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TOP CHALLENGES FOR SCIENCE AGENCIES: 

REPORTS FROM THE INSPECTORS GENERAL 

(PART I AND PART II) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

THURSDAY, FEBRUARY 28, 2013 

and 

THURSDAY, MARCH 14, 2013 

Serial No. 113–9 

and 

Serial No. 113–13 

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

( 

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

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. LAMAR S. SMITH, Texas, Chair 

DANA ROHRABACHER, California 

RALPH M. HALL, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

FRANK D. LUCAS, Oklahoma 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

LARRY BUCSHON, Indiana 

STEVE STOCKMAN, Texas 

BILL POSEY, Florida 

CYNTHIA LUMMIS, Wyoming 

DAVID SCHWEIKERT, Arizona 

THOMAS MASSIE, Kentucky 

KEVIN CRAMER, North Dakota 

JIM BRIDENSTINE, Oklahoma 

RANDY WEBER, Texas 

CHRIS STEWART, Utah 

EDDIE BERNICE JOHNSON, Texas 

LYNN C. WOOLSEY, California 

ZOE LOFGREN, California 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

FREDERICA S. WILSON, Florida 

SUZANNE BONAMICI, Oregon 

ERIC SWALWELL, California 

DAN MAFFEI, New York 

ALAN GRAYSON, Florida 

JOSEPH KENNEDY III, Massachusetts 

SCOTT PETERS, California 

DEREK KILMER, Washington 

AMI BERA, California 

ELIZABETH ESTY, Connecticut 

MARC VEASEY, Texas 

JULIA BROWNLEY, California 

MARK TAKANO, California 

VACANCY 

SUBCOMMITTEE ON ENERGY

HON. PAUL C. BROUN, Georgia, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

BILL POSEY, Florida 

DAVID SCHWEIKERT, Arizona 

KEVIN CRAMER, North Dakota 

LAMAR S. SMITH, Texas 

DAN MAFFEI, New York 

ERIC SWALWELL, California 

SCOTT PETERS, California 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

Thursday, February 28, 2013 

Page 

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

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

Opening Statements 

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

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

Representatives .................................................................................................... 6 

Written Statement ............................................................................................ 7 

Statement by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, 

U.S. House of Representatives ............................................................................ 8 

Written Statement ............................................................................................ 10 

Witnesses: 

Mr. Paul K. Martin, Inspector General, National Aeronautics and Space Administration (NASA), Office of Inspector General 

Oral Statement ................................................................................................. 13 

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

Ms. Allison C. Lerner, Inspector General, National Science Foundation (NSF), 

Office of Inspector General 

Oral Statement ................................................................................................. 22 

Written Statement ............................................................................................ 24 

Mr. David Smith, Deputy Inspector General, U.S. Department of Commerce 

(DOC), Office of Inspector General 

Oral Statement ................................................................................................. 32 

Written Statement ............................................................................................ 34 

Discussion ................................................................................................................. 39 

Appendix I: Answers to Post-Hearing Questions 

Mr. Paul K. Martin, Inspector General, National Aeronautics and Space Administration (NASA), Office of Inspector General ............................................. 54 

Ms. Allison C. Lerner, Inspector General, National Science Foundation (NSF), 

Office of Inspector General .................................................................................. 60 

Mr. David Smith, Deputy Inspector General, U.S. Department of Commerce 

(DOC), Office of Inspector General ..................................................................... 68 

Appendix II: Additional Material for the Record 

Letter submitted by Representative Dan Maffei, Ranking Minority Member, 

Subcommittee on Oversight, Committee on Science, Space, and Technology, 

U.S. House of Representatives ............................................................................ 86 

Washington Post article, submitted by Representative Dan Maffei, Ranking 

Minority Member, Subcommittee on Oversight, Committee on Science, 

Space, and Technology, U.S. House of Representatives .................................... 92 
Page

IV 

Office of Personnel Management’s 2012 Federal Employee Viewpoint Survey 

Results, submitted by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives ............................................................... 94 
Page

V 

C O N T E N T S 

Thursday, March 14, 2013 

Page 

Witness List ............................................................................................................. 128 

Hearing Charter ...................................................................................................... 129 

Opening Statements 

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

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

Representatives .................................................................................................... 132 

Written Statement ............................................................................................ 133 

Statement by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, 

U.S. House of Representatives ............................................................................ 134 

Written Statement ............................................................................................ 135 

Witnesses: 

Mr. Gregory H. Friedman, Inspector General, U.S. Department of Energy, 

Office of Inspector General 

Oral Statement ................................................................................................. 137 

Written Statement ............................................................................................ 139 

Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental Protection 

Agency, Office of Inspector General 

Oral Statement ................................................................................................. 150 

Written Statement ............................................................................................ 152 

Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of the 

Interior, Office of Inspector General 

Oral Statement ................................................................................................. 161 

Written Statement ............................................................................................ 163 

Discussion ................................................................................................................. 168

Appendix I: Answers to Post-Hearing Questions 

Mr. Gregory H. Friedman, Inspector General, U.S. Department of Energy, 

Office of Inspector General .................................................................................. 184 

Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental Protection 

Agency, Office of Inspector General ................................................................... 190 

Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of the 

Interior, Office of Inspector General ................................................................... 196 

(1) 

TOP CHALLENGES FOR SCIENCE AGENCIES: 

REPORTS FROM THE INSPECTORS GENERAL 

(PART I) 

THURSDAY, FEBRUARY 28, 2013 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OVERSIGHT

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:01 a.m., in Room 

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

[Chairman of the Subcommittee] presiding. 
2 

LAMAR S. SMITH, Texas 

CHAIRMAN 

~onIlrcss of the tinitcd ~tates 

lttOUSf of 'JR.£presrntatluc.s 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

2321 RAYBURN HOUSE OFF!CE BUILD!NG 

WASHINGTON, DC 20515-6301 

(202) 225-6371 

www.science.no .. sa.gov 

Subcommittee on Oversight 

Top Challenges for Science Agencies: 

EDDIE BERNICE JOHNSON, Texas 

RANKING MEMBER 

Reports from the Inspectors General- Part 1 

Thursday, February 28, 20.13 

10:00 a.m. to 12:00 p.m. 

n 18 Rayburn House Office Building 

Mr. Paul K. Martin, Inspector General, National Aeronautics and Space Administration, Office 

of Inspector General 

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

General 

Mr. David Smith, Deputy Inspector General, U.s. Department of Commerce, Office of 

Inspector General 
3 

U.S. House of Representatives 

Committee on Science, Space, and Technology 

Subcommittee on Oversight 

HEARING CHARTER 

Top Challenges/or Science Agencies: 

Reports from the Inspectors General 

Part 1 

Thursday, February 28, 2013 

10:00 a.m. - 12:00 p.m. 

2318 Rayburn House Office Building 

At 10:00 a.m. on February 28, 2013, the Subcommittee on Oversight will hold a hearing titled 

"Top Challenges for Science Agencies: Reports from the Inspectors General - Part 1." This is 

the first of two such hearings planned prior to the Committee's review of the Administration's 

FY 2014 budget requests of these agencies. The hearing will provide Members of the 

Subcommittee the opportunity to receive testimony on the most serious performance and 

management challenges facing the National Aeronautics and Space Administration (NASA), the 

National Science Foundation (NSF), and the Department of Commerce (DOC) from the 

perspective of the Inspectors General of the respective agency. 

Witnesses 

• Mr. Paul K. Martin, Inspector General, National Aeronautics and Space Administration, 

Office of Inspector General 

• Ms. Allison C. Lerner, Inspector General, National Science Foundation, Office of 

Inspector General 

• Mr. David Smith, Deputy Inspector General, U.S. Department of Commerce, Office of 

Inspector General 

Overview 

Public Law 106--531 (the Reports Consolidation Act of 2000), requires agency Inspectors 

General (IG) to file annual reports that identify the most serious management and performance 

challenges facing their agencies. l These reports also assess agencies' progress in their efforts to 

resolve the issues identified by the IGs. 

1 Public Law 106-351, "Reports Consolidation Acts of2000," available at: http://www.gpo.gov/fdsys/pkgIPLAW106publ531/htmi/PLA W -I 06pubI531.htm. 

Page 11 
4 

The NASA IG's report states, "In deciding whether to identify an issue as a top challenge, we 

consider the significance of the issue in relation to the Agency's mission; its susceptibility to 

fraud, waste, and abuse; whether the underlying causes are systemic in nature; and the Agency's 

progress in addressing the challenge.,,2 The report identifies the following issues at NASA:3 

• The Future of U.S. Human Space Flight 

• Project Management 

• Infrastructure and Facilities Management 

• Acquisition and Contract Management 

• Information Technology Security and Governance 

The NSF IG's report states, "In accordance with the Reports Consolidation Act of 2000, I am 

submitting our annual statement summarizing what the Office of Inspector General considers to 

be the most serious management and performance challenges facing the National Science 

Foundation (NSF). We have compiled this list based on our audit and investigative work, 

general knowledge of the agency's operations and evaluative reports of others, including the 

Government Accountability Office and NSF's various advisory committees, contractors, and 

staff.,,4 The NSF IG lists the following issues:5 

• Establishing Accountability over Large Cooperative Agreements 

• Improving Grant Administration 

• Strengthening Contract Administration 

• Ensuring Proper Stewardship of ARRA [American Recovery and Reinvestment Act] 

funds 

• Managing the U.S. Antarctic Program 

• Implementing Recommendations to Improve Workforce Management and the Workplace 

Environment 

• Encouraging Ethical Conduct of Research 

• Managing Programs and Resources in Times of Budget Austerity 

According to the DOC IG's report, "The Department plays a pivotal role in implementing the 

President's initiatives for economic recovery and job creation and, like other federal agencies, 

faces significant financial uncertainties in the upcoming year. The report identifies what we 

consider, from our oversight perspective, to be the most significant management and 

performance challenges facing the Department,,,6 specifically, to:7 

2 2012 Report on NASA'S Top Management and Petformance Challenges, November 8, 2012, available at: 

http://oig.nasa.govINASA2012ManagementChallenges.pdf. 

3 Ibid. 

4 Management Challenges for NSF in FY 2013, October 15, 2012, available at: 

http://www.nsf.gov/oigI2013MgmtChallenges.pdf. 

5 Ibid. 

6 Top Management Challenges FaCing the Dept. of Commerce, November 9,2012, available at: 

http://www .oig.doc.govlPages/Top-Management-Challenges-FY -2013 .aspx. 

7 Ibid. 

Page I 2 
5 

• Stimulate economic growth in key industries, increase exports, and enhance stewardship 

of marine fisheries. 

• Increase oversight of resources entrusted by the public and invest for long-term benefits. 

• Strengthen security and investments in information technology. 

• Implement framework for acquisition project management and improve contracts 

oversight. 

• Reduce risks of cost overruns, schedule delays, and coverage gaps for NOAA's [National 

Oceanic and Atmospheric Administration] satellite programs. 

Page 13 
6 

Chairman BROUN. The Subcommittee on Oversight will come to 

order. 

Good morning, everyone. I am glad Ms. Lerner finally got 

through security and got here. I was worried about you, but welcome. 

In front of you are the packets containing the written testimony, 

the biographies, and Truth in Testimony disclosures for today’s witness panels. I will recognize myself for an opening statement for 

five minutes. 

Good morning, everyone. The title of today’s hearing is: ‘‘Top 

Challenges for Science Agencies: Reports from the Inspectors General, Part 1,’’ Part 2 to follow. This is the first of two hearings 

where we will hear from witnesses from the Offices of Inspectors 

General representing the agencies within this Committee’s jurisdiction. The object of the hearing is to learn about the major performance and management challenges facing each agency from the perspective of each of the Offices of Inspector General. 

Today we will hear from the IG offices with jurisdiction over the 

National Aeronautics and Space Administration, the National 

Science Foundation and the U.S. Department of Commerce. It is 

my hope that this information will help inform our colleagues—on 

both sides of the aisle—about the issues at the agencies over which 

we have the responsibility to conduct thorough and appropriate 

oversight. With the President’s budget expected shortly, this hearing will help us as an authorizing Committee, to coordinate with 

the Appropriations Committee, by identifying for that Committee 

programs, projects and activities that work as opposed to those 

that need to be modified or perhaps eliminated. 

There is no shortage of issues. This Committee has a history of 

probing NASA, especially in the area of information technology security where last year we held a hearing on that topic. Unfortunately, some of the issues that I raised back then are still outstanding today. In addition to the revelation that NASA needs to 

do more to protect sensitive information from going out the back 

door through cyber intrusions and lax protocols, I am increasingly 

concerned about the possibility of sensitive information going out 

the front door, possibly with tacit approval from research centers. 

The National Aeronautics and Space Act has the dual responsibility of providing ‘‘the widest practical dissemination of information concerning its activities and results’’ as well as establishing 

‘‘such security requirements, restrictions and safeguards as the Administrator deems necessary in the interest of national security.’’ 

Similarly, the Act also gave NASA broad authority to enter into 

agreements outside of the normal federal acquisition process. Originally meant to support smaller-scale projects, it is increasingly 

being used for larger, multimillion-dollar procurements. 

NASA is not the only agency that has this authority. The NSF 

has roughly $11 billion tied up in other transaction authorities 

such as Cooperative Agreements which, like NASA’s Space Act 

Agreements, do not carry the same oversight and transparency requirements as contracts. 

The Department of Commerce, which includes bureaus such as 

NOAA, which in turn houses the National Weather Service, has 

been the focus of this Committee since over a year ago when we 
7 

started hearing claims about financial mismanagement and Antideficiency Act violations. That culminated in a September 12, 2012, 

hearing for which we still have not received agency responses to 

questions that we submitted for the record, and I hope they will be 

forthcoming very soon but we still haven’t heard back from them. 

And I can’t talk about NOAA without mentioning its satellite programs, which are of great concern to this Committee, particularly 

in light of potential gaps in future coverage. These are symptoms 

of what I perceive to be larger management challenges within 

NOAA. 

This exercise of deliberating over a program’s performance and 

challenges is a particularly timely one because as you all know, 

starting tomorrow, federal agencies will do the exact opposite and 

implement across-the-board, indiscriminate funding cuts as a result 

of the sequester. The House of Representatives on more than one 

occasion has tried to offer a solution to prevent these cuts from taking place but we have hit a wall with the Senate and with the Administration. And I know I don’t always see eye to eye with my 

friends on the other side of the aisle, but I respect them and believe that we share the same goal regardless of which side of the 

room we sit in, and that is to serve our respective constituencies 

in the best manner possible. To that end, I urge my colleagues, Republicans and Democrats alike, to take advantage of the opportunity this hearing presents and question the witnesses about the 

agencies within their jurisdiction. 

[The prepared statement of Mr. Broun follows:] 

PREPARED STATEMENT OF CHAIRMAN PAUL C. BROUN

Good morning. The title of today’s hearing is ‘‘Top Challenges for Science Agencies: Reports from the Inspectors General – Part 1.’’ This is the first of two hearings 

where we will hear from witnesses from the Offices of Inspectors General representing agencies within this Committee’s jurisdiction. The object of the hearing is 

to learn about the major performance and management challenges facing each agency from the perspective of each Office of the Inspector General. 

Today we will hear from the IG offices with jurisdiction over the National Aeronautics and Space Administration, the National Science Foundation, and the U.S. 

Department of Commerce. It is my hope is that this information will help inform 

my colleagues—on both sides of the aisle—about the issues at the agencies over 

which we have a responsibility to conduct thorough, but appropriate, oversight. 

With the President’s budget expected shortly, this hearing will help us, as an authorizing Committee, to coordinate with the Appropriations Committee, by identifying for that Committee programs, projects and activities that work, as opposed to 

those that need to be modified or perhaps eliminated. 

There is no shortage of issues. This Committee has a history of probing NASA, 

especially in the area of information technology security, where last year, we held 

a hearing on the topic. Unfortunately, some of the issues I raised back then are still 

outstanding today. In addition to the revelation that NASA needs to do more to protect sensitive information from going out the back door through cyber intrusions and 

lax protocols, I am increasingly concerned about the possibility of sensitive information going out the front door—possibly with tacit approval from research centers. 

The National Aeronautics and Space Act has the dual responsibility of providing 

‘‘the widest practical dissemination of information concerning its activities and results’’ as well as, establishing ‘‘such security requirements, restrictions, and safeguards as the Administrator deems necessary in the interest of the national security.’’ Similarly, the Act also gave NASA broad authority to enter into agreements 

outside of the normal federal acquisitions process. Originally meant to support 

smaller-scale projects, it has increasingly been used for larger, multi-million dollar 

procurements. 

NASA is not the only agency that has this authority. The NSF has roughly $11 

billion tied up in other transaction authorities such as Cooperative Agreements, 
8 

which, like NASA’s Space Act Agreements, also do not carry the same oversight and 

transparency requirements as contracts. 

The Department of Commerce, which includes bureaus such as NOAA, which in 

turn houses the National Weather Service, has been the focus of this Committee 

since over a year ago when we started hearing claims about financial mismanagement and Anti-deficiency Act violations. That culminated in a September 2012 hearing, for which we still have not received agency responses to questions we submitted 

for the record. And I can’t talk about NOAA without mentioning its satellite programs, which are of great concern to this Committee, particularly in light of potential gaps in future coverage. These are symptoms of what I perceive to be larger 

management challenges at NOAA. 

This exercise of deliberating over a program’s performance and challenges is a 

particularly timely one because as you all know starting tomorrow, federal agencies 

will do the exact opposite, and implement across-the-board indiscriminate funding 

cuts as a result of the sequester. The House of Representatives, on more than one 

occasion, has tried to offer a solution to prevent these cuts from taking place, but 

we’ve hit a wall with the Senate and the Administration. 

Now I know I don’t always see eye-to-eye with my friends on the other side of 

the aisle, but I respect them, and believe we share the same goal regardless of 

which side of the room we sit in, and that is to serve our respective constituents 

in the best manner possible. To that end, I urge my colleagues - Republicans and 

Democrats alike—to take advantage of the opportunity this hearing presents, and 

question the witnesses about the agencies within their jurisdiction. 

Chairman BROUN. Now I recognize the Ranking Member, the 

gentleman from New York, for an opening statement for five minutes. You are recognized. 

Mr. MAFFEI. Mr. Chairman, I thank you very much. I too share 

your concerns about NOAA’s response to the Committee, but on 

this, I want to welcome the three witnesses. Inspector Generals, 

sometimes called IGs, carry an unusual mandate and a heavy burden, Inspector Generals stand on the front line of accountability 

and work to improve government and protect taxpayer interests. As 

the kind of the cop on the beat in agencies, they function not just 

as another executive office but also as Congress’s eyes and ears in 

those agencies. This is why IGs have a statutory responsibility to 

quickly inform Congress of any significant wrongdoing at their 

agencies. 

While some IGs have tried to morph their role into that of a 

management consultant to agency leadership, and that is fine, it is 

still extremely important, though, and Congress expects Inspector 

Generals to view themselves as watchdogs first and foremost. 

IGs have enormous discretion to go with their great responsibility. Within the limits of the law, they can decide what they will 

and will not pursue, how they will structure their offices, who they 

will hire and fire, and how they will spend their budgets. The agencies they overlook are in no position to second-guess their actions 

as that would undermine the IG’s necessary independence. 

However, this independence combined with large budgets outside 

the control of any other office leaves open the possibility that a bad 

Inspector General may abuse that position. Inspector Generals are 

a classic example of the old question, who will watch the watchmen. With no authority over them in their agencies, serving at the 

pleasure of the President, but a President who stands in great distance, and often keeping information about their activities secret 

from the public and even Congress, the job of ensuring that an IG 

who is not doing their job would be identified and removed can fall 

through the cracks. 
9 

The Chairman’s purpose in holding this hearing, it is my understanding, is to explore what three IGs from NASA, NSF and Commerce have accomplished in the last year and hopes to take on 

next, and I applaud the Chairman for holding this hearing. 

I have no reason to doubt that the two Inspector Generals before 

us have been doing good work and are raising important questions, 

and I welcome your testimony. The Subcommittee staff, however, 

and Members of the news media have reported serious and pressing concerns in the Office of Department of Commerce Inspector 

General, and yet, Mr. Chairman, Mr. Zinser, the Commerce Inspector General, has decided not to appear before us or in staff briefings before the hearing. 

Now, Mr. Smith, I do sincerely appreciate your time and attention. I hope you can understand why the Committee Members 

might be disappointed that we don’t have direct access to the Department of Commerce IG. It is nothing about your work, you are 

a fine public servant, but we want to make sure we have direct access to an IG. 

So Mr. Chairman, the Committee was first alerted to one serious 

concern when staff discovered that the Inspector General, Mr. 

Zinser, let NOAA investigate itself regarding criminal financial 

misconduct. The explanations he offered to the staff back in August 

to Members in September and then written responses to questions 

for the record are contradictory and his office has refused to provide records Members requested to better understand what happened. Then in December, the Washington Post reported that Mr. 

Zinser, along with his Principal Assistant for Investigations and his 

General Counsel, compelled senior employees to resign and sign 

nondisclosure agreements that would bar them from disclosing information about the operation of his office to either the Office of 

the Special Counsel, which is the whistleblower protection office in 

the Federal Government, or even to Congress itself. 

Now, why would the IG compel senior officials to relinquish their 

statutory and, in fact, constitutional right of redress? The conduct 

reported in the Post should be shocking to conduct for any federal 

official, let alone an Inspector General. And if we find an Inspector 

General who we would hope would listen to whistleblowers, not silence them, is engaged in gag orders, that is not acceptable conduct. 

The recent Federal Best Places to Work survey brings up other 

concerns that show that the Department of Commerce IG Office 

was ranking 291 out of 292 places polled, making it among the 

worst places to work, according to the survey. In this survey, 50 

percent of the staff said they were going to look for another job in 

the next year, and almost half were unsure or felt unsafe in telling 

senior leadership if they find violations of the law, regulation or 

policy. So according to this survey, the Inspector General staff are 

afraid to report violations of law. I should add that our staff has 

begun to receive information from former employees at Commerce 

Department of Inspector General, and some of the allegations are 

very serious. 

So for all these reasons, Mr. Chairman, Ms. Johnson, Ms. Wilson, 

Ms. Bonamici and I have sent a letter to GAO. We have asked that 

they open an investigation into the management and conduct of the 
10 

IG at the Department of Commerce. At a time when we face the 

possibility of large-scale, arbitrary cuts to both domestic and military programs, I believe that any charges of wasting taxpayer dollars or using them to run an ineffective office must be investigated. 

Congress has the responsibility and authority to hold IGs accountable, and we have to ensure money has not been wasted or ineffectively protected, and that laws have not been broken in the name 

of enforcement. If indeed Mr. Zinser or any Inspector General has 

allowed his office to be abused or become ineffective, then we in 

Congress have the responsibility to bring that to light. 

And Mr. Chairman, I would like to ask if the article in the Post, 

the letter from Mrs. Johnson, Ms. Wilson, Ms. Bonamici and I and 

the other supporting materials be included after this statement in 

the record. 

[The prepared statement of Mr. Maffei follows:] 

PREPARED STATEMENT OF RANKING MINORITY MEMBER DAN MAFFEI

Mr. Chairman, I thank you very much. I too share your concerns about NOAA’s 

response to the Committee. But on this I want to welcome the three witnesses. 

Inspector Generals, sometimes called ‘‘IGs,’’ carry an unusual mandate and heavy 

burden. Inspector Generals stand on the front line of accountability, and work to 

improve government and protect taxpayer interests. As the ′′kind of cop′′ on the beat 

in agencies, they function not just as another executive office, but also as Congress’s 

eyes and ears in those agencies. This is why IGs have a statutory responsibility to 

quickly inform Congress of any significant wrongdoing at their agencies. While some 

IGs have tried to morph their role into that of a management consultant to agency 

leadership, and that’s fine, it is still extremely important though, and congress expects, Inspector Generals to view themselves as watchdogs first and foremost. 

IGs have enormous discretion to go with their great responsibility. Within the limits of the law, they can decide what they will and will not pursue, how they will 

structure their offices, who they will hire and fire, and how they will spend their 

budgets. The agencies they overlook are in no position to second guess their actions, 

as that would undermine the IG’s necessary independence. However, this independence combined with large budgets outside the control of any other office leaves open 

the possibility that a bad Inspector General may abuse that position. Inspector Generals are a classic example of the old question, ′′who will watch the watchman?′′ 

With no authority over them in their agencies, serving at the pleasure of the President, but the President who stands at great distance, and often keeping information 

about their activities secret from the public and even Congress, the job of insuring 

that a IG who is not doing their job would be identified and removed can fall 

through the cracks. 

The Chairman’s purpose in holding this hearing, it is my understanding, is to explore what the three IGs from NASA, NSF and Commerce have accomplished in the 

last year and hope to take on next, and I applaud the Chairman for holding this 

hearing. I have no reason to doubt that the two Inspector Generals before us have 

been doing good work, and are raising important questions, and I welcome your testimony. 

The subcommittee staff however and members of the news media have reported 

serious and pressing concerns in the office of the Department of Commerce Inspector General. And yet, Mr. Chairman, Mr. Zinser, the Commerce Inspector General, 

has decided not to appear before us, or in staff briefings before the hearing. Now, 

Mr. Smith, I do sincerely appreciate your time and attention. I hope you can understand why the Committee Members might be disappointed that we don’t have direct 

access to the Department of Commerce IG. It is nothing about your work, you are 

a fine public servant, but we want to make sure that we have direct access to an 

IG. 

Mr. Chairman, the committee was first alerted to one serious concern when staff 

discovered that the Inspector General Mr. Zinser let NOAA investigate itself regarding criminal financial misconduct. The explanations he offered to the staff back in 

August to members in September and then written responses to questions for the 

record are contradictory, and his office has refused to provide records members requested to better understand what happened. Then, in December, the Washington 
11 

Post reported that Mr. Zinser, along with his principal Assistant for Investigations 

and his General Counsel, compelled senior employees to resign and sign non-disclosure agreements that would bar them from disclosing information about the operation of his office to either the Office of Special Counsel, which is the whistleblower 

protection office in the federal government, or even to Congress itself. 

Now, why would the IG compel senior officials to relinquish their statutory and 

in fact, constitutional, right of redress? The conduct reported in the Post should be 

shocking conduct for any federal official, let alone an Inspector General. And if we 

find an Inspector General, who we would hope would listen to whistleblowers, not 

silence them, has engaged in gag orders, that is not acceptable conduct. 

The recent Federal Best Places to Work survey brings up other concerns, that 

show that the Department of Commerce IG office is ranking 291 out of 292 places 

polled, making it among the worst places to work according to the survey. In this 

survey, 50% of the staff said they were going to look for another job in the next 

year, and almost half were unsure or felt unsafe in telling senior leadership if they 

find violations of the law, regulation or policy. So according to the survey, the Inspector General staff are afraid to report violations of law. I should add that our 

staff has begun to receive information from former employees at Commerce Department of Inspector General, and some of the allegations are very serious. 

So for all these reasons Mr. Chairman, Ms. Johnson, Ms. Wilson, Ms. Bonamici 

and I have sent a letter to GAO, we have asked that they open an investigation 

into the management and conduct of the IG at the Department of Commerce. 

At a time when we face the possibility of large scale arbitrary cuts, to both domestic and military programs, I believe that any charges of wasting taxpayer dollars, 

or using them to run an ineffective office, must be investigated. Congress has the 

responsibility and authority to hold IGs accountable, and we have to ensure money 

has not been wasted or ineffectively protected, and that laws have not been broken 

in the name of enforcement. If indeed Mr. Zinser or any Inspector General has allowed his office to be abused, or become ineffective, then we in Congress have the 

responsibility to bring that to light. Now Mr. Chairman, I would like to ask if the 

article of the Post, the letter from Ms. Johnson Ms. Wilson Ms. Bonamici and I and 

other supporting materials be included after this statement in the record. 

Thank you Mr. Chairman. 

Chairman BROUN. Hearing no objection, so ordered. 

[Submitted materials appear in Appendix II:] 

Mr. MAFFEI. Thank you, Mr. Chairman. 

Chairman BROUN. Thank you, Mr. Maffei. 

Part 2 of this hearing, this series that we are doing, will feature 

the IGs from DOE, EPA and DOI. At that hearing, the EPA IG also 

had a conflicting schedule, so this is not unique for a Deputy to 

come and testify, and I appreciate the Deputy from the Department 

of Commerce coming. The Committee is working with all the IGs 

within our jurisdiction. We are trying to get everybody here that 

we possibly can, and I assure you that this is not unique. We have 

made compromises like this previously and we will have to in the 

future as we go forward, Mr. Maffei. I know you haven’t been on 

this Committee very long but we welcome you and are glad to have 

you here, and I know that you and I are going to continue to work 

very strongly together through this process, but I am as interested 

as you are in getting to the bottom of all this, because nobody 

wants to see fraud, waste and abuse, and we have to count upon 

the IGs to make sure that that doesn’t happen, so that is what this 

is, my objective in doing these hearings and trying to find out what 

is going on in these agencies and I want to have a strong IG system. 

Mr. MAFFEI. That is my concern too, Mr. Chairman. 

Chairman BROUN. Thank you, and I know we both have that 

same desire so just understand that this is not a unique situation 

today, and I thank you, Mr. Smith for being here. 
12 

If there are Members who wish to submit additional opening 

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

point. 

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

Our first witness is Mr. Paul Martin, who has been before us before—— 

Mr. MAFFEI. Mr. Chairman? 

Chairman BROUN. Yes, sir. 

Mr. MAFFEI. I haven’t been on this Subcommittee, this Committee very long or the Subcommittee very long but my understanding is, it is the usual to swear in the witnesses, is it not? 

Chairman BROUN. We have done so in the past, and we can do 

that. 

Mr. MAFFEI. I would ask that we do, if it a usual thing, given 

that we are an oversight—— 

Chairman BROUN. It is my plan to do so, and we—just sit tight. 

Mr. MAFFEI. Absolutely. Sorry. 

Chairman BROUN. Just sit tight. 

Mr. MAFFEI. As you say, I am new. 

Chairman SMITH OF TEXAS. Will the chairman yield just for a 

second? 

Chairman BROUN. Absolutely. The Committee Full Chair, Mr. 

Smith. 

Chairman SMITH OF TEXAS. I just want to kind of explain what 

our overall policy is. It was my feeling that we didn’t need to do 

so for two reasons. One, under House rules, all witnesses are assumed to be under oath, and two, in the letters to the witnesses, 

I believe they are—I want to get the gentleman’s attention just to 

make those points. 

Chairman BROUN. If the minority Counsel will listen, please as 

you all talk? 

Chairman SMITH OF TEXAS. That is all right. He is not listening. 

Chairman BROUN. He is listening. 

Chairman SMITH OF TEXAS. Let me make my two points. One, 

under House rules, witnesses are assumed to be under oath, so I 

thought it was a little bit redundant to have to swear them in. Second of all, I believe that the letters that the witnesses get inviting 

them to testify remind them of that fact as well, so we feel like we 

have got it covered. If the gentleman wants to make an exception 

to that general rule, that is fine with me, but I just want to reassure him that the witnesses are reminded that they are under 

oath, one way or the other, whether it is verbally or in writing. 

Chairman BROUN. Thank you, Mr. Chairman. 

Chairman SMITH OF TEXAS. Sure. 

Chairman BROUN. We will—— 

Mr. MAFFEI. Mr. Chairman, if you would yield? 

Chairman BROUN. Mr. Maffei. 

Mr. MAFFEI. My understanding, and this could be mistaken, but 

my understanding is that in the past years, the Committee did— 

this Subcommittee did administer an oath, whether to remind or 

whether to reaffirm, for whatever reason, and my concern is if we 

don’t do it, and I admit that I didn’t know these rules when we did 

our first Subcommittee hearing, but if we don’t do it now and consistently, we don’t want to imply that it is necessary at any par-
13 

ticular time for the witnesses. So whatever we normally do, we 

should decide that and just normally follow the same rules. And I 

want to thank the distinguished Chairman of the Full Committee 

for his comment. 

Chairman BROUN. I am entertaining a unanimous consent request from Mr. Maffei that witnesses take an oath. Hearing no objection, so ordered. 

Mr. MAFFEI. Thank you. 

Chairman BROUN. Our first witness today is Inspector General 

of the National Aeronautics and Space Administration, as I already 

mentioned, is Mr. Paul Martin, who has been here before this Committee before, and I appreciate your coming, Mr. Martin. Our second witness is Ms. Allison Lerner, the Inspector General of the National Science Foundation. Our third witness will be Mr. David 

Smith, Deputy Inspector General of the U.S. Department of Commerce. 

As our witnesses should know, spoken testimony is limited to 

five minutes each, and please, because we have votes shortly coming, so if you would, try to maintain within that 5-minute window, 

and then each Member will have five minutes to ask questions. 

Your written testimony will be included in the record of this hearing. 

It is the practice of this Subcommittee on Investigations and 

Oversight to receive testimony under oath. If you now would all 

please stand and raise your right hand, unless you have an objection to taking an oath. Do you solemnly swear to affirm to tell the 

whole truth and nothing but the truth, so help you God? Thank 

you. You may be seated. Let the record reflect that all the witnesses participating have taken the oath, and Mr. Maffei, I like 

that too, and I wanted to do this myself. 

We now recognize our first witness, Mr. Martin, to present your 

testimony. Sir, you have five minutes. 

TESTIMONY OF MR. PAUL K. MARTIN, 

INSPECTOR GENERAL, 

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 

(NASA), OFFICE OF INSPECTOR GENERAL 

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

Maffei, Chairman Smith and Members of the Subcommittee. 

