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REDUCING WASTE AND MISMANAGEMENT: 

IMPLEMENTING AGENCY WATCHDOGS’ 

RECOMMENDATIONS COULD SAVE 

TAXPAYERS BILLIONS 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

MARCH 5, 2013 

Serial No. 113–15 

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

( 

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

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

MARK POCAN, Wisconsin 

TAMMY DUCKWORTH, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

VACANCY 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on March 5, 2013 .............................................................................. 1 

WITNESSES 

The Honorable Anthony W. Miller, Deputy Secretary, U.S. Department of 

Education 

Oral Statement ................................................................................................. 8 

Written Statement ............................................................................................ 11 

The Honorable Kathleen S. Tighe, Inspector General, U.S. Department of 

Education 

Oral Statement ................................................................................................. 15 

Written Statement ............................................................................................ 16 

The Honorable John D. Porcari, Deputy Secretary, U.S. Department of Transportation 

Oral Statement ................................................................................................. 30 

Written Statement ............................................................................................ 32 

The Honorable Calvin L. Scovel III, Inspector General, U.S. Department 

of Transportation 

Oral Statement ................................................................................................. 45 

Written Statement ............................................................................................ 47 

APPENDIX 

Letter submitted for the record by a teacher ........................................................ 100 

Letter from the Department of Transportion to The Honorable Darrell Issa 

and Elijah E. Cummings ..................................................................................... 102 

Letter from the United States Department of Education to The Honorable 

Darrell Issa and Elijah E. Cummings ................................................................ 110 

Open and Unimplemented IG Recommendations Could Save Taxpayes $67 

Billion, Staff Report from Committe on Oversight and Government Reform . 118 

(1) 

REDUCING WASTE AND MISMANAGEMENT: 

IMPLEMENTING AGENCY WATCHDOGS’ RECOMMENDATIONS COULD SAVE TAXPAYERS 

BILLIONS 

Tuesday, March 5, 2013, 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 10:06 a.m., in Room 

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

Present: Representatives Issa, Mica, Duncan, McHenry, Jordan, 

Chaffetz, Walberg, Lankford, DesJarlais, Farenthold, Lummis, 

Woodall, Massie, Collins, Meadows, Bentivolio, DeSantis, 

Cummings, Maloney, Tierney, Clay, Connolly, Speier, Cartwright, 

Pocan, Duckworth, Davis, and Horsford. 

Staff Present: Ali Ahmad, Majority Communications Advisor; 

Kurt Bardella, Majority Senior Policy Advisor; Molly Boyl, Majority 

Parliamentarian; Lawrence J. Brady, Majority Staff Director; Sharon Casey, Majority Senior Assistant Clerk; Steve Castor, Majority 

Chief Counsel, Investigations; John Cuaderes, Majority Deputy 

Staff Director; Jessica L. Donlon, Majority Counsel; Kate Dunbar, 

Majority Legislative Assistant; Adam P. Fromm, Majority Director 

of Member Services and Committee Operations; Linda Good, Majority Chief Clerk; Frederick Hill, Majority Director of Communications and Senior Policy Advisor; Christopher Hixon, Majority Deputy Chief Counsel, Oversight; Jean Humbrecht, Majority Counsel; 

Mark D. Marin, Majority Director of Oversight; Kristin L. Nelson, 

Majority Counsel; Laura L. Rush, Majority Deputy Chief Clerk; 

Scott Schmidt, Majority Deputy Director of Digital Strategy; Jonathan J. Skladany, Majority Counsel; Peter Warren, Majority Legislative Policy Director; Rebecca Watkins, Majority Deputy Director 

of Communications; Claire Coleman, Minority Counsel; Jimmy 

Fremgen, Minority Legislative Assistant; Susanne Sachsman 

Grooms, Minority Chief Counsel; Jennifer Hoffman, Minority Press 

Secretary; Carla Hultberg, Minority Chief Clerk; Adam Koshkin, 

Minority Research Assistant; Elisa LaNier, Minority Deputy Clerk; 

Lucinda Lessley, Minority Policy Director; Dave Rapallo, Minority 

Staff Director; and Rory Sheehan, Minority New Media Press Secretary. 

Chairman ISSA. The committee will come to order. 

The Oversight Committee exists to secure two fundamental principles: first, Americans have a right to know that the money WashVerDate Aug 31 2005 08:59 May 29, 2013 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\80899.TXT APRIL
2 

ington takes from them is well spent and, second, Americans deserve an efficient, effective Government that works for them. Our 

duty on the Oversight and Government Reform Committee is to 

protect these rights. 

Our solemn responsibility is to hold Government accountable to 

taxpayers, because taxpayers have a right to know what they get 

from their Government, and we will work tirelessly in partnership 

with citizen watchdogs and our IGs to deliver the facts to the 

American people and bring genuine reform to the Federal bureaucracy. 

Today, I first want to thank our ranking member, Mr. 

Cummings, for joining me in this hearing that will serve as a factbased blueprint for a conversation unfolding about Government 

savings and Government spending. With attention to policymakers 

on how best to manage an $85 billion sequestration, this is the 

time to lead the discussion on finding and eliminating waste that 

is based in fact. 

We have heard tales of massive teacher layoffs, pay cuts, Capitol 

janitors, security guards, and many other effects of sequestration. 

I am here to say some of them might be true. There will be, in fact, 

reductions in the size of the Federal workforce. There will be 

changes in contracts. But many of them can be avoided if we look 

for win-win savings. 

One of our challenges is knowing, whether you are a Republican 

or a Democrat, whether you are in the House or the Senate, whether you are an IG or administering a part of Government, we all 

know that there are embedded wastes in Government. There are 

fiefdoms, if you will, that over the years, with their budget divisions, have built up inherent duplicative programs. We spent years 

examining them. 

We are, today, meeting, among others, with two widely respected 

IGs who, among other things, by definition, will tell us it is frustrating to be an IG; you don’t control your budget, you may not 

even control whether or not there is an IG in the post or, as often 

happens under both administrations that I have served under, you 

have acting positions. 

There are widely different rules on what an IG can do but, most 

importantly, IGs, under the current law, have a number of limitations. If someone leaves the Federal workforce, they leave the ability of an IG to specifically demand their presence and hold them 

accountable. If someone is in another part of Government not covered by that particular IG, it is only on the request and granting 

by the other agency that investigation can cross the lines of jurisdiction. 

It is inherently wrong. We form joint task forces. We spend each 

other’s money. We work together. We are one Government and we 

need to have solutions that meet that one Government oversight. 

More importantly, with sequestration, one thing we are considering here today is IGs are not immune from it. In any company 

I can imagine, in tough times, when you are making budget cuts 

and you are looking to find waste, you don’t lay off the people who 

find the waste for you. You don’t, in a fraud situation, get rid of 

your auditors. That is one of the challenges we will face, and as 

a committee and the primary committee of jurisdiction for all IGs, 

3 

one of our challenges is to empower a small $2 billion total Government budget and about 12,000 men and women that call themselves IGs to do more, not less. 

We also, today, have entered for the record, and it is on our Web 

site, one of the continuing reports that began with several of my 

predecessors ago in which we looked at the potential savings. I 

want to make it clear the number in that figure continues to rise. 

It rises for two reasons: Government is getting bigger and the reporting we are getting is more detailed. And I want to thank all 

those who annually give us that information for scrubbing better 

and better. As far as I can tell, we have never had a year in which 

we got less; we always got more. 

One of my predecessors, Mr. Henry Waxman, under the Bush ad- ministration, put out a number of $26 billion that could be saved 

if the Bush administration would act faster on these suggestions. 

At the time, I was probably what you would call an apologist. I was 

looking for how many of those were relatively recent; how many 

had been closed; how inherently fair or unfair Mr. Waxman’s work 

was. When the burden changed from Mr. Waxman to myself, I 

began to realize that he had done the Bush administration a great 

favor. The numbers, in fact, were simply tabulations of what was 

reported. Some, in fact, could be explained. Many could be explained. Some would be dealt with in a short period of time, and 

many were. 

But as we all know, Mr. Cummings, myself, and everyone on the 

dais, oversight is in fact about recognizing the potential for savings, 

recognizing and putting in front of the Administration, at a minimum, and the public, in some cases, what we can do, and then encouraging it to happen faster. 

This committee has had some recent successes in finding specific 

areas of waste and overpayment, pushing the Government to act 

faster to save the taxpayers literally billions of dollars. It is the 

kind of thing we should do and we will do. 

I am halfway through my chairmanship. Being halfway through 

a chairmanship tells you that when you look behind you, you ask 

have I done enough; and the answer is I haven’t. Looking forward, 

I have little time to do more. So with my partners on both sides 

of the dais, today we are starting a much greater dialogue with our 

IGs, a much greater dialogue with the changes that need to be 

made if in fact Government outside of this body, in the executive 

branch, can do better, do quicker to save the taxpayers money. 

With that, I would like to thank my partner, Mr. Cummings, for 

his help in preparation for this hearing, and I recognize the gentleman from Maryland. 

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

Mr. Chairman, first of all, I appreciate your statements and, as 

you were talking, I could not help but be reminded that in so many 

instances our IGs are our last line of defense. Last line of defense. 

IGs are critical to ensuring that our Government works effectively 

and efficiently on behalf of American taxpayers. They will be meeting a deadline on April 15th, that is, the taxpayers, and they want 

to know that their money is spent effectively and efficiently. And 

you are right, Mr. Chairman, we need to be acting with the urgency of now if we are going to make a difference. 

4 

Our committee in particular relies heavily on the IGs’ detailed 

audits, inspections, and investigations to support our oversight efforts. We depend on IGs to cast a very critical eye over all aspects 

of agency operations, to question why things are done the way they 

are done and to affirmatively identify ways to improve program effectiveness. We are, indeed, partners with the IG because they, in 

so many instances, provide us with information that we are then 

able to look into and make changes. 

In December, Chairman Issa and I sent joint letters to all 73 IGs, 

asking them to identify the most significant open recommendations 

for reducing waste and improving efficiency in their agencies. Today’s hearing will be the first of a series of hearings to examine 

these recommendations. 

Today I am happy to welcome the IGs from the Department of 

Education and Transportation, as well as the deputy secretaries 

from each Department. I would like to give special welcome to my 

friend, Deputy Secretary John Porcari. He served for many years 

as secretary of the Maryland Department of Transportation and I 

have had the opportunity to work closely with him on important 

transportation issues for my State. I have the deepest respect. I 

look forward to hearing from him and our other witnesses about 

how they are working to improve our Government. 

In addition, I plan to ask all of our witnesses about the devastating effects of sequestration. 

Mr. Chairman, just this weekend I was at an IHOP restaurant 

after church, and a lady walked in with her 11-year-old and she 

mentioned to me that she just got the sequester notice from the Department of Defense that she would be having to be furloughed for 

four days out of a month and it would cost her $800. She has two 

kids, one in college and one 11-year-old, who she had with her, and 

she literally broke out in tears. 

The reason why I mention this is I want us to be reminded that 

sequestration does have an impact. But we can hopefully lessen 

that impact by making sure that we spend dollars effectively and 

efficiently in the long-run to make sure that those dollars are spent 

in a way where we can avoid those kinds of situations. 

This is a huge issue and, frankly, we would be derelict in our 

duty if we did not examine how these arbitrary and massive cuts 

will impact core Government services that Americans across the 

Country rely on every single day. Like almost all Federal agencies, 

the two Departments testifying before us today will have to make 

deep cuts to key programs and services. For example, these drastic 

cuts will reduce our mobility in the skies. The vast majority of 

FAA’s 47,000 employees are facing extensive furloughs, including 

air traffic controllers. This will result in delays and disruptions at 

our airports, cancelled flights, and impeded commerce. I know 

there many who are saying that sequestration will have little impact. They just need to come to my district. 

Sequestration also will have a devastating impact on education 

programs across the Country, including on our most vulnerable 

folks, our children. Cuts in Title I grants to high poverty school districts could eliminate support to an estimated 2,700 schools and 1.2 

million disadvantaged students. Sequestration also deeply impacts 

5 

children with disabilities, slashing funds from programs that provide special education teachers, staff, and other support. 

The irony is that we are holding a hearing today on IG recommendations to make these two agencies more effective and efficient, but it will be more difficult for these agencies to implement 

these recommendations while their budgets are being cut and their 

employees are being furloughed. 

You are absolutely right, Mr. Chairman. When we have a group 

of people who are basically saving the taxpayers money and making sure those monies are being spent effectively and efficiently, 

those are the last people we need to see being furloughed. Even IG 

offices themselves will feel the negative effects of sequestration, 

hindering their ability to conduct the very oversight work we are 

praising them for today. 

So I want to thank our witnesses for being here today. And as 

to the report that the Chairman is submitting, I thank you for your 

courtesy in talking to me before the hearing and I thank you for 

making it clear that if there is any disagreement in the numbers, 

we can resolve them at a future date. 

With that, I yield back. 

Chairman ISSA. I thank the gentleman very much. 

We now go to the gentleman from Ohio, Mr. Jordan. 

Mr. JORDAN. Thank you, Mr. Chairman, for having this hearing 

today. I couldn’t agree with you more. This hearing is about facts. 

This hearing is about credibility. And let’s just cut to the chase. If 

Government agencies and the secretaries who head those agencies 

would spend more time implementing the IGs’ recommendations 

and less time scaring the American people with all the political 

statements they have made regarding sequestration, the taxpayers 

would be a lot better off. I mean, it is just simple facts. 

We had a hearing two weeks ago, no, excuse me, last week, 

where we had the special inspector general for TARP come in and 

talk about, repeatedly, three years now, she has made recommendations to the paymaster, the special master for executive 

compensation, and only one of the eight recommendations she has 

repeatedly made have been implemented. And the facts are this: in 

2009, when that program was put in place, when the taxpayers 

bailed out seven different companies, only six executives were getting pay of over half a million dollars a year. Now, with only two 

companies still left in the program, 23 executives are getting pay 

of over half a million dollars a year because the paymaster won’t 

follow the inspector general’s recommendations. I mean, this is 

something that has to be done if we are going to save the taxpayers 

the kind of money they deserve to have saved. 

And, of course, just this past week, Mr. Chairman, when President Obama said at his press conference that the janitors and security guards who work at the Capitol will face pay cuts, the superintendent of the Capitol had to send an email out to employees saying pay and benefits will not be impacted. Once again, the President was making statements that just weren’t accurate. 

Of course, the one that is most famous is the Secretary of Education, Mr. Duncan. And you don’t have to take my word for it that 

he misled the American people; take The Washington Post, that 

conservative newspaper who always takes the conservative posiVerDate Aug 31 2005 08:59 May 29, 2013 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\80899.TXT APRIL
6 

tion. Take their word for it. When Mr. Duncan said this: It means 

a lot more children will not get the kinds of services and opportunities they need, and as many as 40,000 teachers could lose their job. 

Here is what The Washington Post said. The Washington Post said, 

‘‘Mr. Duncan made this claim not once, not twice, but three times. 

Let this be a teachable moment for him. Next time, before going 

on television, check your facts.’’ And then the last line in the article 

says, ‘‘Four Pinocchios. That is the most you can get.’’ That means 

he totally misled the American people on this. 

We need more time spent on implementing what the inspectors 

general tell our agencies to do; less time spent on this political 

game of scaring the American people about 2.4 percent cut to the 

overall Federal budget. 

So I appreciate the chairman having this hearing, having the 

witnesses today, and I look forward to a good hearing for all members, and would yield to the gentleman from North Carolina. 

Mr. MCHENRY. And I thank my colleague for yielding. 

Chairman ISSA. For two minutes and 16 seconds. 

Mr. MCHENRY. Yes. I will keep it brief. 

Chairman ISSA. The gentleman is only yielding his time. 

Mr. MCHENRY. Thanks. Well, actually, you can just give me 2.4 

percent less, in light of the sequester. 

So, with that, I just wanted to say that this Congress has acted 

to give the executive branch dramatic flexibility for implementing 

the sequester. Dramatic flexibility. Presidents, for my full lifetime, 

have asked for this level of budget flexibility. This President has 

said he does not want it. So the implementation of the sequester 

has been limited in terms of how agencies can fulfill those cuts, but 

the executive branch does have flexibility in implementing this to 

make sure that that person that the ranking member met on Sunday after church doesn’t have to be in tears and does not have to 

be furloughed. There are many choices the executive branch could 

make, beginning with the recommendations from the IGs. 

So I thank my colleague for yielding and would yield back the 

balance. 

Mr. JORDAN. I thank the gentleman. 

Yield back my time. 

Chairman ISSA. I thank both the gentlemen. 

We now recognize the gentleman from Pennsylvania, Mr. Cartwright, for the opening statement. 

Mr. CARTWRIGHT. Thank you, Chairman Issa and Ranking Member Cummings. 

The implementation of recommendations from our inspectors 

general can serve to decrease waste and ensure that the Federal 

Government is spending the taxpayers’ money as efficiently as possible. 

I want to welcome our witnesses here today and tell you I look 

forward to hearing about the work of the IGs today and working 

with my colleagues to maximize the efficiency of Government, an 

endeavor which is increasingly important during these difficult economic times. 

For example, bridge safety is particularly important in my district. I represent the 17th Congressional District of Pennsylvania, 

including Lackawanna County, Pennsylvania. In Lackawanna 

7 

County, Pennsylvania alone we have 66 bridges that have been 

graded as structurally deficient or have deterioration to one or 

more of their major components, and another four bridges that are 

closed entirely. That is more than 10 percent of the total bridge closures in the State of Pennsylvania. It represents more than an inconvenience; it is a danger and a looming expense that will be difficult to pay. It is the type of issue we need to head off before it 

gets to this point, and I believe the recommendations of the IG can 

help. 

Unfortunately, implementation of these recommendations is 

going to be all the more difficult because the testimony from the 

Inspectors General Tighe and Scovel come in the midst of yet another manufactured fiscal crisis. Republican leadership’s refusal to 

negotiate in good faith with President Obama has forced our Nation into this sequestration, costing vital programs the money needed to operate. The cuts to the Department of Education and Transportation each measure about $2 billion. The Department of Education will see devastating decreases in areas including special education programs, disability services, and higher education. Transportation cuts will slash the budget of the key safety agency such 

as the Federal Aviation Administration. 

Moreover, the CR put forth by the Republican leadership this 

week would further slash funding to areas such as highway safety 

to below the levels agreed upon just last in MAP–21, the comprehensive service transportation bill. The CR also fails to account 

for the new structures put in place by MAP–21, thus allocating 

money to accounts that no longer exist in law, while not funding 

new vital programs. These are real problems with relatively simple 

fixes that Congress should be solving, instead of creating new 

issues for these departments. 

Additionally, the very IG offices that make these recommendations will be cut by the sequester. Inspector General Tighe’s office 

will be reduced by $3 million and Inspector General Scovel’s office 

will lose $4 million. If we are to emphasize the role played by these 

offices, it makes no sense to allow this sequester to cut back on 

their future work. 

The negative impacts of sequester cuts are simply more proof 

that blindly hacking at the budget is not an effective path towards 

fiscal responsibility. If we are to make progress in reducing waste 

and maximizing services, we can’t allow the sequester to continue. 

We can begin by following a common sense approach, like the ones 

proposed by Representative Chris Van Hollen and House Democrats or the White House, which replaces the sequester by closing 

loopholes for oil and gas companies, ensuring the wealthy don’t use 

tax breaks to pay less than their fair share, and things like refocusing our farm subsidies. 

We cannot do this alone. I urge Republican leadership to come 

to the table in order to seriously and responsibly seek a balanced 

approach that will put our Nation on a path towards fiscal responsibility without jeopardizing our services or our national economic 

recovery. 

With that, I yield back. Thank you. 

Chairman ISSA. The gentleman yields back. 

8 

We would now like to welcome our witnesses today. The Honorable Anthony W. Miller is Deputy Secretary of the U.S. Department of Education and is Education Department’s Chief Operating 

Officer; the Honorable Kathleen Tighe is Inspector General of the 

United States Department of Education. Welcome. And the Honorable John Porcari is Deputy Secretary at the U.S. Department of 

Transportation and is DOT’s Chief Operating Officer; and the Honorable Calvin L. Scovel III is the Inspector General of the Department of Transportation. 

And as many of you have seen on C–SPAN, pursuant to our 

rules, would you please rise to take the oath? And raise your right 

hands. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? 

[Witnesses respond in the affirmative.] 

Chairman ISSA. Let the record reflect all witnesses answered in 

the affirmative. 

This panel is extremely important to us. Your opening statements are all in the record in their entirety, so, to the greatest extent possible, if you could limit yourself to the five minutes, summarize where approach, we would appreciate it. And that will leave 

more time for the Q&A that I know you are all looking forward to. 

With that, Mr. Miller, if you would lead off. 

WITNESS STATEMENTS 

STATEMENT OF THE HONORABLE ANTHONY W. MILLER 

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

Cummings, and committee members for the opportunity to testify 

before you on the Department’s efforts to improve efficiency, reduce 

fraud, and reduce waste. My testimony today will be organized 

around four key components. First, I would like to start with our 

overarching philosophy. 

Since the start of our administration in 2009, Secretary Duncan 

and our team have been committed to enhancing how the Department conducts its operations. When the Secretary asked me to join 

his team, it was an explicit intend to leverage my extensive private 

sector experience to enhance the Department’s operational and performance management capabilities. 

The Department of Education is committed to a philosophy of 

continuous improvement as we manage a broad array of programs 

and activities as cost-effectively as possible that will help ensure 

our Nation’s students have the opportunity to obtain a world-class 

education. And I can tell you with confidence that, while we remain 

focused on ways to continuously improve our performance, the Department of Education has long been engaged in making dramatic 

gains in our programmatic and operational efficiency. 

Let me start with what we have done to streamline our grant 

and Federal aid programs. Recognizing that 99 percent of the Federal funds for the Department are invested in programs, we know 

that programmatic change will have the highest impact. We looked 

at programs across the Department with an eye toward increasing 

9 

efficiency, maximizing impact, and ensuring the sustainability of 

improvements. 

We proposed, and Congress enacted, reforms to the student loan programs in 2010, which saved taxpayers $68 billion by boosting 

our share of Federal student loan volume from around 20 percent 

to 100 percent. We also proposed cost-cutting efforts to further save 

billions of dollars by eliminating and consolidating some Department programs and reforming other programs. From 2010 to 2012, 

Congress acted on many of these recommendations by eliminating 

49 programs, which resulted in savings of taxpayers of $1.2 billion 

a year. 

Next I want to talk about how we have adopted a risk management approach. Overall, the Department has been historically been 

very efficient in administering its grants and loans programs, but 

we wanted to evaluate areas for further improvement. In particular, we worked aggressively to improve how we support and 

provide oversight of grantees and student aid recipients to mitigate 

the risk of waste, fraud, and abuse before it happens. 

We have added steps to pre-screen all grantee slates, for example, recognizing that the more we can do early in the process reduces the potential risks later in the process. We have also taken 

steps post-award to mitigate the risk. We focus on working closely 

with our inspector general and GAO in this effort, and in our first 

year Secretary Duncan met with GAO’s comptroller general to ensure a collaborative working relationship and, likewise, the Secretary and I work very cooperatively with Inspector General Tighe 

and we have put in place formal processes to ensure both GAO and 

IG have access to the Department staff and have access to the resources to stay apprised of key issues. In the last 12 months, we 

have dramatically improved our ability to identify and resolve highpriority audits in a timely manner, and we are finding new ways 

to leverage audits to make targeted improvements in other critical 

areas. 

For the remaining one percent of the Department’s funds, which 

are reflected in our administrative spending, we have taken a 

multi-pronged approach to improve our efforts. From an internal 

management perspective, we have tried to control personnel levels, 

which represents one-third of the administrative cost, as well as 

taking on 60 percent of the Department’s administration cost in the 

area of contracts. We have reduced rented office space; we have 

taken advantage of emerging technologies such as cloud computing; 

and specifically we have held and/or reduced staffing levels. For example, since 2010 we have gone from more than 4400 full-time 

equivalents to approximately 4,250 FTEs, resulting in approximately $18 million in annual cost savings. 

Lastly, let me turn our attention to Executive Order 13589, promoting efficient spending. In response to the President’s Executive 

order, we took a holistic approach at spending and aggressively cut 

travel, printing, and supply costs. We were able to exceed this target in fiscal year 2012, reducing spending on these activities by 

more than 20 percent. Key steps we took included, wherever possible, using video conferencing and conference calls to reduce travel; publishing online instead of hard copy, when we could; and getting smarter in our acquisition of supplies. These strategies have 

10 

enabled us to cut spending on travel by 20 percent, reduce spending on printing and supplies by 30 percent and 29 percent, respectively; and we are on pace to meet the 30 percent reduction requirement in OMB’s Memorandum 1212. 

In conclusion, I would like to say while we are focused on the 

topic of efficiency, as has already been highlighted, I would be remiss if I did not address the issue of the sequester. Even as you 

asked us to take thoughtful, surgical steps to save money, which 

is smart government, the sequester requires us to cut by hatchet 

in a way that is not good for Government. At a time when we 

should be investing in education to ensure our Nation’s youth will 

be prepared for the increasingly globally competitive world, the 

steps sequestration forces us to take are counterproductive, to use 

a gentle word. 

The Department remains committed to ensuring that taxpayer 

dollars are spent wisely and that recipients of taxpayer funds are 

used as intended. We are proud of the work we have accomplished 

thus far and look forward to continuing to improve on both our 

process and our outcomes. 

Thank you, Chairman Issa, Ranking Member Cummings, and 

members of the committee for the opportunity to testify today 

about the efforts we are undertaking to improve and promote efficiency and reduce costs. I would be glad to answer any questions. 

[Prepared statement of Mr. Miller follows:] 

11 


Insert offset folio 1 here 80899.001

Testimony of 

Anthony Miller 

Deputy Secretary 

U.S. Department of Education 

Before the Committee on Oversight and Government Reform 

March 5, 2013 

Thank you, Mr. Chairman, Ranking Member Cummings and Members of the Committee for 

inviting me to testify before the Committee as you examine opportunities to reduce waste and 

improve efficiency within the federal government. During these challenging fiscal times, the 

Department of Education is doing its part to identify areas where we can reduce spending, while 

preserving our ability to manage a broad array of programs and activities as effectively as 

possible to ensure our nation's students have the opportunity to obtain a world-class education. 

Executive Order 13589, "Promoting Efficient Spending" 

On November 9, 2011, the President signed Executive Order 13589, "Promoting Efficient 

Spending," which directed all federal agencies to identify cost-cutting opportunities in a variety 

of administrative categories, including travel, printing, and supplies. Overall, administrative 

spending represents less than I percent of the over $200 billion in total annual program 

appropriations and new loan volume administered by the Department. The Department has 

historically been very efficient in administering its grant and loan programs. 

The Department has placed great focus on complying with Executive Order 13589. We formed a 

working group with members from across the Department with a goal to reduce spending in the 

areas of travel, printing, and supplies by at least 20 percent below FY 2010 levels by FY 2013. 

We were able to exceed this target in FY 2012, reducing spending on these activities by over 20 

percent. The working group took a holistic look at the various activities cited in the Executive 

Order and developed mUltiple strategies for obtaining savings in travel, printing, and supply 

costs. 

Among other things, we: 

• Increased the use of video-teleconferencing, conference calls, and other electronic 

meeting technologies to reduce staff travel expenses such as airfare, hotel, transportation, 

and per diem costs. 

• Successfully incorporated electronic alternatives to printing, such as electronic grant 

award notifications and posting and accessing documents online. We streamlined work 

areas to reduce the number of printers and created shared environments to reduce 

hardware costs. 

• Developed strategic sourcing protocols to enable the Department to implement 

acquisition strategies to reduce contract costs, particularly with regard to office supplies. 
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These strategies have allowed us to significantly reduce costs for travel, printing and supplies. 

Specifically, since 2010, the travel budget has been reduced by 20 percent, printing costs have 

decreased by 30 percent, and the Department cut supplies by 29 percent. 

Reducing Personnel and Contract Costs 

In addition to carrying out Executive Order 13589, the Department has taken extra steps to 

control personnel levels and adjust or cut contract costs during the last 18 months. We have also 

looked for ways to increase efficiency, from reducing our rented office space to taking advantage 

of emerging technologies such as cloud computing. Moreover, as we continue to become more 

efficient, we have been able to reduce staffing levels. Some examples of how we have reduced 

costs in these areas include: 

• Nearly a year after implementing the 100 percent Direct Loans program, the Department 

had more than 4,400 on-board full-time-equivalents (FTE). Today, with a similar if not 

heavier workload, we have approximately 4,250 FTE. 

• Revamped our contract negotiation practices and the use of fixed-priced contracts to 

reduce contract costs and obtain the best value, while maintaining quality of service. 

• The Department undertook an initiative to significantly improve its existing IT 

Infrastructure contract called EDUCATE. In doing so, the Department will save 

$550,000 in FY 2013 and approximately $16 million over the life of (he contract. All 

services under the contract will take advantage of the latest technologies and services to 

internal and external customers will be improved. 

• The number of entrances to Department buildings during non-peak hours has been 

reduced and evening and weekend hours when the Department buildings are open and 

fully staffed have been limited, thereby enabling us to realize a decrease in guard service 

costs. 

• We have realized cost efficiencies by cutting back on heating and cooling costs during 

non-peak hours and cycling usage during peak hours. 

Streamlining Grant and Federal Student Aid Programs 

In recent years, the Department has worked aggressively to enhance efficiency and reduce waste 

in a number of critical areas related (0 our core work of supporting and providing oversight of 

grantees and aid recipients. For example: 

• Since 2009, we have proposed cost-cutting efforts to save billions of dollars by 

eliminating and consolidating some Department programs and reforming other programs. 

From 2010-2012, Congress acted on many of these recommendations by eliminating 49 

programs, representing a savings to taxpayers of $1.2 billion annually. 

• We also proposed, and Congress enacted, reforms to the student loan programs in 2010, 

which further saved taxpayers $68 billion (some of which we invested in the Pell Grant 

program) by boosting our share offederal student loan volume from around 20 percent of 

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total volume to 100 percent. The transition to awarding and collecting all federal loans 

was a signi ficant undertaking, but the significant long-term savings justified the change. 

With respect to improving efficiency, the Department: 

• Moved from a paper-based Free Application for Federal Student Aid (FAFSA) to almost 

entirely online FAFSA process for students and their families, which has reduced cost 

associated with paper forms and lowered the burden on applicants. 

• Instituted a new feature in F AFSA that allows applicants to specify their high school to 

help protect against fraud and abuse of the federal student aid program. 

• Established a link to IRS data with the online F AFSA application, which cuts down on 

the amount of data that applicants have to enter manually and improves the verification of 

income to determine benefit amounts, reducingthe potential for fraud and abuse of the 

federal student aid program as well as lowering the burden on our schools in the manual 

verification process. 

• Implemented new guidance for ED and grantee staff who are responsible for conferences, 

directing them to first determine whether in-person conferences are necessary or can be 

replaced by virtually hosted events, and then, if in-person conferences are necessary, to 

scrutinize all expenses through a rigorous review process. 

• Devoted resources to the Department's suspension and debarment process to ensure that 

grantees whose conduct demonstrates a lack of business integrity or honesty are ineligible 

to receive federal grants. 

The Department's Risk Management Service works with all program offices to support the 

monitoring of grantees. The risk management team is responsible for working with program 

offices to conduct a fiscal risk analysis before awarding new or continuing discretionary grants. 

Continued Focus on Efficient Spending 

With respect to our continuing work to increase efficiency, we appreciate the Office of the 

Inspector General's (OIG) audits, recommendations, and findings as important tools in our 

continuous improvement efforts. We have the same expectation for ourselves as we have for 

schools: "We can always do better." We believe in accountability. Our goal is to continuously 

improve the Department's functioning so that we deliver high quality services and make the best 

use of taxpayer dollars. We carefully review all OIG audit findings and recommendations and 

focus on the areas of greatest financial risk. 

In the last 12 months we have dramatically improved our ability to identify and resolve highpriority audits in a timely manner, and we are finding new ways to leverage audits to make 

targeted improvements in other critical areas. 

For example, in response to a July 2012 OIG audit that focused on External Audit Resolution, 

the Department established an Audit Resolution Advisory Panel with members from every major 

officc in the agency involved in audits, including the 01G. This panel has been successful in 

establishing a new governance and accountability framework for audits, and is making 

significant progress in ensuring more timely and efficient resolution of high priority audits. 

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Conclusion 

The Department is committed to ensuring that taxpayer dollars are spent wisely and that 

recipients of taxpayer funds are using them as intended. We believe that we have done a good 

job implementing Executive Order 13589 and continually examine how we can further improve. 

Thank you Chairman Issa, Ranking Member Cummings, and Members of the Committee for the 

opportunity to testify today about the efforts the Department has taken to promote efficiency and 

reduce costs. I would be glad to answer any questions from the Committee. 

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Chairman ISSA. Thank you. 

Ms. Tighe. 

STATEMENT OF THE HONORABLE KATHLEEN S. TIGHE 

Ms. TIGHE. Chairman Issa, Ranking Member Cummings, and 

members of the committee, I am pleased to be here today to discuss 

opportunities to reduce waste and improve efficiency at the U.S. 

Department of Education. I want to thank the committee for its 

work in highlighting the issue of unimplemented OIG recommendations and for shining a spotlight on a topic that is an important 

part of good government. 

Since 2007, we have reported to this committee on several occasions on recommendations made in OIG reports that the Department had not yet implemented. Our most recent letter focused on 

high priority short-term and long-term recommendations. We highlighted recommendations we have made in five very diverse areas, 

all of which we believe are important to the Department’s ability 

to deliver its programs and operations efficiently, and without 

waste of taxpayer dollars. 

As is set out more fully in my written statement, those areas are: 

Federal student aid fraud rings, the Federal student aid debt management system, IT security, improper payments, and charter 

schools. Each of these areas is directly aligned with the Department’s management challenges for this fiscal year, as identified by 

my office. 

The goal of our audit, investigative and related work in these 

and other areas is not simply to identify problems, but to recommend improvements and promote corrective action. Since 2002, 

my office has issued six reports on the Department’s audit resolution and follow-up processes, each noting problems with ineffective 

internal controls, lack of staff and training to conduct resolution activity, and a lack of organizational priority placed on audit resolution. 

Our most recent audit, issued in 2012, found that 90 percent of 

the external OIG audits issued in the three year period we looked 

at had not been resolved within the six-month deadline mandated 

by OMB. Over half of these were overdue for resolution by an average of over 1,000 days and included questioned costs of $568 million. Because the Department did not act, it lost the opportunity 

to recover $415 million of these questioned costs as a result of the 

statute of limitations. 

The results of our work, whether it is audits, inspections, or investigations, can serve as a tool for the Department management 

and its daily operations, long-term strategic planning, and overall 

risk management. However, our work is effective only if the Department implements timely corrective action to address identified 

deficiencies or weaknesses. We are aware that the Department is 

planning to take steps to improve its audit resolution and followup processes, as the deputy secretary indicated, particularly in response to our recent audit, and we will closely monitor and report 

on this progress. 

This concludes my statement and I am also happy to answer 

questions. 

[Prepared statement of Ms. Tighe follows:] 

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Testimony of Kathleen S. Tighe, Inspector General 

U.S. Department of Education 

Before the 

Committee on Oversight and Government Reform 

U.S. House of Representatives 

March 5, 2013 

Chairman Issa, Ranking Member Cummings, and members of the Committee, I am pleased to be 

here today to discuss opportunities to reduce waste and improve efficiency at the 

U.S. Department of Education (Department). As requested, I am focusing my testimony on the 

issue of audit resolution and recommendations made in Office of Inspector General (OIG) 

reports that the Department has not yet implemented. I want to thank the Committee for its work 

in highlighting the issue of unimplemented OIG recommendations over the last several years and 

for holding this hearing to further shine a spotlight on an issue that is such a vital part of good 

government. 

As you know, the mission of my office is to promote effectiveness, efficiency, and integrity in 

Departmental programs and operations. We do this by conducting independent audits, 

inspections, investigations, and other reviews. When we identify problems or weaknesses, we 

make recommendations on actions the Department should take to correct those weaknesses or fix 

those problems. The goal of our work is not simply to identify problems, but also to encourage 

improvements and corrective actions. That is what audit resolution and followup are all about. 

They are important mechanisms for helping management improve the performance of the 

Department and its programs. For the purposes of this testimony, we use "audit resolution and 
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followup" to refer to the Department's activities in response to formal recommendations in OIO 

audits, inspections, and other reviews. 1 

Unimplemented recommendations are a by-product of ineffective audit resolution and followup 

processes, which hamper an agency's ability to increase program and operational efficiency and 

prevent waste. Since 2002, we have issued six audit reports related to audit resolution and 

followup. We have also produced five letters for this Committee since 2007 on 

recommendations made in OIO audit reports that the Department had not yet implemented. Our 

most recent letter, provided to the Committee in December 2012, focused on high-priority shortterm and long-term recommendations that the Department has not yet implemented. 

Today, I will discuss information on the Department's audit resolution and followup processes, 

the challenges it faces, and the findings of our recent work involving audit resolution and 

followup. I will also discuss the information included in our December 2012 letter to this 

Committee. 

Background on thc Department's Audit Resolution and Followup Processes 

The Office of Management and Budget (OMB) Circular A-50, "Audit Followup," issued in 

1982, provides the policies and procedures for use by executive agencies when considering audit 

reports, such as those the 010 issues. It requires agencies to establish systems to ensure the 

prompt and proper resolution and implementation of audit recommendations and provides that 

I The Department is also responsible for resolving recommendations in other products related to Department 

programs and operations, including those issued by the Government Accountability Office and by non-Federal 

auditors (such as independent public accountants and State auditors). 

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agency heads are responsible for designating a top management official to oversee audit 

followup, including resolution and corrective actions. At the Department, the Chief Financial 

Officer is the designated Audit Followup Official and is charged with the timely resolution of 

audit reports and ensuring that appropriate corrective actions have been taken on agreed-upon 

audit recommendations. OMB Circular A-50 requires agencies to resolve audits within 6 months 

of issuance. It also requires OIG to review and generally agree with the Department's proposed 

corrective action on recommendations made in an audit report before the audit can be considered 

resolved. 

There are generally two types of OIG audits-internal and external. Internal audits identify 

deficiencies and recommend improvements in Department operations and programs to ensure 

that the Department is using Federal education funds effectively and efficiently and 

accomplishing program goals. External audits are of external entities that receive funding 

from the Department, such as State educational agencies (SEAs), local educational agencies 

(LEAs), institutions of higher education, contractors, and nonprofit organizations. External 

OIG audit reports generally include recommendations for Department management to require 

the external entity to take corrective action. These recommendations may be monetary, which 

recommend that the entity return funds to the Department, or nonmonetary, which recommend 

that the entity improve operations or internal controls. 

The audit resolution process begins with the issuance of a final audit report. An internal audit is 

generally considered resolved when the Department and OIG agree on a corrective action plan 

for each recommendation. An external audit is considered resolved when the Department issues 

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a program determination letter on the audit report to the external entity, which is agreed to by 

OIG. Upon resolution, the Department is responsible for ensuring that the corrective actions are 

actually taken. When the corrective actions for a recommendation have been implemented, the 

recommendation is considered completed. An audit is considered closed when the Department 

ensures that all corrective actions have been implemented, including that funds are repaid or 

settlement made2 

Challenges in Audit Resolution and Followup 

As mentioned previously, since 2002, we have issued six audit reports on the Department's audit 

resolution and followup processes, most recently in 2012. These reports have noted 

longstanding challenges in these areas, including the following: 

• Untimely resolution of audits, particularly external audits, that has (1) impacted the 

potential recovery of funds due to the statute of limitations 3 applicable to monetary 

recommendations made in audits of entities (such as SEAs and LEAs) and (2) delayed 

corrective actions by auditees. Specifically, our 2012 audit of the Department's 

resolution process for OIG external audits found the following: 

2 As required by the Inspector General Act of 1978, as amended, the OIG provides information in its Semiannual 

Reports to Congress on audit reports issued, audit repOlts that are not yet resolved, and audit reports that have been 

resolved but for which corrective actions have not been implemented for at least a year after issuance of the final 

audit report. 

