Subcommittee. Thank you for the opportunity to testify today about our oversight of the Department of 

Commerce’s Science, Technology, and other programs funded 

through the Recovery Act. 

I would like to summarize my testimony by updating the Subcommittee on the status of Commerce’s spending of Recovery Act 

funds and informing the Subcommittee of the most significant challenges remaining for Commerce with respect to the Recovery Act. 

The Act appropriated $7.9 billion to five Commerce agencies in the 

OIG. As a result of approximately $1.1 billion in rescissions and 

transfers, that amount was reduced to $6.8 billion, almost all of 

which has been obligated. Approximately $2.9 billion, or 40 percent 

of those obligations, has been spent. The 2010 decennial census and 

the coupon program that NTIA administered as part of the Nation’s transition to digital TV accounts for $1.3 billion spent so far. 

In all, the Department awarded 467 grants and issued 433 con- tracts under the Recovery Act. As of September 30, 2011, nearly $4 

billion for Recovery Act programs and operations at Commerce 

agencies had not yet been dispersed—including $2.8 billion for infrastructure grants under NTIA’s Broadband Technology Opportunities Program, or BTOP; $300 million for NIST construction of research facilities and their Science and Technical Research Programs; and $125 million for NOAA procurement, acquisition, and 

construction projects. 

By far, BTOP remains the most significant Recovery Act challenge for Commerce. Aside from BTOP, however, the greatest challenge lies in completing other projects on time. Given the constrained budget environment, increased cost or loss of Recovery Act 

funding caused by schedule delays could put projects and the operations they support at serious risk. For example, our testimony discusses projects that NOAA itself identified as experiencing schedule challenges—including the construction of the NOAA ship Reuben Lasker, an $87 million project which has experienced significant delays and difficulties meeting performance requirements; and 

the construction of the La Jolla Southwest Science Center in California, an $85 million project which has also experienced delays 

(the responsibility for which is currently a matter of dispute between the government and the contractor). 

We are currently auditing the $179 million NIST Recovery Act 

program which awarded 16 construction grants, primarily for university research facilities, and believe there are four projects that 

are at some risk of not being completed by the new September 2013 

deadline recently set by OMB. 

Finally, Mr. Chairman, based on our ongoing oversight and close 

interaction with the Department and its bureaus, we have seen improved oversight procedures and processes as well as evidence that 
73 

the Department is being diligent about its responsibilities under 

the Recovery Act. As demonstrated by our July 2011 findings concerning recipient reporting, the Recovery Act has resulted in more 

diligent oversight by program offices and greater executive-level involvement than we have seen in the past. In our view, the emphasis on transparency and accountability has been a significant benefit of the Recovery Act. 

Going forward, a challenge will be to institutionalize that emphasis on transparency and accountability for all spending carried out 

by the Department of Commerce, and we look forward to working 

with the Department in doing so. 

This concludes my statement, Mr. Chairman. I would be happy 

to respond to any questions. 

[The prepared statement of Mr. Zinser follows:] 

PREPARED STATEMENT OF HON. TODD ZINSER, 

INSPECTOR GENERAL, 

U.S. DEPARTMENT OF COMMERCE
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Chairman BROUN. Thank you, Mr. Zinser. 

Now, the Subcommittee recognizes Ms. Lerner for five minutes. 

STATEMENT OF MS. ALLISON LERNER, 

INSPECTOR GENERAL, 

NATIONAL SCIENCE FOUNDATION 

Ms. LERNER. Thank you. 

Chairman Broun, Ranking Member Tonko, and Members of the 

Subcommittee, I appreciate this opportunity to provide an update 

of my office’s continuing efforts to monitor the $3 billion in Recovery Act funds provided to the National Science Foundation. 

Our approach to ARRA oversight has consisted of two phases: a 

proactive phase for risk mitigation activities that was accomplished 

primarily during the funding stage to help prevent problems and 

prepare for more substantive work; and an operational phase, during which we plan to undertake more traditional audits, investigations, and other types of reviews. 

During the proactive phase, we conducted real-time reviews of 

NSF’s ARRA-related activities that resulted in several recommendations to NSF management. Our work during this phase 

included identifying potential high-risk ARRA awardees and recommending ways to make NSF’s award process more accountable and 

transparent. We also conducted a series of reviews of universities 

and nonprofit organizations that received ARRA funds to determine 

at an early stage whether those institutions had the financial capability to manage Recovery Act funding and how well those organizations were complying with the Act’s quarterly reporting requirements. 

With respect to financial capability, we concluded that, in general, the entities we examined had established adequate internal 

controls to ensure that ARRA funds were properly segregated as 

required. 

With regard to data quality, we found that while the institutions 

we reviewed had generally established appropriate processes, there 

were several areas in which NSF recipients were not consistently, 

accurately, or completely reporting data. We made recommendations to NSF to promote consistent and accurate reporting, and the 

Agency generally agreed with those recommendations. The ARRA 

recipients we reviewed also indicated that they were taking action 

to improve their reporting. 

In the operational phase, among other things, we are planning 

to audit specific ARRA awards at recipient institutions. In determining which awards to audit, we will conduct a risk assessment, 

which takes into consideration variables such as award type, the 

results of prior audits, and ARRA-specific issues such as the total 

number and dollar value of Recovery Act awards. 

Mr. Chairman, because of the large amounts of ARRA funding 

they received, the complexity of the projects, and the management 

challenges inherent in construction projects, we have directed significant oversight to NSF’s construction of three major projects: the 

Alaska Region Research Vessel, the Ocean Observatory’s Initiative 

(or OOI), and the Advanced Technology Solar Telescope (or ATST). 

I will conclude my testimony by focusing on problems uncovered in 
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audits of OOI and ATST and the impact of those problems on Recovery Act funds. 

We began this oversight activity with audits of the cost proposals 

for OOI, which had total projected costs of $386 million with $106 

million in ARRA funds, and for ATST, which had total projected 

costs of $298 million with $146 million in ARRA funds. We reviewed these proposals because they are the basis on which recipients can draw down funds over the course of their awards. The resulting audits performed on our behalf by the Defense Contract 

Audit Agency disclosed significant problems with the use and management of contingency funds. 