The successful landing of the Curiosity over on the surface of 

Mars in August energized the public about NASA’s activities in a 

way not seen since the final Space Shuttle flight. Another highlight 

this past year was the first commercial resupply mission to the 

International Space Station by SpaceX in October. However, NASA 

also faced significant challenges including the need to reprogram 

funds to address cost overruns in the James Webb Space Telescope. 

This shift contributed to delays in several ongoing projects and cancellation of several others including one with the European Space 

Agency for planned science missions to Mars. At the same time, 

NASA is busy developing a new rocket, capsule, and related launch 

infrastructure to enable crewed missions to an asteroid or Mars— 

expensive and technically complex undertakings in an increasingly 

austere budget environment. 
14 

Along with the rest of the Federal Government, NASA is poised to tumble over the ‘‘fiscal cliff’’ tomorrow with $894 million in sequestration cuts. Indeed, from our perspective, declining budgets 

and fiscal uncertainties present the most significant external challenge to NASA. 

My written statement discusses our complete list of management 

and performance challenges. This morning, I plan to briefly highlight three. 

First, project management. Over its 50-year history, NASA has 

been at the forefront of science and space exploration. However, in 

addition to their achievements, many NASA projects share another 

less positive trait—they cost significantly more to complete and 

take much longer to launch than originally planned. Last September, the OIG issued a report that identified four primary challenges facing NASA as it seeks to achieve project cost, schedule 

and performance goals: the Agency’s culture of optimism, underestimating technical complexity, funding instability and limited opportunities for project managers’ development. 

Second, NASA’s aging infrastructure. Eighty percent of NASA’s 

4,900 buildings are more than 40 years old and beyond their design 

life. However, NASA has not been able to fully fund required upkeep costs and estimates its deferred maintenance expenses at $2.3 

billion. One way NASA could reduce these costs is to reduce the 

amount of unneeded infrastructure in its inventory. To be successful, NASA must move beyond its historic ‘‘keep it in case we need 

it’’ mindset. In an audit we issued earlier this month, the OIG 

identified 33 facilities including wind tunnels, test stands, airfields, 

and launch-related infrastructure that NASA was neither fully utilizing nor had a future mission need. These facilities cost the agency more than $43 million to maintain in fiscal 2011 alone. 

And finally, information technology security. One year ago, I sat 

behind this same table and testified alongside NASA’s Chief Information Officer about the state of IT security at NASA. Among 

other things, I mentioned that at the time only one percent of 

NASA’s laptop computers were fully encrypted compared to a government-wide rate of 54 percent. Eight months later, an 

unencrypted NASA laptop computer containing personally identifiable information on more than 40,000 individuals was stolen from 

the vehicle of a NASA employee. Agency officials estimate that 

credit monitoring and other expenses related to the theft could cost 

NASA up to $850,000. Following that incident, the NASA Administrator accelerated the timetable for encrypting the hard drives on 

all Agency laptops, and as of two weeks ago the Agency reported 

an encryption rate for its laptops of 99 percent. Our audits and investigations continue to identify recurring weaknesses in NASA’s 

IT security program, and we anticipate making additional recommendations as we complete an audit examining the Agency’s IT 

governance structure. Reexamination of NASA’s overall approach 

to IT is particularly timely given that the Agency is currently seeking a new CIO. 

In closing, the National Research Council recently concluded that 

there is, and I quote, ‘‘a significant mismatch between the programs to which NASA is committed and the budgets that have 

been provided or anticipated.’’ In other words, too many programs 
15 

are chasing too few dollars. I hope that the NRC’s, report together 

with the ongoing work of the OIG and GAO, will contribute to a 

dialogue about NASA’s future priorities and lead to enactment of 

a realistic budget that will enable the Agency to accomplish its 

multifaceted mission. Thank you. 

[The prepared statement of Mr. Martin follows:] 
16 

Testimony before the Subcommittee on Oversight, 

House Committee on Science, Space, and Technology 

U.S. House of Representatives 

For Release on Delivery 

expected at 

10:00 a.m. EST 

Thursday 

February 28, 2013 

Top Challenges for Science Agencies: 

Report from the Inspectors General - Part 1 

Statement of 

Paul K. Martin 

Inspector General 

National Aeronautics and Space Administration 
17 

Chainnan Broun, Ranking Member Maffei, and Members of the Subcommittee: 

The Office oflnspector General (01G) is committed to providing independent, aggressive, and 

objective oversight of the National Aeronautics and Space Administration (NASA), and we 

welcome this opportunity to discuss the major challenges facing the Agency. 

The successful landing of the Curiosity rover on the surface of Mars in August energized the 

public about NASA's activities in a way not seen since the final Space Shuttle flight. Similarly, 

the first commercial resupply mission to the International Space Station (ISS) in October by 

Space Exploration Technologies Corporation's (SpaceX) Dragon spacecraft marked a milestone 

toward NASA's goal of fostering development of a commercial space transportation capability to 

low Earth orbit. 

The past year was not without its challenges, however, including the need to reprogram funds 

from several Agency initiatives to accommodate cost overruns in the James Webb Space 

Telescope (JWST) and other projects. This shift contributed to developmental delays in several 

ongoing projects and cancellation of others, including a joint project with the European Space 

Agency for planned missions to Mars in 2016 and 2018. 

Moreover, receipt of less than half its requested budget extended the earliest date that NASA 

expects to obtain commercial crew transportation services to the ISS to 2017 - a date 

uncomfortably close to the Station's currently scheduled 2020 retirement. At the same time, 

NASA is moving forward with development of a new rocket, capsule, and related launch 

infrastructure to enable crewed missions to an asteroid, the Moon, or Mars - expensive and 

technically complex undertakings in an increasingly austere budget environment. 

Declining budgets and fiscal uncertainties present the most significant extemal challenges to 

NASA's ability to successfully move forward on its many projects and programs. NASA began 

the current fiscal year under a 6-month continuing resolution that funds the Agency at last year's 

level of$17.8 billion. Along with the rest of the Federal Government, NASA is poised to tumble 

over the "fiscal cliff' on March I, with sequestration cuts that reduce its spending authority by 

$894 million. 

Against this bleak budgetary backdrop, Agency managers continue to face significant challenges 

managing NASA's diverse portfolio of science, exploration, and aeronautics projects. 

Specifically, each year we identify the Top Management and Perfonnance Challenges facing 

NASA and our most recent list highlighted the following five issues: 

• The Future of U.S. Human Space Flight; 

• Project Management; 

• Infrastructure and Facilities Management; 

• Acquisition and Contract Management; and 

• lnfonnation Technology Security and Governance 

A detailed description of these challenges and the ongoing and completed work by our office 

examining them is contained in the Top Challenges document appended to this statement. 
18 

In my testimony this moming, I will highlight three issues: I) project management; 2) NASA's 

aging infrastructure; and 3) information technology (1T) security. 

Project Management 

Over its 50-year history NASA has been at the forefront of science and space exploration and 

rightly takes credit for numerous scientific and technological discoveries and innovations. 

However, in addition to their significant achievements, many NASA projects share another less 

positive trait - they cost significantly more to complete and take much longer to launch than 

originally planned. 

Last September, the OIG issued a report that examined NASA's project management practices to 

identify the primary challenges to achieving its cost, schedule, and performance goals. Cost and 

schedule increases on large projects like the JWST can have a cascading effect on NASA's entire 

portfolio. To illustrate, in fiscal year (FY) 2012 NASA moved $156 million from other Science 

Mission Directorate projects and its Cross Agency Support account to cover cost increases in the 

JWST project. In addition, the Wide-Field Infrared Survey Telescope and several other missions 

have been postponed to make funding available for JWST. Moreover, as previously noted, 

NASA has pulled out of an agreement with the European Space Agency on two future Mars 

missions and is reevaluating its Mars exploration strategy to accommodate a more restricted 

funding profile. 

OUf project management review identified four factors that present the greatest challenges to 

successful project outcomes at NASA: I) the Agency's Culture of Optimism; 2) 

Underestimating Technical Complexity; 3) Funding Instability; and 4) Limited Opportunities for 

Project Managers' Development. The September audit report and the 2012 Management 

Challenges document discuss each of these factors in detail. 

One of NASA's largest ongoing project is its new "heavy-lift" rocket known as the Space 

Launch System or SLS. The NASA Authorization Act of2010 set a goal for the Agency to 

achieve operational capability for the SLS and the accompanying Multi-Purpose Crew Vehicle 

(MPCV) by December 31,2016. NASA's current plan is to launch an uncrewed test flight of the 

SLS and MPCV in 2017, followed by the first crewed flight in 2021. 

Establishing realistic long-term budgets for the SLS, MPCV, and associated ground support 

programs is difficult, as illustrated by an August 2011 independent cost assessment for the 

program that concluded NASA's estimates are reasonable for near-term budget planning but do 

not support establishment of long-term budgets or detailed baselines. Constrained budgets also 

impact the pace of NASA's development efforts. For example, because the MPCV program is 

anticipating a "flat" budget profile for at least the next 10 years, NASA has adopted an 

incremental developmental approach that concentrates on systems needed to meet specific 

mission objectives for each test flight rather than an approach under which work on all MPCV 

systems progresses concurrently. The OrG is currently examining NASA's efforts to develop the 

MPCV and will continue to focus resources on NASA's launch and crew transportation 

development efforts in the years to come. 

2 
19 

NASA's Aging Infrastructure 

NASA is the ninth largest Federal Government property holder, controlling approximately 4,900 

buildings and structures with an estimated replacement value of more than $30 billion. In 

addition, more than 80 percent of the Agency's facilities are 40 or more years old and beyond 

their design life. Under its current policy, NASA is required to maintain these facilities either in 

an operational status or, if they are not being used, in sufficient condition that they do not pose a 

safety hazard. However, NASA has not been able to fully fund required maintenance costs for 

its facilities and in 2012 estimated its deferred maintenance costs at $2.3 billion. 

One way NASA could reduce its facilities maintenance costs is to reduce the amount of 

unneeded infrastructure in its inventory. To be successful in this effort, NASA must move 

beyond its historic "keep it in case we need it" approach of managing its facilities. In an audit 

we issued earlier this month, the OIG identified 33 wind tunnels, test stands, thermal vacuum 

chambers, airfields, and launch-related facilities that NASA was not fully utilizing or for which 

Agency managers could not identify a future mission use. These facilities cost the Agency more 

than $43 million to maintain in FY 2011 alone. 

We found that NASA's efforts to reduce its underutilized facilities have been hindered by several 

longstanding and interrelated challenges: I) fluctuating and uncertain strategic requirements; 

2) Agency culture and business practices; 3) political pressure; and 4) inadequate funding. To its 

credit, NASA is undertaking a series of initiatives aimed at "rightsizing" the Agency's real 

property footprint. However, we noted that many of these efforts are in the early stages and may 

ultimately be insufficient to overcome the cultural and political obstacles that have impeded past 

efforts to reduce unneeded infrastructure. Accordingly, an independent outside process similar 

to the Department of Defense's Base Realignment and Closure Commission may be necessary. 

Leasing offers NASA another means to help address maintenance costs associated with its aging 

and underutilized facilities. However, Federal law and policy prohibit NASA from leasing 

facilities for which it has no current or future mission-related use. For these facilities, the 

Agency should consider other options, such as demolition or reporting the property to the 

General Services Administration for sale or transfer to another entity. The challenge for NASA 

is to use leasing when appropriate to generate revenue to offset facilities operations and 

maintenance costs while not using it as a way to hold on to facilities it does not need. 

Information Technology Security 

One year ago today, I sat behind this same witness table and testified alongside NASA's Chief 

Information Officer (CIO) about the state of IT security at NASA. Among other things, I 

mentioned that at the time only 1 percent of NASA's laptop computers were fully encrypted 

compared to a Government-wide rate of 54 percent. 

On October 31, 2012, a NASA laptop containing the Social Security numbers and other 

personally identifiable information (PH) for more than 40,000 individuals was stolen from the 

vehicle of a Headquarters employee. Although the laptop was password protected, neither the 

laptop itself nor the individual files were encrypted. As a result of this theft, NASA contracted 

3 
20 

with a company to provide credit monitoring to the affected individuals and the Agency 

estimates that these services could cost up to $850,000. 

Following the October 31 theft, the NASA Administrator accelerated the timetable to encrypt the 

hard drives of the Agency's laptop computers. As of February 15, NASA reported that it had 

encrypted 99.4 percent of Agency laptops identified as requiring encryption, had exempted 1,636 

laptops from the requirement, and was determining whether another 2,947 laptops required 

encryption or also would be exempted. 

NASA's portfolio of information technology assets includes more than 550 information systems 

that control spacecraft, collect and process scientific data, and enable NASA personnel to 

collaborate with colleagues around the world. Hundreds of thousands of NASA personnel, 

contractors, academics, and members of the public use these IT systems daily and NASA 

depends on them to carry out its essential operations. Overall, NASA spends more than 

$1.5 billion annually on its IT-related activities, $58 million of that for IT security. 

NASA remains a target of cyber intruders both because of the large size of its networks and 

because of the technical and scientific information it maintains. Over the years, NASA has 

increasingly become a target of a sophisticated form of cyber attack known as advanced 

persistent threats (APTs). The individuals or nations behind these APTs are typically well 

organized and well funded. 

Our investigation of a series of APT attacks at the Jet Propulsion Laboratory (JPL) involving 

Chinese-based Internet protocol addresses between November 2011 and February 2012 

confirmed that cyber attackers were successful in achieving control over much of JPL's network 

for several weeks and used this access to steal or attempt to steal NASA-funded data. While data 

theft appears to be the primary motive, the level of access gained by the intruders positioned 

them to have caused significant operational disruption had that been their goal. 

Through our audits and investigations, we have identified systemic and recurring weaknesses in 

NASA's IT security program that adversely affect the Agency's ability to protect the information 

and information systems vital to its mission. In particular, the CIO's inability to ensure that 

NASA's mission computer networks implement key IT security controls continues to put these 

critical IT assets at risk of compromise. For example, the Agency has not yet implemented two 

recommendations from a May 20 10 ola audit report to monitor its mission networks for the 

presence of critical software patches and technical vulnerabilities. 

Achieving the Agency's IT security goals will require sustained improvements in NASA's 

overarching IT management practices. Effective IT governance is the key to accommodating the 

myriad interests of internal and external stakeholders and making decisions that balance 

compliance, cost, risk, and mission success. Effective IT governance also helps ensure that 

public funds are efficiently spent by coordinating spending across NASA when purchasing IT 

products and services. 

4 
21 

We are completing a review examining NASA's IT governance structure and anticipate making 

several recommendations for improvement. Such a reexamination is particularly timely given 

that NASA is currently seeking a new CIO. 

Conclusion 

The National Research Council (NRC) recently concluded that there is a "significant mismatch 

between the programs to which NASA is committed and the budgets that have been provided or 

anticipated." In other words, too many programs are chasing too few dollars. I am hopeful that 

the NRC's report, together with the ongoing work of the OIG and Government Accountability 

Office, will contribute to a dialogue between the Administration and the Congress about NASA's 

future priorities and lead to enactment of a realistic budget that will enable the Agency to 

accomplish its multifaceted missions. 

We look forward to continuing our cooperative working relationship with NASA, this 

Subcommittee, and other congressional committees as we conduct audits and investigations that 

focus on the Agency's top management and performance challenges. 

5 
22 

Chairman BROUN. Thank you, Mr. Martin. 

Now, Ms. Lerner, you are recognized for five minutes. 

TESTIMONY OF MS. ALLISON C. LERNER, 

INSPECTOR GENERAL, 

NATIONAL SCIENCE FOUNDATION (NSF), 

OFFICE OF INSPECTOR GENERAL 

Ms. LERNER. Thank you. Mr. Chairman and Members of the Subcommittee, I appreciate this opportunity to discuss the work of the 

National Science Foundation Office of Inspector General to safeguard federal tax dollars awarded by the Foundation and to protect 

the integrity of NSF programs and operations. My statement will 

focus on accountability of cooperative agreements for NSF’s large 

facility construction projects, grants management and contract 

monitoring, three management challenges that have a direct impact on NSF’s ability to carry out its mission of advancing scientific 

research by funding external awardees. I will also address NSF’s 

efforts to encourage the ethical conduct of research, another top 

management challenge. 

Over the past two years, my office has issued several audits that 

have raised serious questions about NSF’s accountability over cooperative agreements for high-risk, high-dollar projects. NSF currently has 685 open cooperative agreements totaling nearly $11 billion. Thirty-eight of these are valued at over $50 million each and 

comprise $5–1/2 billion of the total amount of such agreements. 

In September of 2012, we issued an alert memorandum to NSF 

management outlining serious weaknesses in the Foundation’s cost 

surveillance measures for awarding and managing high-risk, highdollar cooperative agreements. At the pre-award phase of such 

projects, appropriate controls should include conducting audits of 

awardees’ proposed budgets and accounting systems to ensure that 

awardees cost estimates are fair and reasonable and that their accounting systems are adequate to bill the government properly and 

to manage funds in accordance with federal requirements. While 

such audits are not required by law or regulation for cooperative 

agreements, obtaining such information at the pre-award stage of 

high-risk, high-dollar cooperative agreements is especially important as the proposed budget once approved by NSF creates the 

basis upon which awardees can draw down advanced funds over 

the course of the award. NSF does not regularly obtain such audits. 

Post-award controls for high-risk, high-dollar projects should include incurred costs of submissions and audits to ensure that costs 

claimed are allowable. As with pre-award audits, incurred cost submissions and audits are not required for cooperative agreements by 

law or regulation, and we are not recommending that NSF obtain 

them for every agreement. However, such submissions and audits 

are critical tools for ensuring accountability in high-risk, high-dollar cooperative agreements. Simply stated, these are reasonable 

and prudent steps to protect taxpayer funds. 

In December 2012, the NSF Director charged the senior advisor 

in his office with conducting a major assessment of policies and 

procedures governing NSF-supported large facilities to address 

these and other matters. We are optimistic that this process will 
23 

yield more robust oversight and monitoring for NSF’s large cooperative agreements. 

With respect to grants management, oversight and management 

of awards that is sufficient to safeguard federal funds invested in 

scientific research has been an ongoing challenge for NSF as grants 

recipients request payments as an aggregate amount and are not 

required to present supporting documentation such as invoices and 

receipts to receive payments. In the face of these oversight challenges, my office is using automated techniques to supplement traditional audit tools and help us improve our ability to identify highrisk awardees, expand our audit coverage to examine more transactions, and better focus our limited resources on questionable expenditures. 

In the area of contract monitoring, we continue to recommend 

that NSF obtain incurred cost audits for cost-reimbursable contracts and that it obtain cost accounting disclosure statements from 

contractors and ensure that they are audited and an approved in 

a timely manner. Incurred cost audits enable management to assess a contractor’s compliance with the financial terms and conditions of a contract and approved disclosure statement is essential 

to establish how the contractor classifies and bills costs to the government. 

With respect to the responsible conduct of research, pursuing allegations of research misconduct by NSF-funded researchers continues to be a focus of our investigative work. In recent years, we 

have seen a significant rise in the number of substantive allegations of such misconduct associated with NSF proposals and 

awards. It is imperative to the integrity of research funded with 

taxpayer dollars that we ensure that NSF principal investigators 

carry out their projects with the highest ethical standards. 

Finally, we are continuing our efforts with the IG community to 

combat fraud in the Small Business Innovation Research and 

Small Business Technology Transfer programs. We will continue to 

target our work on areas that pose the highest risk of misuse of 

taxpayer dollars and to do our utmost to ensure that misused funds 

are returned to the government. 

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

questions. 

[The prepared statement of Ms. Lerner follows:] 
24 

Statement of Allison C. Lerner 

Inspector General 

National Science Foundation 

Committee on Science, Space, and Technology 

Subcommittee on Investigations and Oversight 

United States House of Representatives 

"Top Challenges for Science Agencies: Reports from the Inspectors General-Part 1" 

February 28, 2013 

Mr. Chairman and Members of the Subcommittee, I appreciate this opportunity to discuss the 

Office of Inspector General's (OIG) work to promote the efficiency and effectiveness of the 

National Science Foundation's (NSF) programs and operations and to safeguard their integrity. 

My office is committed to providing rigorous, independent oversight of NSF, and I welcome the 

chance to discuss my office's work. 

The OIG is an independent entity and reports directly to Congress and the National Science 

Board. Our mission is to conduct independent audits and investigations of National Science 

Foundation programs and operations and to recommend policies and corrective actions to 

promote effectiveness and efficiency and prevent and detect waste, fraud, and abuse. Consistent 

with our statutory mandate, the OIG has an oversight role and does not determine policy or 

engage in management activities involving the Foundation or program operations. Thus, my 

office is not responsible for managing any NSF programs, nor do we attempt to assess the 

scientific merit of research funded by the Foundation. 

My office has identified eight top management challenges facing NSF. My testimony will focus 

on accountability over cooperative agreements for NSF's large facility construction projects, 

grant administration, and contract monitoring. These oversight issues have a direct impact on 

NSF's ability to carry out its mission of advancing scientific research, which is accomplished 

primarily through funding external awardees. I will also address the ethical conduct of research, 

another top management challenge. 

Accountability over Cooperative Agreements 

Over the past two years, my office has issued several audits that have raised serious questions 

about NSF's accountability over Cooperative Agreements (CAs) for high-risk, high-dollar 

projects. NSF currently has 685 open cooperative agreements, totaling nearly $11 billion. 

Thirty-eight of these CAs are for over $50 million each and comprise $5.5 billion of the total 

amount of CAs. Among other things, NSF uses CAs for the construction, operation, and 

maintenance of its large facility research projects. 
25 

A CA is not subject to the same rigor and reporting mechanisms as a contract, and does not have 

the same level of transparency over expenditures as a contract. Since NSF has chosen to use 

CAs for the construction, operation and maintenance of high-risk, high-dollar large facility 

projects, it is imperative that it exercise strong cost surveillance controls over the Iifecycle of 

such projects. In September of2012 we issued an alert memo to NSF management outlining 

serious weaknesses in NSF's management of high-risk, high-dollar CAs. 

At the pre-award phase of such projects, appropriate controls should include conducting audits of 

awardees' proposed budgets and accounting systems to ensure that awardees' cost estimates are 

fair and reasonable and that their accounting systems are adequate to bill the govemment 

properly and to manage funds in accordance with federal requirements. Although they are not 

required for CAs by law or regulation, such audits provide essential information that NSF can 

use to ensure that it funds only costs that are allowable and can be supported by adequate 

documentation. Obtaining such information at the pre-award stage of high-risk, high-dollar CAs 

is especially important as the proposed budget, once approved by NSF, creates the basis upon 

which awardees can draw down advanced funds over the course of the award for specific cost 

items. 

NSF does not regularly obtain pre-award audits for its high-risk, high-dollar projects. Over the 

last two years, however, my office commissioned Defense Contract Audit Agency audits of the 

proposed construction budgets for three large facility awards valued at $1.1 billion -- the Ocean 

Observatories Initiative, the Advanced Solar Technology Telescope, and the National Ecological 

Observatory Network. The findings were dramatic and underscored the need for such oversight. 

Specifically, DCAA questioned approximately $305 million (almost 28 percent) in unallowable 

or unsupported costs, including $223 million in unallowable contingency costs, including over 

$54 million in Recovery Act funds. 

It is worth pointing out that of the three proposal audits we commissioned, two of the awardees' 

proposals were initially found to be unacceptable for audit. After much work, one of the 

proposals was ultimately audited; the auditors rendered an adverse opinion, finding that the 

proposal did not constitute an acceptable basis for the negotiation of a fair and reasonable price. 

The auditors found that the accounting system used to prepare the second proposal was 

inadequate; therefore, that proposal remains unaudited. NSF needs a much more robust process 

to ensure that it obtains better cost information before funding its major CAs. Inadequate 

proposals that contain large amounts of unallowable and unsupported costs undermine NSF's 

ability to serve as a proper steward of NSF funds. 

As we worked with NSF to resolve the recommendations contained in the DCAA audits, we 

identified weaknesses in NSF's post-award monitoring processes for high-risk projects that 

compound our concern that unallowable costs could be charged to awards. In particular, we 

found that NSF does not routinely obtain incurred cost submissions or audits of direct or indirect 

costs claimed on its largest CAs to determine their allowability. 

As with pre-award audits, incurred cost submissions and audits are not required for CAs by law 

or regulation, and we are not recommending that NSF obtain them for every CA. However, such 

submissions and audits are essential tools for ensuring accountability in high-risk, high-dollar 

projects. In their absence, unallowable costs charged to these awards may go undetected because 

2 
26 

NSF lacks sufficient visibility over incurred costs. The failure to regularly obtain incurred cost 

submissions also has a negative impact on our office's ability to conduct incurred cost audits. 

We have recommended that NSF, using a risk-based approach, develop end-to-end cost 

surveillance policies and procedures for its high-dollar, high-risk CAs to ensure adequate 

stewardship over federal funds. We have also recommended specific cost surveillance measures 

that could be undertaken at the pre-and post-award stages and that, at a minimum, NSF 

implement increased monitoring of CAs valued at over $50 million. 

As mentioned, DCAA found significant amounts of unallowable contingency amounts in the 

proposed budgets for the large facility projects it reviewed. Given the amount offunds involved 

and the recurring nature of this finding, we decided to gain a deeper insight into how 

contingencies were actually used in construction projects by auditing NSF's EarthScope award, a 

closed construction project. We found that proposed contingency amounts were not consistent 

with OMB cost principles, there was a lack of visibility over contingency expenditures, and NSF 

approved the use of contingencies for non-contingent events. The significant internal control 

problems made it all but impossible for us to determine if contingency amounts were ultimately 

used to purchase unallowable items or to hide cost or schedule overruns. The lack of visibility 

also deprived NSF of the ability to routinely ensure the appropriate use of contingency funds. 

Accordingly, NSF risked not having funds available for true contingencies when the need arose 

and forfeited the use of those funds for other important projects. 

The work my office has done clearly demonstrates that NSF is faced with a much bigger problem 

than contingency alone. Given the results of our proposal audits and the lack of incurred cost 

submissions and audits, it is clear that there are significant weaknesses in NSF's cost 

surveillance measures for awarding and managing CAs. Until those processes are strengthened, 

the Foundation cannot ensure that it is not overpaying for large construction projects. 

We are optimistic that NSF is moving in the right direction to address the systemic problems 

relating to oversight of cooperative agreements. In December 2012 the NSF director charged a 

senior advisor in his office with coordinating a major assessment of processes, policies, and 

mechanisms for supporting large research facilities from conception to construction to operation 

and sun-setting. The stated goal of this endeavor is to create a vision and framework with 

recommendations, pathways and timelines for NSF to foster the best research infrastructure for 

decades to come. The advisor's final report is supposed to be completed in March of 2013, and 

the charge includes interim milestones. 

Some of the analysis conducted by the senior advisor will touch on issues raised in our alert 

memorandum on CAs and our contingency-focused audits. Among other things, the charge 

specifically states the importance of ensuring that the processes used to estimate and support 

costs associated with large facility projects are robust, and ascertaining that NSF has strong 

methods for continuously ensuring that funds provided for these projects are used in accordance 

with NSF and federal requirements. It further states that the analysis and recommendations 

should address, among other things, the impacts of existing NSF policies and whether 

modifications or new policies are needed (including the potential need for process improvements 

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27 

to enable informed funding decisions and to ensure accountability of funds through post-award 

monitoring and incurred cost audits). In light of this focus, it is likely that the outcome of this 

review process will significantly impact how our recommendations are resolved. Accordingly, 

my office is paying close attention to NSF's progress in this endeavor and providing feedback, as 

appropriate, based on our recommendations. Because NSF uses CAs to fund its riskiest and 

most costly large facility projects, strengthening controls in this arena will have a profound and 

beneficial effect on the agency's ability to act as a strong steward of federal funds. 

Grants Management 

NSF makes more than 11,000 awards armually, valued at approximately $7 billion, to about 

2,000 institutions. Because NSF accomplishes its mission primarily through grants to individual 

researchers and institutions, robust oversight of grants management is essential for proper 

accountability over federal tax dollars intended to advance the progress in science. Undertaking 

such oversight can be challenging: unlike contractors, grant recipients request payments as an 

aggregate dollar amount and are not required to present supporting documentation, such as 

invoices and receipts, to receive payment from the agency. 

Oversight and management of awards that is sufficient to safeguard federal funds invested in 

scientific research has been an ongoing challenge for NSF. The Foundation's FY 2011 [mancial 

statement audit noted several areas of concern about its processes for awarding and 

administering grants, including a lack of follow-up to determine whether awardees acted to 

correct problems identified in desk reviews and delays in resolving open audit recommendations. 

The FY 2012 audit stated that while improvements had been made in this area, improvements in 

internal controls over processing grant transactions were necessary and follow-up remained a 

concern. Previously, NSF has indicated that staffing constraints have caused it to reduce the 

number of site visits to monitor high-risk awardees and that increased workload has hampered its 

ability to resolve audit recommendations in a timely marmer, but the agency reported that it 

completed the 30 site visits it plarmed to conduct in FY 2012. 

For our part, in the face of these oversight challenges, the OIG is using automated techniques, 

which enhance our oversight and permit us to: 

• Better identify high-risk awardees 

• Expand audit coverage to 100 percent of expenditures 

• Focus our limited audit resources on questionable expenditures. 

Using automated techniques enables us to obtain data from multiple [mancial and program 

databases, which we can compare and analyze to identify anomalies in cost data and in awardexpenditure patterns. These techniques provide a level of transparency over recipient spending 

wen beyond that available from traditional methods. Examples of some of the data sources we 

can now use include funding payments, the System for A ward Management (formerly the 

Excluded Parties List System), NSF award data, and general ledger data. Because these 

techniques are relatively new to the university community and to NSF, we have communicated 

extensively with NSF and with the university audit community about how we are using these 

tools in our work. 

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It is important to note that automated teclmiques are a starting point, not an end point and that 

they complement, but do not replace, traditional audit teclmiques. We will continue to use 

traditional audit tools including interviews, request for support for transactions, and discussions 

to request additional material as we conduct our work. 

Our recent audit of a university which is among the top 30 largest NSF award recipients shows 

the impact of our new approach in that job. Analytics allowed ns to look at more than 280,000 

transactions posted to the 604 NSF awards the university had during our 3-year audit period. We 

also used analytics tools to cross check data from fmancial records and NSF data systems and to 

merge those two databases into a single database we could use for analysis. 

Using this approach, university records told us, among other things, when equipment was 

purchased and how much was charged so we could identifY whether items were allowable under 

the award and had been purchased after the grant expired. We also were able to quickly identifY 

additional items for testing or new areas to perform tests as items came to our attention during 

audit work. We ultimately identified over $6 million in questionable expenditures. Our findings 

illustrate the value of using these techniques to provide a higher level of accountability over the 

billions of dollars in NSF awards. 

Our audits of NSF awards have repeatedly questioned costs as result of internal control 

deficiencies such as unsupported cost sharing, unallowable labor costs, and charges for expenses 

unrelated to the NSF award, among other things. Automated teclmiques have significantly 

expanded our oversight capacity and given us a more robust method to determine whether 

awardees are using funds appropriately. It is important for NSF to take prompt action to address 

recommendations and to act swiftly to recover funds when they are found to be unallowable. 

Contract Monitoring 

Cost reimbursement (CR) contracts are inherently risky because the government assumes much 

of the risk that poor performance on the part of the contractor will result in cost overruns. In FY 

2012, NSF obligated $402 million for all contracts. Of that amount, $282 million was for CR 

contracts, including $123 million in advance payments issued before work was done. 

The OIG evaluates NSF's contracting practices primarily through the annual audit of the 

Foundation's Financial Statements. The FY 2010 financial statement audit repeated the FY 2009 

findings of a significant deficiency in NSF's monitoring of cost reimbursement contracts. The 

FY 2010 financial statement audit contained seven recommendations focused on contracts, 

including that NSF continue to obtain incurred cost audits for cost reimbursable contracts, and 

that it obtain Cost Accounting Standards (CAS) disclosure statements from contractors and 

eusure that they are audited and approved in a timely manner. An incurred cost audit is an 

important tool which enables management to assess a contractor's compliance with the financial 

terms and conditions of a contract. An approved CAS disclosure statement is essential to 

establish how the contractor classifies and bills its costs and is a critical tool for conducting an 

incurred cost audit. 

While NSF's most recent fmancial statement audit for FY 2012 no longer cited monitoring of 

cost reimbursement contracts as a significant deficiency as a result of strengthened procedures, it 

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29 

stated that NSF management must continue to implement corrective actions to ensure that it 

maintains adequate control over such contracts. The FY 2012 audit noted two primary areas of 

ongoing concern with regard to monitoring of cost reimbursable contracts. 

The first concern pertained to delays in completing incurred cost audits and the lack of approved 

CAS disclosure statements. The audit recommended that NSF continue to identify cost 

reimbursable contracts for incurred cost audits in order to ensure that costs billed to NSF are 

valid. The second concern cited incomplete oversight procedures with regard to the timely 

receipt of incurred cost submissions and the adequacy of contractors' accounting systems as well 

as the need to fully implement the recent changes to its Acquisition Manual. The audit made 

several recommendations to address these issues. 