'The General Education Provisions Act (GEPA) establishes a statute of limitations for programs administered by 

the Department, including SEA and LEA recipients. The Department cannot seek recovery of funds that were spent 

more than 5 years before an auditee receives a program determination letter. The funds recovered must also be 

proportional to the extent ofharm to the Federal interest that the violation caused. Examples of Federal interest 

include serving eligible beneficiaries, providing authorized services, and complying with expenditure requirements. 

GEPA does not apply to programs authorized under the Higher Education Act of 1965. 

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o 90 percent of the OIG audits with tinal report issuance dates from January I, 

2007, through December 31,2010, had not been resolved within OMB's 6-month 

deadline, 

53 of these audits were overdue for resolution by an average of 1,078 days 

and included questioned costs that totaled $568 million, 

Due to the running of the statute of limitations, the Department lost the 

opportunity to recovery $415 million of these costs, 

o Two years later (January 17,2012),42 percent of the audits were still unresolved, 

o The percentage of external OIG audits not resolved timely increased during each 

calendar year from 2007 through 2010, 

• Ineffective internal controls over audit resolution and followup, such as the failure to 

ensure compliance with OMB Circular A-50. 

• A lack of the following: staff to conduct resolution activities, training so that staff had 

sufficient knowledge to effectively conduct resolution activity, organizational priority 

placed on audit resolution activities, and overall accountability. 

Another challenge for the Department is repeat findings, which are far too common, particularly 

in our information technology security work and in our financial statement audit work, Repeat 

findings are deficiencies that have been identified in previous work and remain unaddressed and 

thus are again identified in subsequent work. The following are examples of some of our repeat 

findings: 

• In our FY 2012 Federal Information Security Management Act review, we found that 6 

of the 11 security control areas we reviewed-risk management, configuration 

management, remote access management, identity and access management, security 
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training, and contingency planning-contained repeat findings from OIG and contractor 

reports issued during the prior 3 years, 

Since 2009, audits of the Department's and the Federal Student Aid office's (FSA) 

financial statements by OIG's independent financial auditors found significant repeat 

deficiencies relating to credit reform estimation and financial reporting processes and 

controls surrounding information systems. 

Improved processes and an increased emphasis on the timely implementation of corrective 

actions can help significantly reduce the occurrence of repeat findings. 

Recent Department Actions to Address Audit Resolution and Followup 

During our 2012 audit of the Department's external audit resolution processes, we found that one 

ot1ice within the Department had developed an internal action plan that was intended to improve 

its overall audit resolution process. The action plan included elements such as a quality 

assessment tool designed to improve the audit resolution specialists' ability to prepare quality 

resolution documentation, a tracking tool to monitor the status of audits throughout the resolution 

process, additional training for audit resolution specialists, an internal Web site to make audit 

resolution resources and tools readily available to audit resolution specialists, and hiring 

additional staff to perform audit resolution activities. If implemented throughout the 

Department, we believe these changes could decrease the volume of audits overdue for 

resolution and improve the overall timeliness of resolution activities for external OIG audits. 

In response to the findings of the 2012 audit, the Department proposed a series of short-term 

actions to address many of the specific recommendations in the report. In addition, the Deputy 

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Secretary has established a cross-agency team to review the audit resolution process. Members 

of this team agreed that the first critical business task would be focusing on resolving all overdue 

OIG external audits. As of February 1,2013, the Department reported that the team is on track 

to resolve these audits by May 31, 2013. Department leaders have asked my oftlce to participate 

in an advisory capacity on this team, and we have agreed to do so. We will be monitoring the 

Department's progress and will evaluate the efTectiveness of the Department's improved audit 

followup process and corrective actions to address audit recommendations. 

Summary of December 2012 Letter to the Committee 

In December 2012, the Committee on Oversight and Government Reform requested information 

from OIG related to our work plan process and high-priority recommendations. We told the 

Committee the major initiatives in our work plan that we intend to undertake this year. We also 

identified short-term and long-term recommendations that, if fully implemented, will address 

weaknesses or deficiencies in Departmental programs and operations. Our recommendations 

affect key areas important to the Department's ability to efTectively achieve its mission: Federal 

student aid, improper payments, information technology security, and charter schools as follows: 

Federal Student Aid-Fraud Rings 

In 2011, we issued a report that brought to the Department's attention a serious fraud 

vulnerability in distance education programs: "fraud rings," whieh are large, loosely 

affiliated groups of criminals who seek to exploit distance education programs in order to 

fraudulently obtain Federal student aid. Because all aspects of distance education take 

place through the Internet (admission, student aid, course instruction), students are not 

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required to present themselves in person at any point and institutions are not required to 

verify prospective and enrolled students' identities; thus, fraud ringleaders are able to use 

the identities of others (with or without their consent) to target distance education 

programs. Fraud rings mainly target lower cost institutions, because the Federal student 

aid awards arc sufficient to pay institutional charges (such as tuition), and the student 

receives the award balance to use for other educational expenses, such as books, room 

and board, and commuting. Our report offered nine specific recommended actions for 

the Department to take to address this fraud. Although the Department agreed (0 all of 

these recommendations, most have not yet been implemented. 

In January 2013, we provided the Department the results of our risk analysis related to 

student aid fraud rings, which for the time period 2009 to 2012, estimated a probable loss 

of more than $187 million in Federal student aid funds as a result of these criminal 

enterprises. 4 

Short-Term Recommendation: Seek a statutory change to the cost of 

attendance calculation for students enrolled in distance education programs under 

the Higher Education Act of 1965 to limit the allowance for room and board and 

other costs that distance education program participants do not incur as a result of 

their studies. 

Long-Term Recommendation: Establish edits in the Department's student aid 

systems, such as verification of an applicant's identity and high school graduation 

status, and to flag potential fraud ring participants and implement controls in the 

Department's Personal Identification Number delivery system. 

4 During this time period, $509.9 billion in Title IV aid was distributed. 

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Federal Student Aid-Default Management 

In 2012, we issued an alert report that identified significant problems with FSA's process 

for managing defaulted student loans. Specifically, we found that the Debt Management 

Collection System 2 (DMCS2) was unable to accept transfer of certain defaulted student 

loans from FSA's loan servicers. Since DMCS2 was implemented in October 2011, the 

Title IV Additional Servicers and ACS Education Solutions, LLC, have accumulated 

more than $1.1 billion in defaulted student loans that should be transferred to the 

Department for management and collection. DMCS2 has been unable to accept transfer 

of these loans and, as a result, the Department is hampered in pursuing collection 

remedies and borrowers are unable to take steps to remove their loans from default status. 

The inability ofDMCS2 to accept these transfers also contributed to a material weakness 

in internal control over financial reporting that was identified in FSA's Fiscal Year 2012 

financial statement audit. Based on our interaction with FSA officials to date, FSA has 

yet to implement effective cOlTective action to bring these affected loans into collection 

and to COlTect the problems with DMCS2. 

Short-Term Recommendation: Identify problems related to DMCS2 loan 

transfers, the source of each problem, and the entire population ofloans adversely 

affected and establish dates for resolving the cause of each identified problem 

related to DMCS2 loan transfers. 

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Long-Term Recommendation: Determine whether DMCS2 ean become a fully 

operational system that will meet all of the baseline functional system 

requirements. 

Information Technology Security 

The Department collects, processes, and stores a large amount of personally identifiable 

information regarding employees, students, and other program participants. OIG has 

identified repeated problems in information technology security and noted increasing 

threats and vulnerabilities to Department systems and data. OIG's information 

technology audits and other reviews have identified management, operational, and 

technical security controls that need improvement to adequately protect the 

confidentiality, integrity, and availability of Department systems and data. 

We have repeatedly recommended that the Department strengthen its controls and 

develop monitoring capabilities designed to help safeguard Department systems and data 

from unauthorized access, misuse, and fraud. Further, since 2009, audits of the 

Department's and FSA's financial statements by OIG's independent financial auditors 

found significant repeat deficiencies involving controls over information technology 

security. In addition, our work has found that Department privileged accounts have been 

compromised by keylogger5 software that could have been used to infect and even extract 

data from Department systems. Based on the Department's flawed mitigation process, 

, Keylogging is the action of tracking the keys struck on a keyboard. Kcylogger software logs and monitors all 

activities on the computer where it is installed. Criminals typically use key loggers to capture user identification and 

password of unwitting individuals for various fraudulent purposes. 

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we have little assurance as to whether sensitive data has been cxfiltrated by unauthorized 

individuals from Department systems. 

Short-Term Reeommendation: We have recommended that the Department 

implement two-factor authentication-a key safeguard against keylogger usagefor all users with access to Departmental systems. Although the Department has 

made progress on implementing two-factor authentication for Department 

employees, it has not yet done so for all contractors and other authorized users. 

Long-Term Recommendation: The Department and FSA must determine why 

information technology initiatives are not effectively implemented and managed 

to ensure successful system integration, system and data security, and 

identification and mitigation of fraudulent activity. 

Improper Payments 

In FY 2011, the OMB designated the Federal Pell Grant program a "high-priority" 

program because the FY 2010 Pell improper payments estimate of$I,005 million (a rate 

of3.12 percent) exceeded the OMB threshold of$750 million. As required with this 

designation, the Department coordinated with OMB to establish and execute a plan to 

implement high-priority program requirements, including designating accountable 

officials and establishing supplemental measures to report. As a result of the Department 

executing its plan, the FY 2011 Pell Grant improper payment rate fell to 2.72 percent, 

with estimated improper payments of$993 million. The FY 2012 improper payment rate 

also fell, dropping to 2.49 percent, with estimated improper payments of $829 million. 

Although the Department is making progress, it can do more. In 2010, the Department 

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implemented the Internal Revenue Service Data Retrieval Tool (IRS DRT), which allows 

Federal student aid applicants and, as needed, parents of applicants, to transfer certain tax 

return information from an IRS Web site directly to their online Free Application for 

Federal Student Aid (F AFSA). However, only 26 percent of all F AFSAs submitted for 

the 2012-2013 academic year used the IRS DRT. Use of the tool is optional, so people 

intent on defrauding the program by providing false income information likely would not 

select the IRS option. Because the IRS DRT is not mandatory, institutions retain the 

burden of verifying an applicant's income. 

Short-Term Recommendation: Study Pell Grant program recipients who do not 

use the IRS DRT and who are not selected for verification to determine whether 

the Department has adequate controls in place or needs to implement additional 

controls to mitigate the risk of improper payments to this population ofPell Grant 

recipients. 

Long-Term Recommendation: Since 1997, we have recommended 

implementation of an IRS income data match that would allow the Department to 

match the information provided on F AFSAs with the income data the IRS 

maintains. While the Higher Education Act of 1965 has been amended to reflect 

this requirement, the Internal Revenue Code has not been similarly amended. 

Amending the Internal Revenue Code to permit this match could help identify 

income inconsistencies and eliminate an area of fraud and abuse within the 

student financial assistance programs. 

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Charter Schools 

Charter schools are nonsectarian, publicly funded schools of choice exempt from certain 

State and local regulations. In return for reduced governmental regulation, charter 

schools agree to be held accountable for their academic and financial performance. A 

total of 42 States and the District of Columbia have enacted laws allowing the 

establishment of charter schools, and the laws differ from State to State. State charter 

school laws assign authorizers to approve charter school applications, oversee and ensure 

compliance, review and renew contracts, and close charter schools. State charter school 

laws allow for various types of authorizers, which can include institutions of higher 

education, independent chartering boards, school districts or LEAs, and not-for-profit 

organizations. OIG has conducted a significant amount of investigative work involving 

charter schools. These investigations have found that authorizers often fail to provide 

adequate oversight to ensure that charter schools properly use and account [or Federal 

funds. Further, in September 2012, we completed an audit of the Department's oversight 

and monitoring of the Charter Schools Program's SEA and non-SEA Planning and 

Implementation Grants. We determined that the Department did not effectively oversee 

and monitor thc grants and did not have an adequate process to ensure SEAs effectively 

oversaw and monitored their subgrantees. 

Short-Term Recommendation: Develop and implement a risk-based approach 

for selecting non-SEA grantees for monitoring activities. 

Long-Term Recommendation: Provide necessary guidance and training to 

SEAs on how to develop and implement procedures to ensure SEAs have 

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Conclusion 

effective monitoring and fiscal controls for tracking the use of funds by charter 

schools. 

010 audits, inspections, investigations, and other reviews identify fraud, waste, and abuse; 

provide information on the effectiveness of internal controls; and evaluate the appropriateness of 

Federal funds usage. The results of our work can serve as a tool for Department management in 

its daily operations, long-term strategic planning, and overall risk management. However, our 

work is effective only if the Department implements timely corrective actions to address 

identified deficiencies or weaknesses that hamper its ability to earry out its mission. We see that 

the Department is planning to take steps to improve its audit resolution and followup processes, 

and we will closely monitor and report on its progress. 

Once again, I want to thank the Committee for highlighting the issue of unimplemented 010 

recommendations and helping make audit resolution a priority for all Federal agencies. This 

concludes my written statement. I am happy to answer any of your questions. 

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30 

Chairman ISSA. Thank you. 

Mr. Porcari. 

STATEMENT OF THE HONORABLE JOHN D. PORCARI 

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

members of the committee, thanks for holding the hearing today. 

At the Department of Transportation, we take great pride in being 

good stewards of taxpayer dollars. We are always looking for ways 

to improve transparency, cut waste, and increase efficiency. This is 

a duty that we take seriously and it is something that we focus on 

every day. I am pleased to join you today to discuss our efforts to 

implement recommendations from the Department’s Office of the 

Inspector General. 

But before I discuss the OIGs recommendations, I would like to 

touch on a topic that is on everyone’s mind earlier: sequestration. 

Sequestration went into effect Friday. It is going to have serious 

impacts on the transportation services that are critical to the traveling public, our cities, and our national economy. Sequestration 

will cut over $650 million from funds recently provided through the 

Disaster Relief Appropriations Act of 2013, which is helping us to 

rebuild critical transit systems, as well as roads and bridges, in 

States hardest hit by Hurricane Sandy. The brunt of these cuts will 

be felt in our work to strengthen our critical transit and rail infrastructure in the face of future natural disasters. 

Sequestration will also cut over $600 million from the Federal 

Aviation Administration and, as a result of these cuts, the vast majority of the FAA’s nearly 47,000 employees could be furloughed for 

up to one day per pay period until the end of this fiscal year. 

What does this mean for the traveling public? Safety is our top 

priority, and we will allow only the amount of air traffic we can 

safely handle to take off and land, which means travelers should 

expect delays. Flights to major cities like New York, Chicago, and 

San Francisco could experience delays of up to 90 minutes during 

peak hours because we will have fewer controllers on staff. Delays 

in those major airports will ripple across the Country. 

In addition, we have notified communities across America that 

we are likely to close over 100 air traffic control towers at airports 

with fewer than 150,000 flight operations per year, and to eliminate midnight shifts in over 60 control towers across the Country. 

These are harmful cuts with real-world consequences that will cost 

jobs and hurt our economy. 

It is important to remember that our deficit challenges cannot be 

addressed by cutting waste and improving efficiency alone. The 

President has put forward a solution to avoid these cuts and we 

need Congress to come together to work on a long-term, balanced 

solution to our deficit challenges. 

At DOT we have worked very hard to implement recommendations from the Office of the Inspector General, and the truth is we 

have made great progress. DOT has established sound systems for 

interacting with the Office of the Inspector General which have enabled us to close 505 audit recommendations during calendar year 

2012. Our efforts resulted in over $1 billion in program funds recovered, reprogrammed, offset, or put to a better use. This represents a 19 percent increase in the number of recommendations 

31 

closed, compared to the previous year, and 58 percent more than 

DOT closed in 2009. 

DOT’s success is based on a systematic approach that uses objective metrics for measuring performance and a sustained effort by 

the Department’s top management. We are making significant 

progress on a range of recommendations, such as the Department’s 

chief financial officer has issued new requirements, conducted 

training and put in place the systems to better ensure that unused 

funds associated with grants are de-obligated based on regular and 

systemic reviews. The Federal Railroad Administration has made 

significant progress on implementing a national rail plan. The Federal Motor Carrier Safety Administration has begun to draft a proposed rule that, if finalized, will further enhance the safety of passenger motor carriers. The notice of proposed rulemaking is scheduled to go out for public comment this spring. 

Finally, the Federal Aviation Administration has made tremendous progress on moving forward with NextGen, which maximizes 

the benefits of a GPS-based surveillance and navigation system. 

NextGen is one of our generation’s greatest infrastructure investments and it is underway right now. As part of our efforts to 

streamline airways, airplanes approaching the Washington, D.C. 

area, for example, started using satellite routes in August. On 

these routes alone, it saved 760,000 gallons of jet fuel per year. 

These are just a few of the areas where DOT has demonstrated 

its commitment to good stewardship of taxpayer money and to 

working effectively with our Office of Inspector General. We will 

continue to carefully review all of the inspector general’s recommendations and we will continue to use an innovative and results-oriented system to improve transparency, cut waste, and increase efficiency. 

Thank you for the opportunity to appear today. I too will be 

happy to answer your questions. 

[Prepared statement of Mr. Porcari follows:] 

32 


Insert offset folio 19 here 80899.019

ST A TEMENT OF 

THE HONORABLE JOHN D. PORCARI 

DEPUTY SECRETARY 

U.S. DEPARTMENT OF TRANSPORTATION 

BEFORE TilE 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

U.S. HOUSE OF REPRESENTATIVES 

Reducing Waste and Mismanagement: Implementing Agency Watchdogs' 

Recommendations Could Save Taxpayer Billions 

MARCH 5, 2013 

Chairman Issa, Ranking Member Cummings and Members of the Committee, thank you for 

holding this hearing today to focus attention on reducing waste and mismanagement by 

implementing the recommendations of the Department of Transportation's (DOT or "the 

Department") Office of the Inspector General (OIG). My testimony today will first include a 

brief overview of the Department's systems for responding to audit recommendations and will 

touch upon some of the more recent successful results we have achieved. I will then highlight 

the progress we have made in response to the specific recommendations identified in the OIG's 

December 2012 letter to the Committee. I will also outline some of the Department's efforts to 

improve the efficiency of project delivery for transportation projects. 

Improving Efficiency: DOT's Systematic Response to OIG Audit Recommendations 

DOT has established sound systems for interacting with the 01G that have enabled us to close 

505 audit recommendations during calendar 2012, with over $1 billion in program funds either 

recovered, reprogrammed, offset, or put to a better usc. This represents a 19 percent increase in 

recommendations closed compared to the previous ycar, and 58 percent more recommendations 

than DOT closed in 2009. 

DOT's success in addressing efficiency and management issues identified by the orG is based 

on a systematic approach that uses objective metrics for measuring performance and a sustained 

effort by top management throughout the Department to focus on results. 
33 


Insert offset folio 20 here 80899.020

At DOT our management response to matters raised by the 010 receives not only the direct 

attention from program personnel familiar with the day-to-day management activities addressed 

in the oro audits, but also the focus of top management officials in the appropriate operating 

administrations (OA), and key officials in the Office of the Secretary. We work hard to ensure 

that issues raised by the oro are addressed, solutions identified, and actions implemented on a 

timely basis and that every opportunity to identify any possibility of waste, fraud or abuse is 

acted upon. 

Once the solutions are identified, we systematically track progress every four to eight weeks. 

Using our Recommendation Action Tracking System, metrics demonstrating progress are shared 

throughout the Department, including with my office, the 010, top level management officials in 

the OAs and our audit liaison personnel. Through the combined efforts of personnel throughout 

the Department, program managers are held accountable in a results-oriented approach to audit 

recommendations. 

This system shines a bright light on every aspect of our response to oro audit recommendations, 

including matters that are highlighted by virtue of their placement on the Department's "Most 

Wanted List." This list, which is a subset of our Recommendation Action Tracking System, 

includes audit recommendations where we have not been satisfied with the rate of progress or 

where we wish to highlight matters that, in our judgment, need priority attention. This is not the 

easy way, but we firmly believe it is the right way for making certain that oro recommendations 

are fully and appropriately addressed. 

DOT Action on Recommendations Highlighted by OIG 

In response to the recommendations highlighted in the 010's December 2012 letter to the 

Committee, we supplemented our usual tracking by adding a "Most Wanted Annex" to further 

enhance transparency on the status of each of the 10 specific recommendations (5 short-term 

recommendations and 5 long-term recommendations) identified by the oro. We are making 

significant progress on each of these action items and will continue to track them through 

closeout. For example: 

• The Federal Motor Carrier Safety Administration (FMCSA) has begun to draft a 

proposed rule that would, if finalized, further enhance safety of passenger motor carriers. 

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34 


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• The Department's Chief Financial Officer has issued new requirements, conducted 

training and put in place the systems to bettcr ensure that unused funds associated with 

grants are de-obligated based on regular and systemic reviews. 

• The Federal Aviation Administration (FAA) met its deadline to review issues relating to 

pilot commuting and has issued new requirements relating to pilot fitness for duty. 

• The Federal Highway Administration (FHWA) completely revised its approach to bridge 

oversight and now uses a specific data driven, risk based performance oriented set of 

metrics. 

• Personal Identity Verification (PIV) cards have been issued to nearly all DOT employees 

and contractors, are used for physical access to DOT facilities and network printing. We 

are in the process of implementing their use for complete network access. 

These are just a few of the areas DOT has demonstrated its commitment to working effectively 

with the Office of Inspector General and made substantial progress ensuring that our programs 

are efficient, effective, and offer the American public the safest transportation systems in the 

world. 

The following offers additional details on our efforts on each of the recommendations 

highlighted by the OIG in its letter. 

Data Collection on Pilot Commuting 

The OIG's report includes a recommendation to ensure the collection and analysis of data on 

pilot domicile and commuting to be able to address pilot fatigue in the aviation industry. Since 

the Colgan crash in February 2009, the subject of commuting by pilots to reach their duty 

stations has received significant attention. The FAA's primary concern is whether and to what 

extent commuting erodes safety due to pilot fatigue. FAA has viewed pilot fatigue as one of 

several factors that determine whether a pilot is fit for duty, which is required for any 

commercial pilot. An air carrier has the duty to responsibly schedule its pilots. At the same 

time, a pilot has an obligation to use his or her rest time in a fashion that allows the pilot to report 

"fit for duty." This includes balancing other employment, family obligations and responsible 

commuting. 

3 
35 


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In response to the OlG's recommendation, FAA agreed to scan for available data on pilot 

commuting since the 2011 National Research Council (NRC) National Academy of Science 

(NAS) report, The Effects ojCommuting on Pilot Fatigue, At this time, we have not found new 

data related to pilot commuting, but will continue to assess this issue as new data on pilot 

commuting becomes available. 

NcxtGcn Master Schedule 

The FAA continues to make great progress in its implementation of the Next Generation Air 

Transportation System (NextGen), a comprehensive overhaul of our National Airspace System 

(NAS), using a suite of tools to facilitate the continuous-rollout of trans formative programs, 

improvements, and upgraded technologies that are better for our environment, better for 

efficiency and flexibility, better for safety, and better for the economy and the traveling public. 

Already, we are seeing benefits from our investments. 

The OIG recommended that the FAA establish an integrated master schedule to manage 

implementation of Next Gen. The FAA employs an enterprise-level approach to track NextGen 

program costs, schedules, and performance milestones. This includes a framework of several 

complementary tools that together address these issues and detail the planning, development, and 

delivery of NextGen. The FAA continues to work on an Integrated Master-Schedule (IMS) to 

strengthen its enterprise-level management tool. Tbe tool is being designed to show how 

changes in programs' schedules will impact the delivery of NextGen capabilities. The IMS will 

draw upon the information contained in the roadmaps of the NAS Enterprise Architecture and 

captures key program activity and milestones for operational improvements specified in the 

NextGcn Segment Implementation Plan (NSIP). The NAS Enterprise Architecture is a strategic 

planning tool that depicts the evolution of the NAS architecture over time. The NSIP describes 

plans for delivery of operational capabilities across two implementation timeframes-Segment 

Alpha (through 2015) and Segment Bravo (2016 through 2020). The NAS Enterprise 

Architecture and NSIP are working documents that provide significant detailed planning 

information to implementing oftices. The FAA publishes an executive level overview of the 

agency's progress annually in the NextGen Implementation Plan (NGIP). 

4 
36 


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Undelivered Orders 

The IG's recommendations addressed an accounting issue for inactive projects, or what the 

Department calls "undelivered orders" (UDOs). UDOs are unpaid obligations for which the 

goods or services ordered and obligated have not been received. Obligations remain open until 

they are fully reduced by a disbursement or are de-obligated or until the appropriation funding 

the obligation is closed. The Department's current financial statement auditor, KPMG, as well 

as our prior auditor, CliftonLarsonAllen, identified a weakness in internal controls over UDOs. 

KPMG concluded that until this control issue is corrected, there is a risk that material 

misstatements of these balances may occur and remain undetected. In late 2012, the 

Department's operating administrations (OA) engaged in an intensive 60-day effort to identify 

and de-obligate unneeded UDOs. These reviews lowered the UDO balance by nearly $2 billion 

through project de-obligations and ongoing billings. 

Since last summer, we have focused management's attention on renewed efforts to ensure the 

accuracy of obligations and undelivered order balances. Our OAs conducted focused reviews of 

these transactions during the third quarter ofFY 2012 to verify balances and make needed 

corrections. We also conducted two separate day-long training sessions for OA staff regarding 

grants and grant close-out procedures, in order to improve the reliability of balances reported for 

these transactions. Further, in February we issucd Department-wide guidance on the periodic 

review of obligations and UDOs. This guidance was a final element of our overall remediation 

efforts and established a framework across the Department for improved, documented internal 

control procedures for reviewing and recording obligation and UDO balances. These measures 

provide the needed framework to address the internal control issues for these balances identified 

by the OlG and the Department's independent auditors. 

Stewardship and Oversight Agreements 

Over the past two decades, Congress has shifted the oversight approach of the FHW A away from 

the individual project level to a broader program-based model. To implement this oversight 

approach, the law requires Stewardship and Oversight (S&O) Agreements to formalize the 

respective roles and responsibilities ofFHWA and the State departments of transportation for the 

federally-assisted, State-administered Federal-aid highway program (FAHP). The OIG has 

5 
37 


Insert offset folio 24 here 80899.024

recommended that the FHW A implement a coordinated approach to review agreements annually 

and to make timely revisions, when appropriate. 

S&O Agreements serve as a compendium of elements that go beyond statutory requirements, 

making reference to the many other control documents that are continually reviewed and updated 

- such as FHW A's Leadership Dashboard targets, Unit Plans, the Risk Register, Financial 

Integrity Review and Evaluation reports - along with State DOT manuals and procedures 

reviewed by FHW A. Together, these documents enable FHWA to assess how State DOTs fulfill 

their respective responsibilities. Additionally, FHW A is using lessons learned from the 

Recovery Act in implementing a Spot Check Program to undertake a quick examination of 

projects typically delegated to States and not subject to dctailed Federal oversight. The Spot 

Check Program will provide another layer of quality assurance for inspection of F AHP projects. 

The FHW A has conducted periodic reviews to ensure that S&O Agreements fulfill their role as 

effectively as possible, resulting most recently in the 2011 revision ofFHWA's S&O guidance, 

which called for more comprehensive Agreements covering project delivery and financial 

controls of the F AHP. Thc FHW A also recognizes the benefits of periodically reevaluating all 

Agency stewardship and oversight practices to adapt to new statutory requirements or 

programmatic needs and recently launched a significant Agency-wide effort to revise its 

stewardship and oversight approach. When fully developed, FHW A's new stewardship and 

oversight approach will provide a more consistent, comprehensive, risk-based oversight 

approach tied directly (0 the Agency's annual Strategic Implementation Plan. The FHWA will 

also issue updated policies and guidance on S&O Agreements as needed to effectively 

implement the rollout of the new S&O approach. Consistent with the OIO's recommendation, 

FEW A plans to implement this new S&O approach by mid-2013. 

Passenger Carrier Leasing 

In order to ensure that unsafe passenger carriers cannot evade FMCSA oversight and 

enforcement applicable to passenger carriers by operating under the authority of another carrier 

that exercises no actual control over those operations, the OIO has recommended that FMCSA 

issue a rule on leasing of passenger carrier vehicles and drivers. 

6 
38 


Insert offset folio 25 here 80899.025

FMCSA concurs with the OIG recommendation. This regulatory initiative was also included in 

DOT's 2012 update to its Motorcoach Safety Action Plan under new actions. 

This action, if finalized, would enable FMCSA, and our Federal and State partners to more 

accurately identify motor carriers transporting passengers in interstate commerce and correctly 

assign responsibility to these entities for regulatory violations during inspections, compliance 

investigations, and crasb studies. It would also provide the general public with an improved 

ability to identify the responsible motor carrier at the time of transportation. While detailed lease 

and interchange regulations for cargo-carrying vehicles have been in effect since 1950, the 

proposed rules for passenger-carrying commercial motor vehicles would focus entirely on 

operational safety of passenger carriers. 

Use of PI V Cards as the Primary Authentication Mechanism 

The OIG has recommended that DOT comply with the requirements in the Homeland Security 

Presidential Directive 12 (HSPD-12) concerning the use of PI V cards as the primary 

authentication mechanism for computer access for all employees and contractors. We embrace 

the need to ensure the security of our networks and infonnation systems, and that in the face of 

continued cyber threats, and increasing requirements, sound prioritization and risk management 

are essential to ensure continued, and cost effective, improvement in the Departmental 

Cybersecurity program and posture. 

The Office o[tbe CIO (OCIO) is collaborating across the agency to maximize results through 

continued execution of existing plans, and tocus upon Cybersecurity activities and investment on 

White House priorities, Department of Homeland Security (DHS) requirements, audit 

recommendations, evolving threats, and program maturation. Among the first-priority 

Cybersecurity activities identified by the Chieflnfonnation Officer (CIO) for FY2013 is 

increasing the required use of PIV cards for network login agency-wide. 

As evidence of DOT's awareness and ongoing commitment to this priority, the Secretary 

designated the OCIO in June 2011 as the office of primary responsibility for implementation of 

HSPD-12 and use of the PIV cards. That same policy established the requirement for all agency 

personnel to use their PIV cards [or access to agency networks and systems. DOT immediately 

undertook initiatives to establish program governance via a new Integrated Project Team (IPT), 

7 
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Insert offset folio 26 here 80899.026

complete the deployment of PlY cards to agency personnel, prepare those cards for use in 

accessing DOT networks, and to establish plans for enabling the use ofPlV cards with DOT 

systems. An internal project was established between ocro, FAA, and other DOT OAs to 

"reduce passwords", and to drive investment in, and modernization of DOT systems to support 

the use of prv cards for access. With these efforts, we have achieved: 

• PIV Card Expansion - The DOT PIV card program has issued more than 89,000 PIV 

cards to date and is now working to implement mandatory usc of PIV cards for secure 

login to DOT systems. 

• Enhanced System Security - DOT implemented a solution to require the PlY card for 

authentication to DOT's multi-function printers, while the FHW A, the Maritime 

Administration, the Volpe Center, and the Office of the Secretary have enabled use of the 

PIV card to access various online applications within their organizations. 

We are currently working to complete a consolidated enterprise plan by the end of May 2013, 

and enforce required PlY use by 80% of agency personnel by March 2014. 

Development of Enterprise Architecture for IT Investment 

Consistent with the OIG recommendations, DOT is committed to establishing a Departmentlevel Enterprise Architecture (EA) program for IT investment that is focused on achieving costs 

savings, minimizing duplication, and ensuring that Information Technology (IT) investments are 

aligned with our strategic priorities. While we are working to reinvigorate our Department-level 

EA program, we continue to deliver results. In my role as Chief Operating Officer, I led the 

Department's PortfolioS tat process during fiscal year 2012-a process focused on minimizing 

duplication and achieving operational efficiencies in "commodity IT". 1 can report that our 

PortfolioStat efforts, having been informed by our Department EA, resulted in about $12 million 

in Fiscal Year (FY) 2013 savings/cost avoidance that were reinvested in innovative, shared 

solutions, such as our new cloud-based Enterprise Messaging System. 

Efforts focused on reducing duplication such as PortfolioS tat, provide the framework that DOT 

needs to use EA effectively in support of management decision-making, integrating with the 

acquisition and budget offices, and, ultimately, achieving efficiencies in IT management and 

operations. 

8 
40 


Insert offset folio 27 here 80899.027

In addition to these Department-level efforts, the DOT OAs - especially the FAA - have mature, 

well-functioning Enterprise Architecture programs. The FAA EA program is a leader within the 

Federal government and is integrated with the strategic planning and investment review 

processes that FAA operates through the Joint Resources Council at DOT. While we build our 

Departmental program, our OAs are providing the necessary oversight to achieve efficiencies 

within their organizations. 

The Department is currently in tInal review of a new Enterprise Architecture Policy that seeks to 

institutionalize and build on our efforts to reduce duplication, achieve efficiencies, and leverage 

OAs EA efforts and successes. Our Department-level EA program will look for ways to better 

integrate these efforts and achieve even greater efficiencies. To achieve these results, the 

Department will need to invest in tools and capabil ities that enable better sharing of EA 

information and help provide the analytical tools necessary to inform and improve DOT IT 

governance, CyberSecurity spending, and acquisition decision-making. 

Completion of a National Rail Plan 

With respect to the OIG's recommendation for completion of a national rail plan, the Federal 

Railroad Administration (FRA) has made significant progress in implementing the national rail 

planning (NRP) provision in the Passenger Rail Investment and Improvement Act of2008 

(PRIIA). FRA met the one-year deadline for submitting a preliminary national rail planning 

document in October 2009 and proactively submitted a progress report less than a year later. 

These reports included a level of detail and direction consistent with relatively new programs: 

PRIIA and the new High-Speed and Intercity Passenger Rail (HSIPR) investment program, both 

of which dramatically altered the rail industry landscape. 

Moving forward, FRA considers rail planning to be a key strategic priority. Consistent with the 

OIG recommendation, FRA has developed a comprehensive, long-range national planning 

strategy that considers different stakeholders' needs and priorities, which entails the release of 

several documents that cumulatively fultill the goals of national rail planning. Additionally, 

FRA's budget proposals in FY 2012 and FY 2013 articulated a clear plan for the future of rail, 

including detailed information on proposed policies, investment program structures, performance 

metrics, and planning priorities. 

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Insert offset folio 28 here 80899.028

Over the past year, FRA has been managing several efforts that are establishing a technical 

foundation for innovative national, regional, and State rail planning. Because PRIIA specifically 

requires any national plans to build upon and "be consistent with" State plans, rather than 

directing FRA to dictate a master "blueprint," FRA has issued draft State rail planning guidance 

to support development of strong State rail plans. Additionally, FRA is working with the 

National Cooperative Rail Research Program to develop rail planning data, tools, and 

methodologies, and is leading the Northeast Corridor FUTURE effort, which is one of the most 

comprehensive and ambitious transportation planning efforts undertaken in decades. 

Furthermore, FRA has established a senior leadership position to head FRA's rail planning and 

policy analysis initiatives, demonstrating FRA's commitment to the importance of rail planning 

in fulfilling the agency's mission and goals. 

Reporting on the Nation's Deficient Bridges 

To improve the quality of inspection data and implement data-driven, risk-based oversight to 

prioritize bridge safety risks as called for in the OIG's 2009 and 2010 reports, FHWA completed 

its effort to establish clearly defined levels of compliance and developed a uniform method for 

determining those levels of compliance. FHW A's new bridge oversight approach, launched in 

March 2011, includes 23 National Bridge Inspection Standards (NBIS) metrics that can be 

independently assessed to determine compliance. FHW A has moved from an overall compliance 

determination for a State to an individual compliance determination for each metric. As a result 

of this more, data-driven, risk-based oversight approach, to date the OIG has closed 10 of 14 

bridge recommendations. FHW A is in the process of completing action, including rulemaking, 

to address the remaining bridge recommendations. 

In response to a recommendation in the 20 10 report, FHW A evaluated the use of information 

included in the Status of the Nation's Highways, Bridges, and Transit: Conditions and 

Performance report, to assess the effectiveness of States' efforts to improve the condition of the 

Nation's bridges. After a thorough analysis, FHWA determined that additional project 

information would need to be collected to directly link expenditure data with improvements to 

deficient bridges. FHW A was developing an approach to collect additional data at the time 

Moving Ahead for Progress in the 21 5t Century Act (MAP-21) was passed. 

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Insert offset folio 29 here 80899.029

The 2012 MAP-21 statute fundamentally restructured the Federal highway program by 

consolidating programs and transforming the program into a performance-based program to 

ensure that decisions are data-driven and that resources are used more efficiently. Bridges are 

now eligible under the National Highway Performance Program and the Surface Transportation 

Program. The Department is required to establish unifornl performance measures for bridge 

conditions on the NationallIighway System (NHS). In light of these new requirements, which 

align with the oro recommendation, FHW A is currently drafting rules that propose to improve 

data-related requirements. Once these requirements are established, FHW A will assess how to 

best utilize the information provided by States. These efforts will help to increase transparency 

and accountability with respect to critical system performance. 

Cost Estimates to Support FAA Realignment and Consolidation Plans 

Finally, the oro has recommended that FAA develop cost estimates to support FAA realigmnent 

and consolidation plans. The ability to meet the future needs of the National Airspace System, 

and the transition to NextOen relies, in large part, on the FAA's ability to optimize its facilities 

and workforce. The FAA is focused on a priority' infrastructure project-the New York 

Integrated Control Facility (ICF). Consistent with the oro recommendation for all FAA facility 

realignments and consolidations, the FAA is working to develop comprehensive cost estimates 

for key programmatic areas associated with the NY ICF. In addition to the base construction 

cost estimate, the FAA is working to develop detailed cost estimates for equipment, salary costs, 

relocation expenses, and training associated with the NY ICF. The recently issued Request for 

Information was a means for the FAA to gain critical information about potential options, but as 

stated in that document, it was undertaken as part of a larger alternatives analysis process in 

FAA's long-term strategy and approach to facility and service transformation. We are 

committed to ensuring that we only move forward with this infrastructure project if it would 

generate measurable operational benefits, including airspace redesign, and long term cost savings 

for the agency. 

With respect to the larger consolidation effort, the FAA has established a collaborative 

workgroup to address relevant provisions in the FAA Modernization and Reform Act of2012. 

This workgroup is charged ",ith developing criteria and recommendations for guiding the FAA's 

efforts on realigning facilities. As part of this effort, templates have been developed for cost11 
43 


Insert offset folio 30 here 80899.030

benefit analysis that line up with the OIG's recommendations. Facility realignment and 

consolidation is an ongoing effort that the FAA will continue to carry out as required by 

Congress pursuant to the relevant statutory provisions. 

Improving the Efficiency of Project Delivery 

The Department has been engaged in a number of activities that will shorten transportation 

project delivery times while protecting the environment, and we expect to renew these efforts in 

response to the President's recent State of the Union commitment to further improve the 

efficiency of infrastructure project delivery 

The Department has worked with others in the Administration to make progress in implementing 

Executive Order 13604, Improving Performance of Federal Permitting and Review of 

Infrastructure Projects, signed in March 2012, which set a goal of reducing project timelines 

while improving outcomes for communities and the environment. The FHW A has also made 

progress in implementing its Every Day Counts initiative that is designed to address goals of 

shortening project delivery, enhancing the safety of our roadways, and protecting the 

environment with urgency. 

The Department, and in particular the FHWA and the Federal Transit Administration (FTA) have 

also accomplished much to implement the project delivery provisions ofMAP-21. We have 

worked to meet aggressive statutory dcadlines-- for example to have completed a final rule 

implementing the exclusion from requirements under the National Environmental Policy Act to 

prepare an environmental impact statement (ElS) or environmental assessment for actions 

following declarations of emergency, and have published a notice of proposed rulemaking for 

new categorical exclusions related to actions within the operational right-of-way and for projects 

with limited Federal share. The ability to issue a combined final EIS and Record of Decision 

was effective upon enactment, and FHWA and FTA have also issued guidance on that procedure. 