NSF requires awardees to include contingency estimates in the 

budgets of construction projects to ensure that actual costs do not 

exceed planned costs. The auditors found that the $150 million in 

contingencies in the two cost proposals are not allowable under federal cost principles which state that ‘‘contingencies for events the 

occurrence of which cannot be foretold with certainty as to time, intensity, or with an assurance that they are happening are unallowable.’’ The questioned amount includes $55 million in ARRA funding. 

The auditors were also troubled by the lack of controls over the 

contingency funds. NSF allows contingency funds to be held by the 

awardee’s project officer during the construction phase. The auditors found that the awardees can draw down contingency funds 

without prior NSF approval at any point in the project and that 

there are no technical barriers to prevent these funds from being 

used for purposes other than contingencies. As a result, there is an 

increased risk of fraud or misuse of these funds. 

We have recommended that NSF require awardees to remove the 

unallowable contingencies from their proposed budgets and that 

NSF, not awardees, control the release of contingency funds. We 

are working with NSF management to resolve these and other contingency findings, and because of the large dollar amounts and the 

risk posed by NSF’s current process of funding contingencies, we 

will begin work this year to examine the use of ARRA funds for 

contingencies in the construction of the Alaska Region Research 

Vessel. 

This concludes my statement, and I will be happy to answer any 

questions. 

[The prepared statement of Ms. Lerner follows:] 
89 

PREPARED STATEMENT OF MS. ALLISON LERNER, 

INSPECTOR GENERAL, 

NATIONAL SCIENCE FOUNDATION
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Chairman BROUN. Thank you, Ms. Lerner. 

I now recognize Ms. Robinson for five minutes. 

STATEMENT OF MS. GAIL ROBINSON, 

DEPUTY INSPECTOR GENERAL, 

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 

Ms. ROBINSON. Thank you, Mr. Chairman. And thank you to you 

and the Members of the Subcommittee for inviting us here today. NASA received $1 billion in direct Recovery Act funding, the 

bulk of which it dedicated to ongoing projects in Earth Science, Astrophysics, Exploration, and Aeronautics Research. For example, 

the James Webb Space Telescope received an infusion of $75 million; the Multipurpose Crew Vehicle, $166 million; and the Mobile 

Launcher, $25 million; while $24.4 million was used to fund contracts in the Small Business Innovative Research and Small Business Technology Transfer Programs. In addition, NASA used $50 

million to repair facilities at the Johnson Space Center that had 

been damaged by Hurricane Ike in 2008. As was already pointed 

out in contrast to some of the other agencies, NASA has obligated 

and, in fact, dispersed virtually all of these funds. 

Since passage of the Act, the OIG has actively monitored NASA’s 

Recovery Act efforts through both our audit and investigative work. 

On the audit side, we have issued seven products, including reports 

examining the Agency’s use of funds for the James Webb Space 

Telescope, for three Earth science missions, and for the Johnson 

hurricane repair work. We also have five audits currently in 

progress. 

Overall, we have found that NASA generally used Recovery Act 

funds in accordance with the requirements and goals of the Act and 

OMB’s implementing guidance. However, we also made more than 

$2 million in monetary findings and identified several internal control weaknesses in NASA’s processes, including unauthorized persons recommending payment of invoices, poor negotiation of project 

oversight costs, and incomplete contract files. We made eight recommendations to improve NASA’s internal controls. The Agency 

agreed with all of our recommendations, and five of them have 

been closed. The Agency continues to work to address the remaining three. 

In addition to our audit work, we currently have seven open investigations relating to the Recovery Act. One is a proactive effort 

involving SBIR and STTR contracts, three involve allegations of 

companies submitting false information, and one involves a possible conflict of interest and misappropriation of funds by a former 

NASA employee. We also have an active investigation involving 

procurement irregularities and a case in which an individual has 

been indicted for stealing copper from a project funded with Recovery Act money. In addition to these ongoing matters, we recently 

closed two cases as unsubstantiated, and we referred two other 

issues to NASA managers for their disposition. 

As NASA’s Recovery Act efforts wind down, the OIG will continue to conduct audits, reviews, and investigations to ensure compliance with the Act’s mandates. 
96 

This concludes my oral statement and I would be happy to answer any questions. 

[The prepared statement of Ms. Robinson follows:] 

PREPARED STATEMENT OF MS. GAIL ROBINSON, 

DEPUTY INSPECTOR GENERAL, 

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
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Chairman BROUN. Thank you, Ms. Robinson. 

I want to thank all of you all. By the way, that is southern for— 

it is plural for you all. But I want to thank all of you all for your 

testimony. 

Reminding Members that Committee rules limit Members’ questions to five minutes per round of questions, the Chair at this point 

will open the round of questions. And I will recognize myself for 

five minutes. 

To Mr. Friedman, a lot of attention has been paid to the loan 

guarantees to Solyndra and Beacon Power because of their bankruptcies. Beacon Power also received funding from DOE’s Energy 

Delivery and Energy Reliability Program, the Office of Science, and 

ARPA–E. What happens to the grant money when companies go 

bankrupt? And does the company keep it? Does the Agency keep 

it or does it go back to the Treasury? 

Mr. FRIEDMAN. Well, Mr. Chairman, I frankly am not personally 

familiar with the specific terms in the non-loan guarantee expenditures the Department made with regard to Beacon, so I can’t give 

you a definitive answer. However, in general, depending upon the 

nature of the agreement, there are either time payments based on 

completion of various aspects of goals of the project or there is a 

payment up front. If, in fact, the entity is bankrupt and they are 

cashless, if that is the case, then obviously, the—if the money has 

been expended it can no longer be recovered. If, on the other hand, 

it has not been dispersed, my assumption would be there would be 

a hold placed on those funds until the bankruptcy is resolved. 