Ethical Conduct of Research 

Research misconduct (defmed as fabrication, falsification, or plagiarism at the federal level) 

damages the scientific enterprise, is a misuse of public funds, and undennines the trust of 

citizens in science and in govemment For these reasons, pursuing allegations of research 

misconduct by NSF-funded researchers continues to be a focus of our investigative work. In 

recent years, we have seen a significant rise in the number of substantive allegations of 

misconduct associated with NSF proposals and awards. It is imperative to the integrity of 

research funded with taxpayer dollars that we ensure that NSF Principal Investigators carry out 

their projects with the highest ethical standards. 

At a time when opinion surveys indicate that an increasing number of Americans are becoming 

distrustful of science, it is more important than ever that the conduct of scientific research not be 

tainted by instances of misrepresentation or cheating. Recent surveys suggest that 75% of high 

school students and 50% of college students admit to cheating, and 30% of researchers admit to 

engaging in questionable research practices. Consistent with these survey results, DIG has seen 

a dramatic increase in substantive allegations of plagiarism and data fabrication, especially with 

respect to junior faculty members and graduate students. Over the past 10 years, the number of 

allegations received by our office has more than tripled, as has the number of findings of 

rcsearch misconduct NSF has made based on DIG investigation reports. 

Our research misconduct investigations follow NSF's Research Misconduct regulation, which is 

based on the govemment wide policy promulgated by the Office of Science and Technology 

Policy. Within our office, investigative scientists with Ph.Ds in chemistry, biology, and other 

scientific disciplines conduct these highly technical, complex investigations. 

When we receive a research misconduct allegation, we first conduct a confidential inquiry to 

establish whether the allegation is substantive. This inquiry often involves confidential 

communication between our office and the accused subject and does not involve the subject's 

institution. If the subject provides an adequate explanation to dispel the allegation, our inquiry 

closes and only the subject is aware that the matter was brought to our attention. This protects 

the subject's reputation from being unjustly tarnished by frivolous or minor allegations. 

If the allegation appears to have substance, we move into the investigation phase, which 

normally involves referring the case to the subject's institution for investigation. lfthe 

institution receives the allegation in the fIrst instance, it conducts an inquiry and notifIes DIG if it 

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30 

detennines an investigation is warranted. The institution conducts an investigation and provides 

us with its investigation report, which we review for fairness, accuracy, and completeness. If the 

institution's report is thorough and adequate for our purposes, we use it as the basis for our 

independent investigation; if the university did not fully address all of the issues, we conduct 

additional investigation ourselves. 

Based on the university's report and any additional investigation on our part, if we conclude that 

the subject committed research misconduct under NSF's definition, we write an investigation 

report and provide the subject an opportunity to comment on our assessment of the evidence and 

recommended actions. After reviewing the subject's comments, we finalize the report and send 

it to NSF's Deputy Director for adjudication. If the Deputy Director concludes that the subject 

committed research misconduct and imposes actions, the subject can appeal the decision to 

NSF's Director, whose decision is final. 

Research misconduct investigations can take anywhere from a year to several years. A number 

of factors, such as whether we have to refer the matter to a university, how long the university 

takes to complete its investigation, and the adequacy of that investigation, affect how long it 

takes to complete an investigation. Currently, we have 110 open cases and six staff, and we are 

seeing an increase in cases each month. 

Since 2003, our investigations have resulted in 120 findings of research misconduct, more than 

80 percent of which found plagiarism. Eighty nine percent of plagiarism allegations involved 

faculty while only 11 percent involved graduate students/post docs. In contrast, 53 percent of 

falsification/fabrication allegations involved graduate students/post docs, and 47 percent 

involved faculty. In the past two years, we have had 24 allegations of data manipulation 

involving students and post docs, which is equal to the number of similar allegations received 

from 2003-2010. 

While NSF has been responsive to the recommendations contained in our research misconduct 

investigation reports, the actions it takes address incidents after the fact. Extrapolating the 

number of allegations OIG has received across the 45,000 proposals NSF receives annually, 

suggests 1300 proposals could contain plagiarism and 450-900 proposals could contain 

problematic data. Affirmative steps are necessary to counter the trends of increasing integrityrelated violations. Since NSF funds research in virtually every non-medical research discipline, 

the agency is in a unique position to lead the government response to addressing these disturbing 

trends at all levels of education. 

Congress passed the America COMPETES Act in 2007 to increase innovation through research 

and development, and to improve the competitiveness of the United States in the world economy. 

For NSF, the Act mandates new requirements to advance the professional and ethical 

development of young scientists, such as mentoring plans for all postdoctoral positions, and 

plans to provide training on the responsible conduct of research to undergraduates, graduate 

students, and postdoctoral researchers funded by NSF. NSF responded to the America 

COMPETES Act by instituting requirements that grantees submit mentoring plans for all NSFsupported "post-docs" and have RCR training plans for NSF-funded students. The NSF guidance 

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31 

as to what these plans should consist of was limited and offered great flexibility to grantee 

institutions to develop plans tailored to their needs. 

Our staff have observed a great deal of variety in grantee RCR programs, which range from high 

quality mentoring programs to ones that simply refer students to web-based or computer-based 

training. In addition, information collected from our site visits and investigations suggests that 

some institutions are not taking these requirements seriously, thereby potentially undermining 

the public's confidence in the research enterprise and placing NSF funds at risk. Accordingly, 

our office is developing a process to examine how awardees have established RCR training 

programs now that sufficient time has passed for the research community to implement the 

America COMPETES RCR requirements. We plan to assess institutions' commitment to the 

program (including resources) and how expectations for the program are communicated to 

faculty and students. We also plan to examine, among other things, course structure and content, 

participation requirements and options, faculty participation, and oversight. We are currently 

working with the Office of Management and Budget to obtain approval to begin this review in 

FY 2013. 

Conclusion 

My office values, and is firmly committed to, its mission to detect and prevent fraud, waste, and 

abuse within NSF or by those who receive NSF funding. These are challenging times to be in 

federal public service. Yet every day I wituess the commitment of OIG auditors, investigators, 

and others to doing work that leads to recommendations to improve NSF's ability to exercise 

strong stewardship over the taxpayer dollars intended to advance scientific research. 

Taxpayers expect government managers to be prudent custodians of agency funds in both good 

times and bad, but expectations are even higher when federal deficits are large and budgets are 

tight. We will continue to target our work and to direct our resources to areas that pose the 

highest risk of misuse of taxpayer dollars and can lead to funds used inappropriately being 

returned to the govemment. Our work reflects my office's sustained commitment to helping 

NSF be an effective steward of taxpayer dollars and benefits from the support of NSF 

management across the Foundation. We look forward to our continued partnership with NSF 

and the Congress to this end. 

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

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32 

Chairman BROUN. Thank you, Ms. Lerner. 

And now, Mr. Smith, you are recognized for five minutes. Thank 

you. 

TESTIMONY OF MR. DAVID SMITH, 

DEPUTY INSPECTOR GENERAL, 

U.S. DEPARTMENT OF COMMERCE (DOC), 

OFFICE OF INSPECTOR GENERAL 

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

Maffei, Committee Chairman Smith, and Members of the Subcommittee, I appreciate the opportunity to testify today about the 

Department of Commerce’s top management challenges in fiscal 

year 2013. 

The Department plays a pivotal role in implementing the President’s initiatives for economic recovery and job creation. Like other 

federal agencies, Commerce faces significant financial uncertainty 

this year. I will describe five top management challenges which we 

have identified from our oversight perspective to be the most significant management and performance challenges facing the Department of Commerce. 

First, stimulate economic growth in key industries, increase exports and enhance stewardship of marine fisheries. The Department has many government-wide initiatives to implement the 

President’s priorities. Successful implementation could have a profound impact on the Nation’s economy. However, it requires focused attention by senior management, close coordination with the 

private sector and other federal agencies, and sustained Congressional support. 

Second, increase oversight of resources entrusted by the public 

and invest for long-term benefits. In this era of constrained budgets, there is a greater risk that management will take shortcuts, 

loosen internal controls and deemphasize oversight to devote resources to other requirements. Therefore, attention to internal controls is critical. 

Third, strengthen security and investments in information technology. Our recent audits of bureau IT systems confirmed the urgency of fixing the Department’s security weaknesses. While we 

support senior management’s recent actions to strengthen the 

Chief Information Officer’s authority, it is too early to judge their 

effectiveness. 

Fourth, implement a framework for acquisition project management and improved contract oversight. In fiscal year 2011, the Department obligated approximately $2.4 billion on contracts for 

goods and services. To maximize these funds, Commerce needs to 

strengthen its acquisition and contract management practices. 

While it has made some progress, we continue to find weaknesses 

in how the Department plans, administers, and oversees its contracts. For example, our recent audit of contract award fees and 

award terms found more than $100 million in questioned costs and 

funds that could have been put to better use. 

Fifth, reduce the risks of cost overruns, schedule delays, and coverage gaps for NOAA’s satellite programs. Satellite programs remain the Department’s largest investment. They encompass almost 

20 percent of Commerce’s budget. Top-level management attention 
33 

will continue to be needed to prevent cost overruns and minimize 

the impact of satellite coverage gaps. We recently issued a report 

on the Joint Polar Satellite System program and are completing 

work on an audit of the Geostationary Operational Environmental 

Satellite-R Series program. 

Over the past several years, the Department has experienced 

many challenges in the areas I have discussed here. To its credit, 

top-level management is working diligently to address its management challenges. Commerce leadership must continue to show the 

way forward to establish a culture of accountability—this is perhaps their greatest challenge of all. 

Again, we appreciate the opportunities to appear before the Subcommittee today, and I will be pleased to respond to any questions 

you may have. Thank you. 

[The prepared statement of Mr. Smith follows:] 
34 

Testimony of 

David Smith 

Deputy Inspector General 

u.s. Department of Commerce 

before the 

House Committee on Science, Space, and Technology 

Subcommittee on OverSight 

Top Challenges for Science Agencies: 

Reports from the Inspectors General, Part I 

February 28, 20 I 3 
35 

Chairman Broun. Ranking Member Maffei. and Members of the Subcommittee: 

I appreciate the opportunity to testify today about the Department of Commerce's top 

management challenges in FY 2013. The Department plays a pivotal role in implementing the 

President's initiatives for economic recovery and job creation and. like other federal agencies. 

faces significant financial uncertainties in the upcoming year. Our Top Management Challenges 

report identifies what we consider. from our oversight perspective. to be the most significant 

management and performance challenges facing the Department. 

We identified five major challenges that represent cross-cutting issues with a focus on 

the President's most important goals and longstanding departmental management 

concerns. 

1. Stimulate Economic Growth in Key Industries, Increase Exports, and Enhance Stewardship 

of Marine Fisheries 

The Department is at the center of the federal government's efforts to stimulate 

economic and job growth in key industries and promote exports. while at the same time 

regulating exports and maintaining the delicate balance between promoting and regulating 

the commercial use of marine fisheries. These efforts require the Department to work 

effectively with interagency partners and the private sector as well as to marshal and 

integrate Commerce resources. We have identified three areas for management 

attention: 

• stimulate economic growth in manufacturing. intellectual 

property. and wireless industries 

• promote and regulate exports 

• protect and promote marine fisheries 

2. Increase Oversight of Resources Entrusted by the Public and Invest for long-Term Benefits 

The Joint Select Committee on Deficit Reduction was tasked with seeking $1.5 trillion in 

government-wide savings over the next 10 years. The Committee did not agree on 

spending reductions. resulting in a potential sequestration that will trigger across-theboard budget cuts beginning in March 2013. Departmental programs will be deeply 

affected. As the Department prepares for this extended period of tighter budgets and 

decreased spending. it is more important than ever to understand the risks associated 

with making trade-offs in allocating resources between the implementation of programs 

and the oversight of those programs. 

Also. after experiencing significant cost increases in the last decennial (from $8.2 billion 

to $12.8 billion between 2000 and 20 I 0 decennials). the Census Bureau-a 

Departmental component-has vowed to contain cost of the 2020 decennial by making 

critical design decisions by the end of FY 2014. However. it has already encountered 

significant challenges in achieving this goal. While the nation is facing significant financial 

2 
36 

hardship, the Department and Census Bureau simply cannot afford to repeat the cost 

growth experienced over prior decennials. We have identified three areas for 

management attention during a period of funding uncertainty: 

• increase internal controls and oversight of Departmental 

operations under a constrained budget 

• invest for efficiencies and long-term benefits 

• implement bold design changes to contain 2020 decennial costs 

while maintaining enumeration quality 

3. Strengthen Security and Investments in Information Technology 

In FY 2012, the Department planned to invest $2.4 billion in IT. This is about 25 percent 

of its annual budget and one of the highest percentages devoted to IT among all civilian 

agencies. The Department and its constituent bureaus rely on IT to support major 

mission activities, such as producing the constitutionally mandated decennial census; 

releasing vital economic statistics (e.g., the gross domestic product and consumer 

spending); granting patents and trademarks; issuing severe weather alerts; and operating 

weather satellites. However, we have identified major concerns in the Department's IT 

security posture and fragmented IT governance. While the Department's Chief 

Information Officer has taken steps to strengthen IT governance, we continue to find 

significant security vulnerabilities in bureau systems, which could lead, and already have 

led, to service disruptions and loss of sensitive information. We have identified four areas 

for management attention: 

• continue improving the Department's IT security posture by 

addressing persistent security weaknesses 

• develop resilient incident response and recovery capabilities with 

increased monitoring of Internet traffic 

• manage the Department's IT portfolio with enhanced governance 

structure 

• strengthen oversight of IT investments 

4. Implement Framework for Acquisition Project Management and Improve Contracts 

Oversight 

In FY 20 II, the Department obligated approximately $2.4 billion on contracts for goods 

and services, including satellite acquisitions, intellectual property protection, broadband 

technology opportunities, management of coastal and ocean resources, information 

technology, and construction and facilities management. To maximize these funds, the 

Department needs to strengthen its acqUisition and contract management practices. 

While it has made some progress-such as reorganizing the Office of Acquisition 
37 

Management to more directly address major acquisition initiatives and implementing an 

Acquisition Center of Excellence, which will consolidate acquisition support for the 

Department's smaller bureaus, our audits continue to find weaknesses in how the 

Department plans, administers, and oversees its contracts. We have identified four areas 

for management attention: 

• implementing the planned framework for acquisition project 

management 

• overseeing high-risk contracts 

• maintaining an acquisition workforce that holds bureau officials 

accountable 

• implementing an effective suspension and debarment program 

5. Reduce Risks of Cost Overruns, Schedule Delays, and Coverage Gaps for NOAA's Satellite 

Programs 

Managing risks in the acquisition and development of the next generation of 

environmental satellites is a continuing challenge for the Department. The two most 

prominent programs, the Joint Polar Satellite System OPSS) and the Geostationary 

Operational Environmental Satellite-R series (GOES-R), together account for one-third 

of NOAA's FY 2013 budget request. They are also the largest investments in the 

Department, comprising nearly 20 percent of the Department's budget. The satellites will 

provide data and imagery for weather forecasting--including severe-storm tracking and 

alerting--and the study of climate change. Operating environmental satellites and 

weather forecasting are designated as primary mission-essential functions of the 

Department because they help lead and sustain the nation in the event of a catastrophe. 

Yet, because of cost overruns, schedule delays, and the aging of NOAA's current 

constellation of satellites, NOAA is confronting coverage gaps for these critical assets. 

Strong program management and close oversight of these programs are needed to 

manage risks that inevitably lead to cost overruns, schedule delays, and coverage gaps for 

the critical capabilities these programs will provide. Based on our work with these 

programs, we have identified four areas for management attention: 

• communicating with stakeholders to define JPSS capabilities, 

schedule, and cost baselines 

• ensuring adequate leadership and governance structure over JPSS 

development 

• developing a plan to support NOAA weather forecasting 

capabilities during coverage gaps 

• reducing program risks associated with GOES-R development 

4 
38 

This concludes my prepared statement, and I will be pleased to respond to any questions 

you or the other Subcommittee members may have. 

5 
39 

Chairman BROUN. Thank you, Mr. Smith. Excellent job by all our 

witnesses staying within your time constraints, and I trust that all 

Members on both sides are very pleased with our witnesses’ testimony, and I appreciate you all’s testimony, you all being available 

for questioning today. 

Reminding Members that Committee rules limit questioning to 

five minutes, the Chair at this point will open the round of questions. The Chair recognizes himself for five minutes. 

‘‘Other Transaction Authority,’’ may sound like a mundane term, 

but agencies are increasingly relying on this obscure acquisition 

tool. Normally, agencies must comply with federal contracting law 

but oftentimes Congress gives agencies other mechanisms in which 

to enter agreements outside of the law. In the instance of NASA, 

they were provided the Space Act Agreement, which is authority 

given in 1958 when the agency was created in order to advance 

NASA’s mission and programs by cooperating with outside entities. 

The NSF authority was granted by 31 U.S.C. Section 3605. Initially designed to only fund small projects, this is a serious concern 

for this Committee. NASA used Space Act Agreements to fund 

$750 million development of the Commercial Orbital Transportation System, and NSF has over 685 Open Cooperative Agreements totaling nearly $11 billion to fund the construction of its 

major research facilities. The NASA IG just initiated an audit of 

the NASA Space Act Agreements on Monday. I appreciate you all 

doing that. But it was initiated on Monday and the NSF IG issued 

an alert memo on Cooperative Agreements last September, and 

thank you also. 

Mr. Martin and Ms. Lerner, to the best of your knowledge, how 

has this Other Transactional Authority implemented—how is this 

Other Transactional Authority implemented by the agency that you 

oversee? Ms. Lerner will start first. Ladies first. 

Ms. LERNER. NSF, as we noted, has 685 Cooperative Agreements. 

Thirty-eight of those are over $50 million, so the area of greatest 

concern to my office obviously is the high-dollar, high-risk Cooperative Agreements, and the concern that we have based on the work 

that we have done is that there aren’t adequate oversight controls 

in place to ensure that the funds that are directed to those types 

of awards are properly stewarded and subject to the same sort of 

accountability that you would expect in these lean budget times. 

We have conducted several audits and provided a great deal of 

feedback to the agency in that area. 

Chairman BROUN. Thank you very much. If you will please let 

this Committee know what we need to do to try to rectify that. 

Mr. Martin? 

Mr. MARTIN. NASA has three types of Space Act Agreements it 

has entered into. There are over 700 reimbursable Space Act 

Agreements, approximately 500 non-reimbursable Space Act Agreements, and three or four what they call funded Space Act Agreements. As you indicated in the preface to your question, earlier this 

week we initiated an audit looking at all three of these types of 

Space Act Agreements focusing in particular on reimbursable 

Space Act Agreements to ensure that NASA is getting and the taxpayer is getting its appropriate funding. 
40 

Chairman BROUN. Okay. I am going to ask a series of questions, 

both of you all, if you would answer this. Is the agency required 

to provide advance notice of solicitation? How do the agencies ensure fair competition? Are they required to make a public list of all 

agreements and amounts in a transparent manner? And are there 

sufficient controls to prevent waste, fraud and abuse as well as 

mismanagement? Mr. Martin? 

Mr. MARTIN. You have raised a lot of the questions that are the 

focus of our ongoing audit now. The GAO looked at the issue of 

Space Act Agreements in the last 2 or three years, did some highlevel work of checking on sort of broad internal controls. The IG’s 

office at NASA is going to do a deep dive and get into the details 

of these agreements. 

Chairman BROUN. Very good. Ms. Lerner? 

Ms. LERNER. I do believe that NSF requires advance notice of solicitation or competition for all of its large cooperative agreements, 

and certainly, as I noted earlier, our office does have real concerns 

about whether there are sufficient controls in place to prevent 

fraud, waste and abuse. 

Chairman BROUN. Well, please make sure that this Committee 

is notified because we want to be sure that there is transparency 

as well as to prevent waste, fraud and abuse. 

Mr. Martin, this Committee is reviewing allegations related to 

ITAR violations at the Ames Research Center, and there seem to 

be very grave allegations there as far as mismanagement there. It 

is our understanding that your office has already reviewed these 

allegations. In order to assist our oversight, please provide the 

Committee with all records relating to your office’s review of these 

allegations. I appreciate your doing so. Thank you. Is that an assurance that we can get those? 

Mr. MARTIN. Yes, we are actually having a conversation tomorrow with a staffer from your Committee as well as Mr. Wolf’s committee to go over some of these issues related to the concerns about 

export control matters at Ames Research Center. 

Chairman BROUN. Well, there are just tremendous allegations 

there of tremendous waste, fraud and abuse in that instance, so I 

hope that you all will look into them very strongly and look at 

those allegations. 

My time is up. Now I recognize Mr. Maffei for five minutes. 

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

Mr. Smith, are you aware of any investigations of suspected 

Anti-Deficiency Act violations happening in the Commerce Inspector General’s Office during Mr. Zinser’s tenure? 

Mr. SMITH. Yes, sir. 

Mr. MAFFEI. You are aware? Can you enlighten us as to any details about that suspected violation and how it was investigated? 

Mr. SMITH. I want to make sure I understand your question. Are 

you referring to investigations—— 

Mr. MAFFEI. I am referring to an investigation of a suspected 

Anti-Deficiency Act violation within the IG’s Office itself. In other 

words, the IG’s Office may or may not have but there is an allegation that it violated the Act. 

Mr. SMITH. No, sir, I am not. 
41 

Mr. MAFFEI. Okay. You are not. Okay. Given that you have been 

about eight weeks at your job? 

Mr. SMITH. I think I am into my third month—my first trimester. Yes, sir. 

Mr. MAFFEI. So am I. So anyway, I respect that, but also I want 

to point out to the Committee that Mr. Smith wouldn’t necessarily 

know even if there was. At this point he hasn’t been there very 

long. 

The law does require that an Anti-Deficiency Act violation can 

only be declared as having happened officially through a decision 

in the agency’s general counsel office. Do you know if Mr. Zinser’s 

office has ever had to refer a suspected Anti-Deficiency Act violation on his own office to the Department of Commerce General 

Counsel? 

Mr. SMITH. No, sir. 

Mr. MAFFEI. Of course. No, you don’t know? 

Mr. SMITH. I don’t know. 

Mr. MAFFEI. Okay. Just trying to figure out how this would all 

work. I want to ask Mr. Martin and Ms. Lerner, what would happen if there was a suspected Anti-Deficiency Act violation within 

an IG office? In other words, if the IG’s office spends money improperly, who would investigate that? Would the IG himself or herself? 

Mr. MARTIN. If it is an allegation against the Inspector General 

him or herself, there is an overarching organization called CIGIE 

made up of Inspectors General. There is an integrity committee as 

part of CIGIE and the allegation of misconduct would go to that 

committee. 

Mr. MAFFEI. Ms. Lerner, you agree with that? 

[Nonverbal response] 

Mr. MAFFEI. Okay. Thank you very much. 

Mr. Smith, I just ask if you could look into it just to see if there 

was any suspected Anti-Deficiency Act violation. These things could 

represent real waste. They could also just be a technical issue, so 

if you wouldn’t mind checking and providing that information for 

this Committee? 

Mr. SMITH. Yes, sir. I would ask to get together with your staff 

to find out any further details, so I could better do that. 

Mr. MAFFEI. That would be very good for us. 

Mr. SMITH. Thank you. 

Mr. MAFFEI. Now, we have gotten a report the Inspector General 

specifically advertised for investigative staff in the State of Arizona 

and hired an investigator based in Arizona and now pays for that 

employee to spend up to three weeks every month in the DC. area. 

Now, if that is true, it would represent real waste of taxpayer 

money as you have to pay the base pay, of course, but as well as 

temporary duty pay for the time they spend in Washington, and 

this could be several thousand dollars each month. Do you know 

how many employees at the Commerce IG’s Office, employees who 

are put on regular TDY status for more than a week a month? 

Mr. SMITH. I know of one investigator we currently have on staff 

who is working out of our Denver office on investigations he is conducting out in that area. 
42 

Mr. MAFFEI. Do you know how much time he spends in Washington every month? 

Mr. SMITH. No, sir, I don’t have that information available. 

Mr. MAFFEI. Could you find out, and also whether there are any 

other employees that are on this TDY status for more than a week 

a month—— 

Mr. SMITH. Yes, sir. 

Mr. MAFFEI. —on a regular or semiregular basis? Do you have 

any idea how much—well, let us leave it at that. 

Obviously, Mr. Chairman, I am worried that these issues with 

this office could extend to waste in management of the taxpayer 

funds by the IG himself. These are things that the Committee staff 

here has had multiple sources on. So I would like to at least see 

if we can’t get the Commerce IG’s Office to sort of address them. 

Some of them are obvious. If there is an employee that lives in Arizona and spends lots of time in Washington, D.C., those are facts. 

We can find that out. So I would like to make sure that the IG’s 

office is willing to provide us with that information. We do rely on 

the Inspector Generals to be the watchdog on everyone else, so it 

is one of those things that we want to make sure that they are 

careful stewards of taxpayer money themselves for their own operation, and then we will also look into the—what is it called? 

CIGIE? We will also look into CIGIE. 

So thank you very much, Mr. Chairman. I yield back the remaining three seconds of my time. 

Chairman BROUN. Thank you, Mr. Maffei. 

What is CIGIE? What is that an acronym for? 

Mr. MARTIN. This is one of the worst acronyms in government. 

Council of the Inspectors General on Integrity and Efficiency. 

Chairman BROUN. Okay. Thank you very much. I just wanted 

that for edification. 

I now recognize the Chairman of the full Committee, Mr. Smith 

from Texas, for five minutes. 

Chairman SMITH OF TEXAS. Thank you, Mr. Chairman. 

Mr. Martin, thank you for your testimony. We appreciate the 

good job you have been doing over the years as well. You mentioned James Webb in your testimony a few minutes ago having 

been behind schedule and over cost. Has that generally been corrected, to your knowledge? I happen to have spoken to the Administrator of NASA yesterday, and he seemed to think that James 

Webb was going to be fully funded and on schedule—get back on 

schedule. Do you see it that way too? 

Mr. MARTIN. I do. And in fact, I was at the Johnson Space Center on Tuesday of this week, and they have a thermal vacuum 

chamber they are retrofitting, built in the 1960s, and they are 

going to put James Webb Space Telescope in there and ice it down. 

Chairman SMITH OF TEXAS. I expect to be there in March, and 

I will double-check, so that is good news. 

Ms. Lerner, you referred to questionable expenditures. We have 

heard about grant problems—you mentioned those as well—research misconduct and so forth. I don’t know that you have got 

much into the way of solutions, if you want to mention a couple of 

solutions, but I would also ask you just for a rough estimate as to 

how many colleges or universities sort of had been suspected of— 
43 

I am not going to find them guilty right now—but have been allegedly engaged in some of these questionable practices. So two questions. How many universities, colleges do you think need a second 

look at their expenditures, and two, do you have some solutions? 

Ms. LERNER. In terms of the first question, the large facilities 

that we are interested in are often run not by colleges and universities but by consortiums of nonprofits. 

Chairman SMITH OF TEXAS. I know. I was asking about a subset 

because they have been getting some attention. 

Ms. LERNER. Exactly. So I don’t have precise numbers on that. 

We can certainly try and get back to you on that. 

Chairman SMITH OF TEXAS. Great. And I would actually like the 

names as well. 

Ms. LERNER. Okay. 

Chairman SMITH OF TEXAS. Okay. 

Ms. LERNER. We will do what we can there. On the issue of research misconduct, and that is defined as fabrication, falsification 

and plagiarism at the federal level, over the last ten years, we had 

approximately 850 allegations of plagiarism and 150 approximately 

allegations of fabrication or falsification of data. Those are allegations. We have had 120 findings of research misconduct. 

Chairman SMITH OF TEXAS. Which represents an increase, I understand, over the past few years. 

Ms. LERNER. Exactly. We are seeing a particular increase in the 

area of data manipulation. In the last two years, we have gotten 

24 allegations of data manipulation, and that is the same amount 

as we got in the previous seven years. 

Chairman SMITH OF TEXAS. Now, what do you do when you see 

evidence, of this getting to the idea of solutions, do you call it to 

their attention? Do you have oversight? Do you threaten? What do 

you do? 

Ms. LERNER. We absolutely call it to their attention. NSF, as 

with other science funding agencies, has a regulation for how you 

investigate research misconduct, and we play an integral part in 

that process at NSF. All allegations of research misconduct are 

supposed to be brought to the IG’s attention. We do an initial inquiry to try and see if it looks like there is substance to the allegation. If there is, then we refer the matter to the university for investigation. When we send the matter to the university for investigation, we examine the procedures that they have in place for 

conducting those investigations. We look at the people who are 

going to participate in the panel that does the investigation to see 

if—— 

Chairman SMITH OF TEXAS. Now, are you generally satisfied with 

the subsequent actions taken by university officials? 

Ms. LERNER. For the most part, yes. 

Chairman SMITH OF TEXAS. Being corrected and so forth? 

Ms. LERNER. Exactly, and if they don’t do it right, then we fix 

it when it comes to us. 

Chairman SMITH OF TEXAS. Okay. Thank you. 

Mr. Smith, is it true that Inspector General staff was prohibited 

by NOAA from attending some of the program management council 

meetings? 

Mr. SMITH. Yes, sir. 
44 

Chairman SMITH OF TEXAS. And why is it important for Inspector General staff to attend those meetings? 

Mr. SMITH. To give you one example, we received the notes and 

minutes from a meeting, which said a decision had been made 

based on discussions that had occurred during the meeting. We 

were not privy to those discussions so we do not know what management’s thought process was. Therefore, we cannot opine on that 

nor can we provide any information that may benefit them. 

Chairman SMITH OF TEXAS. Would you object if I sent a letter 

today to NOAA insisting that they allow Inspector General staff to 

attend such meetings? 

Mr. SMITH. I would thank you very much, sir. 

Chairman SMITH OF TEXAS. Okay. Consider it done. 

Thank you, Mr. Chairman. Yield back. 

Mr. POSEY. [Presiding] Thank you. Mr. Peters, you are recognized for questions. 

Mr. PETERS. Thank you, Mr. Chairman. 

I have a question for Mr. Smith. On December 3, 2012, the 

Washington Post published a story about how the Commerce Inspector General, Mr. Todd Zinser, forced departing senior investigative staff into signing nondisclosure agreements, which barred 

those four members of his staff from approaching either the Office 

of Special Counsel, which exists to protect whistleblowers, or Congress to discuss what they had witnessed in Mr. Zinser’s office, and 

Mr. Smith, I assume you saw that story. 

Mr. SMITH. Yes, sir. 

Mr. PETERS. Have you asked for an explanation about what 

would be the reason to do that either from Mr. Zinser or Mr. Beitel, 

who is the Principal Assistant Inspector General for Investigations 

and whistleblower protections, or Wade Green, the General Counsel? 

Mr. SMITH. In answer to your question, sir, I would say that I 

am aware of the circumstances behind that, and we, as the Office 

of Inspector General, disagree with the characterization that appeared in the press. 

Mr. PETERS. Okay. In what respect? 

Mr. SMITH. We do not believe that the interpretation that was 

provided—that those were gag orders—is correct. We actually used 

the definition of disparage within the EEOC website, which is the 

‘‘telling of falsehoods and lies with reckless regard to the truth.’’ 

That is the connotation that was used. In addition, we have been 

working with OSC and through the Merit Systems Protection 

Board, and they have requested through the arbitrator that we 

submit a joint motion to dismiss the stay as well the protective 

order. The last we heard from OSC, was that they consider through 

the additional language that we submitted on those nondisclosure 

agreements as well as the Whistleblower Enhancement Act that 

was passed, that the concern about enforcing the separation agreements the stay and protective order were meant to prevent is no 

longer an issue. 

Mr. PETERS. Has the Committee been provided copies of those 

agreements? 

Mr. SMITH. I believe they have, sir. 
45 

Mr. PETERS. I am sorry. I haven’t seen those. I guess I would express to you a concern that there be any kind of inhibition placed 

on what people might say because even if—I guess what you are 

saying is that the limitation was confined to what would be considered disparaging remarks? 

Mr. SMITH. Yes, sir, lies, falsehoods. 

Mr. PETERS. Okay. I guess I would like to see for my own purpose, and I will look at those agreements. In the context of open 

government, which is particularly important in California and we 

think works pretty well, that when people make statements, 

whether they are lies or not, are the kinds of things that can shake 

out in the sunshine and that we don’t want to ever intimidate people from making statements about what is going on because they 

are afraid that they are going to be in some sort of litigation or be 

accused of lying or telling a falsehood. That in itself can be intimidating. So I must say that I will wait to see the result of what OSC 

says but it raises a great concern that anyone would be asked to 

sign anything that inhibits their ability to talk in the context of the 

whistleblower law that has been provided for our protection and for 

the protection of taxpayers. 

And I realize you are new and that this preceded you. I guess 

you and Mr. Maffei and I are kind of all on the same timeline. But 

I found that—and I understand we are in politics. We know that 

everything you read in the press isn’t necessarily always 100 percent accurate but I will say that this is extremely—was something 

of great concern when I heard about it, and I look forward to following up on it in the future. 

Mr. SMITH. Yes, sir. If I may, I actually understand that kind of 

intimidation and fear if employees disclose things. I myself had to 

sign a nondisclosure agreement when I left the employment of the 

House and was warned on numerous occasions not to discuss any 

of the work that I had done here. 

Mr. PETERS. Well, unless it is classified material, I think that 

that is inappropriate, and so I would say the notion that we would 

do that, I think, is equally inappropriate unless it is classified, so 

I guess I would take that not as justification but something we 

ought to look into ourselves. 

Maybe I will ask Ms. Lerner or Mr. Martin, are you aware of any 

instances in which your agencies, your IGs might have asked people to sign these kinds of nondisclosure agreements? 