The Department has also concluded a survey of stakeholders to determine what additional 

categorical exclusions should be created to help sponsors advance their transportation priorities 

without unnecessary delays. 

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Insert offset folio 31 here 80899.031

Conclusion 

The Department is committed to good stewardship oflhe taxpayer's money and is constantly 

working to increase efficiency and avoid waste. We value the relationship we have with the 

Department's Inspector General and we respect the audit recommendations that are issued by his 

office. We believe that our sustained focus on a results-oriented approach in responding to audit 

matters will continue to be effective and will enable the Department to follow through on a 

timely basis with an appropriate response to all current and future audit recommendations. 

Thank you for the opportunity to appear before you today. I would be happy to respond to any 

questions you may have. 

13 
45 

Chairman ISSA. Thank you. 

And in anticipation that there is an A B relationship in these 

opening statements, Mr. Scovel. 

STATEMENT OF THE HONORABLE CALVIN L. SCOVEL III 

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

members of the committee, thank you for inviting me here to discuss opportunities for maximizing efficiency at the Department of 

Transportation. 

Each year we recommend hundreds of actions aimed at improving DOT programs and operations, and the Department works with 

us to fully implement them. Currently, more than 500 recommendations remain open. My statement today will focus on 10 

that we have determined that are of the highest priority and that 

impact the Department’s ability to ensure stewardship of its resources, implement transportation infrastructure programs while 

protecting its investments, and to enhance aviation and surface 

safety. 

DOT’s ability to ensure effective stewardship of its resources has 

been limited by longstanding weaknesses in grants management 

and IT procurement and security. In November 2011, we recommended that DOT conduct quarterly reviews of inactive grant 

projects to ensure inactive obligations are liquidated in a timely 

manner. In response, DOT initiated a 60-day effort to review inactive, undelivered orders, which identified $2.1 billion in funds for 

other DOT programs. We also recommended that DOT issue a policy requiring agencies to perform quarterly reviews and annual certifications of obligation balances. 

Last week, in response to our recommendation, the Deputy CFO 

issued a memorandum providing guidance on review of obligations 

in undelivered orders. Later in the year we will determine if this 

guidance helped the Department to correct a persistent, systemic 

problem with unliquidated obligations and to identify opportunities 

to free up funds for other priorities. 

Regarding IT procurement and security, we recommended that 

DOT develop its IT enterprise architecture to realize cost savings, 

reduce duplication of systems, and strengthen IT security through 

multi-factor identity authentication for all DOT employees and contractors. DOT plans to develop an overarching enterprise architecture by May 2013 and to implement an authentication mechanism 

by fiscal year 2016. 

Half of our highest priority recommendations concerned DOT’s 

implementation of critical transportation infrastructure programs 

and the need to protect significant investments in these programs. 

To ensure FAA’s complex, multi-billion dollar NextGen air traffic 

control program delivers promised benefits, we recommended that 

FAA establish an integrated master schedule for implementing new 

technologies and infrastructure. Without a master schedule, the 

agency cannot effectively address program risks, make informed 

cost and scheduled tradeoffs, or determine what capabilities should 

be delivered first to provide users with the greatest benefits. FAA 

is currently working on this master schedule. 

We also recommended that FAA ensure that cost estimates for 

realigning and consolidating air traffic control facilities are comVerDate Aug 31 2005 08:59 May 29, 2013 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 C:\DOCS\80899.TXT APRIL
46 

prehensive and updated. While FAA concurred with our recommendation, it has scaled back its initial plan and is currently focusing solely on the New York area facility, for which it expects to 

provide a detailed cost estimate by the end of 2014. To completely 

implement our recommendation, FAA will need to produce detailed 

financial information regarding its longer term plans for facility 

consolidations in other locations. 

Our high priority surface related recommendations also aim to 

ensure the Department maximizes its infrastructure investments. 

First, we recommended that the Federal Highway Administration 

implement a data-driven, risk-based approach for preparing DOT 

and State agreements for overseeing $40 billion in highway funds 

provided annually to States. Second, we recommended that FHWA 

report regularly on States’ efforts to improve the condition on the 

Nation’s 140,000 deficient bridges. FHWA has begun to implement 

these recommendations and we will continue to monitor its 

progress. 

We also recommended that the Federal Railroad Administration 

complete a national rail plan to provide a framework for integrating passenger and freight rail across the Country and identify 

specific interstate corridor goals and measures of success. Delays in 

establishing a plan with clear stakeholder roles and performance 

measures could result in FRA investing billions of dollars in Federal grant funds without assurance that these efforts support national policy goals or reflect stakeholder commitment. FRA expects 

to complete the plan by June 2014. 

Finally, we identified two high-priority open recommendation 

that support DOT’s number one priority, safety. While the Department’s commitment to safety is clear, DOT needs to bolster its 

oversight by fine-tuning how it collects, verifies, and uses safety 

data. For FAA, we recommended that information on pilot domicile 

and commuting be collected and analyzed to better target solutions 

to reduce pilot fatigue. While FAA agreed with our recommendation, it has yet to complete a scan of available data and determine 

whether additional data could offer significant safety benefits. 

In terms of surface safety, DOT has acted to remove unsafe commercial drivers and carriers from roadways; however, in April 2012 

we recommended that the Federal Motor Carrier Safety Administration publish a rule on passenger carrier leasing with requirements comparable to those for property carriers. FMCSA concurred 

with our recommendation and plans to issue a proposed rule in 

2013. 

OIG is steadfast in its commitment to ensuring DOT achieves the 

highest return on the Nation’s substantial transportation investments. We believe the Department shares this commitment with 

us, as evidenced by its many actions in cooperation with our office. 

We will continue to work with you, Mr. Chairman, the Department, 

and other key stakeholders to protect taxpayer dollars as we assist 

the Department in providing the American people with safe and 

modern transportation systems. 

Mr. Chairman, this concludes my prepared statement. I would be 

happy to take any questions that you or other members of the committee may have. 

[Prepared statement of Mr. Scovel follows:] 

47 


Insert offset folio 32 here 80899.032

Before the Committee on Oversight and Government Reform 

United States House of Representatives 

For ReJease on Delivery 

Expected at 

10:00 a.m. EST 

Tuesday 

March 5, 2013 

CC-2013-009 

Top Ten DIG 

Recommendations for the 

u.s. Department of 

Transportation 

Statement of 

The Honorable Calvin L. Scovel III 

Inspector General 

U.S. Department of Transportation 
48 


Insert offset folio 33 here 80899.033

Mr. Chairman and Members of the Committee: 

Thank you for inviting me here today to discuss opportunities for maximizing efficiency 

at the Department of Transportation (DOT). Each year, we recommend hundreds of 

actions aimed at improving the conduct of the Department's programs and operations, 

and the Department has worked diligently to implemcnt the majority of our 

recommendations. To ensure recommendations are implemented in a timely manner, we 

monitor their status and, as required by law, report semiannually on recommendations 

that remain open I-that is, those that have yet to be fully implemented and documented. 

Periodically, Congress also asks us to identifY open recommendations that we consider 

high priority. Most recently, you requested that we identifY and report our 10 highest 

priority open recommendations in the near and long term. 2 In making this determination, 

we considered several criteria, including dollar implications; documented vulnerabilities; 

impact on safety, economy, or efficiency; and the ability of the Department to effect 

change. 

The open recommendations we identified as the highest priority were made between 

January 20 I 0 and October 2012 in 10 separate reports and cut across the Department and 

its agencies. The highest priority open recommendations also align with the Department's 

top management challenges that we identified and reported last Novembcr (see exhibit). 

My statcmcnt today will focus on how these rccommendations impact the Department's 

ability to (1) ensure effective stewardship of the Department's resources; (2) effectively 

implement transportation infrastructure programs while protecting investments in these 

programs; and (3) enhance aviation and surface safety. 

SUMMARY 

Three of the highest priority open recommendations that we reported in December 2012 

aim to ensure effective stewardship of the Department's resources. While DOT has 

received a clean opinion on its financial statements 6 straight years, longstanding 

weaknesses in grants management and information technology (IT) procurement and 

security have limited DOT's ability to maximize its return on investments. We 

recommended that DOT conduct quarterly reviews of inactive grant projects to ensure 

inactive obligations arc liquidated in a timely manner. In July 2012, DOT initiated a 

60-day effort to deobligate inactive undelivered orders, which resulted in $2.1 billion in 

funds being re-assigned to current projects. We also recommended that DOT develop or 

revise its IT enterprise architecture (EA) policy and procedures to realize cost savings, 

reduce duplication of systems, and strengthen IT security through multi factor identity 

authentication for all DOT employees and contractors. DOT plans to develop an 

I Inspector General Act of 1978.5 eSc. App 3. as amended by the Inspector General Act Amendments of 1988. Pub, L No, 

100-504, 

2 We looked at 637 recommendations included in 217 audit reports issued between September 2004 and November 2012 that 

remained open as of December 10. 20l2. 

2 
49 


Insert offset folio 34 here 80899.034

overarching EA policy by May 2013 and to fully implement an authentication mechanism 

by fiscal year 2016. 

Half of the highest priority recommendations we identified concern DOT's 

implementation of critical air and surface transportation infrastructure programs and the 

need to protect significant investments in these programs. The Department is working to 

address numerous challenges we have identified with the Federal Aviation 

Administration's (FAA) implementation of the Next Generation Air Transportation 

System (NextGen)--a complex, multibillion-dollar effort to modernize the U.S. air traffic 

control system. To ensure the program delivers promised benefits that represent sound 

investments, we recommended that FAA (1) establish an integrated master schedule for 

implementing NextGen's foundational technology and infrastructure programs, which it 

is currently working on, and (2) ensure cost estimates for realigning and consolidating the 

Nation's network of manned air traffic control facilities are comprehensive and regularly 

updated. The Department is also working to address three recommendations we made to 

maximize its surface infrastructure investments. Specifically, we recommended that the 

Federal Highway Administration (FHW A) implement a data-driven, risk-based approach 

for reviewing and revising DOT and State agreements for overseeing about $40 billion in 

highway funds provided annually to States, and report regularly on States' efforts to 

improve the condition of the Nation's more than 140,000 deficient bridges. 3 We also 

rccommended that the Federal Railroad Administration (FRA) complete a National Rail 

Plan (NRP), with measurable performance goals and clear stakeholder roles, which 

would ultimately help ensure its $10 billion high-speed intercity passenger rail grant 

program supports national policy goals. 

The last two highest priority open recommendations we identified have implications for 

DOT's number one priority-safety. While the Department's commitment to safety is 

clear, DOT eontinues to faee challenges to fine-tune how it collects, verifies, and uses 

safety data and to bolster its oversight of aircraft maintenance, inspector resources, and 

pilot performance and training. Our recommendation that FAA collect and analyze 

information on pilot domicile and commuting to bctter target solutions to reduce pilot 

fatigue remains open and is one of our highest priority recommendations for thc 

Department to address in the short term. FAA agreed to conduct a "scan of available 

data" on pilot commuting and to determine whether additional data could offer significant 

safety benefits. In terms of surface satety, the Department has taken action to remove 

unsafe commercial drivers and carriers from roadways. Howcver, the Federal Motor 

Carrier Safety Administration (FMCSA) has yet to implement our April 2012 

recommendation to publish a final rule on passenger carrier leasing with requirements 

comparable to those for property carriers. 

J Deficient bridges are classified as structurally deficient (the bridge deck, superstructure, or substructure is in poor or worse 

condition) or functionally obsolete (because the geometry of the bridge is no longer suitable for the traffic it serves). 

3 
50 


Insert offset folio 35 here 80899.035

BACKGROUND 

As of February 21, 20]3, 555 recommendations included in 191 audit reports issued 

between Septcmber 2004 and February 14,2013, rcmained open-that is, the Department 

or agcncy has yet to fully implement proposed actions or to provide us with supporting 

documentation of their implementation. Thc Department and its agencies frequently 

concur with our recommended actions and work with us to ensure recommendations are 

implemented in a timely manner. Some recommendations, however, remain open for an 

extended period for various reasons, such as the complexity and magnitude of the 

recommendation and the number of actions required to implement the recommendation. 

In some cases, recommendations remain open because the Department or agency does 

not concur with our recommended actions. In these cases, we work with the Department 

or agency to seek alternative actions that meet the intent of our recommendation. 

The Office of Inspector General (OlG) systematically tracks all recommendations on all 

audit reports until final action has been taken, and maintains a database of relatcd 

information such as the target and actual completion dates of correctivc actions, and the 

amount of costs questioned or estimated dollar benefits associated with each 

recommendation. As required by law, we report this infonnation semiannually to 

Congress. The Department has also established a system for tracking open OIG 

recommendations and provides monthly reports to audit managers or groups on their 

status, identifying those that are highest priority. 

In addition to reporting semiannually on the status of our recommendations, we report 

annually on the top management challenges facing the Department, as required by 

Congress and the Office of Management and Budget (OMB). Our 2013 Top Management 

Challenges report identified actions that DOT should take to address its top priority of 

transportation safety and maximize its investments to maintain and modernize 

transportation. 

Over the past several years, Congress has also requested that we identify our highest 

priority open recommendations. Most recently, this Committee asked us to identifY our 

highest priority open recommendations-five short-term and five long-term-which we 

reported on December 21, 2012. To identify these 10 open recommendations, we 

established criteria consistent with the Inspector General Act to promote economy and 

cfficiency in thc administration of Department programs and operations, and the 

Department's safety mission. Specifically, for each recommendation, we considered the 

potential impact on safety, economy, and efficiency; the documented vulnerabilities and 

dollar implications; and the Department's ability to effect change within a short 

timeframe. We also refer to the top management challenges facing the Department and 

our work plans and strategies. As the Department changes its priorities, we reevaluate our 

criteria and adjust them accordingly. 

4 
51 


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ENSURING EFFECTIVE STEWARDSHIP OF THE DEPARTMENT'S 

RESOURCES 

Rigorous stewardship of taxpayer funds is an intrinsic mandate for any government body. 

Over the past 6 years, the Department has successfully maintained a clean opinion on its 

financial statements-a positive step towards good financial management. However, 

longstanding weaknesses in grants management and IT procurement and security have 

limited DOT's ability to maximize its return on investment. 

In November 20 II, we reported that idle funds from undelivered orders under inactive 

grants could free up approximately $1.4 billion for DOT agencies to use for other 

transportation infrastructure improvement projects and create jobs. Accordingly, we 

recommended that quarterly inactive project reviews be conducted to ascertain that 

inactive obligations-with particular attention to those that are tied to stagnant or closcd 

projects-are liquidated in a timely manner. In July 2012, DOT initiated a 60-day, 

resource-intensive rcmediation effort to identify and deobligate inactive undelivered 

orders, which resulted in the liquidation of $2.1 billion-funds that were re-assigned to 

current projects. For fiscal year 2013, DOT plans to issue a policy requiring agencies to 

perform quarterly reviews and annual certifications of obligation balances and train 

personnel who handle them. Implementing this recommendation will help the 

Department begin correcting a persistent, systemic problem with unliquidated 

obligations. 

DOT also has the opportunity to maximize its investments in IT. Each year, DOT spends 

approximately $3 billion on its IT systems-one of the largest IT investments in the 

Federal Government. However, as we reported in April 2012, the Department lacks an 

EA) to align IT investments with its mission, reduce duplicative systems, etfectively 

spend information security funds, and realize cost savings. DOT concurred with our 

recommendation to develop or revise its EA policy and procedures, and plans to develop 

an overarching EA policy by May 2013. However, DOT indicated that it would need 

funding to implement the policy and would commit to a completion date whcn funding 

becomes available. 

DOT also concurred with our long-term recommendation to implement the use of 

personal identity verification (PIV) cards as the primary authentication mechanism for all 

DOT employees and contractors. OMB required all Federal personnel to use by 2012 PIV 

cards to log on to agency computers for multi factor user identity authentication. Issuing 

PIV cards to all Department personnel, including contractors, is a time-consuming, 

costly, and logistically complex endeavor. As of June 2012, only 42 percent of DOT's 

systems were enabled for user logon with PIVs, and only 7 percent used PIV for identity 

authentication. DOT designated PIV card deployment for authentication as one of its top 

cybersccurity priorities for fiscal year 2013 and plans to implement our recommendation 

by fiscal year 2016. 

5 
52 


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EFFECTIVELY IMPLEMENTING TRANSPORTATION 

INFRASTRUCTURE PROGRAMS WHILE PROTECTING INVESTMENTS 

IN THESE PROGRAMS 

Global and domestic travel are projected to significantly increase demand on the Nation's 

transportation system, creating considerable challenges for the Department to improve 

airspace and surface infrastructure. A key concern is FAA's implementation of NextGen, 

a highly complex, multibillion-dollar effort to modernize the U.S. air traffic control 

system. The Department is working hard to address numerous challenges wc have 

identified over the years, but several challenges remain to ensure the program delivers 

promised bcnefits that represent sound investments of taxpayer dollars. 

Two of the highest priority open recommendations relate to NextGen's development and 

implementation, which currently involve a $1 billion annual investment: 

• In April 2012, we recommended that FAA establish an integrated master schedule for 

implementing the six programs that will provide NextGen's foundational technologies 

and infrastructure. 4 A master schedule, with time lines and completion dates, would 

better coordinate these programs' capabilities-many of which are interdependent. 

Without a master schedule, the agency will be challenged to (I) fully address 

operational, tcchnical, and programmatic risks; (2) prioritize and make informed 

tradeoff's for programs' costs and schedules; and (3) determine what capabilities 

should be delivered first to provide users with the greatest benefits. FAA is currently 

working on the intcgrated master schedule. 

• In July 2012, we recommended that FAA develop comprehensive and regularly 

updated cost estimates for its effort to realign and consolidate the Nation's network of 

manned air traffic control facilities into centralized locations-a critical step in 

implemcnting NextGen and replacing the Nation's aging air traffic infrastructure. The 

effort, which FAA estimated would cost in the billions of dollars, would havc 

impacted facilities across the National Airspace System with respect to cost, technical 

challenges, and the aviation workforce. FAA concurred with our recommendation but 

has since scaled baek its plans and will focus only on an integrated facility in the New 

York metropolitan area. FAA expects to provide a detailed cost estimate by 

December 31, 2014; but to completely implement our recommendation, FAA will 

need to produce detailed financial information for Congress and other stakeholders 

regarding its longer term plans for facility realignments and consolidations. 

<1 These six programs are Automatic Dependent SurveillancewBroadcast, System Wide Information Management, Data 

Communications. NextGcn Network Enabled Weather, NAS Voice System, and Collaborative Air Traffic Management 

Technologies. 

6 
53 


Insert offset folio 38 here 80899.038

At the same time, the Department faces challenges maxlmlzmg its investments in 

highway, bridge, and rail infrastructures through effective grant oversight and planning. 

Closing three open recommendations that we identified as highest priority would help 

address these challenges. 

• Federal law requires DOT and Slates to enter into stewardship and oversight 

agreements that establish Federal and State responsibilities for overseeing about 

$40 billion in highway funds provided annually to States. While FHWA fulfilled the 

statutory mandate to enter into these with eaeh State, the agreements do not 

consistently reflect Federal requirements or program risks and priorities that FHW A 

has identified and communicated to its Division Offices. Accordingly, we 

recommended in October 2012 that FHWA implement a coordinated and effective 

data-driven, risk-based approach for Division Offices and Directors of Field Services 

to review agreements annually and make timely revisions, when appropriate. FHW A 

initially planned to implement this recommendation and others from our report 

through its Program of Oversight Initiatives--oversight planning performed by its 

Division Offices. However, FHWA recently informed us that it now plans to align its 

approach for reviewing stewardship and oversight agreements with its risk 

management process, an action it plans to implement in June 2013. We are currently 

reviewing FHWA's plans. 

• FHWA estimates that almost one-fourth of the Nation's more than 600,000 bridges 

have major deterioration, structural cracks, or other deficiencies. Given the limited 

funding to address these deficiencies, we have reported since 2006 the need to 

improve the quality of inspection data and implement data-drivcn, risk-based 

oversight of States' bridge programs. In January 2010, we recommended that FHWA 

report regularly to internal and external stakeholders on the effectiveness of States' 

efforts to improve the condition of the Nation's deficient bridges based on the 

analysis of Highway Bridge Program expenditure data and an evaluation of progress 

made in achieving performance targets. Such action will also be critical to help 

FHW A meet new requirements for more performance-based management of highway 

bridges in the Moving Ahead for Progress in the 21 st Century Act. 5 DOT agreed to 

develop a new template by the end of 2013 to report on States' efforts to address 

deficient bridges and to take steps by 2015 to enhance the level of detail reported on 

bridge conditions. 

• One of the Department's most ambitious and costly mandates is to develop a national 

high-speed rail system, with an initial down palment of $10 billion. The Passenger 

Rail Investment and Improvement Act of 2008 calls for FRA to develop an NRP to 

provide a framework for the integration of passenger and freight rail across the 

country so that public and private stakeholders understand their roles in developing 

, Moving Ahead for Progress in the 21st Century Act (MAP·21), Pub. L. No. 112·141 (2012). 

6 Passenger Raillnveslment and Improvement Act 0[2008 (PRIlA). Pub. L. No. 110·43. 

7 
54 


Insert offset folio 39 here 80899.039

services and can invest with certainty. When complete, the NRP will also identify 

specific interstate corridor goals and measures of success. Delays in establishing the 

NRP could result in FRA investing billions of dollars in Federal grant funds without 

assurance that these efforts support national policy goals, and stakeholders could 

remain reluctant to commit. We recommended that FRA complete an NPR that 

includes measurable performance goals and clear stakeholder roles. FRA currently 

expects to complete the plan by June 2014. 

ENHANCING AIR AND SURFACE SAFETY 

Enhancing aviation and surface safety continues to be the Department's overarching 

priority. This past year, the Department has made important progress toward meeting new 

airline safety regulations to advance air carriers' voluntary safety programs and improve 

pilot rest requirements. Despite this progress, the Department continues to face 

challenges to fine-tune how it collects, verifies, and uses safety data and to bolster its 

oversight of aircraft maintenance, inspector resources, and pilot performance and 

training. 

According to the Air Line Pilots Association, roughly 60 percent of its pilots arc 

commuters. 7 Our recommendation that FAA collect and analyze information on pilot 

domicile and commuting to better target solutions to reduce pilot fatigue-a longstanding 

concern that has been linked to air-related fatalities-remains open and is one of our 

highest priority recommendations for the Department to address in the short term. FAA 

agreed to conduct a "scan of available data" on pilot commuting and to determine 

whether additional data could offer significant safety benefits. According to FAA, the 

Agency planned to complete this work by February 2013. However, we are currently 

awaiting its response to our request for a status update. 

In terms of surface safety, the Department has taken actions to remove unsafe 

commercial drivers and carriers from roadways. However, FMCSA has yet to implement 

our April 2012 recommendation to publish a final rule on passenger carrier leasing with 

requirements comparable to those for property carriers. This recommendation is similar 

to one made by the National Transportation Safety Board (NTSB) following its 

investigation of a fatal bus crash in 2008. NTSB determined the bus company was, in 

effect, shielded from FMCSA oversight because of a lease agreement with another 

company. FMCSA concurred with our recommendation and plans to issue a proposed 

rule in 2013. 

7 Commuting is a common aviation industry practice as pilots are not required to live within close proximity of their assigned 

duty locations, Many pilots reside hundreds or thousands of miles from their duty locations. and their commutes frequently 

involve cross~country air travel. For example, the National Transportation Safety Board's Colgan investigation revealed that out 

of 136 Newark-based Colgan pilots, 49 (36 percent) had commutes of at least 400 miles, with some commuting from States such 

as California, Nevada, and Washington. 

8 
55 


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CONCLUSION 

OIG is steadfast in its commitment to ensuring DOT achieves the highest return on the 

Nation's substantial transportation investments. As part of this commitment, we keep a 

close eye on thc recommendations we make to improve Department programs and 

operations-particularly those of the highest priority-and work with the Department to 

cnsure recommended actions are fully implemented as expeditiously as possible. We 

believe thc Department shares this commitment with us, as evideneed by its many 

actions, eooperation with our office, and monthly reporting on the status of our 

recommendations. We will continue to work with you, Mr. Chairman; the Department; 

and other key stakeholders to protect taxpayer dollars as we assist the Department in 

providing the American people with safe and modern air, highway, rail, and pipeline 

systems. 

Mr. Chairman, this eoncludes my prepared statement. I am happy to answer any 

questions you or other Committee members may have. 

9 
56 


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EXHIBIT. OIG OPEN RECOMMENDATIONS AS THEY RELATE TO THE 

DEPARTMENT'S TOP MANAGEMENT CHALLENGES 

Ensuring the Next Generation Air Transportation System Advances Safety and Air Travel 

FAA 

FAA 

Establish an integrated master schedule framework, 

policy, and standard operating procedures that include 

the Segmented Implementation Plan and 

transformational programs, and a timeline for maturing 

this capability. 

To assist FAA in achieving a successful air traffic 

facility realignment and consolidation plan, the Agency 

should develop comprehensive and regularly updated 

cost estimates that include, at a minimum, estimates 

for construction, equipment, increased salaries, 

relocation expenses, and training. 

Status of Transformational 

Programs and Risks to Achieving 

NextGen Goals, AV-2012-094, April 

2012 

The Success of FAA's Long-Term 

Plan for Air Traffic Facility 

Realignments and ConSOlidations 

Depends on Addressing Key 

Technical, Financial, and Workforce 

Challenges, AV-2012-151, July 

2012 

Enhancing FAA's Oversight and Use of Data To Identify and Mitigate Safety Risks 

FAA Ensure the collection and analysis of data regarding 

domicile and commuting length for all Part 121 flight 

crews. Specifically, information regarding the number 

of pilots and other flight-crewmembers who commute, 

their methods of transportation, and the distances they 

commute, should be collected. 

FAA and Industry Are Taking Action 

To Address Pilot Fatigue, but More 

Information on Pilot Commuting Is 

Needed, AV-2011-176, 

September 2011 

Strengthening Existing Surface Safety Programs and Effectively Implementing New Safety 

Requirements 

FMCSA 

FHWA 

Publish a final rule on passenger carrier leasing with 

requirements similar to those for property carriers. 

Report regularly to internal and external stakeholders 

on the effectiveness of States' efforts to improve the 

condition of the Nation's deficient bridges based on the 

analysis of Highway Bridge Program expenditure data 

and an evaluation of progress made in achieving 

performance targets. 

Timely and Targeted FMCSA 

Action Is Needed To Fully Address 

NTSB Recommendations for 

Improving Passenger Carrier 

OverSight, MH-2012-087, April 

2012 

Assessment of FHWA Oversight of 

the Highway Bridge Program and 

the National Bridge Inspection 

Program, MH-2010-039, January 

2010 

Maximizing Surface Infrastructure Investments With Effective Program Oversight and Execution 

of New Legislative Requirements 

FHWA Implement a coordinated and effective data-driven, 

risk-based approach for Division Offices and Directors 

of Field Services to review agreements annually and 

make timely revisions, when appropriate. 

Improvements to Stewardship and 

Oversight Agreements Are Needed 

To Enhance Federal-Aid Highway 

Program Management, MH-2013-

001, October 2012 

10 
57 


Insert offset folio 42 here 80899.042

Adequately Overseeing Administration of High-Speed Intercity Passenger Rail Grant Funds 

FRA Complete the National Rail Plan and include in it FRA Has Made Progress in 

measurable performance goals and clear stakeholder Implementing PRIIA 

roles. Responsibilities, but Challenges for 

Long-Term HSIPR Remain, CR2012-072, March 2012 

Strengthening Financial Management Over Grants To Better Use Funds, Create Jobs, and 

Improve Infrastructure 

DOT Clifton Gunderson recommended that DOT 

management ensure that Operating Administrations 

perform the quarterly inactive project reviews to 

ascertain that inactive obligations are liquidated in a 

timely manner throughout the year. Particular attention 

should be paid to stagnant or closed projects. 

Quality Control Review of DOT's 

Audited Consolidated Financial 

Statements for Fiscal Years 2011 

and 2010, QC-2012-009, 

November 2011 

Managing and Securing Information Systems To Efficiently Modernize Technology Infrastructure 

and Protect Sensitive Data From 

DOT Develop and/or revise the Department's Enterprise 

Architecture (EA) pOlicy and procedures to address the 

following: development, maintenance, and use of EA in 

the IT investment process. 

DOT Implement the use of personal identity verification 

(PIV) cards as the primary authentication mechanism 

to support multifactor authentication at the system and 

application level for all DOT employees and 

contractors. 

DOT Does Not Have an Effective 

Enterprise Architecture Program for 

Management of Information 

Technology Changes, FI-2012-086, 

2012 

Timely Actions Needed To Improve 

DOT's Cybersecurity, FI-2011-022, 

November 2010 

11 
58 

Chairman ISSA. Thank you. 

I will recognize myself for a short round of questioning. 

Mr. Miller, well, maybe, Mr. Porcari, I will go to you first. Isn’t 

it true that the FAA handled 23 percent more flights a decade ago 

than they do today, and they did it with less air traffic controllers? 

Mr. PORCARI. Mr. Chairman, we have a very different traffic control system now. 

Chairman ISSA. One of the deals around here is you answer the 

question I ask, then you give your ups and adds. So, please, isn’t 

it true? 

Mr. PORCARI. The volume of movements is less than the pre-9/ 

11 numbers. That is correct. 

Chairman ISSA. Okay. Because one of the reasons we are here 

today, you have all, on both sides of the aisle, talked about sequestration, so I am going to focus my short five minutes on that question. If you have less flights and more air traffic controllers, very 

succinctly, what is your justification with all the so-called improvements, and I am a pilot of more than 30 years, including using 

GPS, which is, by the way, as old, almost, as I am as a pilot and 

finally getting implemented? What is your justification for not gaining efficiency in the use of air traffic controllers? 

Air traffic controllers work very hard under great stress. That 

has been true since I first got my license. But the truth is navigation aids and a lot of other things in fact genuinely justify that the 

numbers should be less if these efficiencies, which we are paying 

dearly for, are implemented. 

Mr. PORCARI. In short, Mr. Chairman, the system that we operate today, primarily because commercial airline operations are very 

different than they were even 10 years ago, is significantly different. The hub and spoke operations are concentrated in fewer 

places, much higher volumes. The congestion that we have in our 

major hub and spoke operations is higher than it has been in the 

past. And on the general aviation side, while general aviation continues to do well, the patterns are different as well. 

Chairman ISSA. My time is short and I want to get to all the witnesses. Look, I am a private pilot. There are less of us today than 

there were a decade ago. The fact is the number of aircraft in use, 

that are actually flying, is not going up, it is going down. It has 

been an industry in challenge for a long time, and as somebody 

who counts on air traffic controllers, but the implementation of 

things, including areas that essentially route or forbid private pilots do not justify that. 

So the other thing, quite frankly, is I do believe you put air traffic controllers into places in excess of where they were really demanded. So telling me that some small airports are going to lose 

air traffic controllers, as a general aviation person, begs the real 

question of, yeah, isn’t it in some cases about time? 

Mr. Miller, we sent letters to everyone, including your boss, asking specifically for areas that, this was on February 28th, where 

you would like to make changes, reprogram, essentially, drop programs. So in your testimony, when you said that you were going 

to be forced to drop programs, you weren’t going to be able to do 

it, do you know if Secretary Duncan has, in fact, prepared a response? Because I made it clear that I would sponsor legislation 

59 

immediately, on a case-by-case basis, to give him that specific 

changes, deletes, and so on; he wouldn’t have to wait for the CR. 

And I, by the way, also sent one to Mr. LaHood. 

Mr. MILLER. So we will be preparing kind of the formal response 

to the mechanism. I think our challenge is this, and the Secretary 

and I have spoken about this directly, the bulk of our programs go 

to poor kids, students with disabilities, students in Indian Country 

on reservations, students on military or close to military bases. 

And the real question is which of those students aren’t you going 

to serve. It is a selfish choice. 

Chairman ISSA. Okay. But for 18 months, since the President 

signed sequestration, there was an agreement in sequestration not 

for a tax increase, but for a cut. There was an agreement in the 

tax increase in January that we were having a tax increase. Nobody said, oh, by the way, sequestration is going to be another tax 

increase. 

So one of the challenges we face here is 18 months after the 

President signed sequestration, and I am not one of those people 

that wants to figure out chicken or egg on who came up with it; 

that is for Mr. Woodward and others. The fact is the President 

signed it, he signed it on your behalf. Your boss agreed to these 

cuts. And it is surprising to me that I am still being told that nobody knows where the cuts are. 

Briefly, Mr. Porcari, I would ask, in Hurricane Sandy relief, 

which you mentioned prominently, do you believe that out of that 

$50 billion, when you need to make these Draconian cuts, that perhaps the pay raises for FBI that were included in there of $10 million, could be stripped out; the $2 billion for road projects not anywhere in the affected area of Hurricane Sandy could be stripped 

out; or the $500 million for weather forecasting to create ocean zoning plan, at least for now, could be stripped out of this emergency 

and have no direct affect on Hurricane Sandy victims? 

Mr. PORCARI. I would first comment on the road part of it. What 

Congress was doing with that appropriation is actually paying for 

some of the past disasters that were the emergency relief funding 

for the Federal Highway Administration had not been previously 

appropriated. Those went to previous emergency relief activities. 

We are proud of and believe that we are wisely spending every 

penny of the Hurricane Sandy Relief Fund that has been appropriated to us. 

Chairman ISSA. And I will give the same amount of time to the 

ranking member. 

I will tell you that, when I drove over the Nevada line up to Lake 

Tahoe just a few weeks ago, I saw a brand new, brand new sign 

that gave credit being put in to the stimulus, in other words, to the 

Recovery Act. It was being put up two weeks ago, three weeks ago, 

when we were driving through in the snow. It is amazing to me 

that, with that money still being spent, at least according to the 

sign and the dollars being spent, that every time there is a request 

for a cut there is no money and it is overdue. This is one of the 

challenges we face, is if you don’t do the $67 billion, or some portion of it that we believe can be cut out of waste recognized by the 

IGs, and every program you have is essential, then you are telling 

60 

us that only tax increases of nearly double on the American people 

will in fact solve our deficit. 

With that, I recognize the ranking member for seven minutes. 

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

Mr. Scovel, you heard the response of Mr. Porcari with regard to 

the chairman’s question with regard to airports and air traffic controllers. Are you aware of all this, what he just said, that there is 

a different situation than what it was 10 years ago? I mean, do you 

agree with the answer or do you have enough information to answer what I just asked you? 

Mr. SCOVEL. Thank you, Mr. Cummings. I can agree with parts 

of it. It is a different air traffic control situation that we have today 

than it was 10 or more years ago. But it is also a fact that the 

number of operations has decreased markedly from what it was 10 

or more years ago. 

Mr. Cummings, we have a project underway in my office, at the 

request of Congress, to examine air traffic controller productivity, 

and I think that is what the chairman’s ultimate question goes to. 

That project is underway. I don’t want to prejudge the results but, 

of course, we will be reporting to House T&I and also to this committee when the review is done. 

Mr. CUMMINGS. So, do you agree with the chairman that, and I 

don’t want to put words in his mouth, I am just trying to remember 

what he said, that maybe the distribution of air traffic controllers 

is not the most efficient and effective way to use them? 

Mr. SCOVEL. That is a possibility. We have examined FAA’s air 

traffic controller workforce for a long time and we have offered, in 

the past, recommendations to the agency for how it could analyze 

the composition and also the distribution of its controller workforce, 

because we have found problems in that area in the past. 

Mr. CUMMINGS. And, Mr. Miller, can you please tell us the total 

amount of cuts the Department of Education is now facing as a result of sequestration? 

Mr. MILLER. Well, the impact of our programs is about $2.5 billion. 

Mr. CUMMINGS. I understand that about $722 million is in cuts 

to Title I? 

Mr. MILLER. Yes. And about $600 million in special ed programs. 

Mr. CUMMINGS. And you said it is a Sophie’s choice, when you 

were answering questions. I guess this is what I am getting to. You 

hear two sides of these questions, and this is where I am trying 

to go to, Mr. Scovel. There seems to be some people have the opinion that when these cuts are made, the cuts are made to things 

that they don’t have to be made to; in other words, that you have 

some fat somewhere else that you could cut and not affect, say, programs for kids like me when I was growing up in special ed. So 

I am just wondering. Tell me about that. Explain that to me. Is 

this something mandated or what? 

Mr. MILLER. So the reality is our programs are focused on those 

who are most needy. 

Mr. CUMMINGS. Yes. 

Mr. MILLER. And that is the bulk of our program funding. And 

in an environment where we have fallen behind the world, we are 

16th in the world in terms of college graduates. 

61 

Mr. CUMMINGS. Marching towards a third world nation. 

Mr. MILLER. We are 25th and 17th in terms of math and science 

preparation of our 15-year-olds. And you look at the direct investment in education and how that impacts GDP, how it impacts employment, how it impacts earnings, and the research is pretty compelling that the quality of education, it is clear that investing in 

education is critical. 

Mr. CUMMINGS. But this is my question. 

Mr. MILLER. Which is the tradeoff. We have no choice. 

Mr. CUMMINGS. My question is, again I’m going back, is there 

some way that, when you have sequestration under the circumstances we have them right now, that you could avoid the cuts 

in these areas? 

And, Ms. Tighe, you can chime in if you want. I just want to 

know, because the implication is that maybe the Administration is 

trying to just zero in on things that are going to be most— get the 

headlines or whatever, and I am just trying to figure out how strict 

this situation is. 

Mr. MILLER. Simply put, it would be that is where the money is, 

the money is in these programs. There are no alternatives. 

Mr. CUMMINGS. Ms. Tighe, do you have a comment on that? 

Ms. TIGHE. Well, I would agree that sequestration, in its acrossthe-board approach to cutting, is going to leave many things unfunded, even things that you don’t want. And since Title I and special ed and those monies are the bulk of the Department’s monies, 

yes, that is where you are going to see the cuts. I think a better 

approach would be looking at other ways of reducing funding. I 

mean, part of this hearing was looking at the recommendations we 

make. The deputy secretary brought up the issue of there are programs, there are 200 programs in the Department of Education; 

not all of them are big money programs. But why shouldn’t we look 

a little more thoroughly and holistically at what programs might 

duplicate each other? Let’s get to the point where we have a duplication within the Department and between the Department and 

other departments that focus on education things. Why can’t we 

look at that as a Government and make cuts there? 

Mr. CUMMINGS. So, in other words, go through those programs, 

the ones that are not getting the most bang for the buck, either reduce or eliminate those to free up money for the others, is that 

right? Is that what you are trying to say? 

Ms. TIGHE. Yes. 

Mr. CUMMINGS. So there is some leeway, then, if these recommendations were, with this sequestration that we are going 

through right now, there is some leeway if we were to do these 

things? 

Ms. TIGHE. Oh, I don’t think there is leeway with sequestration. 

Mr. CUMMINGS. I am talking about this one right now, what we 

are going through right now. 

Ms. TIGHE. Yes. Right now I don’t think there is leeway. I mean, 

we are all facing, including my office, across-the-board cuts. 

Mr. CUMMINGS. What kind of cuts are you facing? 

Ms. TIGHE. I am facing I believe $3 million, my somewhat small 

appropriation. I am going to be furloughing all of my employees for 

about 10 to 11 days, including for myself on down, if the sequestraVerDate Aug 31 2005 08:59 May 29, 2013 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 C:\DOCS\80899.TXT APRIL
62 

tion continues through the end of the fiscal year. We have cut out 

our IT support contract for IT security, our FISMA work, and we 

are going to cut the support we give for our risk modeling work, 

and we have told four internal employees they need to leave at the 

end of the month, and cuts like that. 

We have greatly reduced travel, which is really very much impacting. When you are a criminal investigator and auditor, you 

have to travel to do your business. So I am having to make choices 

in what cases we open and what audits we do. 

Mr. CUMMINGS. I see my time is up. Thank you, Mr. Chairman. 

Chairman ISSA. Thank you. 

Mr. McHenry. 

Mr. MCHENRY. I thank the chairman. I yield to my colleague 

from Ohio, Mr. Jordan. 