Chairman BROUN. Well—— 

Mr. FRIEDMAN. But that is an assumption on my part, Mr. Chairman. 

Chairman BROUN. Sure. 

Mr. FRIEDMAN. I am not positive. 

Chairman BROUN. Well, assets should have value, though, so 

where does the taxpayers’ interest fit within the bankruptcy proceedings? 

Mr. FRIEDMAN. Well, I—— 

Chairman BROUN. Who would recover those funds? 

Mr. FRIEDMAN. I am not intimately familiar with the way the Department is proceeding. I have seen the published reports on sale 

of assets and the Department’s interest in those assets. I don’t 

know how that intersects with the funds, other than the loan guarantee funds that have been expended with Beacon. 

Chairman BROUN. Okay. To all you all, if a recipient is unable 

to spend its ARRA funding prior to the OMB deadline of September 

30, 2013, what happens to that money? Does the Agency keep it 

or does it go back to the Treasury? 

Mr. ZINSER. Mr. Chairman, it is unclear from the OMB guidance 

what exactly is going to happen, but one factor of the Dodd-Frank 

legislation is that it included some provisions about unobligated 

and unspent Recovery Act money. I think our sense would be that 

the unspent money would go back to the Treasury. 

Chairman BROUN. Anybody else want to weigh in on that? Dr. 

Rusco. 

Dr. RUSCO. I think in general we agree our reading of it is that 

it will go back to the Treasury. There may be some conditions 
106 

where the OMB guidance is unclear, in which case it would have 

to be resolved. 

Chairman BROUN. All right. Ms. Robinson, in your testimony you 

stated that the $75 million in ARRA funding that NASA received 

for the beleaguered James Webb Space Telescope enabled 454 jobs 

to be retained on the JWST project in the fourth quarter of fiscal 

year 2009 and 149 jobs in the first quarter of fiscal year 2010. I 

am familiar with jobs created and the attempt to quantify jobs 

saved. Is jobs enabled mentioned as a criterion in the Act or in 

OMB guidelines? 

Ms. ROBINSON. I don’t know, Sir, of exactly what they use in the 

OMB guidelines. I do know that the James Webb Space telescope 

project was going to run out of money in that year, in fiscal year 

2009, and that they used that money to continue work which enabled the—primarily the contract personnel to continue that work 

in that period. 

Chairman BROUN. All right. JWST was initially expected to cost 

$1 billion and to launch in 2008. It has now ballooned to almost 

$9 billion and is expected to launch in 2018. Should cost overruns 

be considered an economic stimulus? 

Ms. ROBINSON. Again, I don’t think cost overruns are an economic stimulus. As we are all aware, the program has repeatedly 

been over schedule and over budget, and Congress and NASA and 

the Administration have worked hard to give them the additional 

money they need to finally bring it to fruition. 

Chairman BROUN. Okay. And are these jobs enabled contractors 

that flow from project to project? Or are they federal employees 

that are part of a standing workforce that are there at NASA Center? 

Ms. ROBINSON. I believe with regard to the telescope, they were 

primarily contractor employees. 

Chairman BROUN. Okay. My time has expired. 

I now recognize my Ranking Member, Mr. Tonko, for five minutes. 

Mr. TONKO. Thank you, Mr. Chair. 

While the Solyndra story has preoccupied many, the real story on 

DOE’s Loan Guarantee Program is not about one company going 

under but about the Department holding tens of billions of dollars 

in loans, all of which carry risk. 

From my experience in New York State, I can attest that nuclear 

projects are among the most expensive and sometimes most risky. 

I am not alone in that opinion. In a 2003 study, CBO put the risk 

of default for nuclear loans at ‘‘well above 50 percent.’’ The key factor they wrote is ‘‘accounting for this risk is that we expect that 

the plant would be uneconomic to operate because of its high construction costs relative to other electricity generation sources.’’ 

Nothing has changed on this, of course. In 2003, a new report by 

CBO cites a study that found ‘‘of the 117 privately owned plants 

in the United States that were started in the ’60s and ’70s and for 

which data are available, 48 were cancelled and almost all of them 

experienced significant cost overruns.’’ 

The Solyndra loan is dwarfed by just one of the nuclear project 

loans that DOE has approved. The first approved loan is for over 
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$8 billion to the Southern Company. That single loan is roughly 16 

times the size of the Solyndra loan. 

So, Dr. Rusco, I would ask according to the July 2010 report from 

the Department of Energy which treats—or on the Department of 

Energy by GAO treats nuclear loans differently than other types of 

applicants. Can you describe the treatment that these loans—that 

the loan applicants receive and shed light for us on why there was 

that difference? 

Dr. RUSCO. Well, first of all, there is a difference between the Recovery Act loans and the 1703 loans and the nuclear loans were 

conditionally committed to under the 1703 program. So in that program, the companies themselves will be paying their credit subsidy 

cost. But that is just to clarify that that is not a Recovery Act— 

those aren’t Recovery Act loans. And that money has not yet gone 

out the door and is awaiting licenses. 

What we found is that in the application process that the nuclear 

loans and some of the larger fossil fuel loans were able to essentially skip some steps in the application process and were—reached 

conditional commitment prior to having completed all those steps, 

and we felt that that was inconsistent with the guidance and the 

rules as set out by the program. The explanation by the program 

for that was that more is known about these types of projects and 

therefore they were able to skip those steps, but we didn’t feel the 

documentation for that justification was sufficient. 

Mr. TONKO. Right. But as I understand it, these loans were 

brought under the ARRA in terms of employment-reporting requirements, were they not? And there is absolutely no difference in 

how the Department of Energy handles those loans? 

Dr. RUSCO. Well, the basic loan process differs in the sense that 

for the 1703 programs, the government won’t be picking up the 

credit subsidy cost, which will be very significant for the nuclear 

loans. 

Mr. TONKO. Um-hum. Given the favorable way that nuclear applicants were treated, is there any assurance you can provide this 

panel that DOE is being as tough on reexamining the nuclear loan 

exposure as they are in looking at everything else? Perhaps Dr. 