[Nonverbal response] 

Mr. PETERS. Mr. Martin is giving me a no, and Ms. Lerner. I can 

see that even without their microphones on, so I would ask the 

record to reflect that, and again I express my deep concern about 

this kind of behavior. I hope it does not remain the norm. 

Thank you, Mr. Chairman. I yield back. 

Mr. POSEY. Thank you. The Chair will now recognize the Chair 

for five minutes. 

Mr. Martin, you issued a report a couple weeks ago on NASA’s 

management and infrastructure standards, and in that report, you 

use the term ‘‘political intervention’’, and I want to ask you about 

three examples of political intervention. Number one, the Arc Jet 

facility at Johnson, the platform for the A3 test stand at Stennis, 

and of course, the Constellation. On your report, page 21, you men-
46 

tion a letter signed by 30 Members of Congress, most of them from 

Texas, opposed to the closing of the Arc Jet facility at Johnson. I 

am informed that the Arc Jet facility was needed to test Orion’s 

Constellation crew capsule, still going to be used by the way, their 

heat shield, so I can understand why Members of Congress oppose 

closing down the Arc Jet facility because it could jeopardize the upcoming SLS. That is number one. 

Number two, the A3 test stand at Stennis. Your report on page 

22 also flagged the A3 test stand as political intervention. The test 

stand was intended to test the J–2X engines for Constellation. As 

you know, Congress included language in the 2010 NASA Authorization Act instructing NASA to complete the test stand, which 

NASA wanted to mothball. You note that the stand was already 65 

percent complete and taxpayers had spent $292 million but your 

report fails to mention that the test stand was canceled because 

the Administration canceled Constellation. I think that is correct. 

Both Democrat and Republican Congresses had endorsed Constellation as a replacement for the space shuttle or the successor program. Why do you interpret actions by Members of Congress, including a law passed by Congress and signed by the President, as 

political interference, but don’t consider the cancellation of Constellation as political interference? 

Mr. MARTIN. I think that what we were attempting to do in that 

report, and I thought we were effective in doing so, was pointing 

out the many obstacles that stand in NASA’s way to reducing its 

aged infrastructure, but one of the things we pointed out was the 

interest of Members of Congress to retain certain infrastructure 

and capabilities at centers within their States or within their districts. A lot of the other problem that NASA has with handling its 

infrastructure is the fact that it is sort of changing programs or 

changing directions, and as you pointed out the cancellation of the 

Constellation was a major shift in the approach for manned space 

flight. 

Mr. POSEY. I don’t mean to interrupt you but we are on a very 

tight time schedule here. Did the Administration have a right to 

cancel the program put into law by Congress? 

Mr. MARTIN. I don’t believe that is a question that an Inspector 

General at an agency is appropriate to answer. Did they have a 

legal right to do so? 

Mr. POSEY. Yeah. Is that appropriate? I think you are supposed 

to tell us if we are operating according to good standards, and I 

think that is a significant question that demands an answer, which 

nobody has really been willing to step up and talk about. You have 

a Congressional program in place and an Administration that unilaterally cancels the program. Nine billion dollars flushed down the 

toilet, and you don’t think that ought to be on the radar screen? 

Mr. MARTIN. It certainly is on Congress’s radar screen and the 

Administration’s. In the NASA Authorization Act of 2010, Congress 

worked with the Administration and came up with a new direction 

for moving forward. You mentioned the SLS and the MPCV. It is 

not an Inspector General’s role to say whether that is good policy 

or bad policy. It is the Inspector General’s role to follow the money. 
47 

Mr. POSEY. Well, these instances that you mentioned in your report I think were directly linked to and inextricably entwined with 

those decisions, and like I said, I am new on this Committee. 

Mr. MARTIN. Right. 

Mr. POSEY. And I don’t have all the background, but during the 

review that I have done, I hadn’t seen that issue addressed, and 

I think it would be significant and I think maybe some other Members of the Committee would have an interest in knowing that too. 

Mr. MARTIN. Again, we were pointing out those significant pressures on NASA of multiple kinds including political pressures, 

when it is attempting to address an issue of how to handle its 

aging infrastructure. 

Mr. POSEY. I see my time is expired. Mr. Schweikert, you are recognized. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman. 

Ms. Lerner, you actually had a couple things in your testimony 

that I found interesting. First one. You were saying you were starting to do some—forgive me for paraphrasing—data mining to find 

bad acts. Can you share with me first what you are doing within 

that modeling and how effective you are finding it? 

Ms. LERNER. What we are doing is augmenting our traditional 

approach to auditing by using data analytics, and data analytics 

enable us to better target. If we do 20 or 30 audits in a year, that 

is all that we can do, so we have to, when NSF makes thousands 

of awards a year, be very careful of where we go and do our audit 

work. Data analytics enables us to better target our limited resources to the right places where risk looks to be high, and when 

we get to the institution, then we are able to instead of looking at 

two or three awards that have NSF money and 20 to 30 transactions in each, we can look at all of the awards and all of the 

transactions under them and identify anomalies that warrant further review. It is a starting point, not an endpoint, but it greatly 

enhances what we can see and how we can do our work. 

Mr. SCHWEIKERT. And Mr. Chairman and Ms. Lerner, I am actually a big fan of that. I am actually married to someone who one 

of her specialties was accounting models and—accounting data in 

the statistical models and trying to find those anomalies, and it 

gives you a chance to be able to look at huge data sets and find 

the center, and I hope actually from up and down the auditing 

world out there that we are seeing more of this. 

I am going to commit one of my sins here, and you also touched 

on that you have found some fraud and some bad acts. Real quickly, would you tell me anecdotal—of something you consider outrageous and how it was conducted? 

Ms. LERNER. You mean using the new data—— 

Mr. SCHWEIKERT. No, no, just anything that was found. 

Ms. LERNER. We certainly see situations with NSF awards, 

where the work is completed but funding remains and then, long 

after the award is done, costs from other projects are transferred 

to it to use up the awards, that don’t have anything to do with the 

reason that the award was provided in the first place. 

Mr. SCHWEIKERT. Mr. Chairman, Ms. Lerner, so what you are 

saying is, where a university or institution may have multiple—— 

Ms. LERNER. Awards. 
48 

Mr. SCHWEIKERT. —awards, they run their fund dry and they 

start to do transfer of costs? 

Ms. LERNER. Yes. We can see that now with these new techniques. 

Mr. SCHWEIKERT. And the data mining also will—is to get 

enough to look for all those types of silos? 

Ms. LERNER. Absolutely. It is amazing what we can see, and it 

enables us to have a much stronger set of evidence when we go to 

the agency with better support for the costs that we are questioning. 

Mr. SCHWEIKERT. Mr. Chairman, Ms. Lerner, not that I don’t 

love the rest of you but this one interests me. Do you also end up 

finding—using the data auditing mechanics on also how awards 

are given out, not only how they are performing? Because over the 

years we have had, even on a personal basis, lots of noise on how 

National Science Foundation ultimately does their awards and 

sometimes how certain personalities of people with great writing 

skills. Is there a data metric to sort of audit why and where those 

awards are going? 

Ms. LERNER. We haven’t established metrics in that area but certainly if the data exists, it is something that could be done. The 

question is coming up with the right business rules to put into the 

system to surface the anomalies. 

Mr. SCHWEIKERT. I think there was some chart going around last 

year showing how certain institutions seem to dominate in collection—obtaining the awards where a lot of—so if you look sort of the 

bell curve, it is sort of going to just sort of a handful of institutions. 

Am I off base on that? 

Ms. LERNER. I sincerely doubt that you are. 

Mr. SCHWEIKERT. In my last couple seconds to our other gentlemen, data mining being used in your areas of specialty? 

Mr. SMITH. Sir, the data mining is not necessarily being used at 

the Department of Commerce but when I did work at the Defense 

Finance and Accounting Service, we used it extensively. In fact, the 

gentleman behind me, Mr. Brett Baker, was in charge of that 

whole project and we found discrepancies within the purchase card 

program within the charges billed by transportation companies for 

military household moves as well as many, many other things. 

Mr. SCHWEIKERT. And I am over time, but Mr. Martin? 

Mr. MARTIN. The same thing. We have done audits of credit 

cards, purchase cards, also SBIR audits, Small Business Innovation 

Research grants that NASA awards. 

Mr. SCHWEIKERT. I am over time, but Mr. Chairman, thank you 

for your patience, but when we ask multibillion-dollar programs to 

be, you know, if we were private sector, there would be hundreds 

and hundreds of auditors for things that big. Maybe data is actually part of the future of how we find bad acts. 

Chairman BROUN. Thank you. All of us, Mr. Schweikert, are very 

interested in doing this, and people have to be held responsible and 

accountable. 

We are going to have votes in about somewhere between 10 and 

15 minutes from now, so we are going to go to a second round of 

questions for two minutes each, so if you could, just make sure that 
49 

your answers are real tight and short if you could so that we can 

get as much done here before we have to go for votes. 

Conducting oversight on NOAA took up a disproportionate 

amount of this Subcommittee’s time last year, or in the last Congress, actually. One of the recurring weaknesses that we encountered was the poor financial management of the agency. We have 

seen numerous Anti-deficiency Act violations: the solicitation of a 

magician for training purposes, an independent review team’s description of CFO’s oversight of the JPSS program as ‘‘dysfunctional’’, a fisheries enforcement accounting system that incentivized 

corruption and a budget development process that is no longer tied 

to requirements. Mr. Smith, given the gross negligence that we uncovered in Congress last year, what work are you planning for the 

coming year tied to NOAA financial oversight? And before you answer, let me just tell you, Mr. Martin, Ms. Lerner, I hope you all 

are looking in these same sorts of things, but I am focused on Mr. 

Smith and NOAA at this point. Mr. Smith? 

Mr. SMITH. We currently continue to receive hotline complaints 

concerning the NOAA reprogramming. We are very glad that 

NOAA has brought on Grant Thornton to review their budget 

books. We are continuing to talk to NOAA officials. We are very 

glad to see that they brought on a permanent CFO to review this 

matter. In addition, we just finished an audit of the JPSS program 

and are currently doing an audit of the GOES–R program, so we 

are still actively involved in the high-risk areas and the known 

problems within NOAA. 

Chairman BROUN. Is it appropriate for Grant Thornton to be 

overlooking this since it reports to the person who is involved in 

all this? 

Mr. SMITH. Yes, sir, I believe it is because they are an independent entity that may not be tainted by the culture that we 

found there said, the reason reprogrammings were done was to succeed with the mission. 

Chairman BROUN. To use a trite phrase, the fox watching the 

henhouse is not appropriate and I hope you all look into that. 

My two minutes is up. Now Mr. Maffei for two minutes. 

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

I was interested in this Office of Personnel Management-sponsored employee viewpoint survey. In 2012, it showed, Deputy Inspector General Smith, the office that you work in was next to last 

as the worst place to work in federal offices, 291 out of 292 offices, 

and over half of the staff in the Commerce IG’s Office said they 

would try to leave the office in the next year. Did you know about 

this before you took your position? 

Mr. SMITH. No, sir. The results did not come out until late December. 

Mr. MAFFEI. Well, I thank you for your service. The bottom line 

is, the survey suggests that the staff is almost evenly split between 

those who feel safe reporting violations of laws, rules, regulations 

to the Inspector General and those who are uncertain or expect retaliation for such reporting. That sounds like a highly dysfunctional environment, at least according to this survey. I am going to 

assume you don’t find that acceptable. Are there any programs that 
50 

are going to put in place to kind of improve that workplace atmosphere? 

Mr. SMITH. Yes, sir, there is. In fact, I have been designated to 

be in charge of that. I have already initiated several employee 

working groups and they have met. We are trying to get to the reasons behind the survey results. I also would like to point out the 

fact that even though the difference between the positive and the 

neutral and negative may not be where we want it to be, it is encouraging to see that the number of negative responses from last 

year’s survey has actually decreased for almost every question, and 

I do consider that progress. 

Mr. MAFFEI. Okay. Well, I am going to remain very, very interested in that, and also just to echo what Congressman Peters said 

earlier, obviously there might be reasons for nondisclosure in the 

case of a lawyer-client privilege, privacy of a particular person or 

national security or other kind of sensitive information, but otherwise the appearance of some sort of a problem is certainly there 

whenever these sort of nondisclosure agreements are signed, so I 

would hope that in the future the Commerce IG’s Office would recognize that. 

Thank you. My time is up. 

Mr. SMITH. Sir, if I may just respond to that one, we have discontinued the use of those nondisclosure agreements. 

Mr. MAFFEI. I am glad to hear it, Mr. Smith. Thank you. 

Chairman BROUN. The gentleman’s time is expired. Now Mr. 

Posey, you are recognized for two minutes. 

Mr. POSEY. Thank you, Mr. Chairman. 

Back to Mr. Martin. I want to be sure we show him some love 

too. Hopefully this will just be yes or no. The NASA IG report from 

August 9, 2012, highlights that NASA acknowledges the need to 

clarify the criteria centers should use to determine if underutilized 

property has a current or future mission-related use. That is under 

roman numeral page six of the report. Would it be fair to say that 

in regards to undeveloped land, not structures in the ground or infrastructure in the ground, but undeveloped land at a center that 

has never been designated for future use in any plan is a potential 

candidate for excess property, i.e., leasing, conveying, enhanced use 

agreements? Is that fair to say? 

Mr. MARTIN. Based on your question, I would think so, yes. 

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

Chairman BROUN. Thank you, Mr. Posey. 

I don’t think we have time to go into another round of questioning. I want to thank the witnesses for you all’s valuable testimony today. The Members of the Committee may have additional 

questions for you, and we will ask you to respond to those in writing. Please do that very expeditiously. As I mentioned in my opening statement, we have asked for some reports or answers to questions that have not been produced thus far, and I am very disappointed in the Administration for not providing those answers to 

the questions from this whole Committee from both sides, but I 

hope, and I trust, that you all will answer those very expeditiously. 

The record will remain open for two weeks for additional comments 

and written questions from Members. 
51 

The witnesses are excused. Thank you all so much. We are now 

adjourned. 

[Whereupon, at 11:12 a.m., the Subcommittee was adjourned.] 

(53) 

Appendix I 

ANSWERS TO POST-HEARING QUESTIONS
54 

ANSWERS TO POST-HEARING QUESTIONS

Responses by Mr. Paul K. Martin 
55 

• asset management; 

• vulnerability scanning and configuration management; and 

• continuous monitoring. 

NASA had planned to implement these recommendations by June 2013; however, it has 

delayed implementation until September 2013. 

2) During a hearing this Committee held last year on Information Technology (IT) and 

cyber security issues at NASA, the Chief Information Officer (CIO) identified poor 

execution of security practices as one of the greatest threats facing NASA information 

security. What has been done in the last year to remedy this situation? 

Answer: According to the NASA Office of the Chief Information Officer (OCIO), within the 

past year NASA has developed an action plan to remedy weaknesses in its IT security 

program. This plan includes: 

• Implementing a risk-based approach to cyber security to better align and demonstrate the 

business and mission enhancement gained by implementing effective IT security 

practices and leveraging IT security solutions across the Agency; 

• Improving visibility into Agency mission networks and systems (including JPL) and 

practices for building and operating secure web applications; 

• Ensuring that NASA mission IT personnel integrate security into the system development 

life cycle as well as their day-to-day operations for mission IT capabilities; 

• Expanding collaboration within and external to NASA to continuously develop and 

incorporate innovative security solutions effectively ensuring that the set of risks 

associated with the cost, schedule, and technical performance criteria includes 

infonnation security as a principal ingredient for mission success; and 

• Increasing collaboration efforts between CIO and Mission Directorates in support of ITrelated initiatives. 

However, the 010 is pessimistic about the success of these initiatives because the OCIO plan 

does not address the decentralization of authority and related cultural issues raised in the 

CIO's testimony. We have an ongoing review examining whether NASA's IT governance 

structure appropriately aligns authority and responsibility in support of the Agency's overall 

mission. Specifically, we are reviewing whether NASA's OCIO has the organizational, 

budgetary, and regulatory framework needed to effectively meet the Agency's varied 

missions, including IT security. We expect to issue this report in May 2013. 
56 

Space Act Agreements (SAA) 

3) What are the pros and cons of using SAAs to form NASA's pUblic-private partnerships 

in order to address facilities maintenance backlogs? 

Answer: In February 2013, we initiated an audit of NASA's management of Space Act 

Agreements that will examine (I) NASA's processes for identifying costs, billing, and 

collecting payment on reimbursable agreements, (2) NASA's ability to evaluate and track 

benefits to ensure receipt of fair and reasonable return, and (3) NASA's adherence to export 

control laws when entering into such agreements. Once this review is completed, we will be 

in better position to assess the pros and cons of Space Act Agreements with regards to 

helping address the backlog of NASA facilities maintenance projects. 

4) What is your opinion of the use of SAAs instead of Federal Acquisition Regulation 

(FAR) based contracts in connection with commercial crew vehicles? Understanding 

that NASA has moved some SAAs to FAR-based contractors, has NASA adequately 

addressed the concerns voiced by Congress and the Aerospace Safety Advisory Panel 

about the Agency's continued reliance on SAAs? 

Answer: We currently have ongoing reviews of the commercial crew program and, as 

discussed above, of NASA's management of its Space Act Agreements. While Space Act 

Agreements should not be used in lieu ofa FAR-based contract for acquisition ofa 

spaceflight system, NASA is not actually acquiring these systems but rather is using its 

Space Act authority to partner with private companies to help develop a commercial space 

industry for cargo and crew transportation to the International Space Station (ISS). In its 

commercial cargo program, NASA has transitioned from Space Act Agreements to fixedprice FAR-based contracts with two companies Space Exploration Technologies (SpaceX) 

and Orbital Sciences Corporation - for 20 resupply missions to the ISS. 

In the commercial crew program, NASA intended to transition last August to aFAR-based 

contract for the integrated design phase but changed course and continued to use Space Act 

agreements citing an expected $1 billion shortfall in funding requirements by 2014. Similar 

to our forthcoming review of NASA's commercial cargo program, the OIG has an on-going 

review of the Agency's commercial crew program which we expect to complete by early 

summer. 

Small Business Innovation Research (SBIR) 

5) What overarching safeguards would you recommend that NASA implement in its Small 

Business Innovation Research program to prevent fraud, waste, and abuse? 

Answer: Our audit work has resulted in several recommendations designed to improve 

NASA's intemal controls in its SBIR program. Two audit reports (Review of NASA's 

Management of Its Small Business Innovation Research Program (IG-II-OI O-R) and 

NASA's Management of Small Business Innovation Research and Small Business 
57 

Technology Transfer Contracts Funded by the Recovery Act (IG-12-009-R» made a total of 

15 such recommendations. To date, NASA has implemented 12 of those recommendations. 

One of the open recommendations called for implementation of virtual site visits to 

contractor facilities. Virtual site visits use Internet-based meeting software with visual and 

voice telecommunication. The visits would enable NASA officials to view contractors' 

research facilities, compare actual contractor personnel to proposed personnel, assess 

contractor progress, and ensure that contractors are complying with requirements without 

incurring the cost and time associated with traveling to the contractors' physical locations. 

Our investigations of SBIR allegations have disclosed several instances where the contractor, 

despite representations to the contrary, did not have the facilities, equipment, or qualified 

staff needed to successfully perform the SBIR contract. The number and geographic 

dispersion of SBIR recipients makes it preferable but fiscally challenging to physically visit 

contractor locations to confirm that the facility and personnel purported to be working on the 

award actually have the capability to perform the work. This virtual visit was implemented 

on Recovery Act Phase II awards and NASA has taken steps to implement the virtual visit on 

all SBIR Phase II awards. 

6) In August 2011, NASA entered into a cooperative agreement with the Center for the 

Advancement of Science in Space (CASIS), a non-profit organization that was to 

manage the non-NASA science activities on the International Space Station (ISS). 

However, as identified in your office's 2012 Management Challenges report, "during its 

first year of operation CASIS encountered a variety of start-up challenges, including 

the resignation of its executive director, and as of October 2012, did not have a 

permanent Board of Directors." To what extent has your office examined CASIS and 

do you have any ongoing work regarding ISS utilization? 

Answer: We currently are completing a review examining NASA's efforts to utilize the U.S. 

Laboratory portion of the ISS. The review objectives include: 1) current usage of the ISS; 2) 

CASIS' efforts to facilitate non-exploration research onboard the ISS; and 3) transportation 

challenges that could hinder effective utilization of the ISS. Specific to CAS IS, we are 

examining the organization's achievements to date, metrics used to measure that progress, 

and challenges related to attracting financial donors and users to conduct examinations 

onboard the ISS. We expect to issue the final report this summer. 

NASA Infrastructure 

7) During the hearing, you testified about the waste associated with NASA's aging 

infrastrncture, which require about $2.3 billion in upkeep and maintenance costs. You 

also referenced an audit from earlier this month in which you identified 33 

underutilized facilities with no future mission needs that cost NASA more than $43 

million to maintain in FY 2011. 

a. In addition to identifying the problem, what recommendations have you made to 

NASA to reduce or eliminate this source of expense? 
58 

b. What is the agency's response? 

Answer: Our report found that NASA has ongoing efforts to evaluate Center capabilities 

against the current and future missions of the Agency. We recommended that NASA's 

Associate Administrator complete the Agency's ongoing comprehensive technical 

capabilities assessment; ensure that the assessment includes a process for communicating 

decisions to outside stakeholders; and is established into Agency policy. Such assessments 

should be conducted on a regular basis and sustained over time. We also recommended that 

NASA's Associate Administrator for Mission Support expedite implementation of Corporate 

Portfolio Management (CPM) and develop processes to improve data accuracy with the 

NASA Technical Capabilities Database (NTCD). NASA concurred with our 

recommendations. 

In addition, NASA has a series of initiatives underway that we see as positive steps towards 

"rightsizing" its real property footprint. For example, the development of an Agency 

Facilities Strategy and Integrated Master Plan, capability assessments, and organizational 

changes to centralize decision authority over infrastructure matters should better position the 

Agency to strategically assess infrastructure needs, manage underutilized property, and divest 

itself of facilities that are duplicative or unneeded. However, many of these efforts are in the 

early stages and their ultimate effect on the Agency's ability to reduce its real property 

portfolio remains unclear. 

Despite these efforts, our report noted that these efforts ultimately may be insufficient to 

overcome longstanding cultural and political obstacles to eliminating or consolidating 

Agency facilities and that an outside process similar to the Department of Defense's Base 

Realignment and Closure Commission may be necessary. 

IT AR Records Request 

8) During the hearing, I asked you to provide the Committee with all records relating to 

your office's review of allegations related to ITAR (International Traffic in Arms 

Regulations) violations at the Ames Research Center. Please reference p. 32 of the 

hearing transcript for more information about this request, and please ensure you 

provide the information requested as part of your reply to these questions. 

Answer: Answer: We are conducting an administrative investigation of these allegations and 

therefore it would not be appropriate to share information about these matters at this time. 

We would be pleased to brief your staff on the timing of this review as it progresses. 
59 

Questions submitted by Rep. Bill Posey 

1) Mr. Martin, in August of 2012 the NASA IG office issued a report regarding NASA's 

leasing practices. 

It was fouud that "NASA did not have clear guidance to ensure that property identified 

for leasing was not in excess to the agency's needs" (pp.iii-iv of the Report). 

Can you point to successful leasing practices in other agencies that can serve as a model 

for NASA? Can you offer specific recommendations on how NASA can improve its 

leasing practices? 

Answer: Our August 2012 report assessed whetber NASA effectively: (1) identified space 

available for lease to other entities, (2) marketed available space to potential Federal and 

non-Federal tenants, (3) established internal controls to ensure that lease agreements provide 

the best value to the Government and are fair to potential tenants, and (4) accounted for inkind consideration received from Enhanced Use Leases (EUL). That report found that 

although NASA has made improvements to its leasing program in recent years, the Agency 

still faces significant challenges to ensure tbat it has effective controls in place to maximize 

the benefits of its leasing program. As such, we made the following three recommendations 

aimed at improving NASA leasing practices. 

1) Revise existing policy and develop new policy. Specifically: 

• articulate the criteria Centers should use to determine whether underutilized property has 

a current or future mission use; 

• require that Federal entities be considered for leasing opportunities and that NASA 

coordinate with the GSA Office of Client Solutions to identify potential Federal tenants; 

• require that leasing opportunities be widely publicized; 

• provide guidance for Center management addressing the requirements for lease 

agreements; and 

• provide guidance for determining whether in-kind consideration provides the best value 

to the Government. 

2) Implement a process for identifying and maintaining a complete inventory of real property 

available for leasing. 

3) Institute a review of all existing agreements to ensure they are consistent with applicable 

statutes and regulations regarding signature authority and other required terms. 

We did not benchmark the leasing practices of otber agencies as part of our review. 
60 

Responses by Ms. Allison C. Lerner 

HOUSE COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

SUBCOMMITTEE ON OVERSIGHT 

"Top Challenges for Science Agencies: Reports from the Inspectors General- Part 1" 

Questions for the Record, Ms. Allison C. Lerner, Inspector General, National Science 

Foundation 

Questions submitted by Dr. Paul Broun, Chairman 

Cooperative Agreements 

1) According to your 2012 Management Challenges report, NSF currently has 685 

Cooperative Agreements totaling nearly $11 billion, of which 38 are for over $50 million 

each.! Your office has identified various problems with NSF's Cooperative Agreement 

award and monitoring process. Considering that Cooperative Agreements are not subject 

to the same rigor and reporting mechanisms as a contract: 

a. As indicated in your 2012 Management Challenges report, why does NSF not 

have a strong post-award monitoring process? 

b. How has NSF responded to the suggestion that a stronger post-award monitoring 

process is needed for Cooperative Agreements?2 

OIG: As we have pointed out in the Management Challenges report, there are two main 

problems contributing to an overall weakness in NSF's post-award monitoritng process. 

First, while NSF receives certain financial reports on its large facility cooperative 

agreements, these reports do not contain the level of detail needed to perform adequate 

cost surveillance. NSF only receives sufficient cost details from a few awardees that also 

have large contracts and are therefore required by the Federal Acquisition Regulation to 

provide annual incurred cost submissions. NSF does not require incurred cost 

submissions, or their equivalent, which are important for proper cost monitoring because 

they provide visibility over awardees' claimed costs. Second, NSF does not routinely 

obtain incurred cost audits of nonprofit awardees that have high-risk, high dollar, 

cooperative agreements and grants. Audits of incurred cost submissions are critical for 

proper monitoring and would reveal instances of noncompliance with federal regulations 

as well as costs claimed that are unallowable or unreasonable. Such infonnation is 

particularly important in high value, high risk cooperative agreeements. NSF explained 

that it has chosen not to undertake these oversight measures because they are not required 

in the assistance agreement context. 

J P.I of2012 NSF Management Challenges Report. 

2 P.1-2 of2012 NSF Management Challenges Report. 

1 
61 

To be clear, we are not suggesting that NSF take these actions for all its cooperative 

agreements. We are recommending that NSF should use a risk-based approach that at a 

minimum, includes these elements for its high-risk, high-dollar (those over $50 million) 

cooperative agreements that warrant the additional oversight necessary for proper 

accountability over federal funds. NSF believes that the $50 million level is too low, but 

has not indicated what dollar level it believes would be sufficient. 

In response to our recommendations to institute stronger post-award monitoring, 

however, NSF has stated that it agrees with OIG concerning the need for cost 

surveillance controls over the lifecycle of large facilitites projects, which are funded 

through cooperative agreements. NSF stated in its corrective action plan in response to 

our alert memo that it agrees with some of our recommendations. However, while the 

plan makes repeated references to developing guidance for oversight of cooperative 

agreements, there is no indication of what this guidance will require. NSF needs to have 

a concrete plan to ensure oversight of its high-risk, high-dollar cooperative agreements, 

not simply an ad-hoc approach. 

In addition, in response to a charge from the NSF Director for a senior advisor to 

coordinate a major assessment of processes for supporting large research facilities from 

conception through construction to operation and sun-setting, NSF has developed a plan 

that offers opportunities for more robust oversight. We view this plan as a step in the 

right direction. Nevertheless, we remain concerned that it may be too open-ended. For 

example, as explained in its response to the OIG's alert memo, NSF stated that the need 

for incurred cost audits of even its highest dollar awards would be determined on an ad 

hoc basis. NSF has offered nothing concrete insofar as when such audits or incurred cost 

submissions would be required. Since this effort was spearheaded by the Director, we are 

concerned about NSF maintaining the momentum to address oversight of its high-risk, 

high-dollar cooperative agreements after the Director's departure from the Foundation at 

the end of March. Our recommendations are reasonable and prudent measures to protect 

taxpayer funds. 

2) Does your oversight of Cooperative Agreements (CA) include reviewing ethical or 

conflict-of-interest violations? Have previous CA reviews ever considered such 

violations? 

OIG: Our oversight of cooperative agreements has focused on NSF's cost surveillance 

measures for awarding and managing cooperative agreements and has not included a review to 

determine whether there are conflict-of-interest violations. 

3) What areas of your office's audits tend to be most contentious with institutions? How 

does your office work with institutions to address these issues, and what is the procedure 

if an agreement cannot be reached? 

OIG: We use a risk assessment in determining which external entities to audit, which includes 

factors such as an institution's past record of managing federal awards. The most contentious 

2 
62 

areas are usually those audits that question costs, and the level of disagreement rises along with 

the do llar value of the questioned costs. 

In such audits, the procedure for resolving audit findings is set forth in OMB Circular A-50, 

Audit Followup. Pursuant to A-50, NSF management is responsible for issuing a management 

decision on audit recommendations and for foHowing up with awardees on implementation of 

the agreed upon actions to address recommendations. Thus, while the OIO communicates with 

NSF throughout this process and reviews the proposed actions, NSF works with awardees to 

address the audit recommendations. If the oro and NSF are unable to agree on the corrective 

actions to resolve the recommendations, the matter is referred to NSF's Deputy Director for 

resolution. 

Finally, A-50 provides that all recommendations should be resolved within six months from the 

date the final report is issued. 

4) Who is ultimately responsible for recovering money identified by audits, and what 

happens when NSF disagrees with the OIO? 

OIG: As part of the audit resolution process, NSF is responsible for working with awardees to 

recover money identified by audits. 

According to your written statement, on a recent audit of a university that is among the top 30 

largest NSF award recipients, you identified over $6 million in questionable expenses using new 

automated techniques as a supplement to your traditional audit techniques. How did the 

institution respond to your finding, and how is that situation being resolved? 

OIG: The institution disagreed with the audit findings. Resolution of audit findings between 

NSF and the OIO and closure of audit recommendations will follow the audit resolution 

procedure outlined in the response to question 3. 

5) To perform better oversight of awards, your office has conducted a "virtual site visit pilot 

program as an enhancement to the AMBAP [Award Monitoring and Business Assistance 

Program].,,3 Do you feel that these virtual site visits are sufficient? Are there limitations 

to when a virtual site visit can be employed compared to an actual site visit? 

OIG: NSF's Office of Budget, Finance, and Award Management (BFA), which has the 

responsibility for issuing and overseeing the thousands of awards NSF makes each year, 

commenced its Award Monitoring and Business Assistance Program to help ensure that 

awardees have adequate processes and systems to manage their NSF awards. The virtual site 

visit pilot is BFA's initiative, not the OIG's. 

Virtual site visits can be a cost effective mechanism to identify problems, particulary during a 

time of limited resources. Combined with other oversight tools for high-dollar, high-risk 

awardees, such as accounting system reviews and incurred cost audits, virtual site visits can 

enhance NSF's monitoring capability, especially when on-site reviews are not possible. 

3 P.3 of 20 12 NSF Management Challenges Report. 

3 
63 

We have not done an analysis comparing the adequacy of virtual site visits with actual visits. 

Contracts 

6) The 2012 Management Challenges report raised concerns regarding cost reimbursement 

(CR) contracts, and highlighted the need for better monitoring of costs on NSF's largest 

contracts. The report states, "Although the Contracting Manual was updated to require 

cost incurred submissions every 6 months from its largest contractors, in FY 2011 two of 

three contractors transmitted the submissions late and the third did not submit one at 

all.,,4 What is the next step that NSF should take to ensure compliance with these 

guidelines from contractors who fail to meet them? 

OIG: There is a range of options NSF could consider to ensure compliance by contractors 

including award suspension or termination. Depending on the circumstances, government-wide 

suspension or debarment could also be appropriate. Ultimately, what NSF does is within the 

agency's purview, and we continue to encourage NSF to take strong action to ensure compliance 

with this requirement. 

7) NSF funds large research infrastructure projects through the Major Research Equipment 

and Facilities Construction (MREFC) account. In an effort to keep MREFC project costs 

from escalating during construction, NSF instituted a "no cost overrun policy" on new 

MREFC-funded construction projects. "This policy requires that the total project cost 

estimate developed at the Preliminary Design Stage have adequate contingency to cover 

all foreseeable risks, and that any cost increases not covered by contingency be 

accommodated by reductions in scope." 

In testimony you presented last Congress, you noted that the Defense Contract Audit 

Agency (DCAA) that assists you with audits found that "there are a lack of controls over 

the contingency funds" for several MREFC projects. Specifically, awardees can draw 

down contingency funds as they do normal funds. 

a. What has your office found out so far about how these funds are being used? 

b. What is NSF's response to your office's work on contingency funding, and what 

kind of resolution is your office looking for from its investigation into the 

MREFC funding process? 