Mr. JORDAN. I thank the gentleman for yielding. 

Thank you, Mr. Chairman, again for this hearing. 

Mr. Miller, I just want to be clear what the chairman’s earlier 

questioning. You have not responded to the chairman’s letter sent 

last week? 

Mr. MILLER. I believe the letter was received on the 28th. I got 

notice of it upon my return on Monday. So, no, those wheels are 

turning, but I don’t believe a formal response has been submitted. 

Mr. JORDAN. Tell me when sequestration passed, when that became the law. Do you know when that was? 

Mr. MILLER. Friday. 

Mr. JORDAN. No, no, no, when the legislation passed requiring sequestration to take effect. Do you know when that was? 

Mr. MILLER. I don’t remember the exact date. 

Mr. JORDAN. August 2nd, 2011, 19 months ago. Have you not 

been doing any planning? It seems to me, when you get a letter 

from the chairman about sequestration, you have had 19 months 

to start planning and getting ready for it. In fact, you should have 

been ready for it, if you took some time, you should have been 

ready for it in December, because it was supposed to hit January 

1st and was suspended for two months. It would seem to me you 

would have the response ready to go just like that and you could 

get right back to the chairman. So you guys didn’t start planning 

for this until the last couple weeks? 

Mr. MILLER. We planned on the implementation of sequester, 

and that has been quite consuming, actually. 

Mr. JORDAN. Well, how long have you been planning for it? 

Mr. MILLER. We have been planning on the implementation of 

sequester in varying degrees since the beginning of the year. 

Mr. JORDAN. Why not before that? It passed August 2nd, 2011. 

Mr. MILLER. Because, at least I interpreted the press, like you, 

it was both parties and the Administration, both members of Congress thought that it would not be going into effect. 

Mr. JORDAN. Let me go to the statement that the secretary made, 

the now famous statement: It just means a lot more children will 

not get the kinds of services and opportunities they need, and as 

many as 40,000 teachers could lose their jobs. There are literally 

teachers now who are getting pink slips, who are getting notices 

they can’t come back this fall. Do you know where the secretary got 

63 

that information, when he made that statement, what information 

he was basing that statement on? 

Mr. MILLER. Yes. The issue of the 40,000, which is a recognition 

that the bulk of funding goes to personnel costs and the 40,000 

does represent an estimate of, if that was translated directly with 

the current funding splits. 

Mr. JORDAN. All I am asking is did you guys do some study, were 

you guys given any information saying this is going to happen, we 

have surveyed schools across the Country, surveyed some of the 

military schools, some of the schools in Indian reservations you referenced, did you survey those or did you just sort of make this up? 

Mr. MILLER. No, we would be precluded from that. 

Mr. JORDAN. So how did you base that, how could he make that 

statement? 

Mr. MILLER. Again, we have an understanding of the cost structures from our historic work with at the State, at the district, and 

at the school level. We understand the basis of the cost structure. 

So when the question is asked how might this translate to the impact, we can say, if consistent with the current allocation of fund, 

as it is today, this is what it would translate to. 

Mr. JORDAN. So this was a guess. You said how this might translate. This was a guess that the Department made and portrayed 

to the American people as fact. 

Mr. MILLER. No, I thought we have been very clear about might 

and that, if translated, this is the impact it could have. And I think 

that remains true today and I think there are examples, both in 

anticipation of sequestration up to now and going forward. 

Mr. JORDAN. Excuse me. This doesn’t say might, this says there 

are literally teachers now who are getting pink slips, who are getting notices they can’t come back this fall. Is that true? 

Mr. MILLER. I believe the secretary has already said he spoke inaccurately and tried to correct that statement. But what is true is 

the potential impact of up to potentially 40,000 jobs, as translated 

with the current spending package. 

Mr. JORDAN. Is there anything in writing that was given to the 

secretary before he made this statement, anything in writing to say 

you can say this, we think this is going to happen? Anything in 

writing or just conversation that took place at the Department? 

Mr. MILLER. I can’t speak specifically to what the review materials the secretary had. 

Mr. JORDAN. Was The Washington Post accurate when they gave 

four out of four Pinocchios to the secretary’s statement? Were they 

accurate or do you think they were wrong? 

Mr. MILLER. I would presume that The Washington Post did 

what they thought was consistent with their reporting practices. I 

also know that in a follow-up story today they have also said that 

there is an impact of sequestration likely on jobs, so I would believe 

both accounts from The Washington Post. 

Mr. JORDAN. Mr. Porcari, Mr. LaHood said flights to major cities 

like New York, Chicago, San Francisco, and others could experience 

delays up to 90 minutes during peak hours because we have fewer 

controllers on staff. Now, Mr. Meadows tells me last week, in 

Transportation and Infrastructure Committee, that the FAA administrator admitted under questioning that the 90 minute delays 

64 

in major cities was not based on any data or study. Is that true? 

Same question to Mr. Miller. Do you have any study, any data that 

says we know for sure this is going to happen? Because I flew this 

week and it didn’t happen to me. 

Mr. PORCARI. We know some of the specific impacts. Chicago 

would be a good example. By having less controllers on duty, Chicago has two towers, we would not be able to man the north tower, 

which means one runway would be out of operation. 

Mr. JORDAN. The question is is there any study that indicates 

this in fact is going to be the case? And, if so, was the FAA administrator misleading the Transportation and Infrastructure Committee last week when he said there is no data or study that indicates this is going to be the case? 

Mr. PORCARI. Both the administrator and the secretary were 

pointing out that it is difficult to measure precisely until the cuts 

are in effect. We know it will have a significant impact, and the 

primary impact will be on our busiest airports. 

Mr. JORDAN. So once again it was a guess. We have two secretaries, Secretary of Education and Secretary of Transportation, 

guessing, suggesting without data or any study to support, that 

these effects were going to happen; and we have The Washington 

Post calling the Secretary of Education, I won’t use the term, but 

we have The Washington Post saying that he misled the American 

people to the tune of four out of four Pinocchios. 

Mr. PORCARI. We believe those are reasonable estimates based on 

what we know now. We know the operational impacts will be significant. 

Mr. JORDAN. When did you guys start planning for the sequester? Did you start planning, like I think a good administrator, a 

good planner, a good leader would do, did you start planning in August of 2011, when this bill first passed? 

Mr. PORCARI. We were well prepared for January 1st. 

Mr. JORDAN. Did you start planning then? 

Mr. PORCARI. We started planning in the fall. 

Mr. JORDAN. Okay. 

Mr. Chairman, I yield back. 

Chairman ISSA. I thank the gentleman. 

We now go to the gentlelady from California, Ms. Speier. 

Ms. SPEIER. Thank you, Mr. Chairman. 

Mr. Miller, the IG reports that through 2010, 90 percent of their 

audits that they issued since 2007 have not been resolved within 

six months, 53 of those audits were overdue by an average of almost three years, including questioned costs of $568 million. So due 

to the running of the statute of limitations, it appears that costs 

questioned by the IG in its audits, the Department lost the opportunity to recover $415 million of costs. 

Two years later, in January of 2012, 42 percent of those audits 

were still unresolved. 

So my question to you is is that acceptable performance by the 

Department? 

Mr. MILLER. I think we are in agreement with the IG that we 

need to improve our ability to resolve audits in a more timely way, 

including through the completion of the corrective action plans. It 

is directly why we have taken a number of steps, most recently 

65 

with the formulation of a dedicated task force. We have already 

had a 30 percent, actually, a 33 percent reduction in the backlog, 

and we should take that backlog to zero in the course of this fiscal 

year. 

Ms. SPEIER. But you would agree that you have lost the oppor- tunity to recover $415 million in costs? 

Mr. MILLER. We wouldn’t agree with that specific statement. 

Broadly stated, the opportunity, when you actually look at the recovery, that becomes the total potential, of which generally, based 

on finding, I mean based on what is in the public’s interest, the actual amount, even when we do have timely recovery, is typically a 

fraction of the total potential costs. So I would not want to leave 

an impression that the $400 million-ish figure was in fact the 

amount of recovery that would have happened. That would be inaccurate. 

Ms. SPEIER. Inspector Tighe, do you have any comments? 

Ms. TIGHE. I would agree that we probably wouldn’t have seen a recovery of $415 million. Part of our point is when you let the 

statute of limitations run, you have no opportunity to do anything. 

Ms. SPEIER. Exactly. 

Ms. TIGHE. A lot of that money did involve school districts and 

other State and local entities, who we know aren’t richly funded at 

the moment. On the other hand, part of the problem is not just the 

money, it is the fact that, when you don’t resolve the audit at all, 

you also lose the opportunity to work with the States and other jurisdictions to put in internal controls to make sure they are spending that money wisely. So you really lose a number of opportunities. 

Ms. SPEIER. Thank you. 

Mr. Miller, how much money do you spend, what resources are 

expended in the suspension and debarment process in the Department? 

Mr. MILLER. I don’t have that specific kind of allocation because, 

again, that would be an allocation of individuals that are across 

multiple functions. But we could follow up and get that specific investment we are making on the suspension and debarment specific 

process. 

Ms. SPEIER. All right, if you would get that to the committee, 

that would be helpful. Have any grantees or contractors been suspended or debarred in the past three years? 

Mr. MILLER. Yes. We have had 150 debarments through 2010, 

and I believe that number has increased since. 

Ms. SPEIER. And for what kinds of offenses? 

Mr. MILLER. It has been for a range of offenses. Again, we could 

give you a breakdown of those in a follow-up. 

Ms. SPEIER. All right, would you provide that? And have any of 

these individuals been debarred permanently? 

Mr. MILLER. That, I can’t answer specifically. 

Ms. SPEIER. Would you provide that as well? 

Mr. MILLER. Of course. 

Ms. SPEIER. Inspector, do you have some comments on that? 

Ms. TIGHE. Yes, I do. I think the Department has tried to make 

improvements in its focus on debarment, especially in the non-procurement area. As far as grantees, usually the grantees themselves 

66 

are certainly people associated with grants that have been 

debarred, based often on our criminal investigative work. To say 

grantees themselves are debarred I think may be overstating; usually the Department doesn’t debar a whole entity, it will take individuals out of that entity. But I think that the Department still 

faces challenges in making its suspension and debarment process 

effective. We did an inspection report on it last year that highlighted some issues. 

Ms. SPEIER. All right, thank you. 

I yield back. 

Chairman ISSA. Would the gentlelady yield to me for just a second? 

Ms. SPEIER. I certainly will. 

Chairman ISSA. Following up on the gentlelady’s question, Ms. Tighe, the $415 million, would it be fair to say that, if you had 

every one of those in a situation in which you were negotiating 

with the excess recipient, that the future savings by not having 

this repeat would certainly be as great as that $415 million? In 

other words, the behavioral change would be the ultimate goal, in 

addition to any recovery? 

Ms. TIGHE. Absolutely. I think we have not quantified the fact 

that you can save money over the long haul by putting internal 

controls into place. 

Chairman ISSA. Thank you. 

Ms. Speier, I think you were exactly on the right line. I appreciate your yielding. 

With that we go to Mr. Jordan, a returning star, is recognized. 

Mr. JORDAN. I don’t know about that. Thank you, Mr. Chairman. 

Mr. Porcari, some members of both the House and Senate have 

said that Mr. LaHood’s dire warnings aren’t backed up by financial 

data, where I was questioning you before, and they suggested that 

the FAA could, instead, cut $500 million it spends each year on 

consultants and $200 million it spends on supplies and travel. I 

know this is the FAA, but do you think that is something we can 

focus on? 

Mr. PORCARI. We could not achieve the savings that way, and I 

would be glad to document why. Let me first point out what the 

sequester means. Two-thirds, basically, I am sorry, three-quarters, 

74 percent of our Department is exempt from the sequester, which 

means that the sequestration cuts fall disproportionately on a portion of the Department, primarily the Federal Aviation Administration. That 5 percent cut, because we are partway through a fiscal 

year, is equivalent of a 9 percent cut. 

Mr. JORDAN. But my question is, does the FAA part of your 

budget spend $500 million a year on consultants and $200 million 

a year on supplies and travel? Yes or no? 

Mr. PORCARI. Those categories do exist. What is in those categories is important. 

Mr. JORDAN. Let me ask it another way. Ms. Speier and I are 

working on a piece of legislation. We discovered this two weeks ago 

in this committee, that we all remember the GSA junket to Las 

Vegas, where they spent $600 per day per attendee, $3,000 per 

attendee per conference, and if you use that as a benchmark, 183 

times various Federal agencies have exceeded that mark in various 

67 

conferences they have attended. I am not sure what the number 

was for Transportation; I do remember Defense was over 50 times 

that they had exceeded that benchmark. 

In the past year, has the Department of Transportation held conferences around the Country and have folks attended? 

Mr. PORCARI. We have and we have dramatically scaled that 

back. 

Mr. JORDAN. How many? How many? 

Mr. PORCARI. I would be happy to get you the exact number. 

Mr. JORDAN. Do you know if you were above or below the bench- mark? Did you spend more than $600 per day per attendee, more 

than $3,000 per attendee per conference? 

Mr. PORCARI. We stay within the per diem requirements. 

Mr. JORDAN. Will you check on that, we can get that information, 

if Transportation was above or below the benchmark? 

Mr. PORCARI. I would be happy to get that for you. 

Chairman ISSA. Mr. Jordan, would you yield for just one second? 

Mr. JORDAN. I would be happy to yield to the chairman. 

Chairman ISSA. When you said per diem, that is how much the 

individual gets paid. What the gentleman was asking is about how 

much was spent. And the GSA scandal was not about per diem. 

Mr. PORCARI. Mr. Chairman, what I am referring to is also the 

per diem rate for hotels, what people are spending on hotel rates. 

Mr. JORDAN. How many conferences did you spend Department 

of Transportation employees to last year? 

Mr. PORCARI. I would be happy to get you that. I will tell you 

that I have been personally reviewing and approving conferences. 

Mr. JORDAN. You don’t know that information? As much as it has 

been in the news with GSA, with the hearing we had two weeks 

ago, 183 times we have used that number, and you don’t know that 

information? 

Mr. PORCARI. I will be happy to get it for you. 

Mr. JORDAN. You come before the committee talking about sequestration and you don’t know how many conferences you went 

to? 

Mr. PORCARI. Because we have already achieved the savings we 

think we can achieve on the conference issue. 

Mr. JORDAN. Well, maybe we would disagree with that, and we 

would like to have that information in front of the committee. 

Mr. PORCARI. I would be happy to get it for you. That was last 

year’s cuts. 

Mr. JORDAN. You might think you have achieved it, but maybe 

the American taxpayer doesn’t. That is why we have these hearings. That is what it is all about. 

Mr. PORCARI. We are happy to make that public. 

Mr. JORDAN. Mr. Scovel, do you know how many times they went 

on trips? 

Mr. SCOVEL. Chairman Issa requested that information from the 

Department. We have not audited it. 

Mr. JORDAN. But do you know the number of trips? 

Mr. SCOVEL. Most certainly. Fiscal year 2010, total cost, 

$12,833,000. The number of conferences was 49. 

Mr. JORDAN. Forty-nine conferences, 12 million bucks, but we are 

going to have 90-minute delays because of the sequester, right? We 

68 

have to furlough FAA agents. That is the kind of stuff that just 

drives the American taxpayer crazy. And the fact that you know it, 

you know that information and the agency head doesn’t is a problem. 

Mr. PORCARI. If I may, the single largest FAA conference part of 

it, and that is the largest part of the Department, is actually safety 

training for our air traffic controllers. 

Mr. JORDAN. I am not saying some of them aren’t important. 

What I am saying is 12 million bucks and 49 times. That is something the American taxpayer wants to know. 

Let me move quickly if I can. 

Mr. Miller, do you know how many conferences you sent Department of Education employees to last year? 

Mr. MILLER. It was roughly—— 

Mr. JORDAN. There is no roughly to it; there is a number. How 

many did you go to? 

Mr. MILLER. No, we have a complete breakdown by size of conference. 

Mr. JORDAN. Do you know how many? Was it 10, was it 49? Was 

it above 49 or below 49? Did you beat the Transportation? 

Mr. MILLER. Below 49. 

Mr. JORDAN. Below 49. Well, that is good. 

Ms. Tighe, do you know how many it was? 

Ms. TIGHE. I am sorry, I do not, but I can certainly get that information. 

Mr. JORDAN. Do you know the cost that they had for travel and 

conferences? 

Ms. TIGHE. I know that we reviewed the costs as reported to this 

committee in earlier submissions and to the Senate, but I don’t 

have that off the top of my head. 

Mr. JORDAN. Mr. Miller, do you know, off the top of your head, 

how much money the Department of Education spent on conferences and travel last year? 

Mr. MILLER. In total, I believe it was about $10 million. I know 

our largest conference, which would be the Federal student aid conference, came in at about less than—— 

Mr. JORDAN. How many employees do you have at the Department of Education? 

Mr. MILLER. About 4,400. 

Mr. JORDAN. Forty-four hundred. 

How many employees at the Department of Transportation? 

Mr. PORCARI. Approximately 55,000. 

Mr. JORDAN. Fifty-five thousand and they spent $12 million. 

Forty-four hundred and you spent $10 million? Maybe you weren’t 

better. That is amazing. 

Here is the point. Instead of having the secretaries of these respective Federal agencies out scaring the American people, maybe 

cut back on the conference; maybe actually achieve some savings 

for the taxpayer and do things the way you are supposed to. 

With that, I yield back, Mr. Chairman. 

Chairman ISSA. I thank the gentleman. 

We now recognize the gentleman from Northern Virginia, Mr. 

Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

69 

Gosh, if the American people wonder why it is hard to reach 

agreement on sequestration, perhaps that last round of questioning 

clears that up. 

Mr. Porcari, I wanted to give you an opportunity, without badgering you, to answer the question fully in terms of air traffic controller training, because there seemed to be some confusion between conferences and training. Would you care to explain what 

you were trying to get at before being interrupted? 

Chairman ISSA. Would the gentleman yield for just a second? 

Mr. CONNOLLY. Yes, Mr. Chairman. 

Chairman ISSA. I would like to ask the clock be stopped. That is 

a question, fairly, that shouldn’t come off your time. 

If you would finish the answer, I would appreciate it. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

Mr. PORCARI. Certainly. Thank you, Mr. Connolly. What I was 

referring to with our air traffic controllers is although some of the 

activities are technically listed as a conference, there is a safety 

agenda where they are basically getting updated education on safety activities and other vital parts of their role. We think that is a 

very important part of what they do. We also think it is management’s responsibilities, mine as chief operating officer, to make 

sure they do that responsibly and they do that as cost-effectively 

as possible. 

So for the last year and a half we have been very carefully reviewing conferences, where, when, how many people go, and what 

the agenda is. 

Chairman ISSA. Thank you. 

Mr. CONNOLLY. Thank you, Mr. Chairman, and thank you for 

that courtesy. 

Mr. Porcari, if I could follow up on that. What kind of training 

are we talking about for air traffic controllers? I mean, is this just 

how to party, how to have a good time in Las Vegas? What kind 

of training is this? 

Mr. PORCARI. This is serious safety training. For example, there 

are a number of new technologies that are deployed. We share safety data. There are day-long activities where they are having various safety briefings and updates and participation. What we are 

trying to build is a safety culture. And if you are familiar with safety management systems, it starts with the people and with a holistic approach to safety. We think the reason we have the safest air 

traffic control system and safest aviation system in the world is because we have the best trained safety experts, including our air 

traffic controllers. 

Mr. CONNOLLY. And just to make sure we understand what you 

are talking about, training isn’t for a lifetime; one has to be sort 

of refreshed with changes in technology, changes in new information, changes in technique. For example, we are getting ready, I 

hope, despite sequestration, to invest in the New Gen air traffic 

control system, which will absolutely expand safety over, for example, the Atlantic, but that requires some kind of training and understanding the technology involved. Would that be a fair statement? 

Mr. PORCARI. It is a fair statement. The technology and the 

state-of-the-art is evolving very rapidly. And there was a previous 

70 

question about the number of air traffic controllers today, as opposed to previous. I mentioned that the concentration of commercial activity is different than it was 10 years ago. The other part 

of it that is very important is we are bringing our air traffic control 

community into the design and implementation of our NextGen 

system. That is a very staff-intensive process. But some of the early 

stutter steps that we had with, for example, En Route Automation 

Modernization, or because, in my opinion, we developed a system 

without an integrated project team approach, did not have our controllers as part of the process. We are doing that now. It is a very 

staff-intensive process to do that. 

Mr. CONNOLLY. And, presumably, that serves a public purpose. 

Mr. PORCARI. It certainly serves a public purpose of safety, which 

is our number one priority. 

Mr. CONNOLLY. Right. 

And, Mr. Scovel, as IG, do you take any issue with what Mr. 

Porcari has just said? 

Mr. SCOVEL. On the basis of our available data, sir, it appears 

to be accurate. 

If I could return to one of your earlier questions, and I do want 

to make sure that the record of this committee hearing is accurate, 

because I certainly don’t want to be in a position to have misled 

the committee at all. When I spoke of the Department’s earlier conference expenses for fiscal year 2010, I had also hoped to bring to 

the committee’s attention that the Department reported to this 

committee for fiscal year 2011, having spent $3.4 million on 23 conferences for fiscal year 2012, $668,000 for 11 conferences. 

Mr. CONNOLLY. Okay. 

Mr. SCOVEL. So 2010 certainly appears to be an unusually high 

number. It has come down since then. As I mentioned before, these 

are not audited figures, but they had been supplied by the Department to the committee. 

Mr. CONNOLLY. Thank you. I am sure the committee appreciates 

that. 

Mr. Porcari, real quickly, before my time runs out, and again I 

thank the chair for his graciously allowing you to finish your answer earlier. But you were accused of scaring the public. Will there 

be furloughs among FAA employees, including air traffic controllers, and will that affect flight patterns and delays at airports? Will 

there be furloughs of TSA employees and will there be furloughs 

in CBP, Customs Border Patrol agents, all of which could lead to 

delays at airports, yes? 

Mr. PORCARI. Yes, there will be furloughs among the vast majority of our 47,000 FAA staff, including air traffic controllers. Because we can’t impact safety, we have to reduce the aircraft volumes that can be processed at the most busy times. We know that 

will have a significant impact on reliability and on-time performance. 

Mr. CONNOLLY. Thank you so much. 

And, Mr. Chairman, again, thank you for allowing the witness to 

answer the question. 

Chairman ISSA. You are most welcome. 

We now go to the gentleman from Utah, Mr. Chaffetz. 

Mr. CHAFFETZ. Thank you. 

71 

Talking about the Department of Transportation here, can you 

help me understand the formula as to how many days they are 

going to be on furlough? How many furlough days are there going 

to be and how did you come up with that number? 

Mr. PORCARI. First, in terms of number, we are in the process 

right now of notifying our employees that they will be subject to 

a maximum of one furlough per two-week pay period through the 

end of the fiscal year, so, in other words, up to 11. We have arrived 

at that by first looking at all other available savings, including 

what we can do with contracts. 

Mr. CHAFFETZ. So of the $2.7 billion, how many of the savings 

are you going to have in non-payroll-oriented savings? Where are 

you going to cut that is not payroll? 

Mr. PORCARI. We are cutting back in a number of contracts. And, 

again, within the Federal Aviation Administration, one of the largest contracts is the contract tower program. 

Mr. CHAFFETZ. But looking for a value here, the dollar amount, 

if you have to save $2.7, how much of that is going to come from 

payroll, how much of that is going to come from other savings? 

Mr. PORCARI. With the Federal Aviation Administration number, 

which, overall, the total sequestration number is just over $600 

million, we are going to have information technology savings for 

fiscal year 2013 of about $36 million; we have a 30 percent reduction in travel costs. We are literally looking at every single contract 

for the Federal Aviation Administration. 

Mr. CHAFFETZ. And I appreciate that you said that you started 

this in the fall, so here we are in March. So given, whatever, four, 

six months, how much is going to come out of payroll? 

Mr. PORCARI. We believe, and I will get you that number, because it is a moving target, because as we get further in the fiscal 

year, we originally thought there would be far more than 11 furloughs, and we think 11 is the outer number. 

Mr. CHAFFETZ. Okay, so we don’t know the dollar amount. We 

are talking about maximum maybe 11 days for somebody over the 

course of a year. How did you come up with 90-minute delays? 

Where did that number come from? 

Mr. PORCARI. The delay number comes from what we think can 

happen. Think of a bad weather day in New York or San Francisco 

or Chicago, and those types of delays that you typically get from 

weather activity we think that you will see because of the furlough 

activity. I use the example of Chicago O’Hare, where the airfield 

requires two towers. With one of them out of operation because of 

furloughs, we would actually have to take one of the runways out 

of operation. That is how we tried to measure the impact. 

The other thing I would mention is that the number of impacted 

hub cities we think can be fairly significant, and when any of those 

hubs are impacted, it disrupts the entire system. 

Mr. CHAFFETZ. The challenge that I have is when we say significant or big. It doesn’t sound like much of a plan and some specificity. You are talking about $600 million. What I would love to 

know is the breakdown between the payroll costs versus the others. 

You talk about one day furlough, right, for every two weeks of 

work. Is that for the 47,000 employees at the FAA? 

72 

Mr. PORCARI. Yes, it is for the 47,000 employees that will be subject to it. 

Mr. CHAFFETZ. So how many of those 47,000 employees are actually going to be furloughed? 

Mr. PORCARI. The vast majority of the 47,000 employees. The employees that work for some of the mandatory contract spending 

areas, like the airport improvement program, are not subject to it. 

Every thing but AIP within the FAA is subject to furlough. 

Mr. CHAFFETZ. What I would hope that you could give me, Mr. 

Porcari, is how long would it take you to give me some specificity 

on the questions we just asked? I appreciate you are coming to testify and you have lots of things you have to prepare for, but if you 

have a plan we would like to see it. And what I need to have is 

some specificity on those things I just went through. Is that fair 

enough? What is a fair amount of time? 

Mr. PORCARI. Well, we have some preliminary numbers now. 

Again, we know that they will keep shifting, and I would be happy 

to provide those. 

Mr. CHAFFETZ. By? 

Mr. PORCARI. By close of business today. 

Mr. CHAFFETZ. Thank you. Appreciate it. 

I yield back. 

Chairman ISSA. When you include in that, would you also include, to the extent that you can, for both cabinet positions, any 

steps that could have or were anticipated being taken from the beginning of the fiscal year? Because, for scoring purposes, if you, for 

example, restrained hiring, you could have abated some of this 

starting sooner. And I would just like to know, to the extent that 

that was planned or done. Because I know it is a moving number 

and part of the moving number is things that were not spent that 

had been anticipated be spent. 

Mr. PORCARI. We would be happy to do that. We have been in 

a hiring freeze at the FAA for some time, as well as travel restrictions. 

Chairman ISSA. Right. And I would like to make sure all of that, 

including that which may have reduced the number, is in the 

record. 

Mr. CHAFFETZ. Mr. Chairman, if I could add to that list two 

quick things: the amount of bonuses that were given out this year 

and the number two is how much money you spent in Iraq and Afghanistan. Because there are 17 different agencies that are still 

spending money in Afghanistan and Iraq. If there are any dollars 

associated with that, I would appreciate if you would get back to 

us on that as well. 

Mr. PORCARI. We would be happy to get you those numbers. We 

have not awarded bonuses this year. 

Mr. CHAFFETZ. Thank you. 

Chairman ISSA. Thank you all. 

We now go to the gentlelady from Illinois, Ms. Duckworth. 

Ms. DUCKWORTH. Thank you, Mr. Chairman. 

Mr. Porcari, do you have data on how many aircraft land at 

O’Hare that are controlled by the north air traffic control tower 

every year? 

Mr. PORCARI. Yes, we do, ma’am. 

73 

Ms. DUCKWORTH. And so you could tell me, if that were shut 

down, how many aircraft would not be landing on that closed runway based on past landings at that airport. 

Mr. PORCARI. Yes, we can. 

Ms. DUCKWORTH. Can you tell me how many aircraft takeoffs 

and landings and air traffic is controlled by the remaining tower 

at O’Hare every year? 

Mr. PORCARI. We can get that as well. 

Ms. DUCKWORTH. Wonderful. So can you also tell me how much 

more capacity there is on that remaining tower, should the north 

tower be shut down, that could be absorbed by the single remaining air traffic control tower as it stands? 

Mr. PORCARI. We would be happy to. And, again, the same principles apply at numerous other airports as well. 

Ms. DUCKWORTH. Wonderful. So then you would also be able to 

tell me, based on the capacity historic data on how many land at 

that north runway, if it shuts down, you know how many can get 

picked up by the other control tower, how many would not be able 

to be handled in a timely basis, correct? 

Mr. PORCARI. Yes, we do. And what you are pointing out, I think, 

is very important because part of the estimating process for delays 

goes to historical patterns, whether it is for weather or any other 

throughput delays. 

Ms. DUCKWORTH. Wonderful. Thank you. So as someone who has 

flown most of my adult life, as both a professional pilot, I thank 

you for the training that I, as a DOD pilot, received from the FAA 

at the safety conferences that I attended. It made me a far better 

and safer DOD pilot. And now that I am a general aviation pilot, 

I thank you for keeping me safe. 

In fact, I am going to be signing up for one of those training conferences on how better to speak with air traffic controllers in a 

busy air traffic control environment, so I look forward to attending 

that training in Chicago that is coming up. 

My question is really going to be towards Mr. Miller. Two weeks 

ago I had a meeting with the superintendents of schools in my district, who have been planning on what would happen if the funding 

were cut for Title I, as well as for special education funding, and 

they knew exactly how many people they were going to have to lay 

off, what it was going to cost them. Do you know, Mr. Miller, do 

you know how much money this Country spends on subsidies to the 

oil and gas industry every year? 

Mr. MILLER. No, I am not familiar with that amount. 

Ms. DUCKWORTH. It is $4 billion. Can you tell me what the cutting Title I education funding will cut from the Department of Education? 

Mr. MILLER. It will cut $750 million. 

Ms. DUCKWORTH. So, $750 million. And how about the cutting of 

special education funding? 

Mr. MILLER. It would be another $600 million. 

Ms. DUCKWORTH. Another $600 million. So instead of slashing 

education funding, you know, Democrats offered a balanced alternative that would have made sensible cuts in our Nation’s spending 

to subsidize the oil and gas industries that have had record profits, 

but Republican House leaders have refused to allow a vote. If we 

74 

could just cut spending on oil and gas subsidies, we would save $4 

billion. 

I am concerned, Mr. Miller, that my superintendents of schools 

in my district told me that because there is the requirement that 

they provide services for students with special needs and also for 

special education funding, what would happen, actually, when that 

Title I funding is cut and when that special education funding, 

such as remedial reading tutors, is cut, they would still need to 

provide that, which means that they would actually cut services to 

the mainstream students. 

Can you speak a little bit about what this would do in school districts, to have to shift the pressure from students with special 

needs to mainstream students, and what this would do across the 

Nation if these cuts were to go through? 

Mr. MILLER. There is a requirement in serving the needs of students with special needs is that they need to provide a free and appropriate education, so there is a minimum standard that is required. And as the Federal resources are compromised, then they 

need to ensure that they are still delivering against that standard, 

and that puts a strain on resources. 

It is also at a time when many districts like yours are investing 

in not just the basic services for those children, but they are investing in new instructional technologies that are going to be more effective at accelerating learning. They are having to deal with the 

expansions of students who don’t speak English as their native language as they are putting in new data systems, as they are preparing for higher standards that are international benchmarks. 

So it is not only the loss of resource, but, frankly, the leadership 

that is being spent to do the budget manipulations is taking precious time to also plan from these other meaningful reforms. So 

really it is not just a cost impact, but it is really compromising the 

ability to improve our education system. 

Ms. DUCKWORTH. Thank you, Mr. Miller. So could you tell me if 

you will be keeping data on what the sequestration cuts will do to 

educational programs across the Country? I know some of this is 

based on historic trends, and there has been discussion here of the 

lack of data. Will you be keeping data over the course of sequestration on what it does to funding education and also to what actually 

gets implemented across the Nation? 

Mr. MILLER. We will continue to capture the data that is currently allowable. Of course, there are restrictions in terms of the 

types of data that we can capture, subject to our statutory authorities and regulatory authorities. Consistent with that we will be 

able to capture data so we can continue to understand the adverse 

impact that sequestration is having. 

Ms. DUCKWORTH. Thank you so much, Mr. Miller. 

I am out of time, Mr. Chairman. 

Mrs. LUMMIS. [Presiding.] Mr. Walberg? 

Mr. WALBERG. Thank you, Madam Chairman. 

And thank you to the panel for being here. I know you are taking 

some heat today, probably because of lack of some leadership at the 

top and some inaccurate, incomplete statements that have been 

made. 

75 

But, Mr. Miller, let me ask you a question. The statement was 

made earlier by one of our committee members that we are dangerously close to being third world country status educationally. I 

am not sure of the accuracy of that, but improper payments in the 

Department of Education, Pell grant programs specifically, that exceeded the OMB threshold of $750 million per year seemed to be 

a problem. In fact, in 2010, improper payments exceeded $1 billion. 

Mr. Miller, I ask you what steps has the Department taken to reduce the amount of improper Pell grant payments. 

Mr. MILLER. We have taken a number of steps. First of all, what 

I would like to highlight is that the rate of improper payments has 

dropped significantly. 

Mr. WALBERG. Well, I am glad for the rate, but it is still improper payments taking place. I guess I am asking what are you 

doing to stop it? What steps have been taken? 

Mr. MILLER. And I think it is important because, again, the rate, 

and I am going to answer the question, the rate is important because it speaks to the impact that the steps we are taking are having, because, again, as the number of Pell grants has grown dramatically, the actual percentage that are subject to improper payment has been decreasing. 

We take a number of steps to work specifically with our financial 

aid officers in each of our schools to work to better ensure that we 

have the right students taking out the right amount of loans, 

again, subject to the statutory constraints that we have; we are 

working with our IG to better understand where there is potential 

risk of inappropriate actors, so we are not meeting our eligibility 

requirements; we, specifically on the front end with our FAFSA, 

which is the vehicle by which students apply for and qualify for 

aid, we work with the IRS to put in income verification to minimize 

the risk that inappropriate aid would be granted. 

Mr. WALBERG. Why are so few using the IRS tool? 

Mr. MILLER. I would not characterize that so few are using the 

IRS tool. It is not as much as we would like, and that is one of the 

things we are trying to continue to promote. 

Mr. WALBERG. Go on. 

Mr. MILLER. So those are the types of actions that we are taking 

to reduce the rate of improper payments. 

Mr. WALBERG. Any additional actions you are contemplating taking? The rate may be going down, but we have gone up in dollars. 

Most recent dollars that we went up was over $1 billion. 

Mr. MILLER. In total. Again, that is a net. So we are as concerned 

because part of this is both overpayments and under-payments. So 

we are continuing to address both. We are concerned about borrowers to the degree that that is a concern, and we are trying to 

impact where it allows us to better recover funds for the Federal 

Government. 

Mr. WALBERG. Inspector Tighe, let me address the same concern 

there. As you explained in your statement, some of these payments 

occur when applicants fraudulently report false income information 

to receive grants. Is the fraudulent reporting of false income information the main cause for the improper payments or has your office identified any other reasons? 

76 

Ms. TIGHE. Oh, I think that is one reason, but by no means the 

only reason, which is why I think that the Department’s actions 

and the income match are going to inevitably be limited in helping 

improper payments. Let me speak a minute about the IRS DRT 

which Deputy Secretary Miller talked about. The problem there is 

we don’t think anyone who wants to defraud the Government is 

going to pick the IRS data retrieval system. 

So what is the Department doing to manage those students or 

those applicants, shall we say, some of whom might not really be 

students and who aren’t otherwise chosen for verification by 

schools of their information, their application information? What is 

the Department doing to fix that problem? 

Mr. WALBERG. What are they doing? What have you found? 

Ms. TIGHE. Well, we haven’t found that they are doing anything. 

I would also like to highlight that we do have a problem with how 

the error rate is being calculated, to begin with. We do recognize 

it has gone down, and I think it shows that there has been some 

modest success in the IRS DRT match. But I think that the way 

the error rate is calculated is really just based on a statistical 

study with the IRS based on income. There is also fraud related to 

the number of dependents and a number of other issues like that 

that can happen. 

Mr. WALBERG. When we talk about the other issues related to 

$750 million that could go towards special needs programs, $650 

million, when we have $750 million and now over $1 billion of 

fraud, wasted revenue going to education, I think we have a problem. 

Mrs. LUMMIS. Thank you. 

Mr. WALBERG. I yield back. 

Mrs. LUMMIS. Thank you very much, Mr. Walberg. 

I yield to the gentleman from Pennsylvania, Mr. Cartwright. 

Mr. CARTWRIGHT. Thank you, Madam Chairman. 

First, I would like to emphasize how much I value the work of 

our inspector general community. Your work is critical for everybody who, like me, wants our Government to work and work better 

and be more efficient. So I thank you for your work, in addition to 

being here today. 

Now, Mr. Scovel and Ms. Tighe, I want you to invite you to answer these questions. The sequester’s arbitrary across-the-board 

cuts, they also do apply to the offices of the inspectors general, am 

I correct in that? 

Mr. SCOVEL. That is correct, sir. 

Mr. CARTWRIGHT. All right. So the question is how are your offices impacted when your budgets are cut? 

Mr. SCOVEL. Sir, if I may, we have heard from the other witnesses about how sequestration is impacting their offices, and it is 

a fact that sequestration will impact our office. My fear all along 

has been that because, for instance, as Mr. Porcari spoke of the 

FAA as being a personnel-heavy and, therefore, salaries-and expense-heavy account subject to sequestration, my office too is very 

personnel heavy. Seventy-five percent of my overall budget goes to 

personnel salaries and expenses. 

So if we were going to get hit, that was where it was going to 

happen. And for me, if I am to accomplish my mission, I have to 

77 

have my staff on deck. So my focus from very early on was to minimize the impact on my staff, keep them at work. Sure, they may 

be happy because they are getting a paycheck, but I am happy because I am getting mission. And what we have been doing since, 

actually, late 2011 has been to focus on eliminating, reducing all 

expenses not staff-related, minimize those to the greatest extent 

possible, and then to see how we could ride out sequestration. 

In interest of full disclosure, my office is the recipient of some degree of extra funding in connection with our oversight responsibilities for the Recovery Act and also for Hurricane Sandy relief, so 

that has provided us some flexibility. But we could not get to the 

position where we are today, which is that we will not need to furlough any of our staff, were it not for the cost reduction measures 

that we have had in place for a long time. We have had a hiring 

freeze in place since August 2011; we have reduced staff; we have 

released rented space; we have not paid any bonuses; we have 

withdrawn from a student loan repayment program. Across the 

board we have sought to cut every single expense we possibly 

could. 

Mr. CARTWRIGHT. Let me jump in there, Mr. Scovel. According to 

data provided to this committee, at the end of February 2013, your 

office had about 10 percent fewer full-time equivalents than you 

had in fiscal year 2010. Is that correct? 

Mr. SCOVEL. That is true. We are, in fact, at the lowest strength 

level in the history of our office since the Inspector General Act 

was enacted in 1978. 

Mr. CARTWRIGHT. So what impact has that reduction had on your 

work? 

Mr. SCOVEL. Impact. Data point. It is an imperfect measure, and 

I will acknowledge this. In 2004, each OIG FTE was responsible for 

covering $137 million in DOT budgetary resources. In 2012, each 

OIG FTE is now responsible for covering $192 million of Department budgetary resources. For example, last year, where, in our 

criminal investigation side, I regret to say it, we had to take a pass 

on information that was provided to us to see whether we believed 

we needed to dedicate an investigatory resource, a staff person, to 

participate with other agencies in investigating that offense. We 

didn’t have the personnel and we decided that the expenses associated with participating in that investigation would be too great to 

justify it. 

We have also taken steps internally to increase the degree of 

scrutiny that we will need to apply to every single request, whether 

it is from the Department or from Congress, for audit support. 

Mr. CARTWRIGHT. I want to jump in there and I want to give Ms. 