Rusco or Mr. Friedman, can you give us those assurances in this 

case? 

Dr. RUSCO. GAO has broad concerns about the slow speed at 

which the loan program has codified and made consistent its application review process and its due diligence process. And so we are 

concerned about all loans that may or may not have gone through 

all the steps of the process, and we think that if the program will 

more clearly document what they are doing and their reasons for 

deviating from their process, there will be greater transparency 

and we will be more comfortable. 

Mr. TONKO. Mr. Friedman, would you have anything to add to 

that or would you agree with that? 

Mr. FRIEDMAN. I agree. I don’t have any information on it. I can’t 

give you any assurance because obviously that is not within my 

purview. But we issued a report in March of this year concerning 

the very issues that you have just heard about, which is basically 

the level of documentation with regard to identification of risks and 

the mitigation of those risks and how they have been addressed 
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and the lack of documentation and inadequate documentation. So 

obviously we agree. And it covers the entire portfolio of loan guarantees in terms of the ability of the Department in the event of a 

crisis to identify why they took the actions that they took. So we 

do agree. 

Mr. TONKO. Um-hum. And finally, if we can get some info on the 

funds that are obligated but uncommitted—spent—what leverage 

do the agencies have to push recipients of awards to spend these 

funds? Is there anyone on the panel or all of you that might want 

to address how we could get those monies spent? 

Mr. ZINSER. Sir, I think whether guarantees remain on schedule 

is a function of the program offices overseeing those projects. Beyond that, I think you have to strike a balance between pushing 

the grantees or contractors to spend the money quickly and making 

sure that the money is spent effectively. 

Chairman BROUN. The gentleman’s time has expired. 

I would like to remind my friend from New York there is a huge 

difference between Southern Company and Solyndra, between the 

technology of nuclear energy as well as what Solyndra was trying 

to do. So the risk of the loan to Southern Company or any other 

nuclear power company is vastly different than loaning—lending 

money to a company like Solyndra, particularly with all the warnings that came from the previous Administration, as well as this 

Administration. 

Now, I recognize Dr. Bucshon for five minutes. 

Mr. BUCSHON. Thank you, Mr. Chairman. I thank all the panelists here today. 

When we passed the stimulus bill, I wasn’t here, but it was 

promised that the unemployment rate would be below eight percent 

and drop down, so my questions are going to be related to—similar 

to that process. Because as everyone knows, we now have a persistent over nine percent unemployment rate, and the economy is 

still sluggish. 

It appears to me not being in Congress at the time that everyone 

that received money had to scramble to find uses for the money 

and then retrospectively assess whether or not it was used properly, or more importantly, has resulted in long-term improvement 

and changes that are necessary to decrease our over nine percent 

unemployment. It seems to me that that is backward from the way 

we should be thinking about this process. 

So I will make the assumption that all the departments represented here would take extra money if it is offered to them, but 

the question I have—and I guess I would direct it to Mr. Friedman 

first as it relates to the Department of Energy—did the Department of Energy request the money? Did they need the money? Or, 

in your view, did the Department of Energy have to find ways to 

spend the money once it was out there? 

Mr. FRIEDMAN. Well, I am not sure I have good answer to your 

question, but I—in March of 2009, we issued a report concerning 

lessons learned on our prior work in this regard, Congressman. 

And at that point, it was clear that the Recovery Act, with regard 

to the Department of Energy, had three purposes. One is economic 

stimulus, two is job creation, and three was transformation of the 

Department. So I think there was a clear understanding on the 
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part of both the Congress at the time and those who voted for the 

legislation and the Administration that the funds would be used for 

that purpose as well, transforming the Department of Energy, focusing on green—going green, renewables, and what have you, and 

the technology area. 

Mr. BUCSHON. Okay. Thank you. Mr. Zinser. 

Mr. ZINSER. We are not part of the inner circle of the Department, so we do not have a lot of insight on how the requests were 

formulated. However, there were two factors related to agencies 

that have experienced issues with timely spending. I think some 

were older budget requests that had not been funded in previous 

years, and then, in the case of the Department of Commerce, for 

example, there is an entire $5 billion program thrust upon a small 

agency not properly staffed to administer a program of that size 

and scope. So I think it is likely a combination of factors. 

Mr. BUCSHON. Ms. Lerner. 

Ms. LERNER. Thank you. And I would echo what Mr. Zinser said 

and further it by the fact that I was not at NSF in February of 

2009 when the stimulus act was passed. So I am not aware of what 

role the Agency had in determining the $3 billion that the Agency 

got, but I do know that NSF has wanted to boost the acceptance 

rate for people that they fund over time, and they were excited that 

the $3 billion would enable them to fund more scientific research. 

Two-thirds of the funding that they received was used to fund proposals that they had in hand that had been rated well, so I think 

they were prepared to move pretty quickly and execute the funding 

that they received, and they were able to build the acceptance rate. 

And that helps them, as I said, ensure that more basic scientific 

research is done, and that the science and technology workforce of 

the future is trained. 

Mr. BUCSHON. Ms. Robinson. 

Ms. ROBINSON. I also was not at NASA in 2009 when the Act was 

passed, so I do not know what role the Agency played in how much 

money they were going to get. Again, they did—they got the smallest amount of the people here. They did do a lot up front to make 

sure that they were going to use it appropriately and that they 

were going to meet the transparency and other requirements of the 

Act. 

Mr. BUCSHON. I guess my line of questioning is just meant to establish the fact that it seems to me that a bunch of federal funding 

was thrust upon these different agencies and then they had to 

scramble to find out how to use it and in many cases did not even 

have the infrastructure in place to appropriately implement whatever programs it was supposed to benefit. And being a new Member of Congress, that just seems backwards to me and the way we 

allocate money at the Federal Government. And again, I think that 

the proof is in the results. We still have an over nine percent unemployment rate, and now we have almost $800 billion more on 

the federal deficit and the entire intent of the stimulus was to get 

people back to work. 