OIG: In order to gain insight into how contingencies are actually used in construction projects, 

we audited the use of contingencies in a closed project. We found that NSF lacked visibility 

over expenditure of contingency funds. NSF's policies allowed the awardee to execute all 

change order requests for $250,000 or less to the MREFC account or $100,000 or less for the 

operations and maintenance yearly cost without NSF's review or approval. We found that the 

awardee executed all nine of the existing change orders (which totaled over $1,000,000) without 

seeking NSF's approval thereby limiting NSF's ability to ensure that requests for and approvals 

of the use of contingency funds were appropriate. Current policies continue to allow MREFC 

awardees to execute change order requirements for amounts less than designated thresholds for 

4 PA of2012 NSF Management Challenges Report. 

4 
64 

each project. We also found some instances in which NSF approved the use of contingency 

funds for matters that did not appear to represent the materialization of contingent events such as 

hiring a publications coordinator and paying for office space. 

Further, our audit of a closed award found that awardees did not separately track contingency 

expenditures so it was impossible to tell what these funds were actually used to purchase. In 

addition, a recent audit of another MREFC project revealed many of the same problems. 

The bottom line is that NSF's current method for managing contingencies which allows 

awardees to request and obtain contingency funds without NSF's approval and is exacerbated by 

a lack of visibility into contingency expenditures, increases the risk of misuse of contingency 

funds. At a minimum, NSF should hold unallowable contingency funds (i.e., those for 

unforeseeable occurrences) until the awardee is able to demonstrate through adequate 

documentation, the need for such funds. The 010 is seeking a resolution that implements its 

recommendations which are in line with federal requirements, reasonable, and represent prudent 

business practice. 

NSF's disagrees with the OIO and asserts that its current practice is consistent with federal 

requirements. 

Research Misconduct 

8) You reported that over the past 10 years, the number of allegations and findings of 

research misconduct at NSF has tripled.[l] 

a. Do you think that the increase is because technology has made it easier to 

perpetrate misconduct, or because misconduct is easier to detect? 

b. Has there been a shift in culture with regards to research misconduct? 

OIG: (a) Technology has made it easier for individuals to commit research misconduct and has 

also advanced our ability to detect such activity. 

As cited in my testimony, recent surveys suggest that 30 percent of researchers admit to 

engaging in questionable research practices and 50 percent of college undergraduate students 

admitted to cheating reflecting the current cultural climate. Such attitudes demonstrate the 

importance of affirmative steps to counter integrity-related violations. 

Responsible Conduct of Research (RCR) programs were created in response to requirements in 

the America Competes Act to advance the professional and ethical development of new 

scientists. My office has observed variations in grantee RCR programs. Therefore, among other 

things, we are planning to examine the course content, participation requirements, and oversight 

of institutional RCR programs. 

ilJ P.9 of2012 NSF Management Challenges Report. 

5 
65 

U.S. Antarctic Program (USAP) 

9) The September 2011 NSF IG Report to Congress included the recovery of$ll.4 million 

in wrongful charges from the contractor providing support for the USAP. In 2012, a new 

contractor took over work on the USAP. Has your office been involved with the 

transition to the new contractor for the Antarctic Program? To what degree does your 

staff monitor and review this transition and the work of the new contractor? 

OIG: My office was not involved with the transition to the new contractor for the USAP. The 

selection of a new contractor is an agency function. The IG Act makes clear that OIGs are not to 

perform management functions. As such, we would not have been involved in NSF's process for 

selecting the new contractor or managing the transition. My office did, however, recommend 

that as part of the procurement process, NSF ensure that DCAA audits were obtained of business 

and financial systems along with cost proposals submitted by bidders for the USAP contract. 

Such audits, which NSF obtained, are important to determine whether those systems are capable 

of ensuring that government funds are properly allocated and billed and that costs proposed are 

reasonable. 

Now that the new contractor has been chosen and is in place, we are developing a 

comprehensive, long-term oversight plan for the USAP. As the new contractor is responsible for 

infrastructure and logistical functions for the program, we will be monitoring the new 

contractor's work in these areas. In addition to examining those areas, the plan also includes 

work to determine whether the contractor is charging costs that are reasonable and allowable. 

10) Does NSF have sufficient oversight mechanisms to protect against waste, fraud, and 

abuse relative to the USAP? 

OIG: USAP is a complex program operating in one of the world's most challenging 

environments. The recent Blue Ribbon Panel report made a number of recommendations with 

regard to the program's logistical challenges. NSF has recently completed its response to the 

Panel's recommendations, which we will be evaluating and assessing for any vulnerabilities that 

could increase the risk of waste, fraud, and abuse. We have started an audit to determine 

whether there are opportunities for savings in USAP's medical screening processes. Other issues 

in our oversight plan include the impact of deferred maintenance on USAP facilities and the 

impact on research if an icebreaker is unavailable. 

SBIRISTTR 

11) Based on what seems to be significant concerns of fraud within the Small Business 

Innovation Research (SBIR) program, how are the recommendations of the SBIR 

Working Group - under the Council of Inspectors General on Integrity and Efficiency -

being received by the different SBIR participating agencies? 

OIG: Since its inception in 2009, the working group has made significant progress in preventing 

and detecting fraud in the SBIR program. For example, based on the group's recommendations, 

SBA has made improvements to TECH-Net. the government database of SBIRISTTR awards, to 

better assist in the identification and analysis of companies under examination or investigation. 

6 
66 

A particular focus of the group has been promoting the government-wide use of standardized 

life-cycle certifications to prevent fraud and to facilitate prosecution offraudulent activities. 

This effort culminated in revisions that are being made to the SBA's SBIR policy directives, 

which include requirements for such certifications. The draft policy directive has also 

incorporated a number of other working group suggestions to prevent and detect fraud, waste, 

and abuse in this program. We understand that SBA is finalizing this directive. 

An agent-level working group also shares information and coordinates investigations with SBIR 

agencies. This group has identified several fraud indicators and is working proactive 

investigations. 

12) How much time and staff does your office dedicate to investigating and auditing SBIR 

and STIR (Small Business Technology Transfer) grants? 

a. Is the reason for your focus on these programs a reflection of the problems that 

exist with these types of grants or that NSF doesn't scrutinize them enough? 

b. How has this changed over the past two or three years? 

OIG: We have one agent working full time on SBIR investigations and coordinating the 

interagency working group, but every agent in the office has worked multiple SBIR cases since 

2009. Additionally, most of the other investigative attorneys and investigative scientists on our 

staff have worked SBIR cases over the past few years, on issues including duplicate funding, 

false certifications, and research misconduct. We currently have 58 active SBIR cases. These 

cases make up approximately 20% of the Office ofInvestigations active case load. Twelve of 

these cases have been accepted for civil or criminal prosecution, with several more likely to 

follow in the near future. 

At NSF, the primary objective of the SBIR program is to increase the incentive and opportunity 

for small firms to undertake cutting-edge, high-risk, high-quality scientific, engineering, or 

education research that would have a high potential economic payoff if the research is 

successful. We have focused on the SBIR programs because of the risk of unscrupulous 

companies attempting to fraudulently obtain SBIR funds, duplicative funding, and other types of 

fraud. SBIR funds are directed at small, start-up businesses that may lack experience in 

managing federal funds. While the vast majority of businesses receiving SBIR awards from NSF 

spend the funds properly and report accurately to the agency about their results, our experience 

shows that a small traction of awardees engage in fraudulent activity. 

It is important to emphasize that NSF's SBIR program staff has strongly supported my office's 

efforts to prevent, detect, and prosecute fraud in the program. SBIR program officers regularly 

inform us when they receive allegations of wrongdoing or become aware of information that 

indicates a possible problem. 

OIG: SBIR cases have been an important part of our investigative work since the 1990s and as 

noted above, we have worked closely with SBIR program officials since that time. One of the 

problems we encountered until the working group was established was a lack ofinsight into 

problems with duplicative funding at other agencies. The agent-level working group has 

7 
67 

enhanced our ability to work multi-agency cases and has contributed to the current increase in 

the number of cases. 

As we conduct our investigations, we look for evidence of internal control weaknesses that can 

be exploited. Based on these efforts, we have made several recommendations to NSF to reduce 

the risk of fraud in SBIRISTTR programs including that NSF require awardees to notify the 

agency when any significant changes to the budget or to research are planned. NSF has agreed 

with our recommendations and is taking steps to implement them. 

Question submitted by Rep. Lamar Smith, Chairman, House Science, Space, and Technology 

Committee 

1) During the hearing, I asked you to provide the Committee with the names of universities 

and colleges that need a second look because of questionable grant expenditures. Please 

reference p. 38 of the hearing transcript to refresh your memory about this request, and 

please ensure you provide the information within the timeframe provided in the 

Committee's letter to you. 

OIG: NSF is the funding source for approximately 20 percent of all federally supported basic 

research in science and engineering conducted by the nation's colleges and universities. Each 

year the Foundation funds approximately 10,000 new awards at more than 2,000 institutions. 

The OIG has an important oversight role over these expenditures, but given the breadth of our 

mission, we can only review a small number of awards each year. To target our oversight where 

questionable grant expenditures are most likely we conduct a risk assessment that considers 

factors such as an institution's past record in managing federal funds. 

In addition, we are using automated techniques, which enhance our oversight and permit us to: 

• Better identify high-risk awardees 

• Expand audit coverage to 100 percent of expenditures 

• Focus our limited audit resources on questionable expenditures. 

Using automated techniques enables us to obtain data from multiple financial and program 

databases, which we can compare and analyze to identify anomalies in cost data and in awardexpenditure patterns. These techniques provide a level of transparency over recipient spending 

well beyond that available from traditional methods. 

Following are the names of the colleges and universities where we identified questioned costs in 

FY 2012 and FY 2013: 

Johns Hopkins 

University of Notre Dame 

University of California-Santa Barbara 

University of Wisconsin-Madison 

Jackson State University 

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Responses by Mr. David Smith 

Questions from Chairman Paul Broun 

MANUFACTURING 

1) How successful have DOC programs like the Repatriation Task Force and the Advanced 

Manufacturing Technology Consortia (AMTech) been in meeting DOC goals that include 

repatriating jobs that have moved abroad back to the U.S., or bringing manufacturing jobs 

back to the United States? 

The Repatriation Task Force has a mandate to examine incentives and other activities to 

encourage U.S. companies to bring back manufacturing and research and development 

(R&D) activities from overseas. The Advanced Manufacturing Technology Consortia is a 

public-private partnership aimed at improving R&D investments. OIG has not performed 

audit work on the Department's manufacturing initiatives recently but is tracking reviews 

conducted by other independent entities. For example, GAO has ongoing reviews of the 

implementation of the America COMPETES Reauthorization Act. OIG will use these review 

results to plan for future work. 

2) Given that, as your office's Management Challenges report states, "Many offices, task 

forces, and councils are involved with studying and establishing manufacturing initiatives," is 

DOC doing enough to ensure it avoids duplicating the activities of its partners in other federal 

agencies? 

In its Follow-up on 201 I Report: Status of Actions Taken to Reduce Duplication, Overlap, and 

Fragmentation, Save Tax Dollars, and Enhance Revenue (GAO-12-4535P, February 2012) GAO 

identified continued needs for better coordination between the Department of Commerce 

and other agencies to avoid duplications/overlaps on economic development programs. 

However. given the current constrained budget environment that Commerce and other 

executive departments and agencies are experiencing, we believe it is imperative that the 

Department ensure that its existing resources are used effectively on targeted programs. to 

maximize their efforts and avoid duplication of resources. 

Manufacturing Extension Partnership (MEP) 

3) Is your office conducting any audits of MEP centers, and if so, which ones and how were 

they selected? 

We completed extensive audit work of 6 MEP centers and issued reports in 2009-2010 and 

have continued to conduct follow-up activities associated with the audits. NIST is still using 

the lessons it learned from these audits to help it better manage the program. 

While we have not audited any additional MEP centers, centers expending more than 

$500.000 in a fiscal year are required by the Single Audit Act to submit audits on a fiscal 

year basis. These single audits are performed by independent public accountants. and OIG 

receives and reviews relevant reports on an ongoing basis. The most recent single audit 

reports for Florida MEP and Massachusetts MEP have been received. In these audits, the 

independent public accounting firm rendered its opinion on the financial statements: 
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however, the firm issued a qualification to its opinion on compliance issues due to 

unresolved issues first revealed in our March 2009 audit report. 

Recently, NIST issued a determination on the audit findings of OIG's 2009 audit. NIST staff 

determined that the MEPs did not provide sufficient evidence or documentation that would 

persuade them to change their original position. After an appeal by both MEP Centers did 

not result in further adjustments, NIST issued a bill for $2 million to the MEP center in 

Florida and for $790,000 to the MEP center in Massachusetts. The entire amount must be 

paid in full or negotiated under another acceptable arrangement or the MEP centers could 

encounter enforcement action under their current MEP awards, including but not limited to 

administrative offset of award payments, suspension of the awards, and termination of the 

awards. 

4) According to press accounts, Florida's 2013 "Manufacturing Innovation" conference was 

cancelled shortly before the DOC announced it would review the event's expenses for the past 

two years. While there are many legitimate questions about some of the expenses related to last 

year's Florida conference, questions have also been raised about the role of the NIST MEP 

(National Institute of Standards and Technology's Manufacturing Extension Partnership), 

which organizes and hosts the annual event. 

a. Does your office have any ongoing work regarding the Florida MEP and its relationship 

with the NIST MEP? 

b. If so, please provide an update. 

We have not performed an audit of the Florida MEP since completion of an incurred cost 

audit in March 2009, where we questioned $12.6 million of the Florida MEP's claimed costs 

for the period July 2005 through March 2007. While we have ongoing work regarding the 

NIST MEP program, it is not focused on Florida MEP. We are not planning to conduct any 

additional OIG audits of the Florida MEP program or its cooperative agreement relationship 

with NIST MEP at this time. However, we will be monitoring any single audit reports 

received for the MEPs as noted in question 3 above. We are auditing NIST MEP conference 

costs for FY s 20 I I and 2012, including the Orlando Annual Conference, and anticipate 

completion in the third quarter of FY 2013. 

5) Last year, your office received a letter from Congress requesting that you look into potential 

mismanagement of the NIST MEP. The letter alleged that "NIST MEP is targeting certain 

state centers by withholding matching federal funds to which they are entitled by statute. " 

Moreover, press reports have explained that" MEP Centers allege that NIST has avoided 

sending more money to the centers in order to boost the share of its budget that remains in 

Washington." What is the status of your review, and when can we expect your report on it? 

Our office is currently gathering information to respond to the letter we received from 

Chairman Issa in September 2012. We cannot estimate the date of the completion of our 

work at this time. 

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NATIONAL WEATHER SERVICE (NWS) 

6) After Hurricane Sandy, NOAA and NWS put together a team to conduct a service 

assessment of Sandy, which is a common practice following major weather-related events. The 

first team was disbanded partially because it was going to be co-led by a person from the 

private sector, which, according to agency documents, appears to be a violation of the Federal 

Advisory Committee Act (FACA). Do you have any ongoing work to assess whether past NWS 

Service Assessments violated FA CA? 

We do not have any ongoing work assessing whether past NWS service assessments 

violated FACA. 

7) NOAA and DOC issued memos last May in the aftermath of revelations of financial 

mismanagement at NOAA. Those memos listed several action items with most due dates within 

a few months. 

a. Have you tracked those items to ensure they were accomplished, and can you give us a 

status update on them? 

OIG is currently conducting a review of the status of the Department and NOAA's actions 

to address the decision memoranda issued on May 24. 2012. by Acting Secretary Blank and 

former Under Secretary Lubchenco. respectively. We are evaluating the actions that the 

Department and NOAA deem complete and will issue a report after the completion of our 

work during the third quarter of FY 2013. 

8) Please provide the Committee an update on the status of financial issues at NOAA; 

a. What actions have NWS, NOAA and DOC taken? 

The Department and NOAA are implementing the actions required by the decision 

memoranda issued on May 24. 2012. by Acting Secretary Blank and former Under Secretary 

Lubchenco. respectively. We are evaluating these actions and will issue a report after the 

completion of our work which is estimated during the third quarter of FY 2013. 

b. What actions are outstanding? 

The Department and NOAA have asserted that many of the decision memoranda 

requirements are complete. We are assessing their actions for sufficiency. Our review is 

under way. and we will report the results after the completion of our work estimated to be 

during the third quarter of 2013. 

c. What work do you have ongoing related to the matter? 

In June 2012. OIG received an anonymous complaint alleging that continuous unauthorized 

reprogramming had occurred at NWS from 2000 through June 2012 and that senior NOAA 

officials were aware of this activity. In the course of our investigation. several instances of 

potentially unauthorized reprogramming were identified. In March 2013. we referred these 

specific instances to NOAA and requested it determine if the unauthorized reprogramming 

occurred and. in coordination with the Department, any Antideficiency Act violations. OIG 
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is currently preparing a Report of Investigation addressing whether senior officials were 

involved in or aware of unauthorized reprogramming. 

In August 2012. OIG initiated a review to evaluate the adequacy of the actions taken by the 

Department and NOAA to address the NWS financial management issues. The Department 

and NOAA actions were mandated by the decision memoranda issued on May 24. 2012. by 

Acting Secretary Blank and former Under Secretary Lubchenco. 

We have other ongoing work that identifies funds control issues in the Department. In 

addition. our audit in process of the Department's unliquidated obligations and the annual 

financial statement audit work has identified funds control issues. 

SATELLITES 

9) Has NOAA given a good reason for why the JPSS-2 satellite is going to be re-competed 

instead of sole sourcing both contracts? What impact will there-compete process have on the 

agency in terms of schedule and cost? 

NOAA and the jPSS program have not yet completed an acquisition strategy decision 

memorandum. which was expected by late March 2013. Until we can review the 

memorandum. we cannot comment on their acquisition strategy or what impact the 

strategy will have in terms of schedule and cost. We are aware. however. that NASA-the 

jPSS acquisition agent-has a streamlined competitive bidding process for spacecraft 

contracts that is designed to avoid potential schedule delays. In addition. the Federal 

Acquisition Regulation generally requires contracting officers to use full and open 

competition in soliciting offers and awarding government contracts. 

10) Toward the end of last year, NOAA issued a contingency plan in response to a GAO 

directive to address potential gaps in weather forecasting due to launch delays of weather 

satellites, and a larger general plan is expected to be unveiled later this year. Are you familiar 

with either of these products? Can you provide some insight on them? 

NOAA's contractor conducted an independent analysis of alternatives to mitigate the 

degradation of National Weather Service products in the event a gap in afternoon polarorbiting satellite data occurs. The study captured and assessed ideas. such as leveraging 

other data sources and improving computing capabilities. from a broad range of 

organizations and individuals and made 17 recommendations. Most of the recommendations 

are funded in the Hurricane Sandy supplemental appropriations law. Separately. NOAA 

developed its October 2012 "Mitigation Plan for Potential Data Gap Between Suomi 

National Polar-orbiting Partnership (SNPP) and jPSS-I" report. It includes plans for 

continuous monitoring of indicators of a potential gap. which would trigger further 

decisions. and mitigation options (echoing the 17 recommendations in the analysis of 

alternatives) and references a mitigation decision process. 

11) The Department plans to "replace aI/legacy financial systems-core financial accounting, 

financial management, grants management, acquisition management, and property 

management-with commercially available software between FY s 2014 and 2018." 

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a. What benefits does the Department expect to achieve in its move to modernize its 

financial management system? 

According to the Department. the legacy systems are antiquated. highly customized. and not 

well documented. They have become more and more difficult and expensive to maintain. 

especially with a shrinking pool of knowledge. Conversely. commercial software uses tabledriven design; is easier to maintain; and is more responsive to government-wide changing 

requirements. such as the expansion of Standard General Ledger accounts from four to six 

digits and 508 compliance. Finally. the Department expects the modernized system to have 

the ability to automate the consolidation of the bureau financial statements; the legacy 

systems are not integrated. 

b. What impact would this have on NWS, specifically, would it prevent the ability of 

an individual to use summary level transfers to secretly reprogram funds? 

No. an individual's ability to make summary level transfers is not related to the legacy 

system. However. we will work with the Department to ensure that there are both 

appropriate automated system and documentation/approval controls to better prevent and 

detect inappropriate transactions. 

c. Will this transformation help the Department provide Congress more accurate and 

timely cost estimates, schedules, and program baselines? 

With the replacement system. management should be able to provide more timely 

information to Congress. However. the accuracy of the information still depends on the 

integrity of the data entered into the system. 

OFFICE OF ACQUISITION MANAGEMENT 

12) When did the Office of Acquisition Management develop an Acquisition Project 

Management Framework/Guidebook? 

The framework policy was signed in November 2012. and the bureaus have 6 months to 

describe to the Office of AcquiSition Management (OAM) how they will implement the new 

policy. However, in January 2013. OAM designated three high-profile projects to first 

implement the framework: 2020 decennial census. NIST laboratory construction. and the 

NOAA jPSS satellite. 

a. How well have the bureaus incorporated the new framework/guideline? Who's 

done the best job of this and who's experiencing the most problems? 

So far. NIST appears to be the most successful at incorporating the framework. and Census 

has had the most challenges because it has been difficult for OAM to determine what initial 

acquisition phase their program is in and. accordingly. what documentation is needed. 

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b. What impact has this framework/guideline had on NOAA, given its relationship 

with NASA where NASA is the acquiring agent in the JPSS program for 

example? 

We have not yet observed any impact of the Department's recently issued framework on 

NOAA based on its relationship with NASA for the acquisition of JPSS. 

INFORMATION TECHNOLOGY (IT) 

13) In June 2012, the Acting Secretary issued the "Department IT Portfolio Management 

Strategy, " which expanded the role of the Commerce CIO (Chief Information 

Officer). Oversight. 

a. How much leeway does the CIO have in requiring the different bureaus to take steps to 

strengthen IT security posture now, as compared to before the issuance of this document, and 

is it enough? 

The Acting Secretary's June 2012 memorandum defines the ClO's responsibilities for 

managing the IT portfolio of the Department, including having the lead role in information 

security. By the time the memorandum was issued, we were well into our FY 2012 Federal 

Information Management Act of 2002 (FISMA) audits, and we did not observe any significant 

IT security improvements attributable to the memorandum. We will, however, assess the 

impact of the Acting Secretary's memorandum as we conduct the FY 2013 FISMA audits. 

b. Given that most IG offices work closely with their respective agencies on Information 

Technology issues, how closely does your office work with the Department on IT issues? 

We have established and maintain a strong working relationship with the Department on IT 

issues. My senior staff and I meet with the Department CIO and his senior staff regularly to 

discuss IT issues associated with management, budget, development, and security. We also 

attend CIO Council meetings, where key IT topics are discussed, and the Commerce 

Information Technology Review Board meetings, where program managers of major 

Department IT investments brief cost, schedule, and performance information. In addition, 

we continue to work closely with the Department to strengthen its IT security program. 

14) What tools does your office have to deal with situations when DOC does not address OIGreferred complaints in a timely manner? 

The Department's written policy states that an "operating unit or agency shall report its 

findings ... within 60 days of the referral", but does not prescribe how OIG should handle 

cases where agencies are delinquent in looking into allegations or otherwise not timely in 

responding to referrals.' In order to persuade agencies to handle referrals in a timely 

manner, OIG provides status updates to the agency liaisons and Departmental leadership. 

I See Departmental Administrative Order 207-10, Section 5(d). 

http://www.osec.doc.gov/opogldmp/daos/dao207_10.htm!. 

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• Monthly Reports to Agencies: OIG provides agencies with monthly reports of their 

current pending referrals. in order to remind management about aging referrals. and to 

check the integrity of their own tracking systems. 

• Quarterly Reports to the Secretary: On a quarterly basis. the IG sends a 

memorandum to the Secretary. Deputy Secretary. and other senior officials to inform 

them about the backlog of aging referrals. For example. in January 2013. our office 

reported that "over half the Department's complaint referrals are pending with NOAA. 

where the portion of referrals older than 60 days without an initial response increased 

from 73 percent to 89 percent this quarter." 

a. How big a problem is this? 

As of March 28. the Department had 101 pending complaint referrals. of which 72 were 

older than 60 days without an initial response. NOAA had the largest share of complaints 

pending. 54. of which 85 percent were older than 60 days without a response. NOAA has 

three complaint referrals that are older than two years. and seven additional complaints 

older than one year. 

b. How does your office determine when to forward allegations to the Department? 

OIG staff conducts preliminary research on Department-related complaints and briefs the 

Inspector General and OIG senior leadership. who determine how each complaint should 

be handled. Before deciding to refer a complaint to an operating unit in this manner. OIG 

determines whether the matter would be more appropriately handled by Departmental 

management. 

c. How do you ensure that you are not forwarding complaints that will potentially be 

reviewed by the very individuals identified in the allegation of misconduct? 

In January of 2012. OIG issued the Guide to Conducting Administrative Inquiries to the 

Department, which outlines best practices and guidance for conducting administrative 

inquiries. In OIG's Guide. and on our memoranda forwarding such complaints. we request 

that any officials involved in conducting the inquiry sign a statement testifying to their 

independence from the matters at hand before commencing any inquiry-related activity. In 

our Guide. we note that "It is critical that the operating unit appoint an inquiry official who is 

outside the supervisory chain of the subject and removed from the immediate affairs that 

the allegations relate to."2 In cases where senior officials or agency liaisons are implicated in 

the allegations. we will refer allegations to a different bureau or set of officials to ensure 

independence. 

l See U.S Department of Commerce Office of Inspector General, January 2012. Guide to Conducting Administrative 

Inquiries. Washington. DC: DOC OIG. 6. 

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MANAGEMENT 

15) Your office's 2012 Management Challenges report states "Commerce leadership must 

continue showing the way forward to establish an accountability culture with increased 

transparency, readily available support, and independent validation." The report describes this 

as "perhaps the Department's biggest challenge of all." Can you elaborate on this observation 

by providing examples, and explain whether this is a Department-wide issue, or if certain 

bureaus are more problematic than others? 

The need for an accountability culture with increased transparency. readily available 

support, and independent validation is Department-wide. However. since NOAA accounts 

for almost one-half of the Department's total budget and has more complex operations 

than other bureaus. it has a greater need for improved accountability. The following are 

Department-wide examples identified in recent years: 

• Acquisitions: insufficient procurement alternative analysis (e.g .• NOAA Marine 

Operations Center-Pacific) and inadequate oversight of cost-plus-award-fee contracts 

(e.g .. Census and NOAA) 

• Fund controls: inappropriate accounting of funds received through reimbursable 

agreements (NIST). reporting estimated (vs. actual) conference spending (Departmentwide). and unauthorized reprogramming of funds (NOAAlNWS) 

• Asset controls: inappropriate use of forfeited assets (NOAA Fisheries). improper and 

untimely accounting for property acquisitions. transfers. construction work-in-process. 

asset retirements. and impairment assessments (NOAA) 

• Cybersecurity: perpetual security weaknesses (Department-wide) 

• Grants: inadequate oversight of Federal fund recipients (NOAA. NIST. EDA) 

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Questions from Ranking Member Dan Maffei 

1. Commerce OIG Potential ADA 

At the hearing you testified that you were unaware of any suspected or actual AntiDeficiency 

Act (ADA) violations that have occurred in the Department of Commerce's Office of Inspector 

General (OIG) since Todd Zinser became the Inspector General in December 2007. You said that 

you would look into the matter and provide the Committee with any relevant information. 

Please provide the Committee with a list of any Department of Commerce (DOC) OIG budget 

actions which triggered internal OIG or DOC review for potential ADA violations (from 

December 2007 to present). If any suspected or declared ADA violations have occurred please 

provide a detailed explanation, which includes at a minimum when the ADA violation(s) or 

suspected violation(s) occurred, why they occurred, when Inspector General Todd Zinser became 

aware of the issue, who investigated the allegations and whether or not any suspected ADA 

violations were actually declared or referred from the OIG to the Department of Commerce or 

any other entity, including the Council ofInspectors General on Integrity and Efficiency 

(CIGIE), for review. 

In addition, please provide the Committee with supporting documentation regarding each of the 

suspected or declared ADA violations that may have occurred in the Commerce TO's office. This 

should include, but not be limited to, any Memorandum, reports or draft reports or 

correspondence with, to or between the Commerce OIG and any other offices within the 

Department of Commerce, including the Commerce Department's Office of Budget or the Office 

of General Counsel regarding actual or suspected ADA violations. 

The OIG is not aware of any ADA violations that were committed by this office under the 

current Inspector General. The OIG and Department's Office of General Counsel (OGC) 

did review an OIG contract obligation for ADA compliance in 20 I I, but it was determined 

that the obligation had been proper. That contract was for financial statement audit services 

and the OIG entered into it on December 30, 20 I 0 during the December 22. 20 I O-March 

2. 20 II, continuing resolution (CR) period. It was always clear that the OIG had sufficient 

appropriations to cover the obligation. The availability of apportioned funds needed to be 

confirmed, however. given some confusion within the Department as to whether the entire 

amount of an automatic CR apportionment became available immediately when issued by 

Office of Management and Budget (OMB) Bulletin. 

The OIG and Department's OGC both evaluated the transaction. consistent with 

Department policy, and OMB was consulted as part of the process. OMB advised that the 

"full amount [of the automatic apportionment] was apportioned for the entire CR period" 

per OMB Bulletin 10-3, and thus that it appeared that the OIG had more than adequate 

apportioned funds to cover the contract obligation. Based on this guidance, the 

Department's OGC and the OIG both concurred with OMB that no ADA violation had 

occurred. The Department's OGC issued a memorandum to that effect and concluded its 

review. The OIG and the Department's Office of Budget have subsequently worked 

together to clarify and strengthen procedures for the apportionment approval process 

within the Department. 

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Because the contract obligation at issue here was proper. there was no reporting required 

under the ADA. See 31 U.S.c. §§ 1351 and 1517(b). Moreover. because the matter involved 

a question of appropriations law and did not involve any allegation of wrongdoing by the 

Inspector General or high-level management. the OIG had no reason to refer the matter to 

the Council of Inspectors General on Integrity and Efficiency (ClGIE). See Policies and 

Procedures of the Integrity Committee of the Council of the Inspectors General on 

Integrity and Efficiency. However. the OIG strived to be transparent and collaborative with 

the Department and other government entities throughout the process. Notably. this legal 

review was included in the Department's Performance and Accountability Report for 20 I I 

that was made publicly available. including through posting on the Department's website. 

See pg. 291. 

Regarding your request for supporting documentation: given the sensitive nature of the 

documents you request. we would be pleased to provide those documents in accordance 

with the procedures for document requests required under the Privacy Act. 

2. Temporary Duty Status OIG Employees 

1 asked at the hearing that you provide the Committee with information about the Commerce 10 

employee who lives in Arizona but spends the majority of his time on Temporary Duty (TDY) 

assignment in Washington, D.C. and any other 010 employees that spend more than one week 

per month on TDY in the Washington, D.C. area. Please provide the Committee with the number 

of employees who have spent more than one week per month on TD Y status in Washington, 

D.C. for any time period between January I, 2010 and present. Please indicate their "home" 

assignment, the reason for the TDY, and the cost of their Temporary Duty assignment. 

The U.S Attorney's Office for the District of Maryland and the Federal Bureau of 

Investigation requested that the OIG employee from Arizona assist in a criminal 

investigation. under the exclusive direction of the Department of Justice. beginning in March 

2012. During the time the employee worked for the Department of Justice. he did not 

work in OIG spaces nor was he assigned tasks by OIG personnel. OIG has another 

employee who has spent more than one week per month on TDY assignment in 

Washington. DC. over the past year. This employee works out of OIG's Denver office. and 

travels to Washington. DC. to supervise investigations. meet with OIG officials. and to 

coordinate with the Department of Justice. as needed. 

3. Office of Personnel Management 2012 Survey of Commerce OIG 

Mr. Smith, when I asked about the Office of Personnel Management (OPM) 2012 Survey of the 

Commerce OI G at the hearing you responded that, "the number of negative responses from last 

year's survey has actually decreased for almost every question, and 1 do consider that progress." 

1 wanted to clarify with you that you were referencing the same survey as I was. I assume you 

are familiar with that survey as you have been put in charge of the 10's employee working 

groups. The link to the survey that I referred to at the hearing can be found here: 

http://democrats.science.house.gov/publicationlfederal-employee-viewpointsurvey-results-2012. 

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This survey clearly indicates a dramatic decline in both the morale of the Commerce OlG staff 

over the past two years and a significant deterioration in the staffs respect for the Commerce I G's 

top leaders. To highlight some of the responses: 

In answer to Question # 15, "My performance appraisal is a fair reflection of my performance," 

the number of OIG employees responding positively to that question dropped from 64.8% in 

2010 to 54.7% in 2012. 

In answer to Question #17, "I can disclose a suspected violation of any law, rule or regulation 

without fear of reprisal," the number of OIG staff responding positively to that question dropped 

from 63.3% in 2010 to 55.4% in 2012. 

In answer to Question #21, "My work unit is able to recruit people with the right skills," the 

number ofOIG employees responding negatively to that question nearly doubled from 15.2% in 

2010 to 35.1% in 2012. 

In answer to Question #22, "Promotions in my work unit are based on merit," the number of 

employees responding negatively to that question rose from 22.2% in 2010 to 39.6% in 2012. 

In answer to Question #25, "Awards in my work unit depend on how well employees perform 

their jobs," the number of employees responding positively to that question dropped from 42.4% 

in 2010 to 34.7% in 2012. 

In answer to Question #27, "The skill level in my work unit has improved in the past year," the 

number of employees responding negatively more than tripled in the past two years from 9.2% 

in2010 to 30.0% in 2012. 

In answer to Question #29, "The workforce has the job-relevant knowledge and skills necessary 

to accomplish organizational goals," the number of negative responses swelled from 5.7% in 

2010 to 19.6% in 2012. 