Tighe a chance here. 

Ms. Tighe, your staff also expressed concern about reductions in 

FTE levels in your office and with respect to audits. What impact 

does this have on your ability to conduct audits and investigations? 

Ms. TIGHE. Well, it certainly will have an impact, as I mentioned 

earlier. Like Mr. Scovel’s office, 70 percent of our budget is salaries 

and benefits. The next highest increments of funding are the common support we pay to the Department for IT and other costs that 

I can’t control. 

78 

Then we have our financial statement contract. After that, I get 

travel, training, and smaller contracts. We are canceling or will 

cancel those contracts which support our FISMA work and our data 

risk modeling. We will be furloughing our employees, from me on 

down, for about 11 days, 10 to 11 days through the end of this fiscal year. That will have a very real impact on our work, our audit 

and investigative work. 

We are already turning down cases; we are shifting priorities. 

We are telling our criminal investigators in the field that they can 

only open the highest priority things and they better watch what 

they do. Our audit work, we had put on our audit plan for this 

year, for example, a project to look at the grantees for the race to 

the top monies, which is one of the big dollar marquee initiatives 

of this Administration. I don’t know if we are going to have the 

travel money to go out to those grantees. 

Mrs. LUMMIS. Thank you, Ms. Tighe. 

Thank you, Mr. Cartwright. 

Next is the gentleman from Tennessee, Mr. DesJarlais. 

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

for being here today. We have had a lot of discussion today about 

sequester and we have talked about where we need to cut spending 

and how difficult this is going to be, and it has been kind of contentious and even maybe it seems like people have gotten a little defensive. 

Let me ask the panel, do you agree, just looking at the big picture, looking at our Government and our budget and our deficit, do 

you believe that we have a spending and a deficit problem in this 

Country? Mr. Miller, we will start with you. 

Mr. MILLER. Based on my reading of the press, I believe that 

there is a consensus that we need to both address the deficit to preserve the long-term health of the Country. 

Mr. DESJARLAIS. Okay, so we did that with sequester; we cut $85 

billion, and then we also had a tax increase that raised about $60 

billion in taxes. So we have kind of taken a balanced approach. So 

is that kind of in line with what you think we need to be doing 

right now, based on this $17 trillion in debt? 

Mr. MILLER. Well, to be clear, my area of focus is the Department of Education. 

Mr. DESJARLAIS. I am asking you as a taxpayer. 

Mr. MILLER. I wouldn’t want to hazard what I think is the right 

fiscal policy. 

Mr. DESJARLAIS. All right. 

Mr. MILLER. What I would say is the Administration view is that 

we need a balanced approach. 

Mr. DESJARLAIS. Well, I am just asking you all as taxpayers, because our committee is here to make sure that we are spending 

taxpayers’ money properly. 

So, Ms. Tighe? 

Ms. TIGHE. As a citizen and a taxpayer, not as an IG, I would 

say that certainly a balanced approach makes sense. I can’t help 

but think, sitting as an IG, that there is Government spending 

there ought to be spending that can be cut, programs that can be 

run more wisely. I know that the entitlement programs are a pot 

of money that ought to be looked at in some fashion. I say that as, 

79 

you know, a few years off, myself, from receiving some of those. 

And taxes, and I am no expert on tax policy, but nothing should 

be off the table, in my opinion. 

Mr. DESJARLAIS. So we have already raised taxes. Do you want 

to pay more taxes? 

Ms. TIGHE. My husband doesn’t, but I feel sometimes it is the 

price I pay. 

Mr. DESJARLAIS. Mr. Porcari, yes or no, do you think we have a 

debt and spending problem? 

Mr. PORCARI. As a citizen and a taxpayer, I think the balanced 

approach is the right way to go. 

Mr. DESJARLAIS. Okay. 

Mr. Scovel? 

Mr. SCOVEL. I want to stay in my lane and leave the policy decisions for all of you and the Administration. 

Mr. DESJARLAIS. Okay. Well, I just say that because, again, it is 

easier to cut other people’s spending than your own. You are all 

here; you are passionate about your departments, so on and so 

forth. 

In education, I guess I am disappointed to hear Mr. Miller come 

out and say we are taking a hatchet to education. Do you truly believe there is no waste in education? We have had the Department 

of Education now for three decades, $1 trillion put in there. Math, 

science, and reading scores are essentially flat. There are Pell 

grants that have gone from $12 billion to $43 billion over the last 

four years; we are not really seeing a return on that investment. 

We have had, as I think Representative Jordan said, 19 months 

to prepare for this. Is there nothing in the Department of Education that you could look at that you would want to cut first, before you start saying we are going to take a hatchet to Head Start, 

to special education programs? That sounds to me like scare tactics. That sounds like something I have been hearing from the 

White House. Is there not a better approach in prioritizing spending cuts? 

Mr. MILLER. I would say I think we have. I think what you have 

seen is our proposals, with the support of Congress, to eliminate 49 

programs that cut $1.2 billion out of our programmatic budget has 

in fact been very consistent with trying to make some smart tradeoffs. I think we are at a point now where Title I, in an environment 

where we are actually raising the standards because not enough 

States have competitive standards, we are actually putting more of 

a challenge on our educators to do more, better, faster. 

Mr. DESJARLAIS. Okay. 

Mr. MILLER. We think to dis-invest in education at this time is 

only going to threaten the long-term growth and health of this 

Country. 

Mr. DESJARLAIS. And we all know that sequestration, we talked 

about the Republicans taking these Draconian cuts. You realize the 

super committee had an equal number of Democrats and Republicans at the table, so sequestration was a failure by both sides of 

the aisle to come to an agreement. So we have to make cuts, and 

we better get used to them because there are going to be more coming. This is just one-tenth of our deficit spending. So I would suggest that maybe this is a good learning experience today, that we 

80 

are going to see more cuts and maybe we need to prepare as we 

move on. 

You were talking, Mr. Porcari, about the 47,000 air traffic controllers, and we are going to have to furlough them, we are going 

to have to take maybe up to 11 days out of the year. I know that 

there have been increases in salaries. Forty-seven thousand. 

I don’t know what their annual salary is, but could there be a 

pay cut before we decide, hey, taxpayer, you are going to have delayed flights because we are not going to give up anything? You 

know, nobody wants to give up anything; they just want to take 

more. And I think the problem that we have in this Country and 

this Government right now is excess spending. We all see it. We 

know that sequestration was a responsible thing to do in the sense 

that we finally cut spending. 

But instead of all of us feeling good that we are doing the right 

thing after admitting we have a spending problem, we are, instead, 

villainizing this. This President should be out saying, thank you, 

everybody, for making a shared sacrifice; we have taken the first 

step in doing the right thing. We shouldn’t be sitting here whining 

and complaining about what we have to do, because we have a lot 

more of it to do. 

And I know my time has expired. 

Chairman ISSA. [Presiding.] Mr. Porcari, there is a question 

there. Do you want to answer it relative to the contracts and so on 

for air traffic controllers? 

Mr. PORCARI. Yes. First, I would point out, through sequestration, our employees are in fact taking a pay cut of up to 10 percent 

for the remainder of this fiscal year. We have worked very hard 

over the last couple years to have a good working relationship and 

an appropriate collective bargaining relationship with our air traffic controllers. We have, I think, a 180 degree turn in terms of the 

working relationship that shows up in how we implement things 

like NextGen with our workforce. I would point out I think we run 

the risk of undoing that and unraveling that. 

Chairman ISSA. I will take a liberty for just a second to make 

sure that I get the answer to that last question. Within the contract structure, you can have a reduction in force, you can have furlough. If I understand correctly, simply reducing the amount of pay 

for per hour, even with sequestration, is not contractually allowed, 

is that correct? 

Mr. PORCARI. That is my understanding. We have started, I 

should point out, over 90 days ago, the collective bargaining process with our air traffic controllers for the furloughs. 

Chairman ISSA. Okay. I just want to make sure that we understand what the Government can or can’t do. We all have suggestions of what we would like you to be able to do. I only want us 

to stick to the ones that you could do at this juncture. 

With that, we go to the gentleman from Missouri, Mr. Clay. 

Mr. CLAY. Thank you so much, Mr. Chairman, and thanks for 

this hearing. 

For the record, let me state to my friend from Tennessee that the 

American people know exactly what is going on here in this Congress, which is nothing. We shirked our responsibility with the 

super committee, we shirked our responsibility with SimpsonVerDate Aug 31 2005 08:59 May 29, 2013 Jkt 000000 PO 00000 Frm 00084 Fmt 6633 Sfmt 6633 C:\DOCS\80899.TXT APRIL
81 

Bowles, and they don’t like it. So you can cast blame if you want 

to, but the American people are smarter than that and they know 

that we aren’t doing a thing. 

Let me direct my questions to Mr. Miller and Ms. Tighe. You 

know, in 1994 there were only seven States with charter schools 

school laws and 60 operational charter schools. Today there are 

more than 5,000 charter schools in 40 States and D.C. The rapid 

growth of charter schools presents an opportunity to help reform 

our education system by presenting innovative practices that can 

be incorporated into traditional public schools. But this growth also 

presents risks and requires rigorous oversight. 

Deputy Secretary Miller, one of the concerns identified in the inspector general’s letter to the committee involves how effectively 

the Department is overseeing and monitoring charter school 

grants. There have been numerous reports of fraud in the management of charter schools. Do you agree with Ms. Tighe’s concern 

that there needs to be increased accountability for charter school 

funds once they reach the entity running the charter school? 

Mr. MILLER. Simply put, yes. We believe that, from a policy 

standpoint, the growth in charter schools and the potential they 

offer for being able to develop innovative reforms are good. We 

think oftentimes you have a proliferation of different oversight and 

authorization models at the State level that make the subsequent 

oversight kind of more complicated. 

Our direct interaction, generally speaking, is with the State entity and with the authorizing entity who are responsible for the fiduciary duty in terms of the oversight of funds, so our work is with 

the States versus with the schools. And I think we share concerns 

that States need to do a better job in terms of exercising that oversight. 

Mr. CLAY. So how does the Department create more transparency 

in how charter schools use taxpayer funds? I mean, do you look at 

graduation rates, test scores, reading levels, and math tests? 

Mr. MILLER. Relative to if they are direct recipients of, let’s say, 

Title I monies, they are subject to all of the statutory requirements 

of Title I, and there is an accountability system within that. Generally, the dominant framework, however, is the State framework 

for governing schools, so, again, we work in partnership but respectfully have to defer on cases to where the State’s governance 

framework with respect to charter schools. 

Mr. CLAY. Although we send them Title I money. We have some 

responsibility. 

Mr. MILLER. And we do provide oversight for the Title I. 

Mr. CLAY. Okay, Ms. Tighe, I am a strong supporter of high performing charter schools, but I am also troubled by the risk of the 

privatization of public schools under the guise of charter operators. 

In your investigation involving education charter management organizations, do you find that fraud and other problems are more 

prevalent with for-profit organizations or nonprofit? 

Ms. TIGHE. We haven’t found a difference between profit and forprofit. We have found problems with charter management organizations. We are actually getting ready to commence audit work in 

this area, also, because while we have had a number of investigations involving these entities and charter schools in particular, we 

82 

really wanted to go in and get a good look at what that might 

mean. But I agree with you that there are problems. 

Mr. CLAY. So it could be we may be able to find savings in these 

funds that go to some of these organizations? 

Ms. TIGHE. Well, yes. We have had a number of investigative 

cases already. Probably since the last few years we have opened 56 

charter school investigations; we have had recoveries so far of 

about $10 million. The deputy secretary was correct when he said 

that part of the problem is that there are a number of authorizers 

in every State and they vary, and the level of oversight varies wildly among States, and that, I think, lies where some of the problems 

are. 

Chairman ISSA. I thank the gentleman. A good line of questioning. 

We now go to Mr. Mica of Florida. 

Mr. MICA. Thank you, Mr. Chairman. 

Secretary Porcari, in the recent legislation Congress passed, 

known as MAP–21, the transportation reauthorization, we mandated the consolidation or elimination of some 50 Department of 

Transportation programs. Can you tell me how many positions 

have been eliminated and what taxpayer dollars we can expect 

from that consolidation or elimination of programs? 

Mr. PORCARI. It is a very good question. First, we are in the process of the consolidation right now and, as you know, there are specific MAP–21 requirements for doing so. 

Mr. MICA. Well, can you give us an estimate? Is it going to be 100 positions, 500 positions, and will it save $1 million, $10 million? 

Mr. PORCARI. Although the programs have been consolidated, the 

need for oversight and the implementation of the funds has not 

gone away. We will be redeploying the personnel in what we think 

is the most effective way. 

Mr. MICA. So how many positions do you expect to eliminate? 

Mr. PORCARI. We are currently, through selective hiring freezes, 

trying—— 

Mr. MICA. So nobody? 

Mr. PORCARI. I did not say that. I said through selective hiring 

freezes we are trying to actually—— 

Mr. MICA. Okay. And the other thing I hear, too, from outside, 

talking to our DOTs, people are just trying to justify their continued existence, and Congress sent a mandate out to consolidate or 

eliminate some 50 programs, but people in the Department of 

Transportation are still making excuses to continue the red tape 

and paperwork; and I haven’t gotten into the devolution on that, 

which again I see the same thing. So maybe you could supply the 

committee with some information on the savings and elimination 

of the programs at a time when we are trying to save money. 

You talked about contract towers. Before I became chairman of 

aviation, back in 2001, there was a GAO study, maybe you remember it, Mr. Scovel, about the operation of contract towers, and it 

came in and said that they cost less and also they had better safety 

operations. Well, after I became chairman, they asked me, the air 

traffic controllers said this is a skewed study, this isn’t right, they 

didn’t ask the right questions. I said, well, give me the questions; 

83 

we will ask them. So we did another study. The study came back 

and it said that for every contract tower we save $1 million and 

they also carefully monitored the safety record safer. 

Now, we have been cutting back, you said, contract towers is one 

of our biggest contracts and we are cutting that back? What is the 

proposal to cut back? 

Mr. SCOVEL. First of all, the objective that we have is to—— 

Mr. MICA. But we are spending $134 million? Is that what we 

are spending? 

Mr. SCOVEL. We want to minimize the inconvenience for the 

maximum number of travelers. 

Mr. MICA. So how big is the cut here? 

Mr. SCOVEL. So the criteria, there are up to 248 towers. 

Mr. MICA. Yes, 248. 

Mr. SCOVEL. Both FAA operated and contract towers in that universe. 

Mr. MICA. And each contract tower operates, well, the price that I had is that the savings is about $1.5 million per contract tower, 

and it is also safer. So you are cutting back substantially contract 

towers. You said this is your biggest contract, right? 

Mr. SCOVEL. Yes, it is one of our biggest contracts. 

Mr. MICA. We had a list from way back where the Clinton administration recommended another 69 towers to be converted. Bush 

never converted them. Don’t you think we should start looking at 

some ways we could save money and make it safer? Mr. Scovel, are 

you familiar with that report? 

Mr. SCOVEL. You are generally correct, sir. 

Mr. MICA. Thank you. That is all I need to say. 

[Laughter.] 

Chairman ISSA. The gentleman can get at least a little bit further than generally correct, if you don’t mind. 

Mr. MICA. Well, really quickly. But would you provide the however for the record? Because I only have about a minute left. 

How much in the rail area are we cutting? 

Mr. PORCARI. I am sorry? 

Mr. MICA. The rail area, passenger rail. 

Mr. PORCARI. On the passenger rail side, actually it is about a $10 million cut. We are cutting back on administrative expenses. 

Mr. MICA. We talked about some things with conferences, et 

cetera. Now, you know, the increases in loss on food service on Amtrak have gone from like $81 million to $85 million in the last fiscal cycle. We could eliminate food service. Do you think anyone 

would starve between here and New York? We did a little analysis 

in the Transportation Committee. Every hamburger was underwritten almost $7. We could stop that loss, couldn’t we? Eighty-five 

million dollars in loss. Wouldn’t that be an area that we could look, 

instead of some of these other essential safety services? Would you 

consider that? 

Mr. PORCARI. And again, the Amtrak cuts are about $70 million. 

We will be happy to have that discussion. 

Mr. MICA. But we could do it just by eliminating food service, 

and the loss would save us $85 million just last year. 

Let me close with IT. That is Mr. Clinger up there. He is the 

former chairman when I came to Congress. It says the ClingerVerDate Aug 31 2005 08:59 May 29, 2013 Jkt 000000 PO 00000 Frm 00087 Fmt 6633 Sfmt 6633 C:\DOCS\80899.TXT APRIL
84 

Cohen Act required, again, that all the agencies come up with the 

enterprise architecture. We have $3 billion in annual expenditures 

for IT in your Department and we have 400 information systems; 

some duplicative, some archaic, some obsolete. And I understand 

something is coming in May, a plan? 

Mr. PORCARI. Yes. 

Mr. MICA. Okay, we are waiting with bated breath. 

Mr. PORCARI. We agree there is significant opportunities for savings there, and that has actually been a subject of management 

focus. 

Mr. MICA. Yield back the balance of my time. 

Chairman ISSA. And now for the rest of your answer, if you don’t 

mind. 

Mr. SCOVEL. Thank you very much, Chairman Issa. 

Just very quickly, Mr. Mica, I couldn’t show my face back at my 

office if I let this go by. You mentioned a GAO study on contract 

towers. In fact, it was an OIG study. We have done two of them. 

You are right, they are less expensive than FAA-operated towers; 

they are as safe as FAA towers and generally accepted with approval by the user community. 

Mr. MICA. I apologize. I meant IG. 

Mr. SCOVEL. Thanks. 

Chairman ISSA. Thought he might. 

And, with that, we go to the gentleman from Massachusetts, Mr. 

Tierney. 

Mr. TIERNEY. Thank you, Mr. Chairman. 

Ms. Tighe, your office did a study, I think, over three years; they found that there was $187 million in Federal student aid funds involved in student fraud rings. 

Ms. TIGHE. Yes. 

Mr. TIERNEY. So I commend you on that. It is a good study, but 

in reality it is about less than one-half of one percent of what we 

spend on Federal aid, and next to what I find on the Subcommittee 

of Oversight for the National Security it is like minuscule on that 

basis. But it is important nonetheless. So if you look at for-profit 

institutions in the higher education field or whatever, I have some 

statistics here. Ninety percent of their revenues come from taxpayers. 

Ms. TIGHE. That is correct. That is the limit. 

Mr. TIERNEY. Ninety percent in the form of Federal financial aid, 

Pell grants, student loans, GI bill funds, Department of Defense 

tuition assistance. They have about 10 percent of all student enrollment, but they take up about 25 percent of all financial aid dollars 

that we spend. The Senate Health, Education, Labor and Pensions 

reported, for 2009–2010, they got $32 billion of taxpayer money on 

that. 

That is a lot. We have had some problems with over-pricing tuition and predatory recruiting practices, things of that nature, but 

have you looked at them with respect to whether or not they are 

at greater risk for these fraud rings than some of the other institutions? 

Ms. TIGHE. Where we have seen the greater risk is the low-cost 

institutions, which is primarily community colleges. Now, there are 

for-profit schools. For example, University of Phoenix, that operates 

85 

a community college component called Axia College, which is a little bit lower cost, has seen a number of problems with fraud rings. 

It is the lower cost institutions, primarily, although not exclusively. 

Mr. TIERNEY. Can you explain why that is? 

Ms. TIGHE. Absolutely. 

Mr. TIERNEY. You have so many more dollars in these programs 

going to one set of institutions and less going to the other, so what 

is the distinction? What invites them in? 

Ms. TIGHE. It is not really a function of dollars, I agree with you 

on your statistics. But the problem with fraud rings is it is all 

about what comes back to the so-called student. So when you sign 

up online, online you have invisibility to your institution. So they 

sign up for classes, they apply for student aid; then the community 

college, for example, will take back from the Title IV funding. Say 

they receive a Pell grant of $5,000 because I am going to put zero 

income on my application. Well, what happens is the community 

college will take its, say, $600 for a semester of classes and it will 

remit the rest to you for room and board and books and other expenses related to education. 

The problem we see for distance education is why are we funding 

room and board in those kind of circumstances? All of that grew 

up when brick and mortar schools, where you go on campus, you 

live there, and you need to pay room and board. You do not necessarily need to do that in distance education. 

There is a restriction on the old correspondence schools. Remember those? You do not get room and board for correspondence 

schools. 

The post-9/11 GI bill done by the Department of Defense eliminates significantly living expenses. 

So that gives you money that goes back to the bad guys. So all 

they need to do is get a bunch of their friends or inmates in prison 

institutions to apply for student aid, and then they kick back some 

of that money to the ring leaders. 

Mr. TIERNEY. So, Mr. Miller, that raises a good question. What 

are we doing about that? 

Mr. MILLER. Generally on the issue of how do we address these 

fraud rings, what we are finding is, in large agreement working 

with the IG and following up on their recommendations to take actions, you will see they break down in a series of there are some 

system changes we can make. 

Mr. TIERNEY. Like what? 

Mr. MILLER. Like there are statistical models on the front end, 

through the application, through the FAFSA, of which, again, it is 

not a few, it is about 60 percent of eligible recipients go through 

the FAFSA. You can put flags in if there is a pattern that we think 

looks like suspicious behavior; you can basically require more personal identification to go on through the application process, would 

be an example. Some of these, however, require statutory changes. 

So there are things that require statutory changes that, if we are 

really going to change some of the eligibility requirements, that requires actually Congress to act. 

Mr. TIERNEY. Are you making those recommendations to Congress? 

86 

Mr. MILLER. That is something I will work with Congress and 

pursue what we think is kind of the right process. And in the middle there is regulatory changes that we are also making to address 

this. We go to negotiated rulemaking and, again, it is a very public, 

regulatory process. 

Mr. TIERNEY. So could you provide to this committee the recommendations that you have made for statutory changes and the 

recommendations that you are making for rule changes? 

Mr. MILLER. Yes. There will be a process by which, for negotiated 

rulemaking, we are starting with hearings. 

Mr. TIERNEY. Can you provide for us what it is you are doing? 

Just give us an update on exactly what requests you are making 

for rule changes and what you recommend to Congress we change 

in the statute. 

Mr. MILLER. Of course. I just want it to be clear, though, part 

of the hearings in the regulatory process is to not in fact, we have 

to honor the process, which says we cannot have a prescribed prescription even before we start the negotiated rulemaking process. 

It is meant to be informed by the public. 

Mr. TIERNEY. Okay. 

Mr. MILLER. So at the time, then, that the agenda gets set, we 

would obviously be happy to share that with you. 

Mr. TIERNEY. So you already have some idea of what you think 

ought to be changed in the law, so you can give me that part at 

least, right? 

Mr. MILLER. We have an understanding of the issue. And then 

the question is how do we engage on what the appropriate—— 

Mr. TIERNEY. So you have come to no conclusion yet as to what 

changes in law may be required to be useful? 

Mr. MILLER. No, that would be premature at this point. We understand there is a problem and we understand there are different 

ways to address the problem, and coming up with the specific statutory or legislative solution, we are not at that point. 

Mr. TIERNEY. Ms. Tighe, can you help us? 

Ms. TIGHE. Well, I think that the primary statutory change we 

recommended was the change to the cost of attendance. I think 

there has been some modest movement in the Senate through the 

appropriations bill for this year that would look at Pell grants, but 

I would urge Congress to look at it as a total package, of not just 

Pell, but also the loans that one can get. 

Possibly just looking at Pell could lead to a somewhat perverse 

situation where a financial aid administrator would do two calculations for cost of attendance, one for Pell and one for loans, and a 

student who is disadvantaged or otherwise might get more of a Pell 

might end up borrowing more. So we want to avoid that. 

But I don’t know that the Department has put in concrete fashion any kind of proposal to change the cost of attendance. 

Chairman ISSA. Mr. Tierney, if you would summarize. 

Mr. TIERNEY. Thank you. 

Do you have any written report with respect to this, Ms. Tighe, 

that you want to draw our attention to? 

Ms. TIGHE. Well, we did do a written report on the fraud rings 

that I talked about and we did make that recommendation. 

Mr. TIERNEY. You make that recommendation? 

87 

Ms. TIGHE. Yes, we do. 

Mr. TIERNEY. Thank you. 

Thank you, Mr. Chairman. 

Chairman ISSA. I would like to thank the gentleman. 

I might remind all of us that the ranking member and I, in the 

last Congress, sponsored the Data Act, which passed, that would 

have changed recipient reporting, would have changed a lot of the 

databases on which these kinds of investigations go. 

I am not sure that you can use, but, Mr. Miller, the Recovery 

Act, the so-called rat board, has been extended by this committee’s 

pushing and acting, and I might suggest that what you are trying 

to find, you may still be able to use that asset that former IG 

Devaney set up to do some modeling of what could be done on a 

broader basis; and we certainly would encourage that, and if you 

need support from us, we would provide it. 

With that, we go to the gentleman from Texas, Mr. Farenthold. 

Mr. FARENTHOLD. Thank you, Chairman Issa. 

Back when I was in high school, I was a DJ, and about the time 

I would get sick of a song is about the time people would start to 

know what the song is and start to like it. I am kind of getting that 

same feeling with a lot of this talk about sequestration. A lot of the 

American people, busy raising their families and working, are really catching on; and, to me, I think they are seeing that this is looking a whole lot like a manufactured crisis with people screaming 

that the sky is falling. 

If my personal budget were being sequestered and I were in your 

place, testifying before this committee, I might choose not to pay 

my mortgage and say, oh my God, because of sequestration, my 

children are going to be homeless; or I could choose not to eat out 

as often and say, oh, my family is going to go hungry, or heaven 

forbid we go look for a box of noodles in the pantry, macaroni and 

cheese. Actually, our kids would probably prefer macaroni and 

cheese to some of the places I take them. 

But here is what I am getting at with that. I really do feel like 

this is a lot of posturing, and I want to ask the two secretaries 

here. If I were to come to you and say cut 2 percent from your 

budget, do whatever you need to do to cut 2 percent, 2 or 3 percent, 

minimize the effect on safety, minimize laying employees off. You 

have cart blanche to fix your budget to cut 3 percent. Could you 

do it? And we will start with Mr. Miller. 

Mr. MILLER. I think, candidly, we struggle with that. The money 

is in money for poor kids, money for students with disabilities, 

money for kids on Indian reservations. So it is like what child is 

more or less important or what services are more or less important? 

Mr. FARENTHOLD. But there is no 3 percent in overhead. There 

is no 3 percent in waste, fraud, and abuse. There is no 3 percent 

in something maybe we don’t need to do. 

Mr. MILLER. Ninety-nine percent of our budget is in program dollars, it is in direct program dollars; it is not in overhead. 

Mr. FARENTHOLD. And there is no waste, fraud, and abuse in any 

of those programs, despite these fraud rings we are hearing about? 

So you are telling me you couldn’t cut 3 percent from the budget 

if I asked you to. 

88 

Mr. MILLER. The sequester is forcing us to cut. If you said could 

you find cuts that would not adversely impact education in students who are struggling right now, who are at the least advantage 

and who are struggling to participate in our global economy because they don’t have the skills, I would say no. I would say making those kind of cuts is going to have an adverse impact that we 

will regret. 

Mr. FARENTHOLD. All right. I just can’t believe there is not 3 percent there. 

What about in transportation, Mr. Porcari? 

Mr. PORCARI. Thanks for asking. Again, what the sequester is in 

a part of a fiscal year, because three-quarters of our Department 

is exempt from it, is the equivalent of a 90 percent cut. 

Mr. FARENTHOLD. All right, so if I gave you carte blanche, could 

you do it? 

Mr. PORCARI. Of course we can do it. It is a question of what the 

impacts are. And that is the process we are going through right 

now. I would point out the easy stuff has been done. Since 2008, 

for example, within the Federal Aviation Administration, we have 

cut $510 million out of the cost basis by reducing travel by 30 percent, IT savings of $36 million, $100 million from innovative contracts. 

Mr. FARENTHOLD. I think Mr. Mica came up with a nice laundry 

list of things we could still continue to look at and I find it very 

difficult to believe that just with the increased cost of gasoline, 

many families have had to squeeze 3 percent out of their budget 

now, and I just don’t think it is unreasonable that we would be 

asking. And yet we, in the House, have come up with two different 

replacements for sequester that aren’t as painful, and I get at least 

you could find something, Mr. Miller maybe not. 

I do want to go on to the inspector generals because I have an 

important question for them. I am subcommittee chairman on this 

committee of Post Office, Government Workforce, and the Census, 

and recent news reports in The Washington Post suggest that 

agency managers could be able to choose favorites among their employees to spare them from furloughs in sequestration. 

Let’s ask Mr. Scovel and Ms. Tighe, can you commit to us that 

the IG’s office will be looking to make sure that whatever furloughs 

come are handled in a fair and appropriate manner, and we don’t 

have political reprisals or choosing of favorites? 

Mr. SCOVEL. We will investigate every allegation, and we have 

a hotline center that is equipped to take those allegations and to 

ensure that they are inquired into properly. 

Mr. FARENTHOLD. Ms. Tighe, is there a similar situation in education? 

Ms. TIGHE. Yes. 

Mr. FARENTHOLD. All right, great. 

I actually only have 25 seconds and I had a couple of questions 

on improper payments, so I am just going to yield back the remainder of my time. 

Chairman ISSA. If I could have that time. 

Mr. FARENTHOLD. It is all yours, Mr. Chairman. 

Chairman ISSA. If you, Mr. Porcari, and you, Mr. Miller, if you 

went to your workforce and told them that they had a hypothetical 

89 

choice of taking that furlough, that 5 percent, effective, pay cut or 

finding a way to come back to you and show that they could do the 

same amount of work with 5 percent less employees next year, not 

this year, but in the next fiscal year, would you predict that your 

workers would come up with organizational changes, your middle 

managers with organizational changes, that would allow you to 

keep the pay and benefits where they are and do more or do as 

much with slightly less people? Just a prediction. 

I think that is what Mr. Farenthold was really getting to, is isn’t 

there enough organizational lethargia that builds in that, in fact, 

almost any workforce faced with reducing by attrition and other 

means or taking a pay cut, they will find a way to do better in efficiency? 

Mr. PORCARI. Most of the savings since 2008 that I was just outlining have actually been suggested to us by our employees. We 

have a smart, very committed cadre of public servants. They will 

continue to find savings and I would submit, Mr. Chairman, they 

would do that with or without a sequester scenario. 

Chairman ISSA. Mr. Miller, you would also agree that our workforce is smart and innovative, and, given the right motivation, can 

help us in this process? 

Mr. MILLER. And I would argue that they have been, like what 

Mr. Porcari has stated. I think, frankly, we have asked them, even 

today, to take on more and more responsibilities that they are 

forced, and have been over the last several years, to be more innovative with their programs. 

We are asking them to take more accountability for closing out 

audits. We are asking them to take more responsibility for providing real effective assistance to our grantees; not just about getting the money out, but making sure it is having an impact. So we 

are asking more and more of our employees each and every day. 

So to say, yet again, can you do more, I think our employees would 

welcome it, but they would not see that as a new request. 

Chairman ISSA. Thank you. 

We now go to the gentleman from Nevada and thank him for his 

patience. 

Mr. HORSFORD. Thank you, Mr. Chairman. 

Prior to coming to Congress, I served in the State Senate in Nevada, and over the last few years we experienced tremendous budget shortfalls. It required both sides of the aisle to come together to 

find a balanced approach to pass a balanced budget, which is what 

we have done. 

I believe that the Federal cuts, whether under sequestration, 

under what occurred in the prior fiscal year, or what may come, 

needs to be put in context with the cuts that State and local entities have already incurred. In Nevada, in the Department of Education, 70 percent of our department’s budget are federally funded 

positions, and that is on top of the reductions that were made by 

our State agencies. 

So I am a bit perplexed, Mr. Chairman, that the line of questioning by some members on the other side somehow is pointing 

the blame at our Federal agency heads, rather than taking the responsibility as members to do our job, to come up with the policies 

90 

that we need to arrive at a balanced approach, which is what a lot 

of State governments have been doing for many years. 

Now, I respect the professionals that are here today, and your 

viewpoints, and I specifically want to ask Mr. Porcari on the FAA. 

I am very concerned about air traffic control. We have 40 million 

visitors that come in and out of our major airports in Las Vegas. 

So can you elaborate on what the impact of the furloughs were that 

occurred in 2011 on your employees? We focused a lot on what the 

new impact would be, but what already occurred? 

Mr. PORCARI. To the extent that we have had furloughs in the 

past, they have not been nearly as broad as what is being proposed 

under sequestration. I mentioned that the vast majority of the 

47,000 FAA employees would be subject to furloughs. That is because 70 percent of our operations account is actually the cost of 

people. And those people are out there, overwhelmingly, in the 

field; not in Washington, out there in the field. Unlike anything 

that has happened in the past, it is going to have an across-theboard impact on operations. What we are trying to do is minimize 

the impact on the maximum number of people. 

Mr. HORSFORD. Again, I respect the position that FAA employees 

are definitely going to feel the brunt of this under sequestration. 

What about the average American traveler, what are they going to 

experience? 

Mr. PORCARI. If you are traveling by commercial airline and you 

are generally going, if you are not going point-to-point, if you are 

going through a hub airport, which the bulk of passengers are, you 

are likely to experience delays. It will be significant delays at some 

times. If you are a general aviation user, you will see a number of 

places where control tower services, controlled air space was formerly provided, but will not be either midnight to 8 or 24 hours, 

and you will operate in what we believe is a safe but different operating environment. 

Mr. HORSFORD. And I think, again, this is an important aspect 

because, again, sometimes people talk about Federal employees as 

some nondescript bureaucrat that is not performing an essential 

function. We are talking about air traffic safety. Has anyone forgot 

about 9/11 and the effects of not having the top-notch safety that 

we expect as the traveling public? And what will that cause? 

There is a report that was issued by the Aerospace Industries Association that said the combined reduction in passenger and commercial air traffic resulting from the sequester could lead to anywhere from $10 billion to $20 billion in reduced economic activity 

and a job loss of upwards of 132,000 jobs. 

In Nevada, we can’t afford any more job losses. We are trying to 

get our economy jump-started and moving in the right direction, 

and we need to work in that regard. So is this study accurate? 

Mr. PORCARI. We have not independently verified that study, and 

there are several others out there that have broadly similar conclusions. What we do know is that aviation at large is one of the driving forces behind the economy, whether it is passenger commercial 

air traffic, whether it is aircraft production, whether it is the innovation that happens on the electronic side, on the avionic side 

every day. We know it is one of the drivers of the economy. There 

91 

will clearly be some impacts on the economy, broader impacts from 

these sequestration cuts. 

Mr. HORSFORD. Thank you. 

Mr. Chairman, I just want to close by saying I want to work with 

anybody that has a good idea for how we can identify targeted cuts 

in Federal programs that aren’t efficient, that can be improved. But 

to single out these across-the-board cuts that we know are not good 

for our economy, that are not good for public safety and are ill conceived, we just have to move in a different direction. 

Mr. FARENTHOLD. [Presiding.] Thank you, and the gentleman 

yields back. 

We will now go to the gentleman from Gainesville, Georgia, Mr. 

Collins. 

Mr. COLLINS. Thank you, Mr. Chairman. I appreciate it. 

One of the things that comes when you are new and you are sitting on the front row, you get to listen to the entire hearing a lot 

of times, especially when you are trying to go back and forth. It is 

amazing to me how many things we have talked about that had absolutely nothing to do with this hearing, in all fairness. I mean, we 

have talked about sequestration; we have talked about how it is 

going to affect; we have talked about other things. 

I will tell you what is interesting to me, if you want to talk about 

sequestration, is that there are open and unimplemented IG recommendations could have saved the taxpayers $67 billion over the 

last few years. Sequestration is $84 billion, $85 billion. We haven’t 

talked about that. There are savings that can be had. 

I want to tell you just a quick story to illustrate some questions 

that I have. A few years ago I pastored, if you know my background, if you don’t, I pastored a church for 11 years, I felt led to 

go back to law school, Grayson Law. It was a strange thing in my 

life. But we looked at it and I said, the only way I can go back at 

38 years old is we have to go full-time, to get this over with. 

So my wife and I, we sat down and we said I am going to be losing an income, because I couldn’t work and go to law school at the 

same time. So we looked at all of the things, from buying sandwich 

meat, from buying other things, that we were going to take lunches 

and cut back. I have three children. What was not discussed was 

taking a kid and selling them on eBay. We looked at what we could 

do. 

When I look at this right here, and I served on the Georgia legislature as well, which, by the way, we had, between Federal cuts, 

we had $5 billion in cuts, my friend. In Georgia, what we have 

done is we cut our budget and we lowered taxes and we have attracted business. So it can be done. The problem I am having right 

here is that there seem to be IGs, and we talked about the cuts 

and my friend across the aisle talked about the cuts for the IGs 

themselves. Well, at this point in time, you are not listening to 

them anyway. What is the problem? You have to have a balance 

here. 

I go back to the $67 billion that is left on the table that we are 

not looking at, that we are not talking about. 

Mr. Porcari, the cuts that you were discussing is your pay cuts 

with three furlough days, correct? 

Mr. PORCARI. Yes. 

92 

Mr. COLLINS. Okay. One of the other things, and I believe it was 

my friend from Missouri across the aisle that talked about the 

rhetoric from both sides in dealing with the inaction in Congress. 

I think there is also just an understanding here that there is a 

frustration in lack of sort of common sense in planning. 

Mr. Miller, you said this earlier. And I just going to assume it 

was your statement here, and not assuming it to anything else, but 

you said that we just thought it wasn’t going to happen. That is 

the problem in Government right now, this Pollyanna approach 

that it wasn’t going to happen. But it was law. It was something 

that was coming and now it is here. I think the frustration that 

most people like myself, who had to make plans in going forward, 

was that you are not planning. 

My question also goes back to the political nature of this. Mr. 

Porcari, you have done wonderfully with your talking points from 

the Department of Transportation. I remember Secretary LaHood 

saying the exact same things just the other day. You have done 

well with that, and I understand that. But my question is you mentioned New York, Chicago, and San Francisco, because those are 

the high-profile airports. Just curious, why didn’t you mention Atlanta, which is the busiest airport in the world? Because it doesn’t 

play as well? 

Mr. PORCARI. No. 

Mr. COLLINS. Because you don’t get the bang for the buck from 

New York, Chicago, and San Francisco? 

Mr. PORCARI. Because I could only rattle off three or four at a 

time. 

Mr. COLLINS. So we leave off the largest in the Country? 

Mr. PORCARI. Not at all. There will be substantial impacts in Atlanta. 

Mr. COLLINS. I appreciate that. Next question. In planning furlough days, which a lot of governments in Nevada and a lot of 

other places have had to do, so you are telling me you cannot plan 

well enough that you cannot stagger your furlough days in such a 

way that you would have to close a tower? 

Mr. PORCARI. We will be staggering the furlough days. In other 

words, the employees will have to take one furlough day per pay 

period. 

Mr. COLLINS. But you are telling me that you cannot stagger 

them in such a way and make them effective in such a way that, 

as your comment was in Chicago, closing the north tower? 

Mr. PORCARI. That is correct. In some of our major operation centers, and remember, 84 percent of our operations employees are 

outside of Washington in our tech center. 

Mr. COLLINS. And how long have you had to think about this? 

Mr. PORCARI. We have been working on this for months. 

Mr. COLLINS. And I think that is the problem that I am coming 

to. When you have the IG’s recommendations and you have these 

that have been left on the table, that are currently getting around 

to, not getting done, you have money left on the table but, yet, in 

a hearing like this, in a time when there is now real cuts going on, 

and that is part of the problem, it is now time to squeal and say, 

here are the problems that we are having. 

93 

I will leave with this last story. In Georgia, a few years ago, 

when the cuts started first coming, we were trying to look at all 

of our departments. One of the areas that was hit was our regents, 

which was our higher education, which were taking a direct hit. 

There became a saying that we were going to raise tuition 30 percent, and then one of our presidents actually said, who actually 

was over something, he said we are going to have to cut the cooperative extension program; in other words, we are going to cut 4–H, 

knowing good and well that 4–H was one of the least things that 

would have needed to be cut. Instead, what he did was generate 

700 cards to every person, from crayons to pencils from every child 

across the State that said don’t cut my 4–H program. 