And I yield back. Thank you. 

Chairman BROUN. Thank you, Dr. Bucshon. 

I now recognize Mr. McNerney for five minutes. 

Mr. MCNERNEY. Thank you, Mr. Chairman. 
110 

One of the things that I really have found useful in this set of 

testimonies is that the increase in transparency and accountability 

has been caused by the American—by the ARRA. And that is a 

good thing. 

But moving forward, Dr. Rusco in particular, do you believe that 

those checks and balances have made a difference in reducing 

waste and abuse and fraud? 

Dr. RUSCO. Yes, I am certain that the oversight—the extra oversight that we and the IGs and the other bodies were giving this 

have reduced that. There has been fraud, waste, and abuse found 

but the added oversight has also made the agencies more careful 

and also created better processes for performing their own oversight. 

Mr. MCNERNEY. Well, good. Do you think those processes will be 

in place moving forward into non-ARRA expenditures? 

Mr. RUSCO. I hope so. 

Mr. MCNERNEY. I do, too. Well, that is going to be something we 

are going to be watching, I guess. 

Mr. Wood, I found your testimony very informative, and I want 

to congratulate you and the RAT Board for the excellent work you 

have done in—toward creating transparency. I am sure there is 

room for improvement as we go forward, but there are costs associated with this improvement in transparency reporting and so on. 

Do you have any insights as to whether the enhanced transparency 

is worth the cost that went into developing those processes? 

Mr. WOOD. My position would be that it was worth the costs. We 

established a system where recipients needed to report information 

and they did. We tried to establish systems that were very easy to 

use. When I built the reporting system, I basically told people if 

you can order a book online, you can use the reporting system, 

which is fairly true. It is a Web-based system. 

There can be improvements made. We can incorporate things 

such as pre-population sums of data so that the recipient wouldn’t 

have to add that information. I know the DATA Act includes a provision for providing some administrative overhead. I think it is .5 

percent for recipients to use for things like reporting and so forth. 

So there are some things that could be improved. 

We looked at—one of the concerns was reporting burden when 

we were getting going in looking at the Recovery Act. We think the 

Recovery Act and the Transparency Act—FFATA, its predecessor— 

both established that it was sort of floor of $25,000. So if you received $25,000 or more, you had to report. That scenario you could 

look at for—if you were concerned about reporting burden on small 

entities and so forth. 

Mr. MCNERNEY. Dr. Rusco, again, one of the things that I was 

disappointed to hear was that you were unable to assess the employment impact of the ARRA. Is that—did I understand that correctly? Was that your position? 

Dr. RUSCO. Well, not exactly. GAO has not set out to evaluate 

ourselves what the job creation effects have been. We have looked 

at what has been reported, and we have also looked at some of the 

efforts in particular in the Environmental Management Office of 

DOE, and we found that the methodologies used by that office were 
111 

not conforming to OMB guidance and they were in some cases 

clearly overcounting, in some cases perhaps even undercounting. 

Mr. MCNERNEY. Is there anyone on the panel here this morning 

that could answer that question about the impact of the ARRA 

funding on employment in your particular department? 

Mr. ZINSER. Sir, I think the goal of calculating and tracking job 

creation was very ambitious, but, in the end, it didn’t turn out to 

be very feasible. Jobs might be temporary or term positions; as a 

result, from one reporting period to another, the jobs are created 

in a particular quarter but aren’t cumulative. So when the Recovery.gov Web site reports jobs created, it is just for that most current quarter. 

Mr. MCNERNEY. Well, you know, the improvement in accountability and transparency is terrific. It would be good to have an improvement in terms of being able to assess the impact of this funding on employment. 

And with that I yield back. 

Chairman BROUN. Thank you, Mr. McNerney. 

I now recognize Mrs. Adams for five minutes. 

Mrs. ADAMS. Thank you, Mr. Chair. 

Dr. Rusco, your testimony notes that DOE has only implemented 

two of your eight recommendations concerning weatherization programs that received $5 billion in stimulus funds. Have any independently verified studies been conducted to see what energy savings have occurred as a result of this program? 

Dr. RUSCO. There is a study being done by Oakridge National 

Lab, and they have some preliminary results, but they are also, I 

think, in two years going to have more definitive results of that 

study. 

Mrs. ADAMS. So there is one independent to your knowledge? 

Dr. RUSCO. Yes. 

Mrs. ADAMS. And the five billion dollars in stimulus funds given 

to weatherization programs is more than 20 times as much as programs was previously appropriated. Such huge increases can lead 

to a number of challenges for any agency that sees such an increase. Can you discuss some of the challenges faced by DOE due 

to the increase? And what lessons can be learned from this experience, and how can they be applied to other programs? 

Dr. RUSCO. Well, I think some of the main challenges were related to ramping up both at the Department but also at the recipient level. So the recipients were not used to receiving as much 

funds as were available under the Recovery Act. And some recipients received hardly any funds in the past, and so for them to set 

up the accountability structure and to set up the training systems 

and the reporting systems and to get guidance from DOE took 

time. And those are sort of just the basic challenges of setting up 

something that was—that ran at a much smaller scale. 

Mrs. ADAMS. Thank you. 

Mr. Zinser, your testimony notes a referral from the Recovery 

Board that led to an investigation about a company that had previously pled guilty to a criminal charge concerning export regulations. This company then falsely certified that it had not been convicted of a crime in order to receive the stimulus funding. Which 

company is this, and why did it even—why did they even receive 
112 

the stimulus funds in the first place with the Recovery Board’s 

DATA system in place? 

Mr. ZINSER. Congresswoman, I believe the name of the company 

is MTS, and it does do a lot of work with the government. I think 

what happened is that when it was convicted in 2008, nobody made 

the effort to get it onto the government’s excluded list. And so, 

when the company started competing for contracts, there is some 

ambiguity whether that particular conviction met the government’s 

criteria for exclusion. So it said no based on advice of their counsel. 

Mrs. ADAMS. So that ambiguity from their side—what about your 

side? 