In answer to Question #38, "Prohibited Personnel Practices (for example, illegally discriminating 

for or against any employee/applicant, obstructing a person's right to compete for employment, 

knowingly violating veterans' preference requirements) are not tolerated," the number of 

negative responses jumped from 9.8% in 2010 to 16.8% in 2012. 

In answer to Question #40, "I recommend my organization as a good place to work," the number 

ofOIG staff responding negatively ballooned from 8.8% in 2010 to 45.4%just two years later in 

2012. 

In answer to Question #41, "I believe the results of this survey will be used to make my agency a 

better place to work," the number of negative responses more than doubled from 23.5% in 2010 

to 49.4% in 2012. 

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In answer to Question #53, "In my organization, leaders generate high levels of motivation and 

commitment in the workforce," the number of negative responses rose from 16.4% in 2010 to 

48.5% in 2012. 

In answer to Question #54, "My organization's leaders maintain high standards of honesty and 

integrity," the number of OIG staff responding negatively rose by nearly 400% from 10.6% in 

2010 to 39.6% in 2012. 

In answer to Question #60, "Overall, how good a job do you feel is being done by the manager 

directly above your immediate supervisor/team leader?" the number of employees responding 

negatively increased fromjust 5.6% in 2010 to 26.2% in 2012. 

In answer to Question #61, "I have a high level of respect for my organization'S senior leaders," 

the number of employees responding in the negative rose from 16.2% in 2010 to 37.1% in 2012. 

In answer to Question #69, "Considering everything, how satisfied are you with your job?" the 

number of negative responses increased from 18.9% in 2010 to 30.4% in 2012. 

At the hearing, in answer to my question about this survey you said: " ... I would like to point out 

the fact that even though the difference between the positive and the neutral negative may not be 

where we want it to be, it is encouraging to see that the number of negative responses from last 

year's survey has actually decreased for almost every question, and I do consider that progress." 

Mr. Smith, I do not consider the above responses progress. Please identify for me the specific 

areas you believe point to progress in the management of the Commerce Office of Inspector 

General as highlighted in the OPM survey. 

Regarding the OPM 2012 survey. I think it important to point out that the overall 

satisfaction of federal employees who participated in the survey dropped to its lowest level 

in nearly a decade. according to the Partnership for Public Service. Other reference points 

in the survey showed two-thirds of all federal agencies experienced decreasing employee 

satisfaction. According to one federal human capital practice director who worked with the 

Partnership on the survey. the "overall morale decline is likely due to the stresses faced by 

federal employees in the last year. such as at least two years of pay scale freezes. tight 

budgets. staffing declines and increasing workloads." Despite this. Commerce OIG showed 

a drop in the percentage of negative responses in several morale related areas. such as 

satisfaction with training. sense of accomplishment, and overall job satisfaction. 

As you quoted. I said in my testimony "that the number of negative responses from last 

year's survey has actually decreased for almost every question. and I do consider that 

progress." If people who took the survey are less negative in their responses from one year 

to the next. I consider that progress. My response stated I was comparing the current year 

results (2012) with the prior year results (20 I I). I was also speaking of improvements in 

the percentages of those who provided a "negative" response. I was not comparing our 

results from the current year with responses from two years ago (20 I 0), nor was I speaking 

to differences between "positive" responses from the current year with "pOSitive" 

responses from two years ago. both of which you cited in your examples. Responses to 

questions I. 4. 6. 7. II. 28. 34. 37. 38. 43. 46. 49. 50. 52. 63. 64. 67. 68. and 69 represent 

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examples of improvements in the percentage of "negative" responses between 2012 and 

2011. 

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Questions from The Honorable Scott Peters 

Commerce IG Nondisclosure Orders ("Gag Orders.") 

QFR #1: Mr. Smith, in response to my question at the hearing about the non-disclosure or "gag 

orders" that the Commerce Inspector General Mr. Todd Zinser, Mr. Rick Beitel, the Principal 

Assistant Inspector General for Investigations and Whistleblower Protection, and Mr. Wade 

Green, the Commerce IG's General Counsel, forced several departing IG staff to sign, you said: 

"We do not believe that the interpretation that was provided, that those were gag 

orders, is correct. We actually used the definition of disparage within the EEOC 

website, which says telling of falsehoods and lies with reckless regard to the truth. 

That is the connotation that was used. In addition, we have been working with 

OSC and they have-through the MSPB [Merit Systems Protection Board], and 

they have in fact requested through the arbitrator that we submit a joint motion to 

dismiss the stay as well as dismiss the protective order, and the last we heard from 

OSC, they consider through the additional language that we submitted on those 

nondisclosure agreements as well as the Whistleblower Enhancement Act that 

was passed, that that is no longer an issue." 

I believe your statement mischaracterized the facts relating to both the purpose of the nondisclosure agreements and the status of the investigation into prohibited personnel practices of 

the Commerce Inspector General and his senior staff by the Office of Special Counsel (OSC). 

You claimed that the word "disparage" as used in the non-disclosure agreements was an innocent 

effort to prevent these employees from telling "lies, falsehoods" to Congress and others. It 

seems nonsensical that this was the actual intent of the gag orders. In a November 2012 press 

release regarding these illegal orders, OSC said: "The agreements prohibit employees from 

voluntarily communicating with OSC or Congress." No where did the OSC find that the 

Commerce Office ofInspector General feared that any of the individuals who signed these nondisclosures were forced to do so because there was a legitimate fear by the Commerce OIG that 

these departing employees would run off telling "lies" or "falsehoods." 

Can you please provide the Committee with the name or names of the individuals within 

the Commerce IG's office that described to you the nature, intent and scope of these nondisclosure agreements? 

We disagree with the characterization of the Settlement Agreements that appeared in the 

November 2012 press release, and subsequently in the media. On February 27. 2013, we 

issued our own press release entitled "Statement Regarding Science Committee Minority 

Press Release," which included the following: "We have and will continue to cooperate fully 

with the Office of Special Counsel (OSC) as they continue their investigation. Most recently, 

at the suggestion of the Merit Systems Protection Board (MSPB) mediator, we have filed 

with the OSC a joint request to withdraw the application for Stay and Protective Order. 

Both parties are waiting for the MSPB to act on this joint request. We have met with and 

updated our oversight committees and will continue to keep them informed about this 

matter." 

14 
82 

Today, the MSPB granted the motion to dismiss the protective order and closed the case 

number associated with the motion to withdraw the stay because the stay had already 

expired. 

Further, our use of the word "disparage" is consistent with the definition of disparage used 

by the EEOC, as contained in a sample Settlement Agreement on its website: "Disparage as 

used herein shall mean any communication, or written, of false information or the 

communication of information with reckless disregard to its truth or falsity." 

QFR#2: 

In describing your justification for why IG staff were forced to sign these nondisclosures you 

also failed to mention a portion of the orders that clearly threatened the IG employees coerced 

into signing these agreements, that the OIG would provide their new employers with poor 

performance appraisals of their work if they broke their vow of silence about discussing issues 

regarding the IG's office with either Congress or the Office of Special Counsel. These 

agreements seem intended to both frighten and silence departing employees through 

reprehensible coercive tactics. Again, the OSC said in its November 2012 press release that: 

"The employees were told that manufactured negative performance appraisals 

would be shared with prospective employers if the employees did not sign the 

nondisclosure agreements." 

Why did you omit this important section of the nondisclosure order from your testimony? 

In reviewing my testimony, I do not see where I provided "justification for why IG staff 

were forced to sign these nondisclosures." As noted in my testimony, we disagree with the 

media's characterization of these agreements. My understanding is that the agreements 

were negotiated between OIG attorneys and employees who were represented by counsel 

--or with the employee's counsel directly-in arms-length transactions. I was not asked 

about this section of the OSC press release; I answered the questions I was asked. 

QFR #3: You implied in your testimony that the Department of Commerce Inspector General's 

office has worked with the Office of Special Counsel to resolve the questions regarding the 

nondisclosure orders and that you filed a 'Joint motion" with the Merit Systems Protection Board 

to dismiss the stay and protective order as a result of the revised nondisclosure agreements that 

you personally signed and sent to the former IG staff originally forced into signing these 

agreements in the first place. In your testimony, you said that as a result OSC believes "that that 

is no longer an issue." As you must know, the "joint motion" essentially dealt with rescinding 

the illegal "gag orders" that were imposed on the former I G staff by your office. It did nothing 

to halt the ongoing substantive investigation into the "prohibited personnel practices" that 

occurred in the IG's office. Your sworn testimony created a false impression that OSC was 

about to close their case. 

At the time of your testimony, were you aware that the Office of Special Counsel still had 

an ongoing investigation into the Department of Commerce Office of Inspector General? 

Why did you not acknowledge that fact to the Members of the Committee? 

15 
83 

I have clarified my testimony to emphasize that the joint motion the OIG filed with the 

OSC. at the request of the MSPB arbitrator. cleared up the issue of the stay and protective 

order. As stated above. I answered questions I was asked. Had the question been asked 

whether or not I was aware of OSC's ongoing investigation. I would certainly have 

"acknowledged that fact to the Members of the Committee;" however. since the OSC has 

not provided details on specific allegations. I would not have been able to provide any 

further details other than to say we are cooperating fully with their investigation. 

Finally, in your testimony you suggested that the Committee has been provided with copies of 

the nondisclosure agreements from your office. 1 have been informed by Committee staff that 

we have received no such documents from the Commerce 010. Since, you assumed we had 

been provided with these records at the hearing I would ask that you provide the Committee with 

copies of all of the nondisclosure agreements signed by any staff in the IO's office, both the 

original agreements and any subsequent revisions to them. 

Regarding your request for copies of settlement agreements: given the sensitive nature of 

the documents you request. we would be pleased to provide those documents in 

accordance with the procedures for document requests required under the Privacy Act. 

16 

(85) 

Appendix II 

ADDITIONAL MATERIAL FOR THE RECORD
86 

LETTER SUBMITTED BY RANKING MINORITY MEMBER MAFFEI

February 26,2013 

Mr. Gene L. Dodaro 

Comptroller General of the United States 

U.S. Government Accountability Office (GAO) 

441 G Street, NW 

Washington, D.C. 20548 

Dear Mr. Dodaro: 

The Department of Commerce oversees an annual budget of approximately $8 billion in 

discretionary appropriations funding and employs nearly 47,000 people. A kcy role of the 

department is to crcate jobs, advance economic growth and enhance U.S. international trade. 

The department also promotes and implements many key science and technology programs in 

the telecommunications arena; helps to set federal standards in forensic science, cyber-security 

and electronic health-care records; and develops weather forecasting tools and technologies that 

are vital in wa1'l1ing U.S. citizens of severe storms, coastal flooding and other potentially 

hazardous weather conditions. 1 The Department also manages the radio spectrum, a critically 

important resource and a potential source of billions of dollars in government revenue. 

The Department of Commerce's Office ofInspector General (OIG) has oversight of the agency, 

and endeavors to detect and deter waste, fraud and abuse by conducting audits, inspections, 

evaluations and investigations. The taxpayer provides approximately $26 million a year to fund 

the work ofthis important accountability office. The Commerce OrG has been headed by Todd 

J. Zinser since December 2007 and has oversight responsibility for all Department of Commerce 

agencies, including many that the Science, Space, & Technology Committee has oversight 

jurisdiction over as well, including the National Institute of Standards and Technology (NIST), 

National Oceanic and Atmospheric Administration (NOAA), and other Dcpmiment of 

Commerce offices and programs.2 

Considering the vast array of oversight responsibilities the OIG has for multi-billion dollar 

projects currently underway within Commerce on weather satellite development, weather 

I "Mission Statement," U.S. Department of Commerce, available here: h1lpjlyvww.commel·ce.aov!about-

~~:~~~:~er,ce, Office of Inspector General (OIG) home-page, available here: 
87 

forecasting technologies and other endeavors, and the large number of employees and omces the 

Commerce Department comprises, carrying out these oversight responsibilities effectively, 

emciently and thoroughly is extremely important. The taxpayers' investments in the Department 

can only be protected jfthe OIG is well organized, focused on their mission, and professional in 

their conduct. 

Unfortunately, tlu'ough both the Committee's own oversight of NOAA and recenlnews accounts 

regarding serious allegations of wrong-doing in the Commerce Department's Office oflnspector 

General, it secms clear there are many problems within the lG's office. That is why we are 

writing to you. We believe the Government Accountability Oflice (GAO) is well positioned to 

carry out a thorough review of the organization, management, policies and procedures of this 

omce. The GAO has a long history of investigating the professional standards, alleged 

misconduct and eHiciency of federal Oflices ofInspector Generals. We ask that you carefully 

document any problems within the Commerce lG's office that you identify and provide Congress 

with recommendations regarding improvements to the structure, policies and procedures of that 

off1ce. 

Last September, oUl' Committee held a hearing into the unauthorized reprogramming of millions 

of dollars within the National Weather Service (NWS), part of the National Oceanie 

Atmospheric Administration (NOAA), and the agellcy's failure to inform Congress ofthis 

unlawful reprogramming. In November 2012 the Department of Commerce officially 

acknowledged that this unauthorized reprogramming of funds in 2010 and 2011 violated the 

Anti-deficiency Act (ADA), which is a federal crime. As part of the preparation for this hearing, 

it became clear that the Commerce OlG failed to adequately pursue multiple allegations 

regarding these ADA violations begilming in 2010. The reasons for this failure remain unclear 

and the explanations provided to the Committee have been inconsistent. What does seem clear is 

that the IG's office received credible allegations of financial misconduct involving millions of 

dollars and yet did nothing with them. Moreover, after finally launching a preliminary review 

that concluded the available evidence pointed to a violation oflaw, the IG turned the 

investigation back over to the agency-essentially allowing the agency to investigate itself: Both 

steps are inexplicable and inconsistent with our expectations for an Inspector General. 

In December, adding to our concerns about the conduct of the Commerce IG's office, The 

Washington Post published a story citing an ongoing investigation of this office by the Offiee of 

Special Counsel (OSC). The OSC is the office in the Federal government that acts to protect 

whistleblowers-a function that IGs are also expected to perform. The Post reported on 

allegations of coercive tactics used by the Inspector General Todd Zinser and two of his most 

senior deputies-including his General Counsel and the official who had formerly been in charge 

of Whistle Blower Protections-against at least four senior Commerce OIG law enforcement 

officers. The allegations detail how those four former employees were forced to sign nondisclosure agreements barring tllem from providing information about the Commerce OlG's 

conduct to both the Offlce of Special Counsel and to Congress3 The employees were reportedly 

told by senior OIG management that if they failed to sign the non-disclosure agreements that 

agreen]e"" The Washington 

2 
88 

negative performance appraisals would be manufactured and shared with potential new 

employers. The OSC, an independent federal investigative agency, is specifically chartered to 

safeguard federal employees from reprisals for whistleblowing, and investigates and prosecutes 

allegations of prohibi ted persomlcl practices.4 

Under both 5 U.S.C. §2302 and 5 U.S.C. §7211, it is a prohibited personnel practice to interfere 

with federal employees' ability to communicate with or provide documentation to Congress. 

The law that governs the ban against "Prohibited Personnel Practices," 5 U.S.C. §2302, says in 

part that disclosure is permissible when the individual employee "reasonably believes that the 

disclosure evidences-(i) any violation of any law, rule, or regulation; or (ii) gross 

mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific 

danger to public health or safety."s U.S. CodeS U.S.C. §7211, "Employees' Right to Petition 

Congress," says simply, in its entirety: "The right of employees, individually or collectively, to 

petition Congress or a Member of Congress, or to furnish information to either House of 

Congress, or to a committee or Member thereof, may not be interfered with or denied.,,6 

According to a document filed by OSC with the Merit Systems Protection Board (MSPB) in 

November, the top thTl;:c employees in the Department of Commerce's Office ofInspector 

General (OIG) "have engaged in a pattern of prohibited persollnel practices designed to chill 

employees and former em~loyees from whistleblowing, cooperating with OSC, and reporting 

wrongdoing to Congress." Remarkably, thc OIG web-site says: "OIG is certified by the U.S. 

Office of Special Counsel (Osq as a 5 U.S.C. §2302(c) Whistleblower Protection Agency."g 

Yet, the OSC filing with MSPB concludes: "The ultimate irony is that these gag agreements 

were coerced by an Inspector General the very person sworn to protect a federal agency's 

employees from prohibited personnel practices and to uphold the merits system principles." The 

idea that any Inspector General would hold the threat of negative performance evaluations over 

ilie head of employees in exchange for their silence with Congress or the OSC is simply 

incomprehensible. IGs are supposed to be the place abused employees can go for protection, not 

a source of employee abuse. IGs, uniquely among Federal ot1icials, also have a dual reporting 

obligation to both the Executive Branch and to Congress, so an IG that attempts to obstruct 

communications with Congress----communications that are protected by law--·certainly fails to 

appreciate the IG's position as a law enforcement officiaL 

The work environment at the OIG's office is also suggestive ofa pattern of management that is 

not conducive to good accountability work. The 2012 Federal Employee Viewpoint Survey 

Results (the so-called "Best Places to Work" survey) found the DOC IG's office to be among the 

very worst offices to work in government. Although the survey found the Department of 

Commerce at large was the 4th best place to work among 19 federal agencies snrveyed, of292 

'''Introduction to OSC," U.S. Oft1ce of Special Counsel (OSe), !l!!!rJL:l\:.\YllSi1§£,g!?IclJllJffilll:ffi 

, The text of 5 U.S.C. §2302, Prohibited Personnel Practices, is 

htUJ:!lwww.iaw.comell.edu/uscodeitext!5!2302. 

" The text 01'5 U.S.C. §72II, Employees' Right to Petition Congress, is available here: 

http://www.law.comell.edu/uscode/text!517211. 

7 "Initial Request [or Stay of Personnel Action and Protective Order," U.S. Office orSpecia1 Counsel Ex ReI. John 

Does 1-4 (Petitioners) vs. Department of Commerce, Office of Inspector General (Respondent), November 26, 2012. 

, Department ofCo!11merce, Office of Inspector General (OIG) home-page, available here: 

http://www.ojg.sfu!;gov/Pagcs/default.aspx 

3 
89 

Agency Subcomponent offices surveyed, the DOC OIG came in 291". The office came in dead 

last for "employee skills/mission match; 285tl1 for Ef1ective Leadership-Empowerment; 280th for 

Teamwork; 275th for Effective Leadership-Senior Leaders and 275tl1 for Perfonnance Based 

Rewards and Advancement.9 Drilling dovm into the specific questions, several revealing 

responses are worth noting. Only 55% of those responding indicated that they felt safe to 

"disclose a suspected violation of any law, rule or regulation without fear of reprisal." Only 38% 

indicated that promotions in their work unit were based on merit. On Senior Leadership, only 

36.8% have a high level of respect for that leadership. The staff is almost split on the 

leadership's standards of honesty and integrity. The good news is that 46.1 % believe they do 

maintain those standards, but a plurality of employees, 53.9%, are either unsure (14.3%) or have 

concluded that the leaders fail to meet those standards (39.6%). Such scores in an Inspector 

General's office are simply shocking. Finally, the survey found that in201 1,17.60% of the 

workforce left the Commerce OIG. 10 

These kinds of attitudes may have real consequences for the productivity and integrity of the 

office. A standard evaluative data point used with IG's is to look at their return on investment. 

In other words, one looks at the productivity of the office by comparing the taxpayer dollars 

spent versus the dollars saved by 1G actions. According to 8n analysis by our Committee staff, it 

appears that those returns have been steadily declining since Mr. Zinser took over the office. His 

first year in office (2008) found the DOC orG bringing in $4.56. That figure has been in steady 

decline with figures of$2.88 in 2009, $1.45 in 2010 and $1.05 in 201 L These flgures can be 

subject to great variablity across agencies and even year-to-year in the same agency, but the 

trend is consistent with an office that has declining capacity to carry out high-quality work as 

reflected in the Satisfaction Survey cited above. 

The problems within the Commerce OIG's office appear to be substantive and widespread. 

Apart from the most recent actions to halt the gag orders put in place by the Commerce OIG, the 

Office of Special Counsel (OSC) is apparently investigating other issues regarding potential 

misconduct in the OIG's offlce, particularly questionable hiring practices by senior offlcials. 

Auy of these issues would be deeply troubling in and of themselves. However, multiple and 

disparate management problems appear to be present in the Department of Commerce's Office 

ofInspector General. 

As a result of all of the distmbing information outlined above regarding the work and work 

atmosphere of the Commerce OIG, We request that GAO conduct a thorough review of the 

Department of Commerce's Office ofInspector General. We ask that you specifically examine: 

1. The conduct of the office with regards to managing the 10's Hotline. This Hotline system 

was the method by which the ofJice first received allegations of misconduct with NWS funds, 

according to the IG's testimony before our Committee. The IG's explanation of what was done 

9 "The Best Places to Work, 2012," the P3Iinership for Public Service, Agency Report: Office ofthe Inspector 

General (Commerce). See also thc "2012 Federal Employee Viewpoint Survey Results; Department of Commerce 

Office of the Inspector General," US Office of Personnel Management. 

10 "The Best Places to Work in The Federal Government: 2012 Rankings," Compiled by the Partnership for Public 

Service and the Deloitte Consulting finn, specific rankings ofthe Department of Commerce's Office oflnspector 

General (DOC OrG) available here: http://bestplacestowork.orgIBPTE!:lm)j:l!~l~lJLGMM 

4 
90 

with those allegations, and how they choose to pursue or not pursue allegations has been 

inconsistent over time. Without a properly functioning Hotline, the IG will miss early signs of 

trouble in the agency, just as this IG apparently did with illegal conduct in the NWS CFO's 

office. 

2. Whether the office engages in prohihited personnel practices. The work satisfaction survey 

results suggest that the four employees who were forced to sign non-disclosure agreements may 

not be the only ones who have witnessed misconduct. Both hiring and tIring, as well as 

retention, pay and bonus decisions appear to be arbitrary and worth examining. If the IG has 

hired or promoted staff not fully qualified for their positions or staff who have used their senior 

positions in abusive ways, or has made hiring, l1ring and promotion decisions based on metrics 

of performance other than contributing to protecting the taxpayer and enforcing the law, the 

Congress needs to know this. 

3. Why does productivity in tile ofi1ce seem to be in decline in the last few years? Are staff 

empowered to carry out audits and investigations of the highest value targets? Are staff free to 

follow leads and evidence regardless of where they lead? Is the decision-making in the 

Leadership effective and well-documented? This is particularly important in the one matter that 

the Subcommittee is aware of: the IG deciding to send back to the agency an investigation into 

unauthorized reprogramming at NWS. That matter has generated three different types of 

explanations by the Inspector Gencral and none of them are reassuring. Other Inspector 

Generals we have consulted with have all indicated that they would never return such an 

investigation to the agency, especially since the people you are empowering to do the 

investigation may themselves have been involved in the misconduct. 

Please coordinate with our staffregarding this project. You may contact Dr. Dan Pearson (202-

225-4494), the Subcommittee on Oversight's Minority staff director, or Mr. Douglas Pastemak 

(202-226-8892), the Subcommittee on Oversight's Minority chief investigator to discuss this 

project. 

" Ie 

Ranking Member 

Committee on Science, Space & Technology 

Frederica Wilson 

Ranking Member 

Subcommittee on Technology 

Sincerely, 

Dan Maffci 

Ranking Member 

Subcommittee on Oversight 

ne Bonamici 

Ran <ing Member 

Subcommittee on Environment 

5 
91 

cc: Mr.Lamar Smith 

Chairman 

Committee on Science, Space & Technology 

Dr. Paul Broun 

Chairman 

Subcommittee on Oversight 

Dr. Andy Harris 

Chaimlan 

Subcommittee on Environment 

Mr. Thomas Massie 

Chairman 

Subcommittee on Technology 

Mr. Todd 1. Zinser 

Inspector General 

Department ofComl11erce 

6 
92 

WASHINGTON POST ARTICLE SUBMITTED BY RANKING MINORITY MEMBER MAFFEI

http;!lwww.washingtonpost.comlblogs/federal-eye/wp/2012/12/03/watchdog-wins-reprieve-forcommerce-department-agents-under-gag-agreementl 

Federal Eye 

Keeping tabs on the federal government 

Watchdog wins reprieve for Commerce Department agents 

under gag agreement 

Commerce Department Inspector General Todd Zinser. 

(Courtesy of Commerce Department Inspector General' s Office) 

A board that conducts hearings over questionable personnel practices issued a stay order against the 

Commerce Department's Office of the Inspector General Thursday, temporarily lifting gag 

agreements aimed at preventing four senior law enforcement officers from speaking out against the 

agency. 

The Office of Special Counsel, which requested the order from the Merit Systems Protection Board, 

claims three top inspector general's officials coerced four of their agents to sign nondisclosure 

agreements to keep them from volunteering information about the agency to the OSC or Congress, 

thereby violating whistleblower laws. 

The board-said in its stay order that it found "reasonable grounds to believe that the agency took or 

threatened to take [personnel actions] against the former employees in violation" of the 

Whistleblower Protection Act and the Lloyd-LaFollette Act, a 1912 law that codified whistleblowillg 

rights for federal employees. 
93 

OSC alleges that Inspector General Todd Zinser, Deputy Inspector General Wade Green and 

Principal Assistant Inspector General for Investigations Rick Beitel issued tailing performance 

reviews to each of the agents before asking them to sign the settlements, promising not to place the 

negative appraisals in the agents' personnel folders and saying they would provide prospective 

employers with nentral references if the officers signed the agreements. 

Those actions, if they occurred, would contradict a maj or part of the inspector general's mission, 

which is to work with potential whistleblowers instead of silencing them. 

Reports of wrongdoing by the inspector general's office preceded the case involving th.e stay order, 

according to OSC spokeswoman Ann O'Hanlon, who said she could not elaborate on those cases. 

Zinser said in an intervicw that OSC is investigating his office for alleged personnel practices 

relating to two Commerce Department employees not connected to the stay order. He said he does 

not know the identities of any of the workers involved in allegations against h.is department or the 

details of their claims. The OSC has not released that information to the pUblic. 

OSC claims the coercive actions by tIle inspector general's office occurred in 2010 and 2011. 

According to Zinser, only five people signed separation agreements with his department during that 

time period. . 

The order from the Merit Systems Protection Board, which lasts until Jan. 14, allows tile agents 

involved in the stay order to volunteer information to OSC, as well as other investigative bodies and 

the media, without immediate repercussions from the inspector general's office. 

"OSC is committed to ensuring that agencies do not interfere with whistleblowing to Congress," 

Special Counsel Carolyn Lemer said in a statement. "We are pleased that the ]Merit Systems 

Protection Board] has granted the stay so tIlat OSC can further investigate this matter." 

The inspector general's office released a statement Friday saying three of the agerits involved in the 

case signed their separation agreements witll representation from attorney's "considered among the 

best in federal labor law," while the fourth had at least consulted a lawyer before signing the contract. 

"We strongly support employees' rights to register complaints and have not interfered with those 

rights," the inspector general's office said in its statement. "As wc all know, tllere are two sides to 

every story and hopefully at some point in this process we will have the opportunity to provide the 

facts for the public record." 

Zinser said of the investigation: "It's really a situation where we're going to cooperate witll OSC and 

be as transparent as we can about it." 
94 

OFFICE OF PERSONNEL MANAGEMENT’S 2012 FEDERAL EMPLOYEE VIEWPOINT

SURVEY RESULTS SUBMITTED BY RANKING MINORITY MEMBER MAFFEI
95 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspedor General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector General 

687,687 

19,872 

110 

123 

60 

This 2012 Federal Employee Viewpoint SUlvey Report provides summary results for subagencies within your 

department or agency. The results include response percentages for each survey item, The definitions for the 

Positive, Neutral, and Negative response percentages vary in the fonowing ways across the three primary 

response scales used in the survey: 

Positive: Strongly Agree and Agree / Vel)' Sati'lfied and Sali~!ied I Vel), Good and Good 

Neutral: Neither Agree nor Dimgree I Neither Sa/i,,{ied /lor Dissatisfied I Fair 

Negative: Disagree and Strongly Disagree / Dissati'lfied and Very Dissatisfied! Poor and Very Poor 

Positive, Neutral, and Negative percentages are based on the total number of responses (N) that are in these three 

categories, The number of Do Not Know (DNK) or No Basis 10 Judge (NBJ) responses, where applicable, is 

listed separately, 

Note: The report tables that follow do not include results for any subagency listed in the Response Summary table 

(above) that had fewer than 10 completed surveys, 

My Work Experience 

1. 

2012 Governmentwide 

2012 Department of Commerce 

2612 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector Genera! 

2006 Office of Inspector General 

686,499 632% 

19,832 68,6% 

110 45,2% 

123 485% 

60 73,2% 

16.6% 

16.2% 

20.9% 

15.8% 

14.9% 

20.2% 

15.3% 

12,9% 

35.7% 

11.9% 
96 

My Work Experience (continued) 

2. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector Genera! 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

3. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Offi(:e -of Inspector Genera! 

2011 Office of Inspector Genera! 

2010 Office of Inspector Genera! 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

2012 Governmentwide 

2012 Department of Commerce 

2012 Offk;e of Inspector General 

2011 Office of Inspector General 

2010 Office of inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

n" .... ",rt",,,,,,,,t of Commerce 

of Inspector General 

1st Level 

684,821 71.9% 

19.781 75.7% 

110 S(t2.% 

121 56.5% 

60 71.0% 

681,499 57.Stl/o 

19,705 603% 

100 46.1% 

123 50.2% 

60 57.1% 

684.685 72.4% 

19.772 73.8% 

109 51.a% 

122 58,7% 

60 68.4°/" 

14.5% 

13.1% 

29.3% 

15.4% 

16.8% 

18.7% 

21.0% 

19.7% 

18.8% 

26.5% 

14.4% 

14.8% 

21.9% 

135%, 

20.2%, 

13.6% 

11.2% 

20.6% 

28.2% 

12.2%) 

18.7% 

34.1% 

30.9% 

16.4% 

13.2% 

11,4% 

26.3% 

27,8"/r, 

11A% 
97 

My Work Experience (continued) 

5. llike 

2012 Governml2otwide 

2012 Department of Commerce 

2012 Office 'Of Inspector Gener(J11 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

6. lknow what 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

7. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Offlce of inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

U~,Da"l1n~ln'l' of Commerce 

of Inspector General 

1st Level 

682.133 83.8%. 

19,708 82.5% 

110 63.3% 

122 74,1% 

59 81.1% 

681,765 80.1% 

19,699 82.9% 

110 61.2% 

122 54.9%-

60 66.2%1-

684,790 96.5°/(1-

19,782 96.9% 

116 97.0% 

122 95.0% 

60 98.2% 

10.4% 

11.9% 

23,8% 

13.0% 

14.2% 

10.9% 

17.9% 

21.7% 

23% 

2.3% 

1.7% 

3.2% 

1.8% 

5.7% 

5.6% 

12.9% 

12.9%. 

4.7% 

9.0% 

7.1% 

24.5% 

27,1% 

12.2% 

12% 

0.8% 

1.3% 

1.8% 

0.0% 
98 

My WorK Experience (continued) 

8. lam 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of lnspectof General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

Oenartnu!rlt of Commerce 

of Inspector General 

1st Level 

685,285 91.4% 

19,795 90.0% 

110 80.8% 

121 88,0% 

60 84.4%, 

7.1% 

8.6% 

17.3% 

10.2% 

15.6% 

15% 

1.4% 

2.0% 

9. llwve sufficient resources (for e:xmnple. people, material .. , budget) to get my job done. 

2012 Govemmentwide '~~" __ 

"'III 2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of inspector Genera! 

2006 Office of Inspector General 

10. My workload is reasonable. 

2012 Governmenwide 

2012 Department of Commerce 

2012 Offi-ce of inspector General 

2011 Office of Inspector General 

2010 Office of Inspector Genera! 

2008 Office of Inspector General 

2006 Office of Inspector General 

684,607 48.0% 

19,780 53.3% 

109 37.1% 

122 34.4% 

59 60.5% 

683,078 58.9% 

19,739 SR8% 

107 54.3% 

123 55.9% 

58 51.1% 

16.9% 

16.5% 

1$.8% 

233(% 

25.8% 

16.2% 

18.4% 

22.7% 

17.8% 

25.1% 

35.1% 

30.2%. 

44,1% 

423% 

13.7% 

24.9% 

22.8% 

23.0% 

263% 

23.8% 

1,855 

44 

1,258 

31 
99 

My Work Experience (continued) 

11. A(y tnlents are used well in tiu!lvorkplace. 

2012 Governmentwlde 671,969 59.5% 16.8% 23.7% 3,517 

2012 Department of Commerce 19,451 61.8% 1BA(l/u 19.8l.1/Q 67 

2012 Office af Inspector Gen~af 166 39.4% 23.0% 37.6% 

2011 Office of Inspector General 123 42.3% 163% 41.4% 

2010 Office of Inspector General 59 44,8% 28.0% 27.2% 

2008 Office of Inspector General 

2006 Office of Inspector General 

12, I know how my work relates to the agency's goals and priorities. 