What the American people are frustrated here is they don’t understand an out-of-balance budget, they don’t understand deficit reduction and they don’t understand $67 billion left on the table. 

That is what I don’t understand and that is what the American 

people don’t understand. And that is the only problem I have. 

Mr. Chairman, I yield back. 

Mr. FARENTHOLD. Thank you, Mr. Collins. 

We will now go to the gentlelady from New York, Mrs. Maloney. 

Mrs. MALONEY. I thank the chairman for yielding and I thank all 

of the panelists for being here. I would like to address my questions to Mr. Porcari, particularly as it pertains to Sandy aid. I 

know you referenced that in your opening statement, so I, first of 

all, want to thank all of my colleagues that voted for the Sandy aid 

for New York, New Jersey, and 21 other States that were impacted. 

Mr. Porcari, the cuts to the Department of Transportation under 

sequestration would have a devastating impact on Hurricane 

Sandy relief efforts in New York and New Jersey, and I would like 

to ask about two key DOT programs, the Federal Highway Administration Emergency Relief Program and the Federal Transit Administration’s Public Transportation Emergency Relief Program. 

Each faces sharp cuts under sequestration, is that correct? 

Mr. PORCARI. That is correct. 

Mrs. MALONEY. Now, the Emergency Relief Program, which provides relief funds to repair Federal highways and bridges, they face 

over $100 million in cuts under sequestration, is that right? 

Mr. PORCARI. That is right, $101 million. 

Mrs. MALONEY. One hundred and one million dollars. And will 

the Federal Highway Administration’s Relief Program be required 

to grant less money to State departments of transportation than 

has already been approved for Sandy relief? Will this directly affect 

Sandy relief? 

Mr. PORCARI. We have made provisions with the Federal Highway emergency relief money that it will not affect Sandy relief. 

Mrs. MALONEY. Wow! 

Mr. PORCARI. As I mentioned, part of the appropriation actually 

covered previous natural disasters. At least in the case of the Federal Highway Administration, this will not be true in the case of 

the Federal Transit Administration, we will not be impacting 

Sandy relief. The Federal Transit cut of approximately $544 million 

will, unfortunately, directly impact the rebuilding post-Sandy. 

Mrs. MALONEY. Well, that is a problem. New York, as you know, 

is a transit city. We are probably the largest transit city in the 

94 

world in terms of how we move our people. Will that be a $544 million cut to Sandy, or how much will it affect the transportation? 

Mr. PORCARI. That transit cut of $544 million will be towards 

Sandy aid. 

Mrs. MALONEY. Whoa, whoa! 

Mr. PORCARI. And if I may point out, one of the important things 

that Congress approved in the Sandy aid is mitigation, in other 

words, rebuilding to a more resilient standard. There have been 

two storm events in the last 18 months that have flooded parts of 

the transit system, for example. 

Mrs. MALONEY. Five stations in my district, five subway lines. It 

is huge. 

Mr. PORCARI. And it is those resiliency efforts that will bear the 

brunt of that cut. 

Mrs. MALONEY. Wow. Now, is it disproportionate to Sandy than 

the rest of the Country? 

Mr. PORCARI. This transit cut applies only to Sandy aid. 

Mrs. MALONEY. Only to Sandy aid. Oh my word. Oh, no. Is there 

any way we can change that? 

Mr. PORCARI. If it is the will of Congress, obviously. 

Mrs. MALONEY. Well, why were we able not to sustain the cuts 

in the Emergency Relief Program, but the cuts went through in the 

transit program? I am just curious. How was that decision made? 

Mr. PORCARI. Well, the Federal Highway Emergency Relief funds were a little over $2 billion, and of that the cut, as I mentioned, 

was $101 million, which left a sufficient balance to not only take 

care of all the highway-related Hurricane Sandy relief that we believe will be required under the program, but to cover some of the 

existing priorities as well. 

Mrs. MALONEY. And then this other $544 million is only to the 

transit money for Sandy? 

Mr. PORCARI. That is correct. 

Mrs. MALONEY. Wow. Who made that decision? Did you cut transit across the Country or just transit to New York? 

Mr. PORCARI. That was a specific sequestration cut. We did not 

have any flexibility in that. 

Mrs. MALONEY. Okay. Thank you for that information. 

I also wanted to talk about a flight from the great State of New 

York killing a number of people, including a very dear friend of 

mine. In February of 2009, Flight 3407 crashed on approach to Buffalo. It was very tragic. Both pilots, both flight attendants, and 45 

passengers were killed. And the National Transportation Safety 

Board stated as follows, ‘‘The pilots’ performance was likely impaired because of fatigue.’’ And both of the pilots operating the 

flight were found to have ‘‘commuted hundreds of miles prior to the 

flight.’’ 

In December of 2011, the Department of Transportation issued 

a new rule, known as the Pilot Fatigue Rule, to emphasize the responsibility of pilots and airlines to ensure that pilots are fit to fly 

when they report for duty. However, the new rule does not restrict 

the amount of commuting the pilots may undertake on their way 

to the airport, and I would like to ask, who would be the proper 

person, Mr. Scovel? Who would be the proper person to answer 

this? 

95 

Have you recommended that the FAA ensure that the collection 

of data regarding domestic and commuting link for all part of 121 

flight crews? And why did you make this recommendation? Were 

you the one who made the recommendation, Mr. Scovel? 

Mr. SCOVEL. We did, Mrs. Maloney. Thank you. 

Mrs. MALONEY. Okay. Why did you make the recommendation 

and what type of study do you feel is required to understand the 

risk of fatigue associated with pilots’ commute? 

Mr. SCOVEL. We made that recommendation, in part, because of 

just what you said, of NTSB’s finding. We found that most significant and eye-opening in terms of when we looked at the FAA’s 

available information on pilot domicile and commuting, it didn’t 

exist. 

So we thought it would be helpful to the agency in their safety 

oversight responsibilities to at least begin to collect that data; not 

to jump to the conclusion that regulation of pilot domicile or commuting practices should be embarked on, but in light of the dearth 

of the data, NTSB’s concern, the fact that the National Academy 

of Sciences, as well, did a study and found a lack of available data, 

we thought it would behoove the safety regulators to take a look. 

Mrs. MALONEY. Well, Mr. Porcari, can I ask you very quickly do 

you think that the amount of review of existing studies and literature is sufficient? 

Mr. PORCARI. We are not satisfied with the data that we have. 

Mr. Scovel mentioned the National Academy of Sciences’ study. 

There was also some work done by our own FAA Aeromedical Institute on cabin crews that we used as a proxy for flight crews. In neither case did it draw a direct link between commuting time and fitness for duty, which is the responsibility of the air crew. But we 

all know that we can benefit from better data on this. 

Mrs. MALONEY. Mr. Scovel, do you believe the FAA’s examination 

of existing literature is enough? 

Mr. SCOVEL. Not yet. 

Mrs. MALONEY. Why not? 

Mr. SCOVEL. The FAA owes us their response, and I believe it 

was due, in fact, at the end of last week, the 28th. We haven’t yet 

seen it. I am told informally that it is on the way. 

Mrs. MALONEY. Okay, I would like to ask the chairman if we 

could request that we get a copy of that. That is important to me 

and the families that lost their loved ones, and airline pilots and 

everyone else. 

Deputy Porcari, can you commit today to make an effort to collect 

and analyze primary source data on this issue to determine whether additional steps should be taken to ensure flight safety? 

Mr. PORCARI. We are looking right now at what can be done in 

terms of reliable data, and what I can commit to you is that safety 

is our number one priority. We know that this is a real frustration 

of all of us and we need to understand this better at this point, so 

I would like, if I can, for the work that the FAA is completing now 

to speak for itself as the next step in this process. 

Mrs. MALONEY. Well, thank you. My time has expired, regretfully. I have a lot of other questions, but thank you so much for 

your time and testimony. 

96 

Mr. FARENTHOLD. Thank you, Mrs. Maloney. We will do a quick 

second round. I know the ranking member has a couple questions 

he would like to ask and I just have one or two I would like to ask, 

so we will do that, if the panel will indulge us for a moment. 

Mr. Scovel, I read through your testimony and listened to what 

you had to say. The bulk of the IG recommendations out of DOT, 

rightly so, deal with safety issues, bridges in particular. I know in 

the district I represent, we have an aging bridge that we are looking at $600 million that we are going to have to replace, and that 

is not uncommon around the Country. 

What we didn’t really talk about and one of the purposes of this 

hearing was where we can find savings to avoid having to do an 

additional tax increase to maybe offset some of the things with sequester. In some of the unimplemented reports from your Department, did you find some cost savings? 

Mr. SCOVEL. Of course we did. Thank you, Mr. Farenthold. Last 

year we had financial recommendations totaling $1.7 billion for the 

Department. The year before that, $1.7 billion for the Department. 

That is not to say that all of those financial recommendations 

translate immediately to cost savings, because they do not. 

For some of them, for instance, we would expect that our recommendations, for instance, for the enterprise architecture or FAA 

facility consolidation and realignment, they are forward-looking. 

We would expect that they would lead to better decision-making 

and ultimate cost savings over the course of a long process to fully 

implement the program. 

Mr. FARENTHOLD. Mr. Porcari, let me ask you another. We heard 

a lot of testimony about NextGen in aviation. I have the privilege 

of also serving on the Transportation and Infrastructure Committee Aviation Subcommittee, and we have heard a lot about the 

delays associated with NextGen. 

I also have the opportunity to speak to various folks within the 

airline industry on my commutes back and forth to Texas, and I 

hear time and time again that not only are these delays costing the 

airlines efficiency and money, but they are potentially costing us 

money. Do you have any idea how much we would have saved if 

we would have gotten NextGen done anywhere near on time? 

Mr. PORCARI. We can get you some estimates of the accelerated 

benefits, but I will tell you just in one piece of it, using required 

navigation performance in Seattle-Tacoma Airport, where it is in 

place right now, it is saving the airlines a significant amount of 

money. It is also the equivalent to taking a couple thousand cars 

off the road in terms of environmental safety. 

Mr. FARENTHOLD. And I know they are struggling getting a route 

from Houston to Corpus Christi that has all been done. There is 

some sort of other regulatory approval, I think environmental. 

Mr. PORCARI. The Houston Metroplex initiative is actually one of 

the marquee early short-term benefits of NextGen. I have been 

down to Houston to actually meet with the interdepartmental staff 

working on it; they take great pride in getting the approvals concurrently, in designing the approaches and the other requires parts 

on an accelerated basis. They are literally committed to shaving 

years off of what would be a multi-year process. 

97 

Mr. FARENTHOLD. And is there anything that this committee can 

do to help expedite that process? 

Mr. PORCARI. Congress has been very supportive, historically, of 

NextGen, which is a multi-year system of systems that, quite 

frankly, is very expensive. It is that continued year-to-year commitment so that we can plan ahead, so that the contracting community 

and the airlines can be confident to make those investments. That 

is the single most important thing, the consistency and predictability of it. 

Mr. FARENTHOLD. And having had the privilege of touring some 

FAA facilities, you have some fine men and women working there, 

but you have 1950s technology in there, and I think the traveling 

public would be better served, as well as the environment and a 

vast variety of other factors, if that were taken care of. 

Mr. PORCARI. Absolutely. 

Mr. FARENTHOLD. And I will yield back the remainder of my time 

and recognize the ranking member for his second round of questions. 

Mr. CUMMINGS. Thank you very much. 

First of all, I want to thank you all for being here, and thank 

you for your testimony, it has been extremely helpful. It is clear 

that more needs to be done. These recommendations need to be followed through, and I would hope that both Departments would act 

on them swiftly. 

Certainly, a lot of the discussion has gone to sequestration because that is what we are dealing with, and we have heard Mr. 

DesJarlais say there is more to come. He made that very clear. 

More cuts to come beyond sequestration. 

So I guess I am trying to figure out, as I listened to you, Ms. 

Tighe, and you, Mr. Scovel, I was saying to myself, you know, the 

IG offices have tremendous credibility. As a lawyer, I tremendously 

respect, and as a legislator I respect what you all do. And as you 

talked about, I think it was you that said there was some criminal 

investigation that you couldn’t get into or whatever because of personnel. I wish that there was a level of trust with regard to other 

Federal employees outside of your agencies. 

I was telling a group on the Floor the other day, when they were 

talking about Federal employees, it was mentioned that Federal 

employees only leave at a .4 percent rate, Federal Government; in 

other words, their exit rate is not as extensive as the private sector 

because they have great benefits and because they have all this 

pay. And I tried to tell them if they listened to some Federal employees and asked them why they do what they do, in most instances it is because they want to help the public, period. It is not 

about pay. 

So when we look at people losing their jobs, and there are going 

to be some jobs lost; when we look at people taking furloughs, like 

the lady that I met the other day who is going to lose $800 a 

month, when she has two kids, trying to put one through college; 

that is pain. And we may act like it is not a big deal, but it is a 

big deal. 

The thing that I guess I am really concerned about is I want us 

to make sure that when we say that there is going to be impact, 

that is true; in other words, that if there is something else that can 

98 

be done to avoid certain things, I want to know that those things 

are being done. But I guess we get, with situation like you, Mr. 

Miller, when you talk about a Sophie’s choice, where you have disadvantaged kids trying to make it, struggling, trying to be all that 

God meant for them to be, and they can’t get there when you are 

cutting things like WIC and all kinds of things. I know WIC is not 

your piece, but you know, the aid, Title I and all that. That is kind 

of tough. 

So, Mr. Porcari, coming back to you, you said that three-fourths 

of your budget is exempt basically, is that what you are saying? 

Mr. PORCARI. That is correct, 74 percent is exempt. 

Mr. CUMMINGS. So this is my question. When I look at BWI in 

Baltimore, they already have, according to our account, about 

258,000 commercial flights a year. I am trying to figure out that 

backup, at some point something has to give. It seems like they are 

already flying from 5:00 in the morning to 1:00 at night. So I am 

trying to figure out what gives. Are you following what I am saying? 

Mr. PORCARI. It is an excellent question, Mr. Cummings. Flight 

delays is like throwing a rock in a pond; it ripples through the entire system. So you may have flights taking off late as part of it; 

you may have cancellations. Because most passengers are moving 

through a hub and spoke system, they may miss their connections. 

Those connections are very tightly tied together in banks. So we 

can’t fully quantify what all the impacts are. We believe that they 

will be significant. 

It is also important to point out that they are cumulative, in the 

sense that your airport experience also includes the TSA delays to 

get through the security line, then the potential flight delays beyond that. 

Mr. CUMMINGS. Ms. Tighe, just one question. Exactly where does 

your responsibility end and theirs begin? For example, you talk 

about possible criminal investigations or whatever, and you talk 

about this money that has been lost, statute of limitations run. 

Where is the line there? You follow my question? 

Ms. TIGHE. No, I understand. Generally, the IG makes recommendations. We are not management; we can’t make management decisions. We make recommendations and the Department 

has to decide how to proceed on those. And it is really their responsibility to execute. If they come up with corrective action which we 

do get a chance to agree on, then it is really up to them to execute 

that. I mean, that is fully in their responsibility. 

Mr. CUMMINGS. The reason why I ask that is when you talk 

about criminal investigations, I am just trying to figure out where 

is that line. 

Ms. TIGHE. Generally, when you talk about criminal investigations, that is purely under my bailiwick, that is not something the 

Department decides one way or another. In fact, I think the secretary, under the IG Act, is specifically prohibited from impacting 

my investigations and what I initiate and what I don’t. I do know 

that, resource-wise, I am going to have to drop numbers over the 

next couple years. Let’s look past this year. I need to drop my numbers. 

99 

Mr. CUMMINGS. When you say drop your numbers, what do you 

mean? 

Ms. TIGHE. In terms of people. Because I have too many people. 

We haven’t had good attrition. And that is maybe a nice reflection 

of we are an okay place to work, but, on the other hand, for a budget it has created some problems. So we have to drop. We are going 

to have to do a buyout and do all the ways the Government has 

to reduce numbers. That is going to mean fewer investigators and 

fewer auditors. And that is fine if that is the decision we make that 

that is how we want to spend our money, but that is one of the 

consequences of, let’s put sequestration aside. We are still looking 

at an era of lower budgets. 

Mr. CUMMINGS. Thank you very much. 

And thank you all very much. 

Mr. FARENTHOLD. Seeing we have no other members waiting to 

ask questions, I would like to take this opportunity on behalf of the 

entire committee to thank our panel for being in front of us. I realize we may not be the easiest committee to testify for. As our mission statement says, it is our solemn responsibility to hold the Government accountable to the taxpayers, and that is what we try to 

do. Chairman Issa likes to refer to us sometimes as the watchdogs, 

so thank you for coming before the dogs. Thank you very much, 

and we are adjourned. 

[Whereupon, at 12:58 p.m., the committee was adjourned.] 

100 


Insert offset folio 43 here 80899.043

~~7')cff~~ #11-1/ 

"Reducing Waste aid Mismanagement: Implementing Agency Watchdogs' Recommendations 

Could Save Taxpayers Billions" 

Committee on Oversight and Government Reform 

Good morning Chairman Issa, Ranking Member Cummings, Members of the 

Committee and witnesses, thank you for having this very important hearing. As a 

teacher, both at a private and public school, for 15 years, I am not surprised by the 

amount of waste and lack of accountability within the Department of Education. Think 

of how much money we could provide to our students, teachers, and communities if 

we weren't wasting it by funneling the funds through the Washington bureaucracy. 

Unfortunately, I am not at all surprised with the lack of accountability in the 

Department of Education. What is the point of audits and recommendations if they're 

never enforced and change is not implemented? 

One thing I've learned in my short time in Congress is that politicians love passing laws 

and agencies love demanding more money, but no one wants to be held accountable 

for misuse and waste. No one wants to be the "bad guy" and demand actual 

accountability. Good intentions seem to have replaced good results at the Department 

of Education. 

Only in government can audit after audit find the same problems and no one is 

reprimanded. Only Congress would continue to fund agencies at higher levels even 

though they have only produced poor results. 

This hearing today will hopefully lead to some major changes, including but not limited 

to, actual procedures that aren't just talked about but also implemented. 

We hear sound bite after sound bite about teachers being laid off, students not 

receiving text books, and special needs students no longer receiving services simply 

because Congress won't spend more. I think this hearing will once again show that 

Washington does not have a revenue problem, but a problem with how money can be 

used effectively. It is time for government to stop pointing fingers at the supposed 

"lack of funding" and instead start looking at how they can produce the best results 

they can with the billions of dollars of taxpayer money they have. 
101 


Insert offset folio 44 here 80899.044

My questions are directed towards Ms. Tighe. 

Questions 

1. With all the waste of taxpayer dollars, the obvious lack of accountability within 

the Department, do you believe the Department of Education should be taking 

on any more responsibilities or administering anymore programs or grants until 

it gets up-to-date on the recommendations coming from your office? 

2. Your testimony referenced one department that "developed an internal action 

plan" to improve its overall audit resolution process. What incentives are in 

place to encourage such responsible behavior, and why did only one office find it 

necessary to develop an action plan? 

3. According to Secretary Duncan, teachers will be laid off as a result of 

sequestration. Do you believe this is the case, or would simply implementing IG 

recommendations ensure teachers can stay at work? 

4. HHS released a report in December about the failure of Head Start. What 

procedures are in place at the Department to amend programs deemed to be 

failing? 

S. You said in your testimony that the Department audits Charter schools in order 

to ensure they are using funds appropriately. Do you do this for public schools as 

well? 

6. It is clear to me there are many procedures in place to ensure wise use of 

taxpayer dollars, but they lack an enforcement mechanism. As the IG, what do 

you need us to do in order to put some actual teeth into the work you do so 

recommendations turn into actual results? 

7. What incentives are in the Department of Education to encourage employees to 

be more frugal with taxpayer dollars in order to get the best bang for the buck? 

8. Do you believe the Department of Education is deserving of all the federal 

taxpayer dollars it receives and what would you recommend to hold Department 

of Education employees and Administrators accountable for taxpayer dollars? 
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Insert offset folio 45 here 80899.045

U.S. Department of 

Transportation 

Office of the Secretary 

of Transportation 

December 21,2012 

The Honorable Darrell Issa 

Chairman, Committee on Oversight 

and Government Reform 

United States House of Representatives 

Washington, DC 20515 

The Honorable Elijah E. Cummings 

Ranking Member, Committee on Oversight 

and Government Reform 

United States House of Representatives 

Washington, DC 20515 

The Inspector General 

Dear Chairman Issa and Ranking Member Cummings: 

Office of Inspector Genera! 

Washington, D.C. 20590 

Thank you for your December 5, 2012, letter requesting that we provide our 

10 highest priority openl recommendations-5 short-term and 5 long-term-to 

improve agency efficiency and reduce waste. 2 You also asked that we describe 

whether and what ways agency management solicits our input about how to improve 

efficiency and reduce waste. 

We continue to support the Department through our audits and investigations as it 

carries out its mission to improve the management and execution of programs and 

protect resources from fraud, waste, abuse, and violations of law. As of 

December 10,2012, we have identified a total of 637 open recommendations, which 

were included in 217 audit reports issued between September 2004 and November 

2012. We considered several criteria in identifying the following open 

recommendations as the highest priorities, 3 including their impact on safety, 

economy, or efficiency; documented vulnerabilities; dollar implications; and the 

ability of the Department to effect change in these programs or areas. 

I Open recommendations include those for which the Department or an agency has either (I) concurred and proposed action 

plans but has yet to complete implementation, (2) completed the planned actions but has yet to provide us with supporting 

documentation, or (3) nonconcurred. 

2 Per your request, we define as short~tenn those recommendations that can be achieved by December 2013 and long-tenn as 

those recommendations that can be achieved after December 2013. 

3 The recommendations we identified as high priority are from reports issued between 2010 and 2012. The order in which 

the recommendations are listed does not indicate any order of priority within those lists. 

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Top Five Short-Term Open Recommendations 

Operating 

Administration 

Federal Aviation 

Administration 

(FAA) 

Open Recommendation 

Ensure the collection and analysis of data regarding 

domicile and commuting length for all Part 121 flight 

crews, SpeCifically, information regarding the number 

of pilots and other flight-crewmembers who 

commute, their methods oftransportation, and the 

distances they commute, should be collected. 

OIG Report 

FAA and Industry Are 

Taking Action To Address 

Pilot Fatigue, but More 

Information on Pilot 

Commuting Is Needed, 

AV-2011-176, 

September 12, 2011 

2 

Pilot fatigue is a longstanding safety issue but was highlighted after the fatal 2009 

Colgan accident, in which both pilots commuted hundreds of miles prior to the flight. 

Our report recommended that FAA collect and analyze information on pilot domicile 

and commuting4 to better target solutions to reduce fatigue within the aviation 

industry. According to the Air Line Pilots Association, roughly 60 percent of its pilots 

are commuters. FAA has agreed to conduct a "scan of available data" on pilot 

commuting and will determine whether additional data could offer significant safety 

benefits by February 2013. 

Operating 

Administration 

Federal Aviation 

Administration 

(FAA) 

Open Recommendation 

Establish an integrated master schedule framework, 

policy, and standard operating procedures that 

include the Segmented Implementation Plan and 

transformational programs, and a timeline for 

maturing this capability. 

OIG Report 

Status of Transformational 

Pragrams and Risks to 

Achieving NextGen Goa/s, 

AV-2012-094, April 2012 

FAA now spends almost $1 billion annually to develop and implement the Next 

Generation Air Transportation System (NextGen). However, it has yet to complete an 

integrated master schedule to manage implementation of the six programs that will 

provide the foundational technologies and infrastructure needed for NextGen. 5 The 

planned master schedule will better coordinate these programs' capabilities-many of 

which are interdependent-and include tirnelines and completion dates. Without a 

master schedule, FAA will be challenged to (1) fully address operational, technical, 

and programmatic risks; (2) prioritize and make informed tradeoffs for programs' 

costs and schedules; and (3) determine what capabilities should be delivered first to 

4 Commuting is a common aviation industry practice as pilots are not required to live within close proximity of their 

assigned duty locations, Many pilots reside hundreds or thousands of miles from their duty locations, and their commutes 

frequently involve cross-country air travel. For example, the National Transportation Safety Board's Colgan investigation 

revealed that out of 136 Newark-based Colgan pilots, 49 (36 percent), had commutes of at least 400 miles, with some 

commuting from States such as California, Nevada, and Washington, 

5 These six programs are Automatic Dependent Surveillance-Broadcast, System Wide Infonnatjon Management, D~ta 

Communications, NextGen Network Enabled Weather, NAS Voice System, and Collaborative Air Traffic Management 

Technologies, 

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Insert offset folio 47 here 80899.047

3 

provide users with the greatest benefits. FAA is currently working on the integrated 

master schedule. 

Operating 

Administration 

Department of 

Transportation 

(DOT) 

Open Recommendation 

Clifton Gunderson recommended that DOT 

management ensure that OAs perform the quarterly 

inactive project reviews to ascertain that inactive 

obligations are liquidated in a timely manner 

throughout the year. Particular attention should be 

paid to stagnant or closed projects. 

OIG Report 

Quality Control Review of 

DOT's Audited 

Consolidated Financial 

Statements for Fiscal Years 

2011 and 2010, QC-2012-

009, November 2011 

Clifton Gunderson conducted an independent audit of DOT's financial statements and 

identified a significant deficiency in internal controls over unliquidated obligations 

(Undelivered Orders, or UDOS).6 This weakness resulted in inactive grant UDOs of 

approximately $1.4 billion. These are idle funds that DOT agencies can use for other 

projects to improve transportation infrastructure and create jobs. DOT concurred with 

our recommendation and in July 2012 initiated a 60-day, resource-intensive 

remediation effort to identify and deobligate inactive UDOs that resulted in the 

liquidation of $2.1 billion in unneeded UDOs. For fiscal year 2013, DOT plans to 

issue policy requiring DOT agencies to perform quarterly reviews and annual 

certifications of obligation balances and train personnel who handle them. 

Implementing this recommendation will help the Department begin correcting a 

persistent, systemic problem 7 with unliquidated obligations. 

Operating 

Administration 

Federal Highway 

Administration 

(FHWA) 

Open Recommendation 

Implement a coordinated and effective data-driven, 

risk-based approach for Division Offices and Directors 

of Field Services to review Agreements annually and 

make timely revisions, when appropriate. 

OIG Report 

Improvements to 

Stewardship and Oversight 

Agreements Are Needed To 

Enhance Federal-Aid 

Highway Pragram 

Management, MH-2013-

001, October 2012 

Stewardship and oversight agreements are required by law and establish Federal and 

State responsibilities to oversee about $40 billion in highway funds provided annually 

to the States. While FHWA fulfilled the statutory mandate to enter into Agreements 

with each State, the Agreements do not consistently reflect Federal requirements or 

program risks and priorities that FHW A has identified and communicated to its 

Division Offices. FHWA plans to implement this recommendation and others from 

6 UDOs represent goods or services ordered, which have not been received prior to the end of the reporting period. Grant 

UDOs represent funding obligated through grantee agreements that have not been disbursed prior to the end of the reporting 

~eriod. 

UDOs were elevated to a material weakness during the fiscal year 2012 audit, and while DOT's immediate efforts were 

commendable and substantially reduced the unneeded UDO balance, additional action is needed to ensure UDOs are 

deobligated in a timely manner in the future. 

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4 

our report through its Program of Oversight Initiatives (POI)--oversight plans at its 

Division Offices. We have requested an action plan to clarify the relationship between 

Agreements and the POls and identify the criteria that FHWA's three Directors of 

Field Services-who oversee the Division Offices in their regions-will use to 

approve POls. We also recormnended that the action plan be reflected in FHWA 

guidance and in each Division Office's POI. 

Operating 

Administration 

Federal Motor 

Carrier Safety 

Administration 

(FMCSA) 

Open Recommendation 

Publish a final rule on passenger carrier leasing with 

requirements similar to those for property carriers. 

OIG Report 

Timely and Targeted 

FMCSA Action Is Needed To 

Fully Address NTSB 

Recommendations for 

Improving Passenger 

Carrier Oversight, MH2012-087, April 2012 

FMCSA oversees more than 3,000 passenger carriers that operate millions of trips per 

year. Following its investigation of a fatal bus crash in 2008 near Victoria, Texas, the 

National Transportation Safety Board (NTSB) recommended that FMCSA require 

documentation of passenger carrier bus leases, as it does for property carriers. NTSB 

determined the Texas bus company was, in effect, shielded from FMC SA oversight 

because of a lease agreement with another company. FMCSA concurred with our 

recommendation and plans to issue a fmal rule by December 31,2013. 

Top Five Long-Term Open Recommendations 

Operating 

Administration 

Department of 

Transportation 

(DOT) 

Open Recommendation 

Implement the use of PIV cards as the primary 

authentication mechanism to support multi-factor 

authentication at the system and application level for 

all DOT employees and contractors. 

OIG Report 

Timely Actions Needed To 

Improve DOT's 

Cybersecurity, FI-2011-022, 

November 2010 

This is an administration priority, and the Office of Management and Budget required 

that, by 2012, all Federal personnel use personal identity verification (PIV) cards to 

log on to agency computers for multifactor user identity authentication. As of June 

2012, only 42 percent of DOT's systems were enabled for user logon with PIVs, and 

only 7 percent actually used PlV for identity authentication. DOT concurred with our 

recommendation, continued issuing PIV cards in fiscal year 2012, and designated PIV 

card deployment for authentication as one of its top cybersecurity priorities for fiscal 

year 2013. DOT plans to complete this action in fiscal year 2016. 

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Operating 

Administration 

Department of 

Transportation 

(DOT) 

Open Recommendation 

Develop and/or revise the Department's EA policy and 

procedures to address the following: development, 

maintenance, and use of EA in the IT investment 

process. 

OIG Report 

DOT Does Not Have an 

Effective Enterprise 

Architecture Program for 

Management of 

Information Technology 

Changes, FI-2012-086, 

April 2012 

5 

With approximately $3 billion in annual expenditures and about 400 infonnation 

technology (IT) systems, DOT has one of the largest IT investments in the Federal 

Government. Under the Clinger-Cohen Act, 8 each Federal department must 

implement a management framework-known as an "enterprise architecture" (EA)-

to effectively manage IT investments. An effective EA drives all infonnation 

technology changes and results in reduced costs in purchasing, training, and staffing; 

improved security through the development and use of mandatory security standards; 

and reduced technical risk by using industry standards on technology infrastructure. 

Because DOT currently lacks an EA it cannot be sure that it is maximizing returns on 

IT investments through cost savings, reducing duplicative systems, aligning 

infonnation technology to mission, and effectively spending infonnation security 

funds-all critical requirements in an environment of scarce resources. DOT 

concurred and plans to develop an overarching policy by May 2013. However, DOT 

indicated that it would need funding to implement this policy and would connnit to a 

completion date when funding becomes available. 

Operating 

Administration 

Federal Railroad 

Administration 

(FRA) 

Open Recommendation 

Complete the National Rail Plan and include in it 

measurable performance goals and clear stakeholder 

roles. 

OIG Report 

FRA Has Made Progress in 

Implementing PRIIA 

Responsibilities, but 

Challenges for Long-Term 

HSIPR Remain, CR-2012-

072, March 2012 

The National Rail Plan (NRP) will fonn the framework for the future of passenger rail 

across the entire country so that public and private stakeholders understand their roles 

in developing services and can invest with certainty. When complete, the NRP will 

also identify specific interstate corridor goals and measures of success. Delays in 

establishing the NRP could result in FRA investing billions of dollars in Federal grant 

funds without assurance that these efforts support national policy goals, and 

stakeholders will remain reluctant to commit. FRA currently plans to complete the 

NRP in June 2014. 

, Clinger-Cohen Act (formerly the Information Technology Management Reform Act), Pub. L No. 104-106, Division E 

(1996); codified at 40 US.C § 11101, et seq. (2011). 

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107 


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Operating 

Administration 

Federal Highway 

Administration 

(FHWA) 

Open Recommendation 

Report regularly to internal and external stakeholders 

on the effectiveness of States' efforts to improve the 

condition of the Nation's deficient bridges based on 

the analysis of Highway Bridge Program expenditure 

data and an evaluation of progress made in achieving 

performance targets. 

6 

OIG Report 

Assessment of FHWA 

Oversight of the Highway 

Bridge Program and the 

Nationol Bridge Inspection 

Program, MH-2010-039, 

January 2010 

According to FHWA, about one-fourth of the Nation's more than 600,000 bridges 

have major deterioration, structural cracks, or other deficiencies. Given the limited 

funding to address these deficiencies, we have emphasized over the past 2 decades the 

need to improve the quality of inspection data and implement data-driven, risk-based 

oversight to prioritize bridge safety risks. Such action will also be critical to help 

FHWA meet new requirements for more perfonnance-based management of highway 

bridges in the Moving Ahead for Progress in the 21st Century Act. 9 DOT agreed to 

develop a new template by the end of 2013 to report on States' efforts to address 

deficient bridges and to take steps by 2015 to enhance the level of detail reported on 

bridge conditions. 

Operating 

Administration 

Federal Aviation 

Administration 

(FAA) 

Open Recommendation 

To assist FAA in achieving a successful air traffic facility 

realignment and consolidation plan, the Agency should 

develop comprehensive and regularly updated cost 

estimates that include, at a minimum, estimates for 

construction, equipment, increased salaries, relocation 

expenses, and training. 

OIG Report 

The Success of FAA's LongTerm Plan for Air Traffic 

Facility Realignments and 

Consolidations Depends on 

Addressing Key Technical, 

Financial, and Workforce 

Challenges, AV·2012-151, 

July 2012 

FAA has plans to realign or consolidate its network of manned air traffic control 

facilities into centralized locations as a critical step in its NextGen efforts and in 

replacing its aging infrastructure. Our recommendation is key due to FAA's 

multibillion-dollar cost estimate for the effort and the impact it will have on facilities 

within the National Airspace System with respect to cost, technical challenges, and 

the aviation workforce. FAA concurred with our recommendation and plans to 

provide a detailed cost estimate for the first integrated facility in the New York 

metropolitan area by December 31, 2014. To completely implement our 

recommendation, FAA will also need to produce detailed fmancial infonnation for 

Congress and other stakeholders regarding its longer tenn plans for other facilities. 

9 The Moving Ahead for Progress in the 21st Century Act (MAP-21), Pub. L. No. 112-141 (2012). 

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108 


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7 

Departmental Coordination with the Office of Inspector General 

We are pleased to report that the Department involves our office in various ways to 

aid its efforts to improve efficiency and reduce waste. These include requesting 

reviews of specific issues; soliciting our ideas on how to improve its practices during 

the course of audits; and inviting our staff to speak at conferences and panels, provide 

modal briefings, or attend workshops. In addition, our senior audit executives meet at 

least annually with senior management from each Operating Administration to discuss 

top audit priorities for combating waste, fraud, and abuse as well as ways to improve 

program efficiency. The following examples describe specific instances of our 

collaboration with the Department: 

• The Federal Transit Administrator requested that our office review oversight 

procedures in its Region III to supplement the Agency's senior management 

nationwide review of its grant oversight program. We conducted the review and in 

August 2012 made six recommendations to enhance the level of oversight that the 

Federal Transit Administration (FTA) provides over grantees, develop 

performance measures assessing the effectiveness of the outcomes of its overall 

oversight program, and ensure regions do not close findings before receiving 

documentation showing that they have been fully resolved. FTA fully concurred 

and provided responsive plans to address our recommendations as it completes its 

review. 

• FAA's Chief Counsel requested our assistance in identifying major organizational 

weaknesses that made its administration of multiple award support services 

ineffective. We provided general advice on weaknesses that existed in FAA's 

Headquarters operations, such as a lack of acquisition professionals who should be 

in place to oversee the implementation of its Acquisition Management System and 

award of large support service contracts. In addition, the DOT Senior Procurement 

Executive requested that we present our findings on several ongoing acquisition 

audits and convey some of the management weaknesses we have encountered in 

our work at the 2012 DOT Spring Acquisition Conference. 

• At the request of the Deputy Secretary and Chief Information Officer, we 

developed Information Security Modal Report Cards, which score each 

Administration's cybersecurity perfonnance using the same methodology that the 

Office of Management and Budget uses to score the Department. The intent of the 

request was to obtain information to better target resources in addressing 

information security weaknesses throughout DOT. Historically, we had targeted 

our reviews of DOT's information security at the Department level. In 2011, we 

briefed the Deputy Secretary and the Chief Information Officer on our first report 

cards, and, at their request, will continue to provide these report cards annually. 

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8 

We also briefed several Administrators on the specific results for their respective 

agencies . 

• After we reported in September 20 I 0 to FAA that the perfonnance measures for 

its Air Traffic Control Optimum Training Solution (ATCOTS) contract were 

ineffective for controlling costs and meeting goals, FAA requested our input on 

how to design perfonnance measures to better hold the contractor accountable. We 

provided FAA with regulations and best practices documented in award fee guides 

used throughout the Federal Government to enhance its awareness of relevant 

guidance and practices that could be applied for the ATCOTS program . 

• Our office has both self-initiated and received invitations from Operating 

Administrations and State officials to give fraud awareness and prevention 

presentations. Since the inception of the American Recovery and Reinvestment 

Act,10 our staff has conducted over 300 such briefings and meetings to more than 

21,000 participants. Audiences have included officials from FHW A, FAA, FRA, 

the District of Columbia and Puerto Rico, State DOT officials from every State, 

FTA officials, local transit authority staff, and local aviation authorities. These 

presentations aim to alert stakeholders to common fraud schemes (e.g., 

disadvantaged business enterprise fraud, collusive bid rigging, product 

substitution, bribery and kickbacks, and conflicts of interest). In addition, 

Operating Administrations have invited our staff to give presentations at other 

fonuns, such as FTA's workshops that take place across the country. 

In closing, we appreciate the Department's responsiveness to our findings and 

recommendations and the Secretary's commitment to ensuring the safe and efficient 

operation of our national transportation system. We note that the Deputy Secretary is 

actively engaged in working with DOT's Operating Administrators to ensure that 

appropriate corrective actions are quickly taken to resolve and close our 

recommendations. 

If you have any questions or need further infonnation, please contact me at (202) 366-

1959 or Nathan Richmond, Director and Counsel for Congressional and External 

Affairs, at (202) 493-0422. 

Sincerely, 

Calvin L. Scovel III 

Inspector General 

10 American Recovery and Reinvestment Act (ARRA), Pub. L. No. 111-5 (2009). 

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110 


Insert offset folio 53 here 80899.053

uNITED STATES DEPARTMENT OF EDUCATION 

OFF!CE OF Il\S?ECTOR CENE?,>\L 

December 20.2012 

The Honorable Darrell Issa 

Chairman, Oversight and Government 

Reform Committee 

U.S. House of Representatives 

2157 Rayburn House Office Building 

Washington, D.C. 20515 

THE I:'-l"SPECTOR GENERAL 

The Honorable Elijah Cummings 

Ranking Member, Oversight and Government 

Reform Committee 

U.S. House of Representatives 

2471 Raybum House Office Building 

Washington, D.C. 20515 

Dear Chairman Issa and Representative Cummings: 

Thank you for your recent letter requesting information from the U.S. Department of Education 

(Department) Office of Inspector General (GIG) related to our work plan and high-priority 

recommendations. I have enclosed the requested information with this letter. I have also 

enclosed a copy of our Annual Plan for Fiscal Year 2013 that presents the major initiatives my 

offices intends to undertake this year. 

As you will note in our response, both our short-term and long-term recommendations involve 

five specific areas where the Department faces a number of challenges that impact its ability to 

effectively achieve its mission. These include long-standing issues that we have identified as 

management challenges, including issues relating to Federal student aid, improper payments, and 

information technology security. . 