Mr. ZINSER. We referred the company for suspension and debarment from government contracting. And it has entered into an 

agreement with the government to have its operations monitored 

by an independent third party. Further, we are investigating its 

conduct for any potential judicial action. 

Mrs. ADAMS. So instead of being disbarred, they have entered 

into a corporate compliance agreement and therefore continuing to 

operate. Would you support disbarring them? 

Mr. ZINSER. We did support disbarring them, yes. 

Mrs. ADAMS. Ms. Robinson, your testimony mentions inflated 

overhead costs for hurricane damage repair at the Johnson Space 

Center. Is NASA making any effort to recoup this money from the 

contractor? 

Ms. ROBINSON. NASA could not recoup the money from the contractor. It was a fixed-price contract and amounts that they had 

agreed to pay. 

Mrs. ADAMS. Your testimony, you know, is generally positive concerning NASA’s stimulus expenditures. Is that because these funds 

were primarily directed towards existing programs? Or was NASA 

better able to manage the funding increase over other agencies? 

Ms. ROBINSON. I think it was probably a combination of the fact 

that it was existing programs and that the Agency took steps 

proactively to make sure that they had set up systems to ensure 

the proper use of the money. 

Mrs. ADAMS. Mr. Zinser, you said in an answer earlier that it 

was an ambitious goal to track the employment or lack of employment based on these funds. Do you think it is possible at all to 

truly know if it did or did not help unemployment? Because the 

numbers show that we are well over eight percent, so if I am going 

by what I see every day in my communities, I would say no, it did 

not help. 

Mr. ZINSER. In the beginning of the Recovery Act, there were two 

different tracks that were set up. One was set up by the Council 

of Economic Advisors where they were going to determine what the 

impact of the Act had been on employment. The other track was 

for award recipients reporting the jobs created. My previous answer 

dealt with that second track. Trying to count the number of jobs 

created and the problems you run into. 

Mrs. ADAMS. Well, let me ask you this. Would you agree that unemployment is higher today than it was when this was passed? 

Mr. ZINSER. Based on my reading of the economic statistics, I 

would say that the unemployment rate is higher today than it was 

then. 
113 

Mrs. ADAMS. Thank you. I yield back. 

Chairman BROUN. Thank you, Mrs. Adams. 

I now recognize Mr. Hultgren for five minutes. 

Mr. HULTGREN. Thank you, Mr. Chairman. And thank you all 

very much. 

This is important for us to be discussing, and the American people want accountability. They want results that really make a difference and get things rolling again, so I think this is an important 

discussion to be having today. So thank you for the work that you 

are doing and for your role being here today. 

It appears to me that money spent on and channeled through the 

national labs was money that was much better spent than these 

apparently rushed loan guarantees and economic interventions that 

we saw. Mr. Friedman, I wanted to address a question to you and 

wondered if you could speak to what efforts and formal studies 

DOE has conducted to assess and properly weigh the relative merits of funding to the labs versus other recipients. Fermilab is located in my district, and they do cutting-edge work that really is 

important. Given how hard it has been for DOE to find even modest additional funding for the lab, this question is very important 

to me, so I wonder if you could shed some light on that for me. 

Mr. FRIEDMAN. Well, if you are asking whether the Department 

has done such a study, I am not aware of one. And they may well 

have. But what we have found, both in terms of the science funds 

and in terms of the environmental remediation funds that the Department received which were significant, the work done in preexisting programs and advancing preexisting programs at the national laboratories actually worked quite well. The requirements of 

the Recovery Act appear to have been followed. There was a fairly 

expeditious expenditure of the funds. They did hire people in fact 

and they have completed the—they have applied reasonably good 

project management skills to those funds. 

Mr. HULTGREN. Okay. Well, again, thank you all for being here. 

I appreciate the work that you are doing in this important discussion. 

I yield back. 

Chairman BROUN. Thank you, Mr. Hultgren. 

We will endeavor to do a second round of questioning. I now recognize myself for five minutes. 

Ms. Lerner and Ms. Robinson, are there lessons learned from the 

Recovery Act SBIR funding that can be translated to overall SBIR 

programs and agencies that are so troubled by waste, fraud, and 

abuse? Whichever one wants to start. 

Ms. ROBINSON. We believe there are. We are actually doing an 

ongoing audit at the moment that is looking at the Agency’s Recovery Act SBIR/STTR work and we haven’t quite completed it yet. 

But we do believe that there will be some actions that the Agency 

took during—before the Recovery Act that would be applicable and 

recommended to apply to their other programs as well, non-Recovery Act. 

Chairman BROUN. Ms. Lerner. 

Ms. LERNER. I would note that the greater access to data about 

SBIR and STTR programs that is provided through the reported 

data and the stimulus act was useful in trying to work those types 
114 

of cases. One of the challenges agencies have had has been the 

quality of data about SBIR and STTR, projects that have been 

funded. There have been improvements made to databases that the 

SBIR program is intended to maintain, but the additional data that 

is available from the Recovery Act is useful as well and it makes 

it easier for our agencies, particularly in cases where there is duplicate funding, to find opportunities to work together and to combat 

fraud in those programs. 

Chairman BROUN. Very good. 

Dr. Rusco, in GAO’s 2009 testimony, they mentioned that the Re- covery Act made a $2.32 billion available to energy to jointly fund 

private sector projects demonstrating clean coal and carbon capture 

and sequestration technologies. FutureGen was the subject of considerable attention by this committee after the Bush Administration decided to cancel the program citing cost overruns. Various reports and testimony, GAO found that DOE did not base its decision 

to restructure FutureGen on a comprehensive analysis of factors 

such as associated cost benefits and risks. Did DOE ever conduct 

the recommended analysis prior to awarding over $1 billion in 

stimulus funding to the project? 

Dr. RUSCO. Beyond the point at which we last testified and reported, we have not looked at that program, but I am unaware of 

such a study at this point. 

Chairman BROUN. So the answer is no. 