2012 Governmentwide 681,644 83.7% 10.1"10 6.2%. 2.503 

2012 Department of Commerce 19,710 85.2% 9.4% 5.4% 49 

2012 Offlc-¢ of Inspector G-enera,f 107 720% 12.1% 15.9% 

2011 Office of Inspector General 121 71.9% 14.8% 13.4% 

2010 Office of Inspector General 59 80.6% 143"/.:1 5.1% 

2008 Office of Inspector General 

2006 Office of Inspector General 

13. The lVork 1 do is important.. 

2012 Governmentwide 680,836 91.2% 6.2% 25% 1,769 

2012 Department of Commerce 19,664 89.9% 75% 2.7% 52 

2012 Off tee of Inspector General 1(l$ 74.9% 16.0% 9,1% 

2011 Office of Inspector General 122 783"/0 13.7% 8.0% 

2010 Office of Inspector Genera! 58 83.0% 14.9% 2.1(1/Q 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 
100 

My Work Experience (continued) 

Deoartl1nel1t of Commerce 

of Inspector General 

1st Level 

(fore:campie, noise level1 temperature, lighting, cleanliness in the workplace) allow employees to perjorm their 

2012 Governmentwide 

2012 Department of CommerCE! 

2012 Office oftns:p~tor General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

15. My performance appraisal is afair reflection of my peifonnance. 

2012 Governmentwide 

2012 Department of Commerce 

2(1.12 Office of Insp-ecto:r General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

16. I aJn held accountable for achieving results. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Insp¢ctor General 

2011 Office of Inspector General 

2010 Office of lnspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

683,306 675% 

19,689 74.4%, 

1(}9 70,4% 

123 675% 

59 67.6% 

675,095 68.8% 

19,650 72.3% 

14.0% 

13.0% 

14.7% 

16.4()jQ 

17.8% 

14.8% 

14.8% 

1tJ$ 54.7% 22.2:% 

120 60.8% 

59 64.8% 

681,102 82.8% 

19,696 85.3% 

109 76,8% 

122 73.7% 

22.0% 

15.7"/(1: 

11.8% 

10.6% 

14,7% 

20.3% 

59 70.2% 24.4% 

18.5% 

12.6% 

14.9% 

16.1% 

14.5'V", 

16.4'l/o 

12.9% 

23,1% 

17.2% 

19.4% 

4,2% 

8.4% 

5.9% 

SA% 

2,522 

106 

10,306 

149 

3,032 

56 
101 

My Work Experience (continued) 

17. 

2012 Govemmentwlde 

2012 Department of Commerce 

2012 Office of inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector Genera! 

2006 Office of Inspector General 

18. My training needs are assessed. 

2012 Governmentwide 

2012 Department of Commerce 

2012: Office of Inspector General 

2011 Office of inspector General 

2010 Office of Inspector Genera! 

2008 Office of Inspector General 

2006 Office of Inspector General 

19. 

2012 Govemmentwide 

2012 Department of Commerce 

2Q12 Office of Inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector Genera! 

2008 Office of Inspector Genera! 

2006 Offke of Inspector General 

• J", .. "",rrrn .. ,n. of Commerce 

of Inspector General 

1st Level 

witlwutfearofreprisal. 

656,457 61.5% 

18,431 63.9% 

100 55,4% 

118 54.5%-

56 63.3% 

677,385 53.1% 

19,550 52.2% 

108 42.3% 

119 42.6% 

59 61,9% 

19.5% 

22.0% 

16.6% 

19.6% 

15.0% 

23.4"1" 

24.7% 

23.2% 

22.6% 

16,2% 

19.0% 

14.2% 

28.0% 

25,9% 

21.T'VI:< 

23.6% 

JU% 

34.8% 

21.9% 

27,152 

1,327 

7.250 

232 

I understood what I had to do to be rated at dfffimmt petfOrmonce levels (for example, 

668.068 67.5% 

19,436 70.0% 

101 52,7% 

121 54.0'V" 

S9 59.6% 

14.8% 

14.5% 

11).0% 

15.8% 

17.8% 

17.7% 

15,6% 

29.3% 

30.2% 

22.6% 

18.229 

387 
102 

of Commerce 

of Inspector General 

My Work Unit 

2Q 

2012 Governmentwlde 

2012 Department of Commerce 

2012 Office of Inspector GeMral 

2011 Office of Inspector General 

2010 Office of Inspector Genera! 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

1st Level 

21. My 'Work unit is able to ret.;ruit people with the right skills. 

2012 Govemmentwide 

2012 Department of Commerce 

2()12 Office of Inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

22. Promotilms in my work unit are based on merit. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Insf,)«tor General 

2011 Office of Inspector General 

2010 Office of Inspector Genera! 

2008 Office of Inspector Genera! 

2006 Office of Inspector General 

685,205 72.8% 

19,824 78-0"/" 

110 10,4% 

115 73.3% 

59 81.8% 

662,253 435% 

18,908 53.8% 

103 41,8% 

117 47.0% 

57 56.2% 

645,137 33.51V() 

18,757 525% 

1'06 33.1% 

110 36.7% 

52 39.2% 

27.2% 

253% 

23,1% 

21.5% 

28.6% 

29.2% 

24.1% 

22.3% 

27.7% 

38.6% 

14.3% 

13.1% 

16,7% 

14.2% 

7.3% 

29.4% 

20.9% 

35,1% 

31.5% 

15.2% 

37.3% 

23.3t>/o 

39,6% 

35.6% 

22.2% 

12.9% 

8.8% 

12,9% 

23,872 

917 

39,208 

1,019 

13 
103 

My Work Unit (contlnuod) 

23. In my work unit. steps art! taken to deallvith a poor peJ;former who cannot or will not improve. 

-

2012 Governmentwide 632,125 29.4% 27.8% 42.8%, 51,759 

2012 Department of Commerce 17,578 38.4% 29.1% 32,6% 2,205 

2012 Office of Inspector General 94 35.0% 29.3% 35.7% 14 

2011 Office of Inspector General 106 31.4% 33.S% 35.1% 17 

2010 Office of Inspector General 54 273% 34.3% 38.4% 

2008 Office of Inspector General 

2006 Office of inspector General 

24. In my work lln~ differences in petj'ormance 4rt! recognized in a tnewtingfill way. 

2012 Governmentvvide 652,024 33,8% 29.2% 37,0% 32.505 

2012 Department of Commerce 18,494 42.9(1/Q 29.3% 27.8% 1,283 

2012 Office of Inspector General 106 34.6% 25.9% 39.5% 

2011 Office of Inspector General 109 31,3(1/" 30.7% 38,0% 13 

2010 Office of !nspector Genera! 53 36.2% 28.9% 35.0% 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

2,. Awards in my work unit depend on how well employees pet/imn tludrjobs. 

2012 Governmentwide 648,791 41,0% 25.4% 33.6% 35.445 

2012 Department of Commerce 18,813 55.2%. 21.9% 22.8% 942 

2012 Office of fns.pedor General 10S 34.7% 22.4% 42.8% 

2011 Office of Inspector Genera! 113 45.5% 18.7% 35,8% 

2010 Office of lnspector General 57 42.4% 27.1% 30.5% 

2008 Office of Inspector General 

2006 Office of Inspector General 
104 

My Work Unit (continued) 

26. Bmployees in my work unit sharejoh knowledge with each other. 

2012 Governmentwide 681.951 71.3% 14.6% 13.1% 2.878 

2012 Department of Commerce 19.656 74]% 143% 11.0% 116 

2012 Office of tnspector General lQ7 65.3% 17.7% 16.9% 

2011 Office of Inspector General 121 67.9% 16.0% 16.1% 

2010 Office of Inspector General 59 74.3% 14.8% 10.9% 

2008 Office of inspector General 

2006 Office of Inspector Genera! 

27. The skill level in my work ul1it has improved in the P(U't year. 

2012 GovemrnentlNide 661.501 54]"Vo 28.6% 16.8"/0 23.067 

2012 Department of Commerce '18.738 56.9% 30.3% 12.8% 1.038 

2012 Office of Inspector General 105 47.1% 22.9% 30.0% 

2011 Office of Inspector General 118 49.5% 32.9%1 17.6% 

2010 Office of Inspector General 59 63.9% 26.9%, 9.2% 

2008 Office of Inspector General 

2006 Office of Inspector General 

28. How 

2012 Governmentwide 683,823 83AC/c 13.6% 3.0% 

2012 Department of Commerce 19.781 88.6% 9.5% 1.9% 

2012 Office of inspector General 110 77.2% 18.3% 4.$% 

2011 Office of Inspector General 123 73.3% 21,1% 5.6% 

2010 Office of Inspector General 60 8L9% 18.1% 0.0% 

2008 Office of inspector General 

2006 Office of Inspector Genera! 
105 

My Agency 

29. The workforce has thejob-relevant knowledge and skills necessary to accompli .. h organizational goals. 

2012 Governmentwide 662.287 71.6% 17.2% 11.2% 9.223 

2012 Department of Commerce 19,200 76.9% 15.0% 8.0% 337 

2012 'Office of Inspector General 104 62.1% 183% 19.6% 

2011 Office of Inspector General 115 62.8% 17,7% 19.5% 

2010 Offk:e of Inspector Genera! 55 74.0% 20,3% 5.7% 

2008 Office of Inspector General 

2006 Office of Inspector General 

30. Employees have afeeling cifpersonal empuwerment with respect to work processes. 

2012 Govemmentwide 657.623 45.2%) 26.0% 28.8'% 13.810 

2012 Department of Commerce 18,998 51,7% 25.4% 23.0% 532 

2Q12 Offlc-e of Inspector General 10S 26.6% 26.9% 52.5% 

2011 Office of Inspector General 119 28.8% 25.6% 45.6% 

2010 Office of Inspector General 52 52.0% 26.7% 21.2% 

2008 Office of Inspector General 

2006 Office of Inspector General 

31. 

2012 Governmenhljide 658,648 48.4% 24.1% 275% 11.646 

2012 Department of Commerce 19,163 58.6% 21.9% 19.4% 327 

2012 Office of inspector General 107 42.1% 24.9% 33.0% 

2011 Office of Inspector Genera! 118 50.6% 22.5% 26.9% 

2010 Office of Inspector General 57 51.0% 35.6% 13.4% 

2008 Office of Inspector General 

2006 Office of Inspector General 
106 

My Agency (continued) 

32. Creativity and innovation are rewarded. 

2012 Governmentwkle 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector Genera! 

2006 Office of Inspector General 

33, Pay raises depend on haw well employees perform their jobs. 

2012 Governrnentwlde 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector Genera! 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

650,663 385% 

18,894 46.4% 

103 29,5% 

113 352% 

55 36.5% 

628,870 21.6% 

18,445 39.4% 

29.6% 

29.0% 

28.4% 

27.7% 

41.3% 

2R1% 

25,6% 

100 2$.3% 26-.5% 

111 323% 

53 26.0% 

29,5% 

37,2% 

31.9% 

24.7% 

42.0% 

37.1% 

22,2% 

50.2% 

35.1% 

18,726 

584 

40,108 

1,042 

10 

the w()rkplace U'orexample, recruiting minorities and women, training in awareness 

2012 Governmentwide 

20·12 Department of Commerce 

20.12 Office of Inspector G~H\erat 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

625,285 56.8% 29.1 % 

113,032 64.2% 25.6% 

105 51,5% 

109 41,2% 

50 53.3% 

27.8% 

37.3% 

35.3% 

14,1% 

10.2% 

:W.1% 

21.511/0 

11.4% 

44.977 

1.469 

12 
107 

My Agency (continued) 

35. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office ofmsj:MH,:wr GeMtal 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

of Commerce 

of Inspector General 

1st Level 

662,923 

19,135 

103 

115 

57 

76,9% 13.4% 9,7% 7,525 

83.7%f 11.3% 4,9% 39. 

84.9% 11.8% 3,3% 

71.7% 18.4% 9.9% 

79.7% iRsoA 1.6% 

16. My organization has prepared employees for potential security threats. 

2012 Governmentwjde '-~1111""'''1II 2012 Department of Commerce 

2012 Office of Inspector Gefland 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

661,974 78.0% 

19,204 80.8% 

lOa: 75.2% 

118 64.1% 

58 75.5% 

37. Arbitrary action, persontll favoritism and coerdonfor partisan political purposes ore not tolerated. 

2012 Governmentwide 636,579 51.2% 

2012 Department of Commerce 18,042 61.7% 

2012 Offl<:e of lnspedor Genera! 102 47.7% 

2011 Office of Inspector General 111 383% 

2010 Office of Inspector Genera! 56 42.8% 

2008 Office of Inspector Genera! 

2006 Office of Inspector General 

13.9% 

13,7°/!} 

17.4% 

24.6% 

22.4% 

23.4%. 

21<8% 

23,0% 

25.0% 

35.5% 

8.2% 

5.5% 

],3% 

11.3% 

2.1% 

25.4% 

16.5% 

29,3% 

36.7% 

21.7% 

7,292 

288 

32,982 

1,440 

10 
108 

My Agency (continued) 

38. Prohibited Personnel Practices (for example, illegally discriminating for or against any employee/applicant, obstructing aperson's 

right to compete,for employment, knowingly violating velerans' prtiference requiremellts) are not tolerated. 

2012 Govemmentwide 

2012 Department of Commerce 

2D12 Office oflnspectQf General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

39. Jl-fyagency is succesiful at accomplisldng its missiolI. 

2012 Governmentwrde 

2012 Department of Commerce 

2:012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

2012 Governmentwidc 

2012 Department of Commerce 

2012 Office of Inspector G~meral 

2011 Office of Inspector General 

2010 Office of inspector Genera! 

2008 Office of lnspector Genera! 

2006 Office of Inspector General 

615,998 65,9% 

17,562 73.2% 

20.0% 

18.0% 

96 54,9% 26,3% 

111 53.4% 

53 56.4% 

658.423 76A!J./(1 

19.099 825% 

28.0% 

33.8% 

16.7% 

13.1% 

101 5M% 24,1% 

118 64.8% 

58 78.9% 

669,665 

19,513 

1011 

121 

59 

22.3% 

15.8% 

66.8% 

74.0% 

31,6% 

44.3% 

51.7(\/1} 

14.1% 

8.7'Yo 

111.8% 

18.6% 

9.8% 

6.9% 

45% 

15.9% 

12.9% 

5.3% 

19.9% 

16.3% 

23.0% 

24.71}/1} 

39.4% 

51,862 

1,904 

13 

10,424 

357 

13.4%~ 

9.8% 

45,4% 

31.0% 

8.8% 
109 

My Agency (conllnued) 

41. 1 b!l!el'e tile results of this surv~' will be used to make my agency a better place to work. 

2012 Govemmentwide 606,522 42.4%, 29.1% 28.4% 63,385 

2012 Department of Commerce 17,673 46.1% 29.6% 24.3% 1,873 

2012 Office oftnspoctof General 97 30,8% 19,9% 49.4% 12 

2011 Office of inspector Genera! 111 39.0"/0" 26.5% 34.5% 11 

2010 Office of !nspector Genera! 51 49.1% 27.5% 23.5()/Q. 

2008 Offfce of inspector General 

2006 Office of Inspector Genera! 

My SupervisorlTeam leader 

4') My supervisor supports my need to balance work and other life issues. 

2012 Governmentwlde 663,393 76.7% 11,9% 11.4% 4,030 

2012 Department of Commerce 19,376 83.4% 9.8% 6.8% 123 

2012 Office of lnspect,oF General 108 81,2% 7,<)% 11,7% 

2011 Office of Inspector General 121 82.4% 9.0% 8.6% 

2010 Office of Inspector Genera! 58 77,3% 8.8% 13.9% 

2008 Office of Inspector General 

2006 Office of Inspector General 

~!!!.!.,.~!.!!!:!..-~h opportunities to demon:trate my leadership skills. 

2012 Governmentwide 663,693 65.2% 17.7% 17.1% 2,957 

2012 Department of Commerce 19,333 68.5% 17.9% 13.6% 143 

2{)12 Offh::;e of Inspector General 100 66,1% 12,2% 21.7% 

2011 Office of Inspector Genera! 121 58.8t1/o 19.1% 22.1% 

2010 Office of Inspector General 58 66.2% ... 16.8% 17.1% 

2008 Office of Inspector General 

2006 Office of Inspector General 
110 

n .. , ... "rtn' .... t of Commerce 

of General 

1st Level Trend Report 

My Supervisorrream leader (continued) 

44. Discllssions with my sttpervisfJrlteam leader about nol perfonnance are worthwhile. 

2012 Governmentwide 658,206 62.2% 19.2% 18.6'% 6.888 

2012 Department of Commerce 19.279 68.7% 16.9% 14.4~/j). 157 

2012 Office of tn$pectorGen~ral 107 61.Q% 18.6% 20.4% 

2011 Office of Inspector General 120 64.4% 16.4% 19.2% 

2010 Office of Inspector Genera! 58 50.6% 22.6% 26.8% 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

45. My silpervisoriteam leader is comml1ti!d to a worliforce represeflta1ive qfall segments of soc· 

2012 Govemrnentwlde 615.578 64.5% 24.6% 10.9% 49.711 

2012 Department of Commerce 17.644 70.1% 22,7% 73% 1,790 

2012 Office of Inspector General 103 69.6% 20.7% 9.8% 

2011 Office of Inspector General 109 63.9% 27.9% 8.2% 13 

2010 Office of Inspector Genera! 53 56.8% 33.1% '10,2% 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

46. My supervisor/team leader provides me with constnlctive suggestions to improve my job perfonnance. 

2012 Governmentwlde 662,244 60.8% 20.6% 18.7% 3.265 

2012 Department of Commerce 19.351 66.4% 19.41

"/(1 14.3% 85 

l612 Office of fnspedor General 108 63,4% 14.9% 21.7% 

2011 Office of Inspector General 119 59.1% 17.1% 23.7% 

2010 Office of Inspector General 57 48.3'% 24A% 27.3% 

2008 Office of Inspector General 

2006 Office of Inspector General 
111 

UE!'Dalnll'l!'!,nl' of Commerce 

of Inspector General 

1st Level 

My SupervisorlTeam Leader (continued) 

47. Supenisorslteam leaders ill my work unit support employee development. 

2012 

2012 

Governmentwlde 

Department of Commerce 

.~ .. -.. - 2012 Office of Inspector Gtmeraf 

2011 Office of Inspector General 

2010 Office of lnspector Genera! 

2008 OffIce of Inspector Genera! 

2006 Office of Inspector General 

41i. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector Genera! 

2008 Office of lnspector General 

2006 Office of Inspector General 

49, leader treats me with 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

657,845 65,1% 

19,227 72.4% 

107 68,2% 

120 63A% 

58 65.1% 

1R6% 

16.1% 

13.6% 

24.1% 

24.0(1/0 

665,079 74.3% .. 

19,488 80.7% 

lQ9 77.&% 

122 77.2% 

59 76.4% 

664,171 79.4% 

19,461 84.3% 

108 79.1% 

122 82.2% 

58 68.7% 

16.3% 

11A% 

18,2% 

12.5% 

10,9% 

13.2% 

10.7% 

9,1% 

11,0% 

15.0% 

11.1% 

8.8% 

11.9% 

7.9%) 

18,8% 

7,510 

219 

125% 

8.6Qjn 

13.1% 

95% 

6.9% 

9.0% 

9.9% 

12.6% 
112 

My Supel'VisorfTeam leader (continued) 

50. 

2012 Governmentwide 664.039 76.8% 10.5% 12.7% 

2012 Department of Commerce 19.436 87.2% 6.9% 5.9% 

201:2 Office o-f Inspector General 109 $83% 7.5% 

2011 Office of Inspector General '122 77.2% 11.7% 11.1% 

2010 Office of Inspector Genera! 59 67.4% 17.1% 15.5"/(\ 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

51. I haw! trust and 

2012 Governmentwide 663.909 65.8% 17.2% 17.0% 

2012 Department of Commerce 19.451 73.0% 14.6% 12,4% 

2012 Offi-ce of Inspector General 107 10.7% 13.7% 15.5% 

2011 Office of Inspector General 121 70.0% 15.6% 14.5% 

2010 Office of Inspector Genera! 59 59.2% 23.0% 17.9% 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

52. 

2012 Governmentwide 663.472 68.4(\/" 18.9% 12.6% 

2012 Department of Commerce 19,458 755% 15.8% 6.7% 

2012: Office of Inspector General 108 75.2% 14.1% 10.7% 

2011 Office of Inspector General 120 73.0% 15.3% 11.7% 

2010 Office of Inspector General S9 63.711/11 24.0% 12.3% 

2008 Office of Inspector General 

2006 Office of Inspector General 
113 

Leadership 

n .. ,,.,,,,",,n .. ,n'l' of Commerce 

of Inspector General 

1st Level 

53. In my organization, leaders~gellerllle high lel'~!:: of motivation and cOllunitment in the workforce. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

54. My organization's leaders maintllin high standards of honesty and integrity. 

2012 Governmenh.yide 

2012 Department of Cammer!;e 

2012 Office of Inspector -General 

2011 Office of Inspector Genera! 

2010 Office of Inspector Genera! 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

651,887 42,9% 26.2% 

19,130 4RO% 26.6% 

107 31.3% 20,2% 

119 34,4% 23.2% 

57 48.7% 34.9%. 

638.553 55.1% 23,P/l> 

18.475 60.8% 22.6% 

10S 46,1% 14,3% 

113 47.9% 25.2% 

55 71.1% 18.3% 

30.9{1/n 

25.4% 

48.5% 

42.5% 

16.4% 

21.8% 

16.6% 

39.6% 

26.9% 

10.6'% 

6,310 

229 

19,203 

863 

55. Managerslsupeni~orslteam leaders work weU with employees of different backgrounds. 

'~~I ___ - 2012 Governmentwlde 631,883 63.4% 22.2% 14.41% 24,592 

2012 Department of Commerce 18,228 69.9% 20.0(l/., 10.1% 1,065 

2012 Office of Inspector Genera! 100 51.8% 24.0% 24,2% 

2011 Office of Inspector Genera! 110 57.4% 29.9% 12.7% 10 

2010 Office of Inspector Genera! 54 59.2% 30.0°/(1 10J3% 

2008 Office of !nspector General 

2006 Office of inspector General 
114 

Leadership (continued) 

56. 

2012 Governmentwlde 

2012 Department of Commerce 

2012. Office of Inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

651,106 62,4%., 

19,116 66]% 

105 50.7% 

120 63.3% 

57 63.6% 

57. Mauagers review and evaluate tTle organization's progress wward meeting its goals and ohjectives. 

2012 Governmentwide 621.279 62.01!/\> 

2012 Department of Commerce 18.250 67,7% 

2(}12 Offlce of Inspector General 104 6U% 

2011 Office of Inspector General 113 70.3% 

2010 Office of Inspector General 53 67.9% 

2008 Office of Inspector General 

2006 Office of Inspector General 

20.8% 

18.6% 

24,8% 

23.4% 

20.8% 

18.4% 

16.0% 

24,6% 

28.5% 

18.1% 

14.6% 

115% 

11.0% 

13.7% 

7S'/() 

58. Mflnage:s promote communication among different work units (for example, about pfojetts,goals, "ceded resources). 

2012 Governmentvvide 639.009 53.3'% 23.0% 23.8% 

2012 Department of Commerce 18.709 56.7% 22.8% 20.5% 

2012 Office of Inspector General lOS 36.6% 26.3% 36,6% 

2011 Office of Inspector Genera! 119 45.1% 24.2% 30]°/;). 

2010 Office of Inspector General 55 48.2(j/o 32]% 19.1% 

2008 Office of Inspector General 

20Q6 Office of !nspector General 

5.427 

163 

34.259 

1,009 

17.366 

592 
115 

leadership (continued) 

!)e![!~lrtITl<!!!nt of Commerce 

of inspedor General 

1st Level 

59. Managers support collaboration (U'70SS work units to tlccomplish work~_ob""ifeICltiVlels.IIIIIIIIIII.111I 

2012 Governmentwide 637,138 56,9% 23.0% 20.1% 18,374 

2012 Department of Commerce 18,681 61.8% 21.8% 16.4% 601 

2012 Office of Inspector General 106 45,1% 31,6% 23.4% 

2011 Office of lnspector General 119 54.3% 25.0% 20.7% 

2010 Office of Inspector Genera! 56 58.0% 33,011/ .. 9,0% 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

60, Overall, how good ajob do YOllfeel is being done by the manager directly above yOW' immediate supervisor Iteam leader? 

2012 Govemmentwide 625,622 57.9% 24.0% 18.1% 30,480 

2012 Department of Commerce 17,769 64,0% 225% 13,6°/1) 1,549 

2012 Office of inspector General 1U2 53.0% 20.8% 26.2% 

2011 Office of Inspector General 113 50.8% 26.6% 22.6% 

2010 Office of Inspector Genera! 53 61.8% 32.6% 5.6% 

2008 Office of Inspector Genera! 

2006 Office of Inspector General 

6J, I have a high level of respect for t1{Y organization's senior leaders. 

2012 Governmentwide 648,951 54.1% 23.3°/" 22.6% 7,190 

2012 Department of Commerce 18,959 57.2% 23.2% 19.6% 359 

lOll: Office of Inspector Genera! 101 36.8% 26,1% 37,1% 

2011 Office of Inspector General 118 41.7% 26.2% 32.1% 

2010 Office of Inspector General S5 55.3% 28.5% 16.2li/ o 

2008 Office of Inspector General 

2006 Office of Inspector General 
116 

leadership (conllnued) 

62. 

2012 Governmentwide 598,453 54,0% 27,6%) 18.4% 56,981 

2012 Department of Commerce 17,314 62.7(1/0 25.3% 12.0% 2,011 

2U12 Office of inspector General 101 46.0% 20.3% 33.7% 

2011 Office of Inspector General 111 45.1% 31.1% 23.9% 

2010 Office of Inspector General 54 72]% 17.5% 9.8% 

2008 Office of Inspector General 

2006 Office of lnspector General 

My Satisfaction 

63. 

2012 Governmentwide 652,744 51.6%) 23.7°1!; 24.7% 

2012 Department of Commerce 19,287 55.0% 23.6% 20.4% 

2012 Office of Inspe<::tor General 108 38.6% 22,3% 39.1% 

2011 Office of Inspector General 120 41]% 175% 40.7% 

2010 Office of Inspector General 59 48.4% 30.6% 21.0% 

2008 Office of Inspector General 

2006 Office of Inspector General 

64, 

2012 Governmentwide 652,105 48.4% 24.2% 275% 

2012 Department of Commerce 19,262 52.4% 233% 24.2% 

2012 Office of Inspector General 100 32.9% 20.6% 40,5% 

2011 Office of Inspector General 120 382%\ 14.5% 47.3% 

2010 Office of Inspector General 59 48.8°/.;> 26.4% 24.9% 

2008 Office of lnspector General 

2006 Office of Inspector General 
117 

My Satisfaction (continued) 

65. 

2012 Governmentvvide 650.832 48.0% 23.8% 28.2% 

2012 Department of Commerce 19.221 56.7% 22.1% 21.2% 

2012 Office of Inspector General 107 37.3% 34.6% 28.1% 

2011 Office of Inspector General 119 43,9% 27.2% 28.9% 

2010 Office of Inspector Genera! 59 54.3% 26.8%. 18.9% 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

66. 

2012 Govemmentwide 650.372 43.4% 293% 27.3% 

2012 Department of Commerce 19,191 47,0% 29.5% 23.5% 

2012 Offfce of Inspector Genarat 100 31.1% 22.3% 46.6% 

2011 Office of Inspector Genera! 120 33,4% 29.6% 37,0% 

2010 Office of Inspector General 59 45.6% 33.9% 20,5% 

2008 Office of Inspector General 

2006 Office of Inspector General 

67. 

2012 Governmentwide 650.630 36.4% 28.4% 35.1% 

2012 Department of Commerce 19.236 41.8% 30.4% 27.8'Yo 

2().12 Office of Inspector General 100 20.4% 34.3% 45.2% 

2011 Office of Inspector General 120 20.4% 33.3%, 46.3% 

2010 Office of !nspector General 59 30.4% 35.8% 33.9% 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 
118 

My Satisfaction (continued) 

68. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Offl-ce of Inspecwr General 

2011 Office of !nspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

69. 

2012 Governmentwlde 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector Genera! 

201 0 Office of Inspector General 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

70. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector Gene:ral 

2011 Office of Inspector Genera! 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

nf'l'l"I::Irin\"'flt of Commerce 

of Inspector General 

1st Level Trend Report 

650,514 53.7% 

19.219 57.5% 

107 40.7% 

59 61,5% 

23.5% 

23.9% 

17.9% 

292% 

650,211 68.0'% 17.3% 

19,227 71.7% 15.8%· 

lOS 45.S% 23.9% 

119 49.41)/1) 1 B.O% 

59 60.0%; 21.1% 

650,947 58.8% 17.2% 

19,247 65.1% 16.6% 

107 59.8% 22.6% 

120 63.7% 26.2% 

59 68.8% 17.3% 

22.8% 

18.6°/" 

41.4% 

42.3% 

93% 

14.7% 

12.5% 

30.4% 

32.5'% 

18.9% 

24.0% 

18.2% 

11.1% 

10.0% 

13,9% 
119 

My Satisfaction (continued) 

71. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 OffIce of Inspector Genera! 

Work/Life 

72. 

2012 Governmentvvide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Jnspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

73. Please select the 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of lnsp-ector General 

2011 Office of Inspector Genera! 

2010 Office of lns~ctor General 

2008 Office of Inspector General 

2006 Office of Inspector General 

UI!'nl'll't~I"I@ll"It of Commerce 

of Inspector General 

1st Level 

651,{)64 58.9% 21,6% 

19.229 65.1% 19.6%, 

107 31.3% 21.4% 

120 42.7% 20.6% 

59 53.5% 

19.5% 

153% 

41.3% 

36.7% 

14.6% 

to telework? Telewoyk means working at a locah'on (}therthan your nonna! 'work site 

iltatBEST 

631,985 

19,061 

108 

120 

651,238 362% 57.9% 

19.237 70.8% 25,2% 

2.u"!\} 

108 93.6% 

120 95.1% 

7.7%) 

13.2% 17.7% 

3.3% 42.0% 

0.9% 31.4% 

4.5% 

4.9% 

3.8% 

7.711>/n 

12,8% 

16.3% 

5,9% 

4.0% 

0.0*/" 

9.6%1 

16.7% 

28.0% 

34.9{'1" 

(coNtinued) 
120 

Work/Life (con!inood) 

7.1 Please select tile 

2012 Govemmentwide 

2012 Department of Commerce 

20:12 Offl-ce of fnspector Genera! 

2011 Office of Inspector Genera! 

2010 Office of Inspector Genera! 

2008 Office of Inspector Genera! 

2006 Office of Inspector General 

74. Doyou 

2012 Govcrnmentwide 

2012 Department of Commerce 

2012 Office of Inspector Genera! 

2011 Office of Inspector General 

2010 Office of Inspector General 

20Q8 Office of Inspector General 

2006 Office of Inspector General 

'hat BEST 

631,985 35.0"'/0 

19,061 115% 

108 0.7% 

120 1.7% 0.0% 

648,172 32.3% 

19,215 55.4% 

22.2%l 

13.4% 

3.8% 

4.2% 

45.3% 

37.0% 

106 43.5% 49.5% 

120 45.2% 40.8% 

75. Do ),011 participate in tltefoflowillg WorkILife programs? Health and Wellnes$ Programs (for example, exercise .• medical 

sC1'eening~ quit smoking programs) 

2012 Governrnentvl/ide 646,836 29.3% 58,7% 

2012 Department of Commerce 19,138 28.9% 63.9% 

2012 Office of InsJX!ctor General 106 12.9% 72.6% 

2011 Office of Inspector General 119 19.9°/\l 66]% 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

12.9''/0 

14.3% 

9.4% 

10.6% 

22.4% 

7,6% 

6.9% 

14.01>/0 

12.0% 

7.3% 

14.5% 

13.4% 
121 

Work/Life (continued) 

76. 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office -of Inspector General 

2011 Office of Inspector Genera! 

2010 Office of Inspector Genera! 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

77. 

2012 Govemmentwide 

2012 Department of Commerce 

2012 'Office of 1nspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

2012 Govemmentwlde 

2012 Department of Commerce 

2012 Office of inspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

645,355 14.0% 

19,072 12.3°/(1 

107 13.8% 

119 4,1% 

80.0% 

84,3% 

82.5% 

90.7% 

WorkILife programs? Child Care Programs (for e.t:ample, tlaycare, parenting class(!S, 

648,002 3]% 

19,164 4.0% 

107 0.0% 

118 0.9% 

647.966 2.5% 

19.136 2.9% 

10S 0.0% 

119 0.9% 

79.1% 

84.8% 

87.2% 

85.5% 

80.0% 

853%l86.3;)/Qo 

84.2% 

6.0% 

3.4% 

3.7% 

5.2% 

172% 

11.2% 

12.6% 

13.6% 

17.6% 

11.8% 

13.7% 

14.9% 
122 

Work/life (continued) 

79. How satisfied are you with tJwfoliowing WQrkILifit progrmm in your agency? Telework 

2012 Governrnentwlde 187,559 72.8% 17.5% 9.7% 

2012 Department of Commerce 11,156 82,6% 10.4% 7.0% 

2012 Ofi'k::e of Inspector General 00 62.3% 16.7% 21.0% 

2011 Office of Inspector General 100 82.7% 13.6% 3.7"/(1 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of inspector General 

"'The rcsulfs for (his item 011(V include empJoyi'CS who indicated thai they participated ill this: pmgraif/. 

80. }Jow soli.Vied are you with thefollowing Work/Life programs in y~!! agenc)'? Alternative Work Schedules (A WS) 

2012 Governmentwlde 228,200 88.5% 8.0% 350ft .. 

2012 Department of Commerce 10,795 93,9% 4A% 1.7% 

2612 Office of {nspector General 43 79,2% 4.$% 16.4% 

2011 Office of Inspector General 54 92.0% 6.1% 1.9(1/0 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

*The results/or this item only iudl/dc employees who indicatt>d that they participated in this program. 