One specific area that we did not include in the attached response yet wanted to highlight, as it 

directly impacts all of our recommendations, is audit resolution. In June, we issued an audit of 

the Department's resolution system for external OlG audits that found that the Department's 

process was not effective and audits were not resolved in a timely manner, which has affected 

the potential recovery of millions of dollars and has likely created delays in the development and 

implementation of corrective actions by auditees (i.e., State educational agencies, local 

educational agencies, and other grantees.) In that report, we made a number of recommendations 

to help the Department improve its process, including that it strengthen Department-Vvide 

accountability for timely audit resolution. In response to the recommendations made in the 

report, the Department has created a task force to exanline ways to improve audit resolution. 

Department leaders have asked my office to participate in an ex-officio capacity on this task 

400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-1510 

Our mission is to ensure equal access to education and to promote educational excellence throughout the Nat:ian. 
111 


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Letter (0 Chairman Issa and Represemative Cummings 

December 20, 2012 

Page 2 

force. We will be monitoring the Department's progress in addressing the recommendations 

made in our report. I have enclosed a copy of our audit report for your review and infonnation. 

If you have any questions or if you need any additional information, please do not hesitate to 

contact me directly at (202) 245-6900, or have a member of your staff contact our Congressional 

Liaison, Catherine Grant, at (202) 245-7023. 

Sincerely, 

/ ,{ (\ ,,~(-j-. \\.....- .,..", "-

Kathleen S. Tighe 

Inspector General 

Enclosures 

ceo The Honorable Gabriella Gomez, Assistant Secretary, Office of Legislation and 

Congressional Affairs, U.S. Department of Education 
112 


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Office of Inspector General 

U.S. Department of Education 

Work Plan and High Priority Recommendations 

December 20, 2012 

The following presents the U.S. Department of Education (Department) Office ofInspector 

General's (OIG) highest-priority short-tenn and long-term reCDmmendations based on OIG 

audit. inspection, investigative, and other reports. These recommendations involve five areas 

where the Department faces challenges that impact its ability to effectively achieve its mission: 

specific operations related to Federal student aid, improper payments, infonnation technology 

(IT) security, and charter schools. Below you will find a summary of each of five the areas, the 

highest-priority short-tenn recommendations and the highest priority long-term 

recommendations for that specific area. As requested, we also include infonnation on how the 

Department solicits input from the OIG on improving efficiency and reducing waste. 

Federal Student Aid - Fraud Rings 

In 2011, we issued a report that brought to the Department's attention a serious fraud 

vulnerability in distance education programs-"fraud rings"-large, loosely affiliated 

groups of criminals who seek to exploit distance education programs in order to 

fraudulently obtain Federal student aid. As all aspects of distance education take place 

through the Internet (admission, student aid, course instruction), students are not required 

to present themselves in person at any point, and institutions are not required to verify 

prospective and enrolled students' identities, so fraud ringleaders use the identities of 

others (with or without their consent) to target distance education programs. Fraud rings 

mainly target lower cost institutions because the Federal student aid awards are sufficient 

to satisfy institutional charges (such as tuition) and result in disbursement of the balance 

of an award to the student for other educational expenses, such as books, room and board, 

and community. OUf report offered nine specific recommended actions for the 

Department to take to address this issue. Although the Department agreed to all of these 

recommendations, most have not yet been implemented. 

Sbort-Term Recommendation: Seek statutory change to the cost of attendance 

calculation for students enrolled in distance education programs under the Higher 

Education Act of 1965 to limit payment for room and board and other costs that 

distance education program participants do not incur. Section 31 O( a) of the 

Departments of Labor, Health and Human Services, and Education, and Related 

Agencies Appropriations Act, 2013, S. 329, as approved by the Senate 

Appropriations Committee, would limit for purposes of the Pel! Grant program 

the cost of attendance calculation for students studying exclusively online to 

tuition, fees, books, and supplies. If enacted, this provision would result in 

immediate savings beginning with the award years beginning July 1,2013. We 

recommend adoption of the provision to prevent fraud by mitigating motive and 

opportunity. Greater savings could be achieved by extending the limitation to all 

student aid programs under the Higher Education Act of 1965. (For further 

1 
113 


Insert offset folio 56 here 80899.056

explanation of the proposal, including reference to our 2011 report mentioned 

above, see Sen. Report 112-176, pp 190-191.) 

Long-Term Recommendation: Our 2011 report included recommendations to 

establish edits in the Department's student aid systems for verification of 

applicants' high school graduation status and to flag potential fraud ring 

participants; we also recommended implementing controls in the Department's 

PIN delivery system. The Department has advised us of its plans to implement 

these recommendations. Due to the timing of the annual student aid processing 

cycle, contractual requirements, and the need to identify funding to implement 

system changes, the Department's plans are divided into actions that could be 

implemented for the 2013-2014 award year, for which processing begins in 

January 2013, and those to be implemented for the 2014-2015 award year. To 

fully achieve desired savings by the 2014-2015 award year, the Department will 

have to stay on target in 2013 in identifying funding and implementing changes 

by January 2014, when processing for the 2014-2015 award year begins. We are 

in the process of completing a report quantifYing the monetary impact of Federal 

student aid fraud rings. We expect to issue this report in January. 

Federal Student Aid - Default Management 

We recently issued an alert report that identified significant problems ",-jth the Federal 

Student Aid office's (FSA) process f'Or managing defaulted student loans. Specifically, 

we found that the Debt Management Collection System 2 (DMCS2) was unable to accept 

transfer of certain defaulted student loans from FSA's loan servicers. Since the DMCS2 

was implemented in October 2011, the Title IV Additional Servicers and ACS Education 

Solutions, LLC (ACS) have accumulated more than $1.1 billion in defaulted student 

loans that shoUld be transferred to the Department for management and collection. 

DMCS2 has been unable to accept transfer of these loans and, as a result, the Department 

is not pursuing collection remedies and borrowers are unable to take steps to remove their 

loans from default status. The inability ofDMCS2 to accept these transfers also 

contributed to a material weakness in internal control over financial reporting that was 

identified in both the Department's and FSA's Fiscal Year (PY) 2012 financial statement 

audits. Based on our interaction with FSA officials to date, FsA has yet toimplement 

effective corrective action to bring these affected loans into collection and correct the 

problems withDMCS2. 

Short-Term ~ecommendation: Identify each problem related to DMCS2 loan 

tranSfers, the Source of each problem, and the entire population of loans adversely 

affected and establish dates for resolving the cause of each identified problem 

related to DMCS210an transfers. Establish temporary workarounds as necessary 

for all identified DMCS2 problems until permanent solutions are implemented. 

Long-Term:Re'Comm~n'dation: Determine whether DMCSl can become a fully 

operation~ system that will meet all Dfthe baseline functional system 

requiiemerits. Ifth<;l system will not meet all of the functional requirements, 

2 
114 


Insert offset folio 57 here 80899.057

develop a plan to address the deficiencies or determine whether to obtain a 

replacement debt management system. Identify and pursue all ayailable 

contractual remedies v,ith ACS for ineffectiyc DMCS2 functionality. 

Given the problems that our work has identified in debt management, we recently started 

an audit ofFSA's oversight of its private collection contractors to detemline if borrowers 

are given the information to rehabilitate their defaulted loans. We are also in the process 

of planning a review to determine the extent ofFSA's problems \vith its debt 

management and collection system implementation. In this review, we ",ill assess FSA' s 

acquisition and implementation of its new debt management and collection system, 

identify issues caused by the implementation of the system, and assess FSA's 

identification of those issues and the effectiveness ofFSA's response. 

Information Technology Security 

The Department collects, processes, and stores a large amount of personally identifiable 

information regarding employees, students, and other program participants. OIG has 

identified repeated problems in IT security and noted increasing threats and 

vulnerabilities to Department systems and data. Since 2006, OIG's IT audits and other 

reviews have identified management, operational, and technical security controls that 

need improvement to adequately protect the confidentiality, integrity, and availability of 

Department systems and data. We have repeatedly made recommendations to the 

Department to strengthen its controls and develop monitoring capabilities designed to 

help safeguard Department systems and data from unauthorized access, misuse, and 

fraud. Further, since 2009, audits of the Department's and FSA's fmancial statements by 

OIG's independent fmancial auditors found significant repeat deficiencies involving 

controls over IT security. 

Short-Term Recommendation: Identified as far back as August 2006, FSA user 

accounts have been compromised by keylogger software that could have been 

used to infect and even extract data from FSA systems. Although FSA has a 

process to address keylogger compromised accounts, this process needs 

improvement. For instance, FSA does not (1) identify all individuals whose data 

were potentially compromised; (2) conduct adequate log reviews of compromised 

privileged accounts to identify unauthorized activity; and (3) keep adequate 

records of its remediation efforts for privileged accounts compromised by 

keylogger software. OlG recommended extending two-factor authentication to all 

external business partners to reduce the risk associated VYith the ongoing 

keylogger threat. Office of Management and Budget's (OMB) 2006 

Memorandum M-06-16, Protective of Sensitive Agency Information specifically 

recommends that all departments and agencies allow remote access only vvith 

two-factor authentication where one authentication is provided by a device 

separate from the computer gaining access, such as a token. OMB stated that 

agencies must ensure these safeguards have been reviewed and are in place within 

45 days of the memorandum'S issuance. Although the Department has made 

progress in this area in regarding Department employees, as evidenced by our FY 

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Insert offset folio 58 here 80899.058

2012 Federal Information Security Management Act audit, two-factor 

authentication has not been fully implemented and enforced by the Department 

for all uses by Department employees and for contractors and other authorized 

users. The Department must ensure that token deployment is expedited so that all 

employees, contractors, and authorized users are able to dual authenticate using 

two-factor authentication. 

Long-Term Recommendation: r'\.lthough the Department is making progress in 

remediating issues relating to its security program, more work is necessary. We 

have identified multiple IT security issues, many of them repeatedly, and, since 

2006, our independent financial statement auditors found significant repeat 

deficiencies involving controls over IT security. For the long-term, the 

Department and FSA must detennine why information technology initiatives are 

not effectively implemented and managed to ensure successful system integration, 

system and data security, and identification of fraudulent activity. 

Improper Payments 

In FY 2011, the OMB designated the Federal Pell Grant program a "high-priority" 

program because the FY 2010 Pell improper payments estimate of$I,005 million (a rate 

of3.12 percent) exceeded the OMB threshold of$750 million. As required with this 

designation, the Department coordinated with OMB to establish and execute a plan to 

implement high-priority program requirements, including designating accountable 

officials and establishing supplemental measures to report, As a result, the FY 2011 Pell 

Grant improper payment rate fell to 2.72 percent, with estimated improper payments of 

$993 million. The preliminary FY 2012 improper payment rate also fell, dropping to 

2.49 percent, with estimated improper payments of $829 million. While progress is being 

made, more can be done. In 2010, the Department implemented the Intemal Revenue 

Service Data Retrieval Tool (IRS DRT), which allows Federal student aid applicants and, 

as needed, parents of applicants, to transfer certain tax return information from an IRS 

website directly to their online Free Application for Federal Student Aid (F AFSA.) 

However, only 26 percent of all FAFSAs submitted for the 2012-2013 academic year 

used the IRS DRT. Use of the IRS DRT is optional, so people intent on defrauding the 

program by providing false.income information would not select the IRS option. The 

IRS DRT not being mandatory leaves the burden on institutions to verify an applicant's 

income. 

Short-Term Recommendation: Study Pell Grant program recipients who do not 

use the IRS DRT and who are not selected for verification to determine whether 

the Department has adequate controls in place or needs to implement additional 

controls to mitigate the risk of improper payments to this population ofPell Grant 

recipients. 

Long-Term ~ecommendation: Since 1997, we have recomrilended 

implementation of an IRS. income data match that would allow the Department to 

match the infanilatioh provided on FAFSAs with the income data that is 

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Insert offset folio 59 here 80899.059

maintained by the IRS. While the HEA has been amended to reflect this 

requirement, the Intemal Revenue Code has not been similarly amended. 

Amending the Internal Revenue Code would go a long way to identifying income 

inconsistencies and eliminating an area of fraud and abuse \vithin the student 

financial assistance programs. 

Charter Schools 

Charter schools are nonsectarian, publicly funded schools of choice exempt from certain 

State and local regulations. In return for reduced governmental regulation, charter 

schools agree, in the form of a charter, to be held accountable for their academic and 

financial performance. To date, 41 States and the District of Columbia have enacted laws 

allo'wing for the establishment of charter schools. Charter school laws differ from State 

to State. State charter school laws assign authorizers to approve charter school 

applications, oversee and ensure compliance, review and renew contracts, and close 

charter schools. State charter school laws allow for various types of authorizers, which 

can include institutions of higher education, independent chartering boards, school 

districts or LEAs, and not-for-profit organizations. OIG has conducted a significant 

anlount of investigative work involving charter schools. These investigations found that 

authorizers often fail to provide adequate oversight to ensure that Federal funds are 

properly used and accounted for. In March 2010, we issued a report on charter schools' 

vulnerabilities to fTaud and highlighted a number of our investigative cases and the 

growth we have seen in this area. As an example, from January 2005 to August 2012, 

OIG has opened 55 investigations involving charter schools and charter school officials, 

founders, and other leaders. To date, these investigations have resulted in 33 indictments 

and 20 convictions, and more than $9.5 million in restitution, fines, forfeitures, and civil 

settlements. 

In September 2012, we completed an audit of the Department's oversight and monitoring 

of the Charter Schools Program's SEA and non-SEA Planning and Implementation 

Grants. The audit determined that the Department did not effectively oversee and 

monitor the grants and did not have an adequate process to ensure SEAs effectively 

oversaw and monitored their subgrantees. We recommended increased oversight of 

grantees by the Department as wen as increased guidance to SEAs on how they should 

oversee the charter schools in their states. 

Short-Term Recommendation: Develop and implement a risk-based approach 

for selecting non-SEA grantees for monitoring activities. Also, ensure that 

grantee fiscal activities are being monitored according to the "Handbook for the 

Discretionary Grant Process," specifically for quarterly expenditure review and 

annual review of A-133 Single Audit reports. 

Long-Term Recommendation: Provide necessary guidance and training to 

SEAs on how to develop and implement procedures to ensure SEAs have 

effective monitoring and fiscal controls for tracking the use of funds by charter 

schools. Also, ensure that SEAs develop and implement adequate monitoring 

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Insert offset folio 60 here 80899.060

procedures tor properly handling charter school closures and for properly 

accounting for Charter School Program funds spent by closed charter schools, 

including the proper disposition of assets purchased with SEA grant funds in 

accordance with Federal regulations. 

Given the vulnerabilities we have found with oversight of charter schools, we are 

planning TWO additional audits in 2013. We \\ill review SEA and Department oversight 

of agreements between charter schools and Charter Management Organizations (CMOs) 

or Educational Management Organizations (EM05) to determine whether select charter 

schools and their governing boards are independent from the CMOslEMOs that manage 

the schools and that other contract terms are appropriate. We also plan to evaluate 

Department and SEA controls to ensure independence of the charter schools and 

CMOIEMO, as well as the appropriateness of other contract terms. We will also evaluate 

the effectiveness and accountability of online charter schools to determine whether scores 

on statewide assessments show an achievement gap between students in online charter 

schools and students in traditional or hybrid learning environments. 

Describe whether and in what wavs agencY management solicits input from vou and your 

office about how to improve efficiency and reduce waste. 

Department management solicits input from the OIG about how to improve efficiency and 

reduce waste in its programs and operations. For example, Department officials provide 

suggestions for our annual work plan-specific programs or areas of operation they would like 

for OIG to audit or review. Department officials have also asked for OIG to participate in an 

advisory or ex-officio capacity on various task forces or work groups focused on improving 

specific programs or initiatives, such as the task force recently created to improve the 

Department's audit resolution process, a Recovery Act Metrics and Monitoring Team, FSA 

policy committees, a Senior Assessment Team, an Investment Review Board and Working 

Group, and a Human Capital Policy Working Group. Our Semiannual Reports to Congress 

provide more information on the focus of these groups and our role in them. 

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Insert offset folio 61 here 80899.061

U.S. House of Representatives 

Committee on Oversight and Government Reform 

Darrell Issa, Chairman 

Open and Unimplemented IG Recommendations 

Could Save Taxpayers $67 Billion 

Staff Report 

Prepared for Chairman Darrell Issa 

U.S. House of Representatives 

113th Congress 

Committee on Oversight and Government Reform 

March 5th. 2013 
119 


Insert offset folio 62 here 80899.062

Contents 

Executive Summary ........................................................................................................................ 2 

Background ..................................................................................................................................... 3 

Methodology ................................................................................................................................... 4 

Findings ........................................................................................................................................... 5 

A. More than 16,900 recommendations remain open or unimplemented .................................. 6 

B. Morc than $67 billion worth of recommendations are open or unimplemented ................... 6 

C. Agencies without permanent IGs have a disproportionately high number of open and 

unimplemented recommendations .............................................................................................. 8 

D. Common challenges identified by the IG community .......................................................... 9 

I. Information Technology (IT) Security ............................................................................. 10 

2. Overpayments ................................................................................................................... II 

Conclusion .................................................................................................................................... 12 
120 


Insert offset folio 63 here 80899.063

Executive Summary 

Congress installed inspectors general (lOs) at Executive Branch departments and 

agencies to identify waste, fraud, and abuse in the federal government. lOs conduct independent 

audits and investigations and make recommendations to protect the interests of taxpayers and 

improve the effectiveness of government. Their valuable work is frustrated if agency 

management ignores or fails to implement their recommendations. 

The House Committee on Oversight and Oovernment Reform has jurisdiction over the 10 

community. This staff report is a compilation of four years' worth of data provided to the 

Committee by the lOs. The lOs responded to annual requests from the Committee for the 

volume and value of their open and unimplemented recommendations beginning in 2009. Based 

on data provided annually by the lOs, the Committee's Republican stafffound that agency 

management has not implemented thousands of recommendations that would save taxpayers 

more than $67 billion. 

The backlog for implementing 10 recommendations has reached an all-time high, and the 

volume of recommendations that remain unimplemented continues to increase every year. In 

2008, then-Chairman Henry Waxman found that the Bush Administration did not fully 

implement more than 13,80010 recommendations made since 2001. Since then-Ranking 

Member Darrell Issa began surveying the lOs, the total number of open and unimplemented 

recommendations has increased dramatically, from 10,894 in 2009 to 16,906 in 2012. The 

potential savings associated with those open and unimplemented recommendations increased 

even more dramatically, from $26 billion when Chairman Waxman released his findings in 2009 

to more than $67 billion in 2012. These figures reflect the most conservative possible 

accounting of the number and dollar value of the lOs' open and unimplemented 

recommendations. It is likely that both totals are significantly higher. 

The data also show a correlation between the absence of a permanent inspector general 

and a high volume of open and unimplemented recommendations. Since 2009, the Department 

of State, the Department of Homeland Security (DHS), and the Agency for International 

Development (USAID) have consistently ranked among the agencies with the most Open and 

unimplemented recommendations. In 2012, they ranked first, second and fourth, respectively. 

The President is responsible for filling the 10 vacancies at these agencies, as well as at the 

Department of the Interior, the Department of Labor, and the Department of Defense. These six 

agencies have been without a permanent inspector general for more than 15 years collectively. 

More than one quarter ($900 billion) of the President's (otal20l3 budget request ($3.6 trillion) 

was for these six agencies, which employ more than three quarters (more than 3.5 million) of the 

entire federal workforce (approximately 4.4 million). 

As Congress and the Administration work to identify new ways to save money, they 

would be well-served by implementing the recommendations of the 10 community. If evidence 

continues to mount that the Administration is dismissive of the work of the 10 community, 

Congress should aggressively incorporate unimplemented recommendations into legislative 

actions. 

2 
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Insert offset folio 64 here 80899.064

Background 

The Inspector Oeneral Act of 1978 (IO Act) established a network of inspectors general 

throughout the federal government departments and agencies to promote economy, efficiency, 

and effectiveness. I The 10 Act placed inspectors general on the front lines of oversight in the 

Executive Branch. Since then, lOs have compiled an impressive track record of detecting and 

preventing waste, fraud and abuse in their agencies' programs. As the eyes and ears of Congress 

embedded within the federal bureaucracy, inspectors general are a critical component of the 

legislative branch's constitutionally-authorized oversight function. Because of their proximity to 

the agencies they oversee and their statutory independence, inspectors general are uniquely 

qualified to audit and investigate waste, fraud, and abuse. 

The [0 Act requires the lOs conduct audits, "recommend policies and activities designed 

... to promote economy, efficiency, and effectiveness" in program administration, prevent and 

detect fraud and abuse. 2 The lOs also "provide a means for keeping the [agency] head ... and 

Congress fully and currently informed about problems and deficiencies .... ,,3 

The lOs receive whistleblower complaints and conduct investigations and audits to 

prevent and detect fraud, waste, and abuse in their agencies' programs. 4 Through their 

investigations and audit reports, the lOs help Congress shape legislation and oversight activities. 

From the perspective of taxpayers, the most important function of inspectors general may 

be the recommendations they provide directly to agency management. These recommendations 

identify measures that agency management can take to improve the agencies' effectiveness and 

reduce costs. During a time ofrecord deficits and runaway federal spending, this function of the 

lOs is even more critical. 

A 1982 Office of Management and Budget (OMB) circular provides guidance for how 

Executive Branch agencies should handle 10 recommendations. 5 Although the 10 Act requires 

federal agencies to act on 10 recommendations within one year, OMB does not require agencies 

to implement 10 recommendations. 6 In cases in which a recommendation identified an 

opportunity to reduce costs, the failure to implement it represents a missed opportunity to save 

taxpayer dollars or spend them in a more efficient way. 

At the end of the 110th Congress, then-Committee Chairman Henry Waxman "asked the 

nation's lOs to identify all recommendations made between January 1,2001, and December 31, 

2008, that had not been implemented by federal agencies.,,7 The Committee also requested 

J Inspector General Act of 1978, Pub. L. No. 95-452. 

2Id. 

J Id. 

4 Id. 

5 See Circular #A-50, Office of Management and Budget (Scp. 29,1982), available at 

http://www.whitehouse.gov!omb!circulars_a050 (last accessed Scpo 27, 2012). 6ld. 

7 H. Comm. on Oversight and Gov't Reform, Inspectors General: Implementing Thousands a/Open 

Recommendations Could Save Taxpayers Almost $26 Billion, 110th Congo (Jan. 2009). 

3 
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Insert offset folio 65 here 80899.065

infonnation about the potential monetary benefits that would result from implementing these 

recommendations. 8 Chairman Waxman's staff concluded that federal agencies could have saved 

taxpayers $25.9 billion by implementing open IG recommendations. 9 

This report contains the findings of the Committee's ongoing effort to conduct oversight 

of how Executive Branch departments and agencies respond to the recommendations of the IG 

community. 

Methodology 

After then-Chairman Waxman's report was released, Ranking Member Issa continued to 

solicit information about Open and unimplemented recommendations from the IG community 

during the Illth Congress. In April 2009, Ranking Member Issa requested infonnation to help 

the Committee better understand the unrealized savings associated with open and unimplemented 

recommendations. Every year sinee then, the IGs have reported the total number of their open 

and unimplemented recommendations and the associated savings that could have been realized if 

their recommendations were implemented. Each 1G was also asked to identify what he or she 

considered to be the three most important open and unimplemented recommendations each year. 

This report is based on the infonnation provided by the TG community over the course of the last 

four years. 

Recommendations result from audits and evaluations performed pursuant to the Inspector 

General Act of 1978, as amended. Implementation of the 1G's recommendations generally 

requires one or more of three types of action: legislative, regulatory, and administrative. 

The estimated savings reported by the IGs to the Committee provide indicators of 

potential savings. The actual savings to be achieved depend on the scope of the legislative, 

regulatory, or administrative action that implements the recommendations. 

For the purposes of this report, the Republican staff calculated the dollar value of the 

open and unimplemented recommendations reported by the IGs by using the most conservative 

number provided. When an IG reported that a recommendation had estimated savings that 

would be realized over several years, the staff used the average annual value of the potential 

savings. 

8 1d. 

9 Jd. 

4 
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Insert offset folio 66 here 80899.066

In fiscal year 2011, more than 14,700 employees at 73 Offices oflnspector General 

(OlGs) conducted audits, inspections, evaluations, and investigations. 10 Collectively, the work 

of the OIG community resulted in significant improvements to the economy and efficiency of 

programs government-wide, with potential savings totaling more than $33 billion. 1 1 With an 

aggregate FY 2011 budget of approximately $2.7 billion, every dollar invested in the OlGs 

provides a return of more than $10. The total potential savings included more than $24 billion 

from audit recommendations agreed to by management; 12 and, $9.1 billion from investigative 

receivables and recoveries. 13 

However, the savings could have been greater. Agency management left billions of 

taxpayer dollars on the table. Collectively, management at the federal agencies did not 

implement 15,784 recommendations from the IGs in FY2011, worth more than $55 billion. In 

2012, those numbers rose to 16,906 and $67 billion. 

In fact, the numbers of open and unimplemented recommendations and unrealized 

savings for taxpayers increased every year since Chairman Waxman issued his findings in 

January 2009. The total number of open al1d unimplemented recommendations has increased by 

more than 55 percent, from 10,894 in 2009 to 16,906 in 2012. The potential savings associated 

with the open and unimplemented recommendations increased even more dramatically, from $29 

billion when the lGs were first surveyed by the Committee's Republican statTin 2009, to more 

than $67 billion in2012, an increase of more than 125 percent. 

10 COUNCIL OF THE INSP1·:croRs Gl'NERAL ON NTEGRITY AND EFFICIENCY, A PROGRESS REPORT TO THE PRES1DFNT, 

YEAR 2011, "Results at a Glance." [hereinafter CIGIE FYll Progress Report] 

[d. This amount does not include $60 billion reported by the U.S. Postal Service Office oflnspec\or 

General on its work associated with Savings Available by Pre funding Pensions and Retirees' Health 

at Benchmarked Levels." 

ld. 

"CIGIE FYII Progress Repol1. 

5 
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Insert offset folio 67 here 80899.067

A. More than 16,900 recommendations remain open or unimplemented. 

According to information provided to the Committee as of September 2012, there are 

more than 16,900 open and unimplemented recommendations. When the lOs were surveyed for 

the first time by then-Ranking Member Issa in 2009, the lOs reported only 10,884 open and 

unimplemented recommendations. 

Annual Number of Open and Unimplemented 

Recommendations 

16,906 

15,784 

14,351 

10,894 

2009 2010 2011 2012 

B. More than $67 billion worth of recommendations are open or 

unimplemented. 

According to information provided to the Committee, there are currently more than $67 

billion worth of open and unimplemented recommendations. This represents an increase of more 

than $40 billion compared to what former Chairman Waxman found in January 2009. When the 

lOs were surveyed for the first time by then-Ranking Member Issa in the spring of 2009, the lOs 

reported only $29 billion worth of open and unimplemented recommendations. 

6 
125 


Insert offset folio 68 here 80899.068

The potential savings associated with the current inventory of open or unimplemented IG 

recommendations-$67 billion-is roughly equivalent to the combined amount of money 

requested in President Obama's 2013 budget for the Department of Energy ($15.6 billion), the 

Department of Transportation ($13.8 billion), the Department oflnterior ($11.4 billion), the 

Social Security Administration ($9.0 billion), the Environmental Protection Agency ($8.3 

billion), the National Science Foundation ($7.4 billion), the Corporation for National and 

Community Service ($1.1 billion), and the Small Business Administration ($0.9 billion). 14 

Annual Value of Open and 

Unimplemented Recommendations 

$67,162,392,168 

$55,550,783,344 

$42,251,405,804 

$29,626,275,991 

2009 2010 2011 2012 

14 The President's Budget for Fiscal Year 2013, available at http://www.whitehouse.gov/omblbudget(lastvisited 

Oct. 17,2012). 

7 
126 


Insert offset folio 69 here 80899.069

C. Agencies without permanent IGs have a disproportionately high 

number of open and unimplemented recommendations. 

Since 2009, the State Department, Department of Homeland Security, and Agency for 

International Development (USAID) have consistently ranked among the departments and 

agencies with the most open or unimplemented recommendations. In 2012, they ranked first, 

second and fourth, respectively. Collectively, these three agencies have been without a 

permanent inspector general for more than seven years. 

There are currently six agencies with IG vacancies that must be filled by the President. 

In addition to the State Department, DHS and US AID, there are also vacancies at the Department 

of Defense, Department of Labor, and Department of the Interior. The lack of permanent IGs at 

these six agencies is especially problematic because of their sheer size. These six arncies 

collectively represent more than one quarter of the President's entire 2013 budget. 1 They 

employ more than three quarters of the entire federal workforce. 16 

Long-term IG vacancies weaken the Office of the Inspector General. A permanent IG 

has the ability to set a long-term strategic plan for the office, including setting investigative and 

audit priorities. An acting official, on the other hand, is known by all orG staff to be temporary. 

One former IG has argued that temporary status "can have a debilitating effect on [an] orG, 

I5ld 

16 Office of Personnel Management FedScope database, data as of June 2012, available at 

http://www.fedscope.opm.gov/employment.asp(lastvisited Oct. 17,2012). 

8 
127 


Insert offset folio 70 here 80899.070

particularly over a lengthy period.,,17 Senator Charles Grassley has stated that "[e]ven the best 

acting inspector general lacks the standing to make lasting changes needed to improve his or her 

office." 18 

Undermined by a lack of legitimacy, recommendations made by acting IGs are less likely 

to be implemented. The vacancies at the State Department and USAID are especially 

problematic because of their expanding responsibilities in Iraq and Afghanistan. President 

Obama's budget requested $8.2 billion in "extraordinary and temporary" funding for State 

Department responsibilities in Iraq, Afghanistan and Pakistan. 19 The request came on top of the 

$43.4 billion proposed for the "core" budget for the State Department and USAID, which 

manages foreign aid. 2o As the military has pulled out of Iraq and drawn down in Afghanistan, 

the Administration has turned to the State Department to oversee spending on political, security 

and economic projects, such as $1.8 billion for Iraqi police training and military assistance. 21 

D. Common challenges identified by the IG community. 

To identify common problems across the federal government, starting in 2010, the 

Committee asked the IGs to describe the three most important open and unimplemented 

recommendations. Although many recommendations were unique, responses from several OIGs 

showed common themes, the most notable relatin~ to matters of poor IT security22 and 

inadequate oversight of payments to contractors. 2. 

17 Project on Government Oversight, "Where Are All the Watchdogs?," http://www.pogo.org/resources/goodgovernmentlgo-igi-20I 20208-where-arc-all-the-watchdogs-inspector-general-vacanciesl.html (last visited Sep. 27, 

2(12). 

18fd 

19 Nicole Gaouette, State Department Budget Bolsters Middle East Aid, Trims Europe, BLOOMBERG, Feb. 21, 2012. 20 fd 

21ld 

22 See, e.g., Letter ftom Patrick E. McFarland, Inspector General (IG), Office of Personnel Management (OPM), to 

H. Comm. on Oversight and Gov't Reform Chairman Darrell Issa (Apr. 26, 2012) (stating that weaknesses reported 

in FY 2008 and 2009 in Certification and Accreditation processes were "a significant deficiency in the internal 

control structure of the agency's IT security program," and that instead of improving in FY 2010 and 2011, the 

"longstanding conditions not only continued, but actually degraded.") According to the letter, the IG believed the 

problem resulted ftom "insufficient staffing in the IT Security and Privacy Group, a lack of policy and procedures, 

and the decentralized designated security officer model in place at OPM". Jd 

23 See. e.g., Letter ftom Stuart W. Bowen, Jr., IG, Special Inspector General for Iraq Reconstruction (SIGlR), to H. 

Comm. on Oversight and Gov't Reform Chairman Darrell Issa (Apr. 26, 2012) (explaining that "the Department of 

State's Bureau ofInternational Narcotics and Law Enforcement Affairs (INL) lacked sufficient resources and 

controls to adequately manage the task orders with DynCorp," making over $2.5 billion vulnerable to waste and 

ftaud). SIGIR also questioned oversight of Anham's business systems and other contract administration functions, 

totaling $113.4 million. Id. 

9 
128 


Insert offset folio 71 here 80899.071

1. Information Technology (IT) Security 

The IGs frequently identified weaknesses in information technology (IT) security in their 

responses to the Committee's annual survey, As cyber security threats increase, the IG 

community is concerned that departments and agencies are not properly addressing IT security, 

and has questioned how agencies will protect vital electronic data in an emergency, Infornlation 

technology security recommendations have included issues related to the security of networks, 

servers, computers, electronic data storage, and outdated IT systems. 

Not only is robust IT security imperative in the federal government to protect networks 

and systems containing top-secret government information, but it is also a matter of great 

concern for American citizens who value their privacy. Due to the increasing amount of digitally 

recorded and stored data identifying American citizens, a security breach could expose millions 

of people to fraud, identity theft, and personal hazard without their knowledge. The IGs have 

found that with the rapid advancement of technology, departments and agencies must take 

stronger measures to maintain IT security at acceptable levels. 

Since 2010, at least thirty-one inspectors general communicated a problem with the 

implementation of IT security measures or expressed related concerns; fifteen experienced issues 

over mUltiple years; and nine expressed concerns related to IT security during all three years 

surveyed. Many recommendations were not new; rather, they were reissued after receiving no 

updates from the agencies from the previous year as to action taken. 24 

In 2009, the OIG for the Office of Personnel Management identified 44 open and 

unimplemented recommendations related to IT security.25 The same year, the OIG for the 

National Endowment for the Humanities (NEB) stated that "the agency does not generally 

implement our recommendations in a timely manner.,,26 Fourteen of the Agency's sixteen 

outstanding recommendations related to internal operations concerned IT security. 27 

In 2010, the OIG for the Government Printing Office stated that its longest outstanding 

recommendation related to network vulnerability. At the time, that recommendation had been 

open for 48 months. 28 In fact, in 2010, IT security related issues accounted for more than onethird of the outstanding recommendations made to the NEH29 Likewise, the 10 for the 

24 See, e.g, Letter from David L. Hunt, IG, FCC, to H. Comm. on Oversight and Gov't Reform Chairman Darrell 

Issa (Jun. 6, 2012) (reporting that agency's second most important recommendation, which urged development of an 

oversight plan for its security program over information systems that coIlcct and maintain FCC data but are not 

operated by the FCC, was first cited in 2009, reissued in 2010, and updated in 2011). 

25 Letter from Patrick E. McFarland, IG, OPM, to H. Comm. on Oversight and Gov't Reform Chairman Darrell Issa 

(May 1,2009), Enclosure I b, Reports with Open Audit Recommendations as 0/1013112008. 

26 Letter from Sheldon L. Bernstein, IG, Nat'! Endowment for the Humanities (NEH), to H. Comm. on Oversight 

and Gov't Reform Ranking Member Darrell Issa (May I, 2009). 

" 1d. 

28 Letter from 1. Anthony Ogden, Inspector General, U.S. Gov't Printing Office, to H. Comm. on Oversight and 

Gov't Reform Chairman Darrelllssa (Apr. 14,2010), attachment, Table a/Open Recommendations. 

29 Letter from Sheldon L. Bernstein, IG, NEH, to H. Comm. on Oversight and GOy't Reform Chairman Darrell Issa 

(Apr. 15,2010) (reporting that of the fifteen open recommendations and one unimplemented recommendation, six 

were related to information security). 

10 
129 


Insert offset folio 72 here 80899.072

Consumer Product Safety Commission reported that "[t]he majority of the open 

recommendations relate to IT security issues. ,,30 In a statement that swnmarizes the situation at 

many agencies, the Pension Benefit Guarantee Corporation noted in 2010 that "the need for 

improvement of information technology operations and security has been a recurring issue at 

PBGC."]I 

During 2011, all three of the most critical outstanding recommendations identified by the 

OIG for the Federal Labor Relations Authority related to IT security.32 In addition, NASA's IG 

reported: 

[C]omputer servers on NASA's Agency-wide mission network had highrisk vulnerabilities that could be exploited from the Internet. Specifically, 

six computer servers associated with information technology (IT) assets 

that control spacecraft and contain critical data had vulnerabilities that 

would allow a remote attacker to take control of or render them 

unavailable. 33 

By 2012, 24 of the most critical open or unimplemented recommendations identified by 

the IGs pertained to internet security, representing a slight increase from the 22 identified in 

2010. All outstanding recommendations for the National Endowment for the Arts in 2012 

concerned IT security deficiencies. 34 The SEC OIG issued a recommendation suggesting that 

the agency check to see whether employees and contractors working in the IT department had 

received a background investigation. 35 

2. Overpayments 

The IGs also consistently reported concerns about inadequate oversight and controls over 

the outflow offederal funds, especially in contracting and bidding. Many times, overpayments 

were made where additional documentation or more stringent approval requirements could have 

identified an ineligibility or overpayment before the funds were disbursed. Alternatively, 

agencies were sometimes too trusting, allowing contractors to bill after the fact in cases in which 

prices were not set in advance. 

30 Letter from Christopher W. Dentel, IG, to H. Comm. on Oversight and Gov't Reform Chairman Darrell Issa (Apr. 

2,2010), n. 1. 

31 Letter from Rebecca Anne Batts, IG, Pension Benefit Guar. Corp., to H. Comm. on Oversight and Gov't Reform 

Chairman Darrell Issa (Apr. 26, 2010). 

32 See Letter tram Dana A. Rooney-Fisher, IG, Federal Labor Relations Authority, to H. Comm. on Oversight and 

Gov't Reform Chairman Darrell Issa (Apr. 29, 20 II), Enclosure. 

33 Letter from Paul K. Martin, IG, NASA, to H. Comm. on Oversight and Gov't Reform Chairman Darrell Issa (Apr. 

26,2011). 

34 Letter from Tonic Jones, IG, Nat'! Endowment for the Arts, to H. Comm. on Oversight and Gov't Reform 

Chairman Darrell Issa (Apr. 19,2012). 

35 Letter ITom SEC OIG to H. Comm. on Oversight and Gov't Reform Chairman Darrell Issa (Apr. 27, 2012), Table 

2: SEC OIG Three Most Important Open and Unimplemented Recommendations as of April 1,2012. 

11 
130 


Insert offset folio 73 here 80899.073

In response to concerns about contracting oversight, IGs frequently recommended that 

agencics only approve contracts for known, specific quantities, with a predetermined price, and a 

term set in advance. At least six of the significant recommendations identified annually by the 

IGs for USAID, the State Department, National Science Foundation, and the SpeciallG for Iraq 

Reconstruction all related to overpayment, contract, or grantee accuracy issues. 

In every year surveyed, the I G for the Department of Defense reported that more than $1 

billion remained uncollected from contractors. A large portion of this amount was the 

outstanding recoveries of payments made that were later deemed unallowable, including 

payments to deceased, retired military members; recoveries of unspecified improper payments 

made, and; recovery of unallowable costs frorn defense contracts36 The longer the 

overpayments remain unrecovered, the less likely collection becomes. 

The IG for USAID, the agency responsible for providing emergency funds and resources 

to foreign countries, disclosed numerous unimplemented recommendations related to vast 

overpayments and suggested recoveries of unsupported or ineligible costs. Many dated back five 

years or more. The difficulty of recovering payments made to foreign contractors in developing 

countries makes the accuracy of contacts from the outset of vital importance. 

In 201 0, the Department of Education's IG recommended that prior to issuing grants 

through the State Fiscal Stabilization Fund, funded by the American Recovery and Reinvestment 

Act 0[2009 (ARRA), reasonable support for key application data should exist. After two years 

without any resolution, the IG identified this recommendation as one of the three most 

significant open recommendations 37 Although the Department ensured that it had received all 

required data and related information, it did not verify that information. The IG does not 

typically assign a dollar amount to recommendations made, but after a one-time appropriation of 

$53.6 billion under ARRA in 2009, in 2010, the budget for the State Fiscal Stabilization Fund 

Program exceeded $23 billion38 

Conclusion 

In the face of record deficits and a mandate to address excessive discretionary spending 

from the Budget Control Act, the House of Representatives has searched for ways to use 

taxpayer dollars more efficiently. The IGs share that mission. They have worked for years to 

identify opportunities to run the federal government in a more cost-effective way, and the return 

on the taxpayer investment in the IG community has been significant. However, management at 

the federal agencies left additional savings on the table by failing to implement thousands of IG 

36 Letter from John R. Crane, Ass't IG, Dep't of Defense, to H. Comm. on Oversight and Gov't Reform Chairman 

Darrell lssa (Apr. 29, 2009). 