Recently, Ameren, the owner of the power plant, announced their 

intent to close down the site to comply with EPA regulations leaving the restructured FutureGen project once more in limbo. What 

implications did this announcement have on the future of the 

project? 

Dr. RUSCO. Again, we haven’t looked at it recently but, you 

know, obviously they—that program has been troubled by a number of things, including the fact that in our view they haven’t really 

reconciled the purpose of the program with what industry is willing 

and able to do, and I think that that needs to be looked into further. 

Chairman BROUN. Okay. What is the current status of the billion 

dollars in stimulus funding? What impact do you anticipate the future announcement will have on the overall cost to FutureGen? 

And if FutureGen does not move forward, what will happen to that 

obligated funding? 

Dr. RUSCO. Yeah, I am sorry I can’t answer that at this point, 

but I could look into that and see if I can answer it for the record. 

Chairman BROUN. Okay. Mr. Friedman, do you have any comment? Can you answer that? 

Mr. FRIEDMAN. No, I can’t elaborate on what has been said already, Mr. Chairman. 

Chairman BROUN. Okay. To all you all, start with RATB, Mr. 

Wood, what oversight body is responsible for ensuring that the 

goals of the stimulus bill were met, and who is looking whether 

outcome-based metrics are being evaluated? 

Mr. WOOD. The Recovery Board does coordination of the accountability mainly for waste, fraud, and abuse and passes out if we find 

information such as was discussed earlier, we will refer it to the 

Inspectors General for investigation. I think on the performance 
115 

metrics, that is an area that was not stressed in the Recovery Act. 

We did publish program plans for each agency that OMB required, 

but if you look at performance metrics per se, it is probably one of 

the weaker areas of the Act. We can track the dollars. We do collect 

information on the jobs, but the performance metrics is probably 

not an area where we specifically collect information. 

Chairman BROUN. Anybody else want to weigh in? 

Mr. ZINSER. Yeah, Mr. Chairman, in the case of NOAA, for example, they received about $150 million for habitat restoration. They 

have actually established a Web site, Restoration.NOAA.gov, that 

identifies where those projects are located, and you go to that Web 

site and you can click on the map and it will actually give you the 

performance of grant recipients associated with those projects. 

Chairman BROUN. You cited one instance but we are spending 

billions of dollars here. Is this just one instance out of all of the 

stimulus funding, or is it pretty pervasive across the whole gamut 

of stimulus expenditures? 

Mr. ZINSER. Recovery.gov does provide for analysis a lot of information about individual projects. Whether they are all outcome 

measures or not, I am not sure. Many are output measures, but for 

many, the key outcome is economic stimulus. And I think I have 

testified about the difficulties in calculating job creation. 

Chairman BROUN. Thank you. My time has expired. 

Mr. Tonko, you are recognized for five minutes. 

Mr. TONKO. Thank you, Mr. Chair. 

Let me congratulate all of you for the work that you have done 

to enhance the public’s ability to see where its money goes. It also 

is important I think to thank you for all the work done to raise 

your own effort to bring accountability to the ARRA program. The 

transparency of ARRA is wonderful, but it does come at a cost, as 

was earlier stated by Representative McNerney. I would like to 

delve into that a little deeper. 

Agencies have obviously more burdens associated with working 

with fund recipients and collecting data. And the IGs and the RAT 

Board have burdens for spot-checking reporting compliance and in 

aggregating data before making them available to the public. Perhaps most importantly, recipients of funds have costs in complying 

with reporting requirements and tracking where those funds specifically go. Now, members and staff have heard complaints over 

the last two years from colleges, from universities, from small businesses that that reporting is indeed onerous and confusing. Now, 

I am very supportive of making government funding as transparent 

as possible for our public. However, it should be stated that we 

don’t want it to see—to have it serve as an unnecessary burden 

onto agencies or small businesses and universities. 

So to our witnesses, I would like you to share your thoughts 

about how we can apply the lessons learned with ARRA to make 

government funding more transparent while not overburdening 

funding agencies and recipients. Just like—could you address what 

you believe is the right balance and should we perhaps establish 

a dollar value which would then kick in for further scrutiny or reporting requirements? Perhaps, Mr. Wood, we can start with you 

and then have the entire panel address that. 
116 

Mr. WOOD. Yeah, I think I mentioned earlier this is an excellent 

question. We tried to build our reporting systems to be as least 

burdensome as possible. There are some things I think we could do. 

You have mentioned some of them. One thing you could look at is 

raising the floor from $25,000 to a higher level. You would lose 

some granularity in the information you collect, but you would 

probably alleviate some of the small business concerns and so forth. 

There are some things we could do technologically and we have 

done. For instance, we installed data checks and so forth to prevent 

people from making common mistakes, putting in the wrong ZIP 

code where putting a New Hampshire ZIP code with Nevada and 

so forth. So there are things we can do along those lines. 

I think the other thing we did in the Recovery Act that was effective is we actually limited it to 99 data elements. That sounds like 

a lot, but that is a limited data set for some of the things the Federal Government does. I think you could even look at reducing the 

number of data elements some, making sure that you really were 

collecting exactly what you wanted. And you could do some prepopulation of those data elements. You could use existing government systems that might have information in them to pre-populate 

it. So, even though there were data elements that needed to be reported, it wasn’t burdensome for the person filing the report. 

Mr. TONKO. Um-hum. Dr. Rusco. 

Dr. RUSCO. I think improved guidance from programming agencies would help and that was one of the big challenges. Getting 

that guidance to be clear and timely was a challenge, and hopefully 

that is also a lesson learned going forward. 

Mr. TONKO. Um-hum. Mr. Friedman. 

Mr. FRIEDMAN. Well, of course you have hit, Mr. Tonko, on one 

of the really important questions that have come out of this, and 

I appreciate that. 

Look, I think we need a risk-based strategy, we need thresholds 

that make sense, and that is one of the lessons that I think we 

have learned. We heard the same thing from recipients that you 

are alluding to, which is that they felt the reporting requirements 

were overly burdensome and not necessarily productive, and we 

agree with that. 