37 Letter from Kathleen S. Tighe, IG, Dep't of Education, to H. Comm. on Oversight and Gov't Reform Chainnan 

Darrelllssa (May 4, 2012). 

38 U.S. Dcp't of Edueation, State Fiscal Stabilization Fund (Mar. 7, 2009), 

http://www2.ed.gov/poliey/gen/leglreeovcry/factsheetistabilization-fund.html.; The White House, Office ofMgmt. 

& Budget, Budget for Fiscal Year2013, Historical Tables, 82-83 (2013). 

12 
131 


Insert offset folio 74 here 80899.074

recommendations worth tens of billions of dollars annually. The fact that eight of the 73 IG 

positions are vacant compounds the problem. 

At the beginning of each fiscal year, staff from the Department of Health and Human 

Services OIG follows up with HHS management and its' operating and staff divisions to 

determine their progress in implementing recommendations. 39 This practice allows the OIG to 

accurately track the agency's progress and to communicate to Congress when legislative action 

may be necessary to effectuate the changes recommended. Because agency management has 

been increasingly dismissive of IG recommendations, Congress should aggressively incorporate 

them into legislative actions. More legislative activity based on IG recommendations will result 

in better use 0 f substantial funds and improvements in program integrity and information 

systems and processes. 

39 lUIS OIG Compendium of Unimplemented Recommendations, Mar. 2011 ed., available al 

hllps:!loighhs.govlpublicationsldocs/compendiumI2011ICMf'-March2011-Finalpd((Jast visited Sep. 26, 20 I 2). 

13 
132 


Insert offset folio 75 here 80899.075

UNITED STATES HOUSE OF REPRESENTATIVES 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

MAJORITY STAff 

JANUARY 2009 

INSPECTORS GENERAL: IMPLEMENTING 

THOUSANDS OF OPEN RECOMMENDATIONS 

COULD SAVE TAXPAYERS ALMOST $26 BILLION 

PREPAREO FOR 

REP. HENRY A. WAXMAN 

SEN. CLAIRE MCCASKilL 

REP. EOOLPHUS TOWNS 
133 


Insert offset folio 76 here 80899.076

TABLE OF CONTENTS 

EXECUTIVE SUMMARY ........................................................................ i 

I. INTRODUCTION ........................................................................... 1 

II. PURPOSE AND METHODOLOGY ................................................. 1 

III. FINDINGS ..................................................................................... 2 

A. Thousands of Recommendations Remain Unimplemented ........... 2 

B. The Federal Government Could Recover Almost $26 Billion by 

Implementing Open IG Recommendations .................................... 3 

C. The Federal Government Could Improve lis Core Programs ......... 6 

1. National and Homeland Security ............................................... 6 

2. Public Heallh and Safety .............................................................. 7 

3. Environmental Protection ............................................................. 8 

4. Procurement Reform ..................................................................... 9 

IV. CONCLUSION ........................................................................... 10 

APPENDIX. NUMBER OF UNIMPLEMENTED INSPECTOR GENERAL 

RECOMMENDATIONS, BY YEAR ISSUED .................................. 11 
134 


Insert offset folio 77 here 80899.077

EXECUTIVE SUMMARY 

Inspectors General (IGs) playa ,ital role in reducbg waste, fraud, and abuse in the fedcral 

govcrnment. They conduct indepeudent audits and investigations and make recommendations to 

protect the interests of taxpayers and improve the effectiveness of government. But their work 

produces few results if federal agencies ignore or reject their fmdings and recommendations. 

This report - the first governmentwide compilation of its kind --finds that thousands of IG 

recommendations, representing billions of dollars in waste and abuse, remain unimplemented. 

The Ovcrsight Committee asked the nation's IGs to identity-aU Twol'tiffiendations made-between 

January 1, 2001, and-December 31 ; 2008, that had not been implemented by federal agencies. 

The Committee also requested infonuation about the potential monetary benefits that would 

result from implementing Ibese recommendations. The Committee received responses from 63 

IGs. 

The infonnation obtained by the Committee shows that tIm:<I:lnsh-A-dministrationhas failed tg 

i1l;lpteIllent'm<Jre-than 13;800IG recommendationHnai:le since-ZOOL Under the Inspector 

General Act, federal agencies are supposed to complete final action on IG recommendations 

within one year. Yet the infonnation provided to the Committee indicates that ahnost half (48%) 

of the open recommendations reviewed were made before 2008, and more than a quarter (27%) 

were made before 2007. 

The -W,[onnatjonprovided by the IGs also indicates ilia! federal agenCfes could save taxpayers 

$25,9_billion by implementing open IG recommendations" The five agencies that could save the 

most moneY'bY impleinenting open recommendations are the Social Security Administration, the 

Department of Health and Human Services, the Department of Defense, the Department of 

Transportation, and the Department of Housing and Urban Development. 

Examples of unimplemented IG recommendations with potential monetary benefits include: 

In April 2006, the Social Security Administration IG estimated that the agency could save 

more than $2 billion annually by ceasing payments to people who no longer meet the 

eligibility criteria for disability benefits due to medical improvement or employment 

status. 

In July 2007, the Defense Department IG estimated that the Pentagon could recoup $837 

million in overpayments by establishing effective recovery audits for military 

telecommunications contracts. 

In February 2007, the Department of Homeland Security IG concluded that FEMA could 

recover $16 million in excessive billings and questionable costs resulting from pnor 

management of a contract for base camp services associated with Hurricane Katrina. 

In addition to costing taxpayers billions of dollars, the failure of federal agencies to implement 

IG recommendations poses serious risks to the security, health, and safety ofthe American 

people. Thousands of unimplemented recommendations would improve national and homeland 

i I !nspec~ors General 
135 


Insert offset folio 78 here 80899.078

security, public health and safety, environmental protection, and Americans' overall quality of 

life. These include: 

Recommendations to strengthen national and homeland security, including proposals 

to better manage the wars and reconstruction efforts in Iraq and Afghanistan; prevent 

terrorist attacks on U.S. soil; protect the nation's food supply from tampering; and secure 

the nation's borders. 

Recommendations to improve the health and safety of the American public, 

including proposals to strengthen the nation's food safety net; ensure worker health and 

safety; pro\~de health care for the nation's veterans; respond efficiently to natnral 

disasters; and maintain the safety of the nation's infrastructure. 

Recommendations to improve America's environment, including those that would 

protect air and water quality; strengthen management of the nation's forests, parks, and 

other public lands; safely dispose of nuclear and other toxic waste; and protect natnral 

resources on or near the nation's defense bases. 

il I Inspectors General 
136 


Insert offset folio 79 here 80899.079

I. INTRODUCTION 

In 1978, Congress passed the Inspector General Act, creating statutory inspectors general (IGs) 

for the major federal agencies.) Currently, 58 IGs fall under the authority of the Inspector 

General Act. Separate legislation provides discrete but parallel authority to nine other IGs. In 

all, Congress has created IGs for 67 federal departments, agencies, and other entities. 2 

The Inspector General Act describes the primary objectives of an IG as conducting independent 

and objective audits, investigations, and inspections; preventing and detecting waste, fraud, and 

abuse; promoting economy, effectiveness, and efficiency; revie"~ng pending legislation and 

regnlation; and keeping the agency head and Congress informed of its work and its findings.' 

After conducting audits, investigations, and inspections, IGs typically issue written reports to 

present their reconunendations to agency officials, who have an opportunity to review and 

conunent on these reports before they are released. According to the Inspector General Act, each 

agency is required to decide whether it agrees with the IG's findings and recommendations 

within six months of the release of a final report. If'tIre:agency.fa:ilstoc1lOmplete~fina!~acti.on.9n 

an)[·reooJ1J1mmdatiOl1within Ullffyear, the·IG must disClose the delay in semi-annual reports to 

eOl1gress'.4" 

II. PURPOSE AND METHODOLOGY 

Each year, lOs make thousands of recommendations for saving taxpayer fu!lds and improving 

the operations of government. Whether these savings are realized and government operations 

improVed depends on the actions of the agency. The'jlurpose:ofthls-report·is to assess-ihffrecord 

oHederal,agenci·escin·irnplelnenting'IG.reconimendationS. 

In December 2007, the Conunittee sent a letter to 63 IGs requesting a list of recommendations 

made between January I, 2001, and December 31, 2007, that had not been implemented by 

agency officials or by Congress.s The IGs responded with a summary oftheir open 

recommendations and the monetary and nonmonetary benefits of implementing the 

recommendations. In December 2008, the Committee asked the lOs to update their responses to 

include reconunendations through the end of 2008.6 Sixty-three IGs provided partial or full 

responses to this new Committee request. 

I Inspector General Act of 1978. Pub. L. No. 95-452. 

2 Congressional Research Service, Statutory Offices of Inspector Genera!: Past and Present (Sept. 25, 2008). 

',nspector General Act of 1978. Pub. L No. 95-452. 

'Id. 

S See, e.g" letter from Chalrmon HenlY A. Waxman to the Honorable Gregory H. friedman. Inspector 

General, Department of Energy IDec. 7. 2007110nline at www.overslght.house.gov/story.asp?lD=1717). The 

Committee did not send a letter to the IG for the Department of Health and Human Se:vices because fhis 

IG produces an annual compendium of unimplemented recommendations.. 

6 Between the Committee's first request in December 2007 and lts second request In 2008, Congress 

created fhe Speda! Inspector Genera! for Afghanistan Reconstruction and new IGs for the Government 

Accountability Omee and Architect of the Capilol. The Committee did not ask these new lGs fo provide 

1 I Inspeciors General 
137 


Insert offset folio 80 here 80899.080

Several of the IGs provided the Committee with a subset of their unimplemented 

recommendations. For example, they reported only their most "significant" unimplemented 

recommendations or excluded recommendations made in grantee audits or recommendations that 

were less than six months old. Because of these omissions, the fmdings in this report likely 

understate the full extent of the unimplemented recommendations and potential cost savings. 

III. FINDINGS 

A. Thousands of Recommendations Remain Unimplemented 

According to the information provided to the Committee, federal agencies have not implemented 

13,847 recommendations made by IGs since January 1,2001. Although the Inspector General 

Act requires federal agencies to complete final action on IG recommendations within one year, 

almost half (48%) of the unimplemented recommendations (6,668) were made before 2008. In 

addition, 27% of the unimplemented recommendations (3,772) were made before 2007 and 16% 

(2,251) before 2006. Approximately 10% of the unimplemented recommendations were made 

between 2001 and 2004. 

The information provided to the Committee indicates that the Departments of Defense, Labor, 

and Housing and Urban Development each have more than 1,000 open recommendations and 

that roughly half of these recommendations were made in 2007 or earlier. Table 1 sets forth the 

ten agencies reporting the most unimplemented recommendations. 

An appendix sets forth a list by agency of the number ofIG recommendations made between 

2001 and 2008 and the number that remain unimplemented. 

information to the Committee on unImplemented recommendations> The CommIttee also did not osk the IG for the 

Centrol Jntelilgence Agency to provide updated dato, 

2 I Inspectors Genera! 
138 


Insert offset folio 81 here 80899.081

Table 1. Ten Agencies with the Most Unimplemented Recommendations' 

De artment of Labor 

Department of Housing and Urban 

Development 

Department of Defense 

Department of State 

Department of Home!and Security 

Department of Aqriculture 

U,S, Agency for Intemational Devel~ment 

Department of Education 

Social Security Administration 

Department of Interior 

I 

/I 01 Open 

Recommendations 

1526 

1,335 

1,047 

894 

870 

747 

644 

639 

595 

592 

I 

%of Open 

Recommendations 

Made Before 2008 

47% 0 

50% 

52% 

37% 

* 

50% 

21% 

60% 

61% 

63% 

~ The Department of Homeland Security lG did not provide the Commutee wilh data on recommendations made in 

calendar year 2008, 

Sixty of the IGs were able to provide the Committee with the total number of recommendations 

they made between January 1, 2001, and December 31, 2008, including those that have been 

implemented and those that have not. These IGs made more than 98,000 recommendations 

between 2001 and 2008,14% of which remained unimplemented at the end of2008. 

B. The Federal Government Could Recover Almost $26 Billion by 

ImplemenHng Open IG Recommendations 

The information provided by the IGs indicates that the federal government could achieve $25.9 

billion in cost savings or new revenue if agencies implemented open recommendations with 

estimated monetary benefits. Recommendations made in 2007 or earlier account for threefourths ($20.3 billion) of these potential savings. 

Two agencies, the Social Security Administration and the Department of Health and Human 

Services, could save approximately $16.3 billion by implementing open 10 recommendations. 

1be Departments of Defense and Transportation could each save more than a billion dollars by 

implementing open recommendations. Table 2 lists all of the agencies with open IO 

recommendations that could save taxpayers money. 

'The lOs for the Department of Health qnd Human Services, Environmental Protection Agency, and U,S. 

Posta) Service only provided data on "Significant" open recommendations. One or more of these agencies 

may fal! in the fop 10 for open recommendations if all recommendations are included. The Department of 

Homeland Security IG did not prov1de fhe Committee with data on recommendations made in calendar 

year 2008; therefore, its total for open recommendations is low. 

3 f Jnspec!ors General 

I , 
139 


Insert offset folio 82 here 80899.082

Table 2. Agencies that Could Save Money by Implementing Open IG Recommendatlons8 

estimated Esllmated 

SavlnQ!_ Savings 

Aaenc for lnter"lolio"al Develoomenl $176,968,526 Federal Cornmunicolions Commission 1,345,673 

Af"""trok $135,300,000 Federal Mariiime Commission $40,800 

Aopalochian ReqioGol Coxmiss:on $440,015 General Services Administration _,!§73,247,380 

Co i~ol Police $2,800,QJ0 Goverrment PrinfinQ Office SSA95 

Corporatbn for National and National Aeronautics and Space 

Community Service $490,670 Administration $7,240,000 

Corporatlon for Publlc 5roodcastlng $ ,632,326 National Endowment for the Arts $969,56' 

National Endowment for the 

Department of AQricvlture $58,371,009 Humani,les $100,000 

Depo:iment of Commerce $29,800,000 National Labor Relations Soard 65,558 

OeDartmeni of Defense $1,511,401,000 National Science foundaHon $206,000 

DeoarlmenJ of Education $883,441,438 Nuc!e9r Reaulotol):: Commlsst~m ~50,589 

Deoariment of Enerov $835,900,049 Office of Personnel Manaoement HO,673,802 

Dept. of Health and Human Services : $7,704,000,000 Pension Benefit GUQranty Corporation $4,778,543 

Deportment of Homeland Security $131,767,99' i Posial Service $656,189,1157 

Department of Housing and Urban 

Develooment $996,943,986 Railroad Retlremeni Board $4245,771 

Deoartment of Interior $55,230,944 Securlties and Exchanae Commission -1134,940 

Denortment of Justice 162,906,030 Small Business. Administration ",H5,214,721 

Department of labor $6,151,857 Smithsonian Instifution ~189,563 

Department of state $47,970]30 Social SecurjtyAdmin!stration $8,639,699,935 

Special Inspector General tor Iraq 

Denortment of the Treasu ,~9400,OOO Reconstruction $3,180,000 

Departmenf of Transporiatlon I $1,467,845,280 Tennessee Vaney Authority $4,347,879 

Treasury fnspector Generol for Tax 

Department ot Veterans Affairs $99,120,444 Administration $678,895,665 

Envi'onmentol Protection Aqency $948,974,949 Total 25951,981,987 

Many of the specific recommendations made by IGs could save millions or even billions of 

dollars, The rGs highlighted for the Committee some of the recommendations they have made 

over the past eight years that could save the most significant amount of money but remain 

unimplemented, They include the following examples: 

In April 2006, the Social Security Administration IG estimated that the agency could save 

more than $2 billion annually by ceasing payments to people who no longer meet the 

s The lGs for the Department of Health and Human Services, the Environmenta! Protection Agency, and the 

U,S. Postal Service only provided data on "sIgnificant!! open recommendations. The Department or 

Homeland Security IG did not provide the Committee with data on recommendations made in calendar 

year 2008. The IGs for the Department of Interior and the Office of Personnel Management excluded 

questioned costs from their totals for potential savings, Data for the U,S. Agency for Intemational 

Development also Includes savings from recommendations made to the Ml!!ennlum Challenge 

Corporation. 

-4 I Inspectors General 
140 


Insert offset folio 83 here 80899.083

eligibility criteria for disability benefits dne to medical improvement or employment status. 9 ~ 

In July 2007, the Defense Department 10 estimated that the Pentagon could recoup $837 

million over five years by establishing effective recovery audits to identifY overpayments 

to military telecommunications contractors, 10 

In March 2007, the Department of Transportation 10 estimated that the Federal Highway 

Administration could put $725 million to better use by ensuring that states conduct 

effective value engineering studies on all federal-aid highway projects, 11 

In March 2007, the Department of Education 10 reco1l11l1ended that management 

determine whether the Bureau of Indian Affairs had used more than $300 million in 

granted funds appropriately and recover any funds used for unauthorizad purposes, 12 

In September 2005, the Amtrak 10 estimated that the agency could save $100 million 

annually by adopting a modern maintenance approach based on reliability-centered 

maintenance, which requires sound technical and economic justifications for maintenance 

activities, 13 

In September 2007, the Department of Housing and Urban Development 10 estimated 

that the agency could save $45 million within the next year by ensuring that 

manufactured housing meets Federal Housing Administration standards for safe and 

sound foundations, 14 

In February 2007, the Department of Homeland Security 10 recommended that FEMA 

recover $16 million in excessive billings and questionable costs resulting from poor 

management of a contract for base camp services associated with Hurricane Katrina, 15 

>' SocIal Security AdminIstration, Office of Inspector General, Congressional Response Report; 

Overpayments in the Social Security Administration's DIsability Programs IApr. 3, 2(06) IMJJ.(J4-24065), 

10 Department of Defense, Office of Inspector General. Identification and Reporting of improper Payments 

through Recovery Audlffng IJuly 9, 2007) ID-2007-110). 

11 Department of Transportation, OffIce of Inspector General, Final Report on Value Engineering in FHWA '5 

Federal-Aid Highway Program IMar, 28. 2007) IMH-2007.040), 

12 Department of Education, Office of !nspector Genera!, Department of Education's Oversight of the 

Department of Interiors Administration oliDEA Part B Funds IMar, 30. 2007) IED-OIGIA06GOO(2), 

13 Amtrak, Office of Inspector General, Amtrak Mechanical Maintenance Operations: System~wide Review 

Recommends New Maintenance Approach (Sept. 6, 2005) IE-O&<l4). 

14 Department of Housing and Urban Development, Office of Inspector Genera!, More Than 80 Percent of 

Recently Insured TItle II Manufactured Housing Loons Are on Homes With Substandard Foundah'ons (Sept, 

24,2007) 12007-KC-0(04), 

15 Department of Homeland Security, Office of lnspector General. Interim Review of Contract Costs.. 

ClearbrooK. LLC IFeb, 2(07) (DD-07-06); E-mail from Department of Homeland Security. Office of Inspec!or 

General. fo Majority Staff, House Committee on Overslghf and Govemment Reform (July 3, 2008) 

{referenc1ng a May 2008 memorandum from FEMA to the Homeland Security lG stating that FEMA does not 

plan to pursue recovery of these funds). 

5 I Inspectors General 
141 


Insert offset folio 84 here 80899.084

C. The Federal Government Could Improve Its Core Programs 

In addition to identifying recommendations that could save billions of dollars, the lOs identified 

many recommendations that could improve the way the goverrunent is run and increase the 

efficiency and effectiveness of govermnent agencies. Although there are no monetary savings 

attached to these recommendations, they relate to core governmental functions, including 

homeland and national security, public health and safety, and environmental protection, among 

others. 

1. National and Homeland Security 

The information provided to the Committee shows that federal agencies have failed to inlplement 

hundreds of recommendations by lOs to strengthen national security and prevent terrorist attacks 

on U.S. soil. Examples ofn.tional and homeland security recommendations that bave not been 

implemented are: 

In May 2003, the 10 for the Nuclear Regulatory Commission issued a report concluding 

that the Commission's limited oversigbt does not provide edequate assurance that all 

licensees properly control and account for special nuclear material, such as plutonium 

and uranium. 16 hl. December 2008 memorandum to l\'RC management, the IG raised 

concerns about "continued delays" in promulgating rules to address these security 

concerns. 'NRC estimates it may not complete the rulernaldng until July 2011, eigbt years 

after the report's release. 17 

In February 2004, the U.s. Department of Agriculture IG released a report determining 

that the Fann Service Agency had not edequately addressed the vuhlerability of 

agricultural commodities, including bulk grains and rice, to adulteration and 

destruction." As of December 2008, the Fann Service Agency and the 10 have been 

unable to reach agreement on two of the report's recommendations." 

hl June 2005, the Department of Romeland Security 10 found that u.s. Customs and 

Border Protection does not consistently enforce federal export controls over cbemical and 

16 Nuclear Regulatory Commission, Office of Inspecfor General, Audit of NRC's Regulatory Oversight of 

Special Nuclear MaterialsiMay 2003110IG.03-A-151. See also Govemment Accountobility Office, NRC and 

DHS Need to Take Addlffonal Steps to BefferTrack and Detect Radioactive Materials (June 19,20(8) IGAO08-598); Govemment Accounfabil!ty Office, NUclear security: Federal and Stafe Action Needed to 

Improve Security of Sealed Radioactive Sources (Aug. 6, 2003) (GAQ..03-8D4) (raising similar concems about 

the security of radioactive materia! and notfng that the Commission had not Implemented half of GAO's 

recommendations). . 

17 E-maU from Nuclear Regulatory Commission, Office of Inspector General, to Majority Staff, House 

Committee on Overnight and Govemment Reform (Jan. 5, 20(9); Memorandum from Stephen D, 

Dingbaum, Assistant Inspector General for Audits, Nuclear Regulatory Commission, Office of !nspector 

Genera!. to R. William Borchardt, Executive Director for Operations, Nuclear Regulatory Commission (Dec. 

22,2008). 

16 U.S. Department of Agriculture, Office of !nspecforGeneral. Homeland Security Issues for USDA Grain and 

Commodities Inventories IFeb. 2004) 1500990013KC). 

19 E-mail from U.S. Department of Agriculture, Office of Inspeclor General, to MajOJ11y Staff, House 

Committee on Oversight and Govemment Reform {Dec. 2, 2008J. 

6 I Inspecfors General 
142 


Insert offset folio 85 here 80899.085

biological commodities at U,S, ports ofexi!. The lG recommended that the agency 

evaluate,its export controls program, in~lud~ng current resources an~ ~:a:mn-5 needs, w,ld 

make adjustments necessary to accomplish Its enforcement responSIb,lIties, - Accordmg 

to the IG, corrective actions will not be completed nnti12012, seven years after the 

report's release. 21 

In July 2006, the Special Inspector General for Iraq Reconstruction released a survey of 

the U,S. Embassy's anti-corrnption program and found fundamental problems that 

hindered effective implementation of U.S, anti-corruption efforts, such as a lack of 

coordination and leadership,22 In a July 2008 follow-up, the IG determined that seven of 

the report's recommendations remained open, leaving "much to be accomplished to fully 

establish and implement a comprehensive and effective program.,,23 

2. Public Health and Safety 

The information provided to the Committee indicates that federal agencies have failed to 

implement hnndreds ofrecommenda1ions by IGs to protect public health and safety, such as 

providing quality health care for the nation's veterans, responding effectively to naloral disasters, 

and ensuring the safety of government-sponsored housing, schools, and other bUildings. 

Examples of public health and safety reconunendations that have not been implemented are: 

In July 2005, the Department of Veterans Affairs 10 found that the Veterans Health 

Administration did not follow established procedures when more than 2,000 veterans 

waited longer than 30 days for appointInents.24 In a September 2007 follow-up report, 

the 10 fonnd that the problems persisted." The Veterans Health Administration is taking 

no further corrective action on the reports' unimplemented recommendations. 26 

In September 2005, the Department of Homeland Secnrity IG released a report 

expressing concerns about FEMA's multi-billion dollar program to update and digitize 

the nation's flood maps. The report warned that inaccurate and obsolete flood maps may 

a> Department of Homeland Security, Office of Inspector General. Controls Over the Export of Chemical 

and Biological CommodWes {June 2005) (OIG-05-21). 

21 E~rnail from Department of Homeland Security, Office of Inspector General, to MaJority Staff, House 

Committee on Oversight and Govemment Reform IJuly 3. 2008). 

22 Special Inspector General for Iraq Reconstruciion, Joint Survey of the U.S. Embassy-Iraq's Anticorruption 

Program IJuly 2006) (SIGIR 06-D21). 

23 Spedallnspector General for Iraq Reconstruction, Anticorruption Efforts in fraq: U.S, and Iroq Take 

Actions but Much Remains To Be Done (July 2008) (SIGIR 08-023); E-mail trom Department of Homeland 

Security, Office of Inspector General, to Majority Staff, House Committee on OversIght and Govemment 

Reform (Dec. 11,2008). 

24 Department of Veterans Affairs, Office of Inspector General, Audit of the Veterans Health 

Administration's Outpatient Scheduling Procedures (July 2005) 104-02887-169). 

25 Departmenf of Veterans Affairs, Office of !nspector General. Audit of fhe Veterans Heafth 

Admlnlstrotion's Outpatient Waiting Times ISept. 2007) 107-00616-199). 

26 E-mail from Department of Veterans Affairs, Office of Inspector General, to Majority Staff, House 

Committee on Oversight and Goyemmenf Reform (July 10,2008); see aiso Department of Veterans Affairs, 

Office of Inspector General, Semiannual Report for April 1,2008 to September 30, 2008 (Nov. 25, 2008). 

7 I lnspectors General 
143 


Insert offset folio 86 here 80899.086

place homeovvners and residents at physical and fInancial risk. 27 FE?\1A has not 

implemented six recOlmnendations from this report as of December 2008 28 

In May 2007, the Department of the Interior IG visited 13 schools run by the Bureau of 

Indian Affairs and found severe structural problems with the potential to injure or kill 

students and faculty, including crumbliug walls and outdated electrical systems. 29 

Although the agency's management concurred with the IG's recommendations, it has not 

produced a plan to identify and mitigate health and safety hazards or target dates for 

accomplishing specifIc steps.30 

3. Environmental Protection 

The information provided to the Cormnittee also indicates that federal agencies have failed to 

implement recommendations to improve protections for the nation's air, water, and endangered 

species. Examples of environmental protection recommendations that have not been 

implemented are: 

In June 2002, the Defense Department 1G released an evaluation of the effectiveness of 

Pentagon programs involving endangered species, unexploded ordnance, air quality, and 

other issues at test and trainitlg ranges. The IG recommended that the Defense 

Department implmnent a comprehensive community outreach plan to address these 

issues.3

! The fInal instruction on community outreach and involvement will not be 

published until March 2009, almost seven years after the initial report's puhlication.32 

In March 2005, the IG for the Environmental Protection Agency issued a report 

identifying fIve key concerns that hamper the ability to hold m~or stationary sources of 

air pollution accountable for meeting air quality requirements. 3 Agency officials 

disagreed with two recommendations that would improve pollution monitoring and give 

the agency more power to issue sanctions. Four recommendations remain open. 34 

27 Department of Homeland Security, Office of Inspector General, Challenges in FEMA 's Flood Ivlap 

Modemization Program ISept. 2005) {OIG-05-44). 

28 E-mail from Department of Home!and Security, Office of Inspector General, to Majority Staff. House 

Committee on OVersight and Government Reform (Dec. 2, 2008). 

'IS Department of the Interior, Office of Inspector General, Flash Report - Bureau of Indian Affairs and Bureau 

of Indian Education: Schools in Need of Immediate ACTIon IMay 2007) IC-IN-BIA-01J08-2oo7). 

30 E-mail from Department of the Interior, Office of Inspector General, to Majority Staff, House Committee 

on Oversight and Government Reform (Sept. 12,2008) and follow-up phone conversation (Dec. 2, 2008); 

Memo from JaCK Rouch, Raglonal Audit Manager, Office of Inspector General, Department of the Interior, 

to the Assistant Secretary for Policy, Management and Budget, Department of the Interior {Aug. 23. 20D7). 

31 Department of Defense, Office of Inspector Genera!, ODD Environmental Community Involvement 

Programs ot rest ond Training Ranges {June 2oo2} 1D-2002-122). 

32 E-mail from Department of Defense, Office of Inspector Genera!, to Majority Stoff, House Committee on 

Oversight and Govemmenf Reform ISept. 10. 2008). 

33 Environmental Protection Agency, Office of Inspector General, Substantial Changes Needed in 

Implementation and Oversight ofTitie V Permits If Program Goals Are To Be Fully Realized IMar.2005) (2005-

P-OOOIO). 

34 E-mail from Environmental Protect1on Agency, Office of Inspector Genera!, fo Majority Staft House 

Committee on Oversight and Government Reform (Dec. 1,2008). 

8 I Jnspedors General 
144 


Insert offset folio 87 here 80899.087

In December 2005, the Department of Agriculture IG released a report finding that the 

Animal and Plant Health Inspection Service needs a formal process to monitor and 

control field releases of genetically engineered organisms,3S Three years after this 

report's release, the department still has not implemented 17 recommendations to 

strengthen monitoring of genetically engineeren crops planted in the open environment. 36 

4. Procurement Reform 

The IGs also highlighted government contracting as a suhject area in which reconmlendations 

have not heen implemented. Examples of unimplemented procurement recommendations are: 

In an October 2004 report on the Mine Safety and Health Administration, the Department 

of Labor IG found a lack of commitment to procurement principles and a management 

structure that allowed program staff to exert undue influence over the procurement 

process. 37 Management did not agree with the IG's recommendation to rescind and 

reassign this procurement authority. In March 2005, the IG found irregularities in the 

Department's award of a sole-source contract and noted inadequate separation of 

procurement duties.38 Management disagreed with the IG's recommendation to create an 

independent acquisition office. 39 

In May 2005, the Department of Energy IG issued a report finding that a construction 

project to eliminate surplns Russian and U.S. nuclear materials was substantially behind 

schedule and over budget. 4

• The Department has failed to implement three of the IG's 

recommendations to finalize the design of the Pit Disassembly and Conversion Facility in 

order to contain costs and stabilize the construction schedule. 41 

3S U,S, Department of Agriculture, Office of !mpector General, Controls Over Jssuonce of Genetically 

Engineered Organism (GEO) Release Permits IDec. 2(05) 150601000BTEI. 

36 E-mail from U.S. Department of Agriculture, Office of Inspector General, to Majolity Staff. House 

Committee on Oversight and Government Reform {Dec. 2, 2008). 

37 Department of Labor, Office of Inspector General. Mine Safety and Health Administration Procurements 

Showed a Pattem of Disregard for Federal and DOL Acquisition Rules and Requirements !Oct. 2004) {2,5..05-

ooHl6-001). 

38 Department of labor, Office of Inspector General, Award aoo Management of Controcts for Encryption 

Software Were SignlNcanHy Flawed (Mar. 2005) (06-05-005-07·720). 

39 E-mail from Department of Lobor, Office of Inspector General, to Majority Staff, House CommIttee on 

Oversight and Govemment Reform (Dec. 2, 2008). 

40 Department of Energy, Office of Inspector General, National Nuclear Security Administration's Pit 

Disassembly and Convers/on Facility (May 2005) IIG-0688). 

41 E~mail from Department of Energy, Office of Inspector General, to Majority stalT, House Commiitee on 

Oversight and Govemment Reform {Dec. 4, 2oo8}. See alsa Government Accountability Office, 

Department of Energy: Major Construction Projects Need a Consistent Approach for Assessing Technology 

Readiness to Help Avoid Cost Increases and Delays (Mar. 2(07) {GAO-07-336} (citing poor management 

and lax contractor oversight as the primary factors driving schedule delays and cost overruns), 
145 


Insert offset folio 88 here 80899.088

IV. CONCLUSION 

IGs playa critical role in fighting waste, fraud, and abuse in federal agencies and identifying 

opportunities to make govenunent more effective and more efficient in fulfilling its 

responsibilities to the American people. Through audits and investigations, IGs each year 

identify serious management challenges and make thousands of recommendations to resolve 

these problems. Implementing the nearly 14,000 open recommendations identified in this report 

could cut waste and abuse by almost $26 billion and improve the efficiency and effectiveness of 

core government programs. 

10 I Inspecfors General 
146 


Insert offset folio 89 here 80899.089

APPENDIX. NUMBER OF UNIMPLEMENTED INSPECTOR 

GENERAL RECOMMENDATIONS, BY YEAR ISSUED 

2001 12002 

Total 

Open 

f---' 2003 2004 200S 2006 2007 2008 Rec$. 

Aaencv tor International D€velooment~2 3 I 0 3 3 13 18 96 508 644 

Amjra\::4~ I 180 

Appabchlan ReQiono! Commission 0 0 0 3 3 5 1 13 25 

Co itol Police I 0 0 0 0 0 0 47 61 108 

CommocEtyJutures Tradino Commission 0 0 0 0 0 1 0 0 1 

All Recs. I 

Made, I 

2001·200a 

4,719 

1,415 

413 

168 

66 

Consumer 

Corp, 

Corporction 

for Nafional 

Product 

for Pubfic 

ond 

SafE:!ty 

Broadcastlnq 

Commt.:n!ty 

Commission 

Service 

0 

0 

3 0 0 0 0 8 

0 

0 

0 

0 

0 

0 

0 0 

0 0 

33 35 

0 

3 

8 8 

2 5 

79 ~ 288 

Denali Commission 0 0 0 0 0 2 II 14 27 59 

Dent. of AaricuHure 5 7 26 26 52 111 150 370 747 3.610 

Dept. of Commerce 0 4 0 1 2 10 24 32 73 832 

Dept, of Defense 7 18 25 57 I 38 168 235 499 1,047 5,699 

Dept. of Education 15 32 34 I 33 52 105 112 256 639 3.437 

Deot. of Enemv 0 2 5 2 10 19 24 1:8 180 2,993 

Deot. of Health and Human Serv!c€s44 22 11 8 12 14 38 21 47 173 725 

Dept. 

Dept. 

Dept. 

of 

of 

of 

Homeland 

Interior 

HOusinQ and 

SecUfity45 

Urban Development 

0 0 

0 

4 

10 

17 

28 

38 

38 

72 

71 

20 

162 

37 

96 

174 

132 

71 

362 

295 

140 217 

673 

140 

1,335 

870 

592 

~ 

~ 

~~ 

Dept 

Dept 

Deot, 

D~pI, 

of 

of 

of 

of Slate 

Justice 

Ihe 

LabOr~6 

Treasury 

25 

0 

0 

3 

27 

8 

0 

2 9 8 

48 

11 

0 

55 

27 

0 

214 

24 

29 26 

1 2 

166 

67 187 

187 

88 

B 

804 

567 

199 

28 

1,526 

894 

361 

39 

~ 

~ 

~ 

1.212 

DeeJ. of Transportation 3 11 11 6 13 34 69 192 339 2,241 

Dept, of Velerans Affairs 0 0 0 0 6 3 8 192 209 7,299 

Election Assisiance Commission 0 0 0 0 0 2 7 62 71 76 

Envlronmenia! Proledion AQeney47 4 8 8 19 5 20 38 5 107 

E va! Em loyment Opportunity Commission 0 0 0 0 1 0 4 29 34 42 

Export~lmport Bonk of the United States 0 0 0 0 0 0 0 0 0 0 

Farm Credit Admlnlstralion 0 0 0 0 0 0 0 3 3 107 

Federa! Commun1cations Commission 0 0 I 2 3 2 0 14 24 45 846 

Federal DeDos)t Insurance Corooration 0 0 0 0 ,0 1 9 6 16 902 

4'2 Data for U.S, AID also includes recommendations mode to the Millennium Challenge Corporation. 

-43 The Amtrak IG dld not provide year-by-year data on open recommendations, only an aggregate total. 

M Data includes only "Significant" recommendations. 

45 The Homeland Secunty IG did not provide data for calendar year 2008, only the first three months of fiscal 

year 2008. 

46 Data for 2008 also Includes the first three months of the Departmenf's 2009 fiscal year. 

-'17 The EPA IG did not provide the total number of recommendations made between 2001 and 2008. Data 

for open recommendations Includes only l'signlf1cant" recommendations. 

11 I Inspectors General 
147 

Æ 


Insert offset folio 90 here 80899.090

Total AI! li:ecs. 

Open Mode, 

2001 2002 2003 2004 2005 200. 2007 2008 Recs. :2001·2008 

Federal Ejection Commission 0 0 ! 0 0 0 10 43 19 72 194 

Federal HOLlsino Finance Aaencv 0 0 0 0 0 0 0 53 53 288 

Federal Labor Relations Authorif ,.ro I 133 

Federql Maritime Commission 0 I 0 0 0 0 3 0 28 I 31 199 

Federal Reserve Boord 0 0 1 0 3 6 1 I 8 19 90 

Federal Trade Commission 0 0 0 0 1 0 2 16 19 ;98 

Genera! Services Admif'istration~~ i 2 5 6 5 5 9 46 135 213 

Government Printing Office&i 0 0 0 0 0 8 18 30 56 214 

International Trade Commission 0 0 0 0 4 0 0 16 20 149 

Leaal Services Coroorotlon 0 0 0 0 ---- 0 0 0 0 0 0 __ 

~lbrarv of Conoress 0 0 2 I 2 0 4 16 34 58 639 

National Aeronautics and Sooce Admin. 0 0 0 1 1 6 31 42 81 l,108 

Notional Archives 0 0 0 0 1 17 14 102 134 455 

Notional Credit Union Administration 0 0 0 0 0 0 14 28 42 '77 

National Endowment for the Arts 0 0 o· 0 0 0 5 34 39 340 

Notional Endowment for the Humanities 0 8 0 0 0 2 9 3 22 481 

National Labor Relations Board 0 0 2 0 0 0 4 6 12 133 

Notional Science fovndotion51 3 1 2 ± 0 7 3 45 61 465 

Nuclear ReQulatory Commission 2 0 4 19 9 2B 62 126 891 

Office of Personnel Management 0 0 2 15 18 55 122 76 2B8 3.601 

! Peace Corns 0 0 0 0 0 3 27 95 125 3.824 

! Pension Benefit Guarantv Coroorotion 0 0 5 3 14 23 19 56 120 662 

Postal Reaulatorv Commission i 0 0 0 0 0 0 0 9 9 22 

Posfal Service52 0 0 0 0 3 9 36 138 186 1.183 

, Railroad Retirement Board 13 14 5 4 43 17 50 602 

Seculitles end Exchanae Commission 0 0 0 1 7 2 27 122 35~ 863 

Small Busln9Ss Administrafion 0 2 1 30 8 14 17 40 t-~ 1 SmithsonkJn Institution 0 0 0 1 2 5 22 24 54 

SociolSecumv Administra1ion 29 45 50 31 41 71 95 233 I 595 

Specla! Inspector Genera! for Iraq 

Reconstructionu 0 0 0 0 4 46 17 37 104 

Tennessee Va8ev Authority 0 0 0 0 1 5 13 110 129 

Treasury Insoector General forTox Admin, 5 0 5 17 13 7 44 126 217 

To1al 148 232 379 530 962 1.521 2896 6,866 13847 

Ml The federal labor Relations Authority IG did not prov1de a year~by~year breakdown of open 

recommendations or a total for recommendatlons made between 2001 and 2008. 

49 The Genera! Services AdmInistration 10. did not provide the toto! number of recommendatIons made 

beJween 2001 and 2008. 

442 

2.717 

344 

2,124 

3.290 

98317 

S) Data for 2008 also includes the first three months of the Govemment Printing Office's 2009 fiscal year. The 

figure for total recommendations made does not include 2001 ~2004, for which data was not available. 

51 Data for 2008 also includes the first three months of the Foundation's 2009 fiscal year. 

52 Data Includes only "signIficant" recommendations, 

53 Data for 2008 also includes the first three months of SIGIR's 2009 fiscal year. 

12 I Inspectors General