I would just—one note of caution, though, that if the body politic 

is prepared to accept the thresholds and understand the risks associated with accepting those thresholds and no reporting below the 

threshold or limited reporting, that would be okay. But if, on the 

other hand, at the end of the day we are going to adopt such a 

mechanism and then have people criticize the fact that there 

wasn’t reporting and there wasn’t adequate oversight below those 

thresholds, we will have actually ended up, I think, moving a ball 

backwards rather than moving the ball forward. I don’t know if 

that makes any sense. I hope that addresses your question. 

I think the—several Members of the Subcommittee have hit on 

some extremely important points with regard to lessons learned 

and best practices, and if we spent 3/4 of a billion dollars or $800 

million on the Stimulus Act and if we haven’t learned both in the 

IG community, in the program part of our agencies, and frankly 

the Congress if I may say so, if we haven’t learned a lot, then 

shame on all of us. 
117 

Mr. TONKO. Thank you. Mr. Zinser. 

Mr. ZINSER. Well, Mr. Wood knows better than anybody about 

the development of FederalReporting.gov. Early on I think the RAT 

Board thought that it would just use existing financial systems to 

access grantee and contractor information. To navigate those labyrinthine systems, however, would take years. So the RAT Board 

came up with this FederalReporting.gov system, and I think the 

legislation that Mike referred to is intended to institutionalize that 

for all government spending, and we think that would be a good 

idea. 

One of the problems the system encountered was that it was layered over existing reporting systems. There were a lot of complaints early on. We have been through nine quarters of reporting 

now, and the complaints have subsided. The recipient data now 

have a high quality. All the OIGs have done audits of the data 

quality, so the data is better, and I think if we were able to get 

rid of some of the legacy systems in place of this 

FederalReporting.gov that would be an improvement. 

Mr. TONKO. Thank you. Ms. Lerner. 

Ms. LERNER. I would concur with what Mr. Zinser said. I certainly have heard a lot of complaints about the burden, especially 

in the early days from NSF recipients. And I have some sympathy 

with that. But, I think part of the reason people feel overburdened 

is because they have to report data not just to the Recovery Board 

but to multiple other sources for the Federal Government. And I 

think, moving forward, if we could get to a point where we could 

combine many of those sources which often require overlapping 

data, we would achieve some cost-savings because we wouldn’t be 

separately maintaining dozens of different reporting systems, just 

the single one. We would have improved accountability because it 

would be one-stop shopping for data, and hopefully in a situation 

like that we could expand on the data collected in a way that would 

provide more useful information to people like me and people like 

you for oversight purposes at a lesser burden on the recipients. 

Mr. TONKO. Thank you. And finally, Ms. Robinson. 

Ms. ROBINSON. I don’t really have anything to add to that. I 

think it is pretty much all done by the panel. 

Mr. TONKO. Thank you very much to all of you. 

Thank you, Mr. Chairman. 

Chairman BROUN. The gentleman’s time has expired. 

Well, I have a lot of leeway here, and I am not going to run 

things real tight, particularly when we are looking into an issue 

such as oversight, transparency, and accountability. 

To me, the good thing that has come out of the stimulus act is 

that I do think we have more transparency and accountability for 

federal spending. We have certainly identified some problems in regard to trying to pour a massive amount of money, almost a trillion 

dollars, and I respectfully disagree with my friend from New York 

about the success of the Stimulus Act. 

I think it has been—you can’t pour almost a trillion dollars into 

the economy without having some positive effects, but I think overall it has been an abject failure and the metrics I use for determining that is we were promised by the President that if we passed 

this stimulus bill—and you and I both were here during that period 
118 

of time, Mr. Tonko, that our unemployment rate would not go 

above eight percent and it has steadily risen to over 10 percent. In 

my district it is over 10 percent; in my State it is over 10 percent 

today. So there are other ways, I think, that are better of stimulating the economy and that is getting the tax burden and regulatory burden off the private sector so that we can start creating 

jobs and start creating a strong economy. 

Having said that, I want to thank the witnesses for all being 

here and for you all’s valuable testimony. It has been very enlightening and I appreciate you all’s hard work. In that regard, I thank 

members for their very insightful questions, too. 

Members of the Subcommittee may have additional questions for 

you all, and we ask that you respond in writing to those questions 

that will be submitted. The record will remain open for two additional weeks for additional comments or questions from the Members. 

The witnesses are excused. Again, thank you all so much for 

being here and for you all’s hard work on this issue. 

The hearing is now adjourned. 

[Whereupon, at 11:36 a.m., the Subcommittee was adjourned.] 
(119) 

Appendix 

ANSWERS TO POST-HEARING QUESTIONS
120 

ANSWERS TO POST-HEARING QUESTIONS

Responses by Dr. Frank Rusco, Director, 

Natural Resources and Environment Team, 

Government Accountability Office 

Questions Submitted by Chairman Paul C. Broun 
121 
122 
123 
124 
125 
126 
127 

Responses by Mr. Michael Wood, 

Executive Director, 

Recovery Accountability and Transparency Board 

Questions Submitted by Chairman Paul C. Broun 
128 
129 
130 
131 

Responses by Hon. Gregory Friedman, 

Inspector General, 

U.S. Department of Energy 

Questions Submitted by Chairman Paul C. Broun 
132 
133 
134 
135 
136 
137 
138 
139 
140 
141 
142 
143 

Responses by Hon. Todd Zinser, 

Inspector General, 

U.S. Department of Commerce 

Questions Submitted by Chairman Paul C. Broun 
144 
145 
146 
147 
148 

Responses by Ms. Allison Lerner, 

Inspector General, 

National Science Foundation 

Questions Submitted by Chairman Paul C. Broun 
149 
150 
151 
152 
153 
154 

Responses by Ms. Gail Robinson, 

Deputy Inspector General, 

National Aeronautics and Space Administration 

Questions Submitted by Chairman Paul C. Broun 

Æ