81. How sati.y(ied are you with the/ollowing WorkILife progmms in your agency? Health and Wellness Programs (for example~ 

exercise~ medical screeJting~ quit smoking programs) 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office of Inspector General 

2011 Office of Inspector General 

2010 Office of Inspector General 

2008 Office of Inspector Genera! 

2006 Office of Inspector Genera! 

184,051 

5,391 

14 

19 

*The resultsfor this item on{l' indude employees who indicated thallhey partici[XIted in this program, 

80.0% 16.6% 3.4% 

85.tW" 12.1% 2.1% 

72.4% 13,2% 14.4% 

84.8% 15.2% 0.0% 

21,200 

276 

5,463 

133 

12,511 

319 
123 

Work/Life (continued) 

82. How satisfied are ),ou with tJlefollowing Work/Life programs in YOllr agency? Employee Assistance Program (EAP) 

2012 Govemmentwide 88.192 75.6% 20.6% 3.8% 

2012 Department of Commerce 2.348 783% 17.0% 4.8% 

2012 Office of Inspector General 13 84.9% 0.0% 15.1% 

2011 Office of Inspector General 5 60.9% 39.1% 0.0% 

2010 Office of Inspector General 

2008 Office of Inspector General 

2006 Office of Inspector General 

*The results/or this itNll on{Y include employees who indicah'il tlial lhey participated in this program. 

thefollowing WorkILije programs in your agency? Child Care Programs (for example, daycare, 

2012 Governmentwide 

2012 Department of Commerce 

2012 Office Qf JnspectQr ueneral 

2011 Office of inspector General 

2010 Office of Inspector General 

2008 Office of !nspector Genera! 

2006 Office of Inspector General 

18.627 

704 

0 

*The results/br this item ou{}' indude {'mph~yees who indicaJed that they participatcd in fllis program. 

72.0% 24.3% 3.7% 

73.4% 24.3% 2A% 

0.0% 0.0% 100.0% 

11.655 

281 

6.929 

232 

84. lltefollowing Work/Lye programs in yourtlgenc)'? Elder Care Programs (for example, support groups~ 

2012 Govemmentwlde 12,577 67.9% 30.0% 2.2% 5.846 

2012 Department of Commerce 525 71.6% 26.6% 1.8% 216 

2012 Office of Inspector General 

2011 Office of Inspector Genera! 2 49.3% 0.0% 50.7% 

2010 Office of Inspector Genera! 

2008 Office of Inspector General 

2006 Office of Inspector Genera! 

"'The reslIltsjor thL~ item only include employees who indicated tllat they participated in this program. 
124 

Demographic Questions 

85. 

R6. 

89. 

Headquarters 

Fie!d 

Non-SupelVisor 

Team Leader 

Supervisor 

Manager 

Executive 

Male 

Female 

Yes 

No 

Race 

American lndian or Alaska Native 

Asian 

Black or African Amelican 

Native Hawaiian or Other Padfic Islander 

White 

Two or more races {Not Hispanic or Latino) 

72 67.9% 

34 32.1 "It> 

62 59,6% 

6.7% 

23 22,1°/.., 

5.8% 

5.8% 

47 46.s'V() 

54 53.5% 

6.0% 

94 94.0!Vo 

4.3'lj() 

8.6% 

22 23.7% 

0 0.0% 

59 63.4% 

0.0% 
125 

Demographic Questions (continued) 

90, 

91, 

25 and under 

26-29 

30-39 

40-49 

50-59 

60 or older 

Federal Wage System 

GS1·6 

G57-12 

GS 13~15 

Senior Executive Service 

Senior Level (SL) or Scientific or Professional (ST) 

Other 

Less than 1 year 

1 to 3 years 

4 to 5 years 

6 to 10 years 

11 to 14 years 

15 to 20 years 

More than 20 years 

tile Federal Government 

93. Howlong 

Less than 1 year 

1 to 3 years 

4 to 5 years 

6 to 10 years 

11 to 20 years 

More than 20 years 

3.1% 

7.2% 

23 23.7'Vo: 

36 37.1% 

27 27.8% 

1.0% 

0,0% 

0.0% 

23 22.8% 

71 70.3(1/(1 

4.0% 

2.0(1/(1 

1.0% 

0,0% 

30 30.6% 

3.1% 

14 14.3% 

16 16.3% 

92% 

26 26.5% 

Department of Justice~ 

1,O(\/(} 

52 52.5% 

2.00/n 

17 17.2!J% 

" 14.1% 

13 13.1% 
126 

Demographic Questions (continued) 

94. 

97. 

98. 

within 

No 

Yes, to retire 

Yes, to take another job within the Federal Government 

Yes, to take another job outside the Federal Government 

Yes, other 

Within one year 

Between one and three years 

Between three and five years 

Five or more years 

Heterosexual or Straight 

Gay, Lesbian, Bisexual. or Transgender 

! prefer not to say 

Yes 

No 

Yes 

No 

46 43.8% 

1.9% 

45 42.9% 

7.6% 

3.8% 

1.0% 

5.1% 

'.0% 

92 92.9~!o 

84 84.8% 

4.0% 

11 11.1% 

Coast 

11 10.6% 

93 89.4% 

2.9% 

102 97.1% 
(127) 

TOP CHALLENGES FOR SCIENCE AGENCIES: 

REPORTS FROM THE INSPECTORS GENERAL 

(PART II) 

THURSDAY, MARCH 14, 2013 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OVERSIGHT

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, D.C. 

The Subcommittee met, pursuant to call, at 12:37 p.m., in Room 

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

[Chairman of the Subcommittee] presiding. 
128 

LAMAR S SMITH, TeKas. 

CHAIRMAN 

(tonllrrss of thE tinitcd ~mt£s 

flouse of 'iRcprcscntatiocs COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

2321 RAYBURN HOUSE OFfiCE BLl'!.OING 

WASHINGTON, DC 20515-6301 

Subcommittee on Oversight 

Top Challenges for Science Agencies: 

Reports from the Inspectors General- Part 2 

Thursday, March 14,2013 

12:30 p.m. to 2:30 p.m. 

2318 Rayburn House Office Building 

EDDIE BERNICE JOHNSON, Texes 

!\A!\Ii(JNG MEMBER 

Mr. Gregory H. Friedman, Inspector General, U.S. Department of Energy, Office ofrnspector 

General 

Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental Protection Agency, Office of 

Inspector General 

Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of the Interior, Office of 

Inspector General 
129 

U.S. House of Representatives 

Committee on Science, Space, and Technology 

Snbcommittee on Oversight 

HEARING CHARTER 

Top Challenges for Science Agencies: 

Reports from the Inspectors General 

Part 2 

Thursday, March 14,2013 

12:30 p.m. - 2:30 p.m. 

2318 Rayburn House Office Building 

At 12:30 p.m. on March 14,2013, the Subcommittee on Oversight will hold a hearing titled "Top 

Challenges for Science Agencies: Reports from the Inspectors General - Part 2." This is the 

second of two such hearings planned prior to the Committee's review of the Administration's FY 

2014 budget requests of these agencies. Part I of this series was held two weeks ago on 

February 28, 2013. 

This hearing will provide Members of the Subcommittee the opportunity to receive testimony on 

the most serious performance and management challenges facing the U.S. Department of Energy 

(DOE), the U.S. Environmental Protection Agency (EPA), and the U.S. Department of the 

Interior (001), from the perspective of the Inspectors General of each agency. 

Witnesses 

• Mr. Gregory H. Friedman, Inspector General, U.S. Department of Energy, Office of 

Inspector General; 

• Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental Protection Agency, 

Office of Inspector General; 

• Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of the Interior. Office 

of Inspector General. 

Overview 

Public Law 106-531 (the Reports Consolidation Act of2000), requires agency Inspectors 

General (IG) to file annual reports that identify the most serious management and performance 

challenges facing their agencies. I These reports also assess agencies' progress in their efforts to 

resolve the issues identified by the IGs. 

1 Public Law 106-351. "Reports Consolidation Acts of 2000," available at: http://www.gpo.gov/fdsysfpkglPLAW1 06publ531lhtmi/PLA W -I 06pubI531.htm. 

Page 11 
130 

U.S. Department of Energy 

The DOE IG's report states that "on an annual basis, the Office of Inspector General identifies 

what it considers to be the most significant management challenges facing the Department. Now 

codified as part of the Reports Consolidation Act of2000, under this effort we assess the 

agency's progress in addressing previously identified challenges and consider emerging issues 

facing the Department. Consistent with our mission, our goal is to use this process to advance 

efforts to work with the Department to enhance the effectiveness of agency pro~rams and 

operations.,,2 The report lists the following as management challenges at DOE: 

• Operational Efficiency and Cost Savings; 

• Contract and Financial Assistance Award Management; 

• Cyber Security; 

• Energy Supply; 

• Environmental Cleanup; 

• Human Capital Management; 

• Nuclear Waste Disposal; 

• Safeguards and Security; 

• Stockpile Stewardship. 

U.S. Environmental Protection Agency 

In reporting on what it considers to be the "most serious management and performance 

challenges facing the Agency,,,4 the EPA IG explains that the office used "audit, evaluation, and 

investigative work, as well as additional analysis of Agency operations, to identify challenges 

and weaknesses."s The following are identified as management challenges at EPA:6 

• Oversight of Delegations to States; 

• Safe Reuse of Contaminated Sites; 

• Limited Capability to Respond to Cyber Security Attacks; 

• EPA's Framework for Assessing and Managing Chemical Risks; 

• Workforce Planning. 

U.S. Department of the Interior 

The DOl IG's report states, "[W]e are submitting what we determined are the most significant 

management and performance challenges facing the U.S. Department of the Interior (DOl). The 

challenges listed are for inclusion in DOl's 'Agency Financial Report' for fiscal year 2012. 

2 Management Challenges at the Department of Energy - Fiscal Year 2013, October 19,2012, available at: 

http://energy .gov/sites/prod/files/l 0-0874 l.pdf. 

3 Ibid. 

4 EPA's Fiscal Year 2012 ./yfanagemenl Challenges, July 5, 2012, available at: 

http://www.epa.gov/oig/reports/20 121Management Challenges-20 l2.pdf. 

5 Ibid. 

6 Ibid. 

Page I 2 
131 

These challenges reflect those that the Office of Inspector General (OIG) considers significant to 

departmental efforts to promote economy, efficiency, and effectiveness in its bureaus' 

management and operations.',1 Top management and performance challenges at DOl are 

identified as:8 

• Energy management; 

• Climate change; 

• Water programs; 

• Responsibility to Indians and Insular Areas; 

• Cobell and Indian land consolidation; and 

• Operational efficiencies. 

7 Inspector General's Statement Summarizing the Major Management and Peiformance Challenges Facing the u.s. 

Department of the Interior, October 15,2012, available at: 

http://www.doi.gov/oiglreports/upload/ER-SP-MOI-0002-2012Public.pdf. 

, Ibid. 

Page I 3 
132 

Chairman BROUN. The Subcommittee on Oversight will come to 

order. 

Good afternoon. In front of you are packets containing the written testimony, the biographies, and truth-in-testimony and the disclosures for today’s witness panel. I recognize myself for five minutes for an opening statement. 

Let me begin first by thanking our witnesses for you all’s patience and flexibility, and you all have been very patient and very 

flexible and I greatly appreciate that. We have had several exchanges over the last couple weeks as we have had to change the 

hearing start time not once but twice. I appreciate you all’s willingness to work with us on this. 

The title of today’s hearing is ‘‘Top Challenges for Science Agencies: Reports from the Inspectors General—Part 2.’’ Part 1 was a 

couple of weeks ago. This is the second of two hearings we scheduled to hear from the Offices of Inspectors General representing 

the agencies within this committee’s jurisdiction. The object of 

these hearings is to learn about the major performance and management challenges facing each agency from the perspective of each 

Inspector General. 

The DOE IG’s office is a regular guest at the hearings before this 

Committee. We follow your work very closely and pay attention to 

your thorough analysis. For example, during testimony provided at 

the Subcommittee hearing last year, your colleague explained that 

the Department ‘‘awarded grants of nearly $300 million for Clean 

Cities projects and about $400 million for Transportation and Electrification efforts.’’ And while both programs required fund recipients to comply with Federal regulations governing financial assistance awards, as noted in testimony provided by your office back 

then, you identified ‘‘needed improvements in financial management for both programs.’’ 

Since then, the Department does not seem to have improved its 

management abilities, as further highlighted in the report by your 

office issued last month about LG Chem. This Michigan company 

received nearly $150 million in Recovery Act funds. Yet, not only 

did the company fail to meet basic project goals, its employees actually got paid for watching movies and playing board games. These 

are serious concerns about serious amounts of taxpayer money that 

require this Committee’s attention. 

As for the EPA, we always have questions about their actions 

and decisions. The Integrated Risk Information System, or IRIS, is 

a perennial topic of discussion even when we were in the Minority. 

IRIS is on the GAO’s high-risk series and continues to be on the 

IG’s management challenges list for the Agency. 

Another issue that this committee has been involved with for 

several months is EPA’s draft Bristol Bay Watershed Assessment. 

EPA has not provided clear answers about the purpose, cost, or relevance of an assessment that is based on a hypothetical mining 

plan. Hypothetical mining plan, mind you. Concerns have been 

raised about this assessment, prompting one peer reviewer to describe it as ‘‘hogwash.’’ We have also heard concerns about the integrity and usefulness of EPA’s second peer review of the assessment. These concerns, along with other potential problems regarding conflict of interest and proper process at other advisory and 
133 

peer-reviewed bodies at the Agency, will require the IG’s diligent 

attention as they ultimately impact important regulatory decisions 

at EPA. 

The Department of Interior also faces many challenges in the future, not the least of which is how it conducts science and incorporates that science into Department decisions. The Department is 

embroiled in scientific integrity cases involving: polar bear research; the Klamath River dam removal decision; the Delta Smelt 

issue regarding California’s Central Valley Water; the evacuation 

of peer reviewers’ comments to justify an offshore drilling moratorium; and the treatment of science in deciding to extend the operating agreement for an oyster company on a national seashore, just 

to name a few. 

Because of the Department’s track record, an uncertain process 

for handling allegations between the IG and the Agency, and questions about the IG’s independence, I see scientific integrity as a 

fundamental challenge facing the Agency moving forward. This 

challenge affects the use of Federal lands, Endangered Species Act 

listings that influence property owners, and countless other important national interests tied to resources and wildlife. 

As Inspectors General, you all have the important responsibility 

of conducting and supervising audits and investigations; providing 

leadership; recommending policies; and preventing and detecting 

waste, fraud, and abuse and mismanagement at the agencies. We 

rely on your diligence and independence to assist in our oversight 

responsibilities. That is why I look forward to receiving your testimonies and hearing your answers to my questions later this hour. 

I thank you. 

Now, I recognize the Ranking Member, my friend from New 

York, the gentleman, Mr. Maffei, for an opening statement. 

[The prepared statement of Mr. Broun follows:] 

PREPARED STATEMENT OF CHAIRMAN PAUL C. BROUN

Good afternoon. Let me begin first by thanking our witnesses for their patience 

and flexibility. We’ve had several exchanges over the last couple of weeks as we had 

to change the hearing start time not once, but twice. I appreciate our witnesses’ 

willingness to work with us. 

The title of today’s hearing is ‘‘Top Challenges for Science Agencies: Reports from 

the Inspectors General – Part 2.’’ This is the second of two hearings we scheduled 

to hear from the Offices of Inspectors General representing agencies within this 

Committee’s jurisdiction. The object of these hearings is to learn about the major 

performance and management challenges facing each agency from the perspective 

of each Inspector General. 

The DOE IG’s office is a regular guest at hearings before this Committee. We follow your work closely, and pay attention to your thorough analysis. For example, 

during testimony provided at a Subcommittee hearing last year, your colleague explained that the Department ‘‘awarded grants of nearly $300 million for Clean Cities projects and about $400 million for Transportation Electrification efforts.’’ And 

while both programs required fund recipients to comply with federal regulations 

governing financial assistance awards, as noted in testimony provided by your office 

back then, you identified ‘‘needed improvements in financial management for both 

programs.’’ Since then, the Department does not seem to have improved its management abilities, as further highlighted in a report your office issued last month about 

LG Chem. This Michigan company received nearly $150 million dollars in Recovery 

Act funds. Yet, not only did the company fail to meet basic project goals, its employees actually got paid for watching movies and playing board games. These are serious concerns about serious amounts of taxpayer money that require this Committee’s attention. 
134 

As for the EPA, we always have questions about their actions and decisions. The 

Integrated Risk Information System, or IRIS, is a perennial topic of discussion, even 

when we were in the Minority. IRIS is on the GAO’s high-risk series, and continues 

to be on the IG’s management challenges list for the agency. 

Another issue that this Committee has been involved with for several months is 

EPA’s draft Bristol Bay Watershed Assessment. EPA has not provided clear answers about the purpose, cost, or relevance of an assessment that is based on a hypothetical mining plan. Concerns have been raised about this assessment, prompting one peer reviewer to describe it as ‘‘hogwash.’’ 

We’ve also heard concerns about the integrity and usefulness of EPA’s second peer 

review of the assessment. These concerns, along with other potential problems regarding conflict of interest and proper process at other advisory and peer review 

bodies at the Agency, will require the IG’s diligent attention as they ultimately impact important regulatory decisions at EPA. 

The Department of Interior also faces many challenges in the future, not least of 

which is how it conducts science and incorporates that science into Department decisions. The Department is embroiled in scientific integrity cases involving: polar bear 

research; the Klamath River dam removal decision; the Delta Smelt issue regarding 

California’s central valley water; the manipulation of peer reviewers’ comments to 

justify an offshore drilling moratorium; and the treatment of science in deciding to 

extend the operating agreement for an oyster company on a National Seashore, just 

to name a few. 

Because of the Department’s track record, an uncertain process for handling allegations between the IG and the Agency, and questions about the IG’s independence, 

I see scientific integrity as a fundamental challenge facing the Agency moving forward. This challenge affects the use of federal lands, Endangered Species Act listings that influence property owners, and countless other important national interests tied to resources and wildlife. 

As Inspectors General, you all have the important responsibility of conducting and 

supervising audits and investigations; providing leadership, recommending policies, 

and preventing and detecting waste, fraud, abuse and mismanagement at agencies. 

We rely on your diligence and independence to assist our oversight responsibilities. 

That’s why I look forward to receiving your testimonies, and hearing your answers 

to my questions later this hour. Thank you. 

Mr. MAFFEI. Thank you, Mr. Chairman, my friend from Georgia. 

And I want to join you in welcoming our witnesses today. We have 

a tight schedule this afternoon and I promise that I won’t take too 

much time, but I really do want—because I really do want to hear 

from these witnesses. 

As was said by the former Chairman of the Recovery Accountability and Transparency Board, Earl Devaney, who pointed out 

that history shows approximately seven percent of any large expenditure is likely to be subject to fraud. Now, while I am sure 

there is a lot of people that believe it is far, far more than that in 

today’s Federal Government, even seven percent is too much. And 

I think we can do better. And that is precisely why we have Inspectors General, to help us locate waste, fraud, abuse and provide accountability to the American people that we are good stewards of 

their tax dollars. They are expected to be the watchdogs first and 

foremost. 

And in that, Inspectors General have a tough job. They have to 

watch what the Agency follows—does in terms of making sure they 

follow the law. They have to guard the taxpayers’ precious dollars. 

They have to offer advice and direction to management without 

getting so close to their agency heads that they lose their independence. On the one hand, they answer to the President, and on the 

other hand, they have to answer to Congress. I think in both cases 

you always answer to the American people. 

All three of our witnesses have had experience standing up to 

those pressures and all demonstrate somewhat different choices on 

how to navigate through them. But even if we do not always agree 
135 

with their conclusions or like the implications of what they find, I 

want to recognize that all three of the offices work hard to produce 

meaningful audits, carry forward criminal investigations when necessary, and produce thoughtful reports that provide perspective on 

management challenges. 

I particularly want to point out that the Department of Energy’s 

IG is an office that provides a good model for others on how to balance the work. 

Mr. Chairman, I am particularly looking forward to—looking to 

these witnesses to tell us about the impact of the current sequestration on the work of their offices and to offer insights into how 

their agencies might adapt to sequestration in the most cost-effective fashion. And in view of the conversation in the full Committee 

earlier, I just want to make it clear, Mr. Chairman, that I do not 

solely hold the Congressional leadership or the President responsible for this. I certainly don’t hold the Chairman responsible, who, 

as noted, had voted against it. I was not in Congress then, and— 

but I do think that whoever is to blame—and there are many—we 

need to look at how to move forward. And so these across-the-board 

cuts done mid-year, they may be producing potential waste and unanticipated costs, and at the very least, I think it would be useful 

for this Committee to gather whatever information we can on this 

matter to inform our actions and that of the full Committee and 

the Congress moving forward. 

And with that, I yield back the balance of my time and I thank 

the Chairman. 

[The prepared statement of Mr. Maffei follows:] 

PREPARED STATEMENT OF RANKING MINORITY MEMBER DAN MAFFEI

Thank you, Chairman Bucshon, and thank you to all of the witnesses for being 

here today. 

One of the reasons I joined this Committee is because of my strong interest in 

working to improve STEM education. I have also served as co-chair of the House 

STEM Education Caucus for the past four years, so I’m glad we’re having this hearing and that we are doing it early in the new Congress. As a former engineer, I 

can personally vouch for the importance of educating our students at all levels in 

STEM fields. 

We’re all familiar with the statistics by now. According to the 2011 TIMSS study, 

U.S. students in 4th grade rank behind students in 10 other countries in science 

aptitude and 15 other countries in math, and students fall further behind as they 

proceed to high school. This has serious consequences for individuals and for our 

nation’s economy. For example, while we still face unacceptably high unemployment, many employers are unable to find qualified workers. I have heard from 

many manufacturers that they are having a difficult time finding workers who have 

basic STEM knowledge. And students who aren’t learning the necessary skills by 

the time they graduate high school are much less likely to pursue STEM fields if 

they go to college, constraining our workforce even further. And with fewer Americans in STEM fields, especially fewer PhDs, American innovation is suffering, further hurting economic development. 

We know that improving STEM education is a complex problem with no easy or 

one-size-fits-all solution. Therefore, we all must work together—the private sector, 

nonprofits, colleges and universities, school districts, and local, state, and federal 

governments—to find solutions that fit specific needs. If the U.S. wants to remain 

the global leader in innovation and technology, we have to tackle these challenges 

with an ‘‘all hands on deck’’ approach. 

Today’s hearing focuses on corporate and nonprofit organization STEM initiatives. 

U.S. companies are realizing more and more how critical it is to their long-term success that we have a robust high-tech workforce. Meanwhile, foundations and other 

nonprofits are increasingly leveraging their resources and expertise in this area as 
136 

the problems grow. I’m very excited to see how much the private sector has stepped 

up on these issues in the last few years, and I look forward to hearing about the 

efforts of the companies and organizations represented here today. But I also want 

to talk about the federal role in this partnership and in particular, the role of the 

National Science Foundation. 

NSF is one of the most important sources of funding for education research. Industry rightly wants to put their money into proven programs. For that to happen, 

somebody has to provide the funding to develop and prove out those programs. NSF 

grants allow education researchers and organizations to test out and evaluate new 

ideas, and to improve our understanding of how people learn and what effective pedagogy really means. Much of what we know and use in STEM education today started out with NSF funding. 

Unfortunately, our Federal investments in STEM education, including at NSF, 

have stagnated and are even being questioned. This is not a good strategy for educating and training our next generation of STEM workers and strengthening American competitiveness. We must continue to address this challenge, so I hope this 

first hearing on STEM education is one of many during this Congress, and that future hearings will look at the role of other stakeholders, including the Federal Government. 

U.S. researchers and universities—which attract top-notch students from many 

nations—remain the best in the world. However, we can’t take this leadership for 

granted. As other countries take bold steps to match and surpass our progress, we 

must all work together so that the U.S. remains the most innovative country in the 

world. I look forward to working with all my colleagues to ensure that we are doing 

our part. 

I want to thank Chairman Bucshon again for calling this hearing, and the witnesses as well for taking the time to offer their insights today. And with that, I yield 

back. 

Chairman BROUN. Thank you, Mr. Maffei. I know you weren’t 

here when we had that bill before us. It was proposed by the President and Members of Congress voted on it on both sides, so it was 

something that I thought was terrible policy and that is the reason 

I voted against it. And I don’t believe generally in across-the-board 

cuts. I think we need to make some targeted cuts. And I appreciate 

the cooperation that I have from you and I love working with you. 

Mr. MAFFEI. And if—— 

Chairman BROUN. We have got a good partnership in this Committee. And so we will go forward. 

Mr. MAFFEI. Wonderful. Thank you, Mr. Chairman. 

Chairman BROUN. If there are Members who wish to submit additional opening statements, your statements will be added to the 

record at this point. 

Chairman BROUN. Now, at this time, I would like to introduce 

our panel of witnesses. Our first witness is Mr. Gregory Friedman, 

Inspector General of the U.S. Department of Energy, a position he 

has held since 1998. I know he has been before this Committee and 

the full Committee before, so we appreciate your being here, Mr. 

Friedman, as many a time participant in these hearings. 

Our second witness is Mr. Arthur Elkins, Jr., Inspector General, 

U.S. Environmental Protection Agency, a position he has held since 

2010. 

And our third witness is Ms. Mary Kendall, Deputy Inspector 

General, U.S. Department of Interior, a position she has held since 

1999, and includes a brief stint as acting Inspector General when 

the former IG left. 

As our witnesses should know, spoken testimony is limited to 

five minutes each, and we are kind of pressed for time today, so 

if you would try to keep your spoken testimony within a five 

minute window, after which the Committee Members will have five 
137 

minutes each to ask questions. Your written testimony will be included in the record of the hearing. 

It is the practice of this Subcommittee on Oversight to receive 

testimony under oath. If you would please rise and raise your right 

hand unless you have an objection to taking an oath. Do either of 

you have an objection—any of you have an objection to taking an 

oath? Okay. 

Let the record reflect all indicated they have no objection doing 

so. 

Do you solemnly swear or affirm to tell the whole truth and 

nothing but the truth, so help you God? 

You may be seated. Let the record reflect that all witnesses participating have taken the oath and said that they did swear to that 

oath. 

I now recognize our first witness, Mr. Friedman, to present your 

testimony. And sir, you have five minutes. 

STATEMENT OF MR. GREGORY H. FRIEDMAN, 

INSPECTOR GENERAL, U.S. DEPARTMENT OF ENERGY, 

OFFICE OF INSPECTOR GENERAL 

Mr. FRIEDMAN. Thank you, Mr. Chairman. 

Mr. Chairman, Ranking Member Maffei, and Members of the 

Subcommittee, I appreciate the opportunity to testify today on the 

major challenges facing the Department of Energy and the associated work of the Office of Inspector General. 

The Department of Energy is a multifaceted agency responsible 

for some of the Nation’s most complex and technologically advanced 

missions. These include vital work in basic and applied research, 

clean energy innovation, environmental cleanup, medical applications, nuclear weapons stewardship, and efforts to enhance national security. To advance these efforts, the Department receives 

an annual appropriation of nearly $30 billion, employs 115,000 or 

so Federal and contractor personnel, and manages assets valued in 

excess of $180 billion. 

We provide in the Office of Inspector General independent oversight of the Department’s programs, and of course our objective is 

to promote economy and efficiency and to prevent and detect fraud, 

waste, and abuse. 

Based on this body of work, on an annual basis, my office identifies what we consider to be the most significant management challenges facing the Department. For Fiscal Year 2013, our list of 

challenges includes the following: operational efficiency and cost 

savings, which I will discuss a little bit more in depth later on; contract and financial assistance award management; cybersecurity; 

energy supply; environmental cleanup; human capital management; nuclear waste disposal; safeguards and security; and stockpile stewardship. We also developed a watch list of emerging issues 

and other items that warrant special attention by department officials. These include infrastructure modernization, the Department’s 

Loan Guarantee Program, and worker and community safety. 

These challenges are integral to the Department’s mission. They 

are not amenable to immediate resolution, and they can only be addressed through a concerted effort over time. 
138 

I would like to focus, as I indicated earlier, on what may be the 

most current challenge. That is sustaining departmental operations 

in a period of constrained resources. In our Fiscal Year 2012 and 

2013 Management Challenge Reports, we provided the Department 

with a series of suggested actions for major operational improvements and cost-reduction initiatives. They include the following: 

First, applying the Quadrennial Technology Review’s strategic 

planning concept to the Department’s entire multibillion dollar 

science portfolio. This would put the Department in a better position from our perspective to develop metrics to evaluate its science 

efforts and to determine whether the science initiatives are aligned 

with current national priorities. 

Second, we proposed eliminating costly duplicative functions associated with the National Nuclear Security Administration. The 

NNSA contains a set of distinctly separate overhead operations 

that are often redundant to existing departmental functions. 

Third, we suggested the Department use a BRAC-style commission—Department of Defense BRAC-style commission to evaluate 

the current alignment of its laboratory and technology complexes 

and proposed revisions, including laboratory rightsizing and laboratory consolidation wherever possible. We noted that of the $10 billion spent annually on operating, the Department’s 16 federally 

funded Research and Development Centers, administrative overhead, and indirect costs account for about $3.5 billion of this 

amount. This burden may not be sustainable in the current budget 

environment. 

Fourth, reprioritizing the Department’s $268 billion environmental remediation liability with the objective of ensuring that 

high-risk initiatives and activities are funded first. This would require an analytically-based remediation strategy which addresses 

environmental concerns on a national complex-wide basis, essentially a form of remediation triage. 

Lastly, we propose evaluating the current structure of the Department’s $1 billion per year physical security apparatus, nearly 

700 million of which is spent on acquiring nearly 4,000 protective 

force guards from contractors around the country. We think other 

options need to be examined, including the possibility of federalizing those individuals. 

The Department of Energy has an extraordinary mission and it 

truly is extraordinary. Yet, like most Federal agencies, it faces significant management challenges. Current budget trends and realities complicate the job of resolving the challenges that we have 

identified and the other issues facing the Department. The operative question going forward from our perspective may well be what 

can the Department afford in this environment? 

We look forward to working with program officials, agency management, and the Congress in our common effort to advance the interest of U.S. taxpayers. 

Mr. Chairman, this concludes my statement and I am pleased to 

answer any questions that you might have. 

[The prepared statement of Mr. Friedman follows:] 
139 

Statement of Gregory H. Friedman 

Inspector General 

U.S. Department of Energy 

Before the 

Subcommittee on Oversight 

Committee on Science, Space, and Technology 

U.S. House of Representatives 

FOR RELEASE ON DELIVERY 

2:00PM 

March 14,2013 
140 

Mr. Chainuan and members ofthe Subcommittee, I appreciate the opportunity to testify today on 

the major challenges facing the Department of Energy as viewed through the prism of the Office 

of Inspector General (orG). 

The Department of Energy is a multi-faceted agency responsible for executing some of the 

Nation's most complex and technologically advanced missions. These missions include cutting 

edge work in basic and applied science, clean energy innovation, energy efficiency and 

conservation, environmental cleanup, medical applications, nuclear weapons stewardship, and 

efforts to enhance national security. In order to execute this diverse portfolio, the Department 

receives an annual appropriation approaching $30 billion, employs nearly 110,000 Federal and 

contractor personnel, and manages assets valued at over $180 billion. 

The underpinning of virtually all Departmental missions is related to science and technology. Its 

complex of 17 national laboratories, 16 of which have been designated as Federally Funded 

Research and Development Centers (FFRDC), and its extensive financial assistance for research 

in independent settings underscore the Department's status as a leader for science in the United 

States. 

The orG provides independent oversight of the Department's operations through a robust 

program of audits, inspections and investigations designed to promote economy and efficiency, 

and to detect and prevent fraud, waste, abuse, and mismanagement. Because of the prominence 

of and the resources committed to the Department's science and technology mission, a 

substantial portion of our work focuses on these important areas. A full inventory of related 

reports can be found at: http://energy.gov/ig/calendar-year-reports.Itis this body of work that 

fonus the basis of my testimony today. 

Department of Energy Management Challenges 

Annually, the OIG identifies what it considers to be the most significant management challenges 

facing the Department. We have a unique, independent perspective, which allows us to provide 

management, the Congress, and the citizenry with an unfiltered view of Departmental operations. 
141 

For FY 2013, our list of significant management challenges and our watch list of emerging issues 

included: 

Management Challenges 

• Operational Efficiency and Cost Savings 

• Contract and Financial Assistance Award Management 

• Cyber Security 

• Energy Supply 

• Environmental Cleanup 

• Human Capital Management 

• Nuclear Waste Disposal 

• Safeguards and Security 

• Stockpile Stewardship 

Watch List 

• hlfrastructure Modernization 

• Loan Guarantee Program 

• Worker and Community Safety 

These challenges impact virtually all of the Department's mission activities. They are not easily 

resolved and must, therefore, be addressed through a concerted, persistent effort over time. 

Anticipating tight Federal budgets in the future, as part of the process of developing our list of 

management challenges for FY 2012, we stepped out of our comfort zone and presented the 

Department with five suggestions for reducing its cost of operations and enhancing agency 

efficiency. I would like to provide an overview of the management challenges and then focus 

specifically on the area of Operational Efficiency and Cost Savings. 

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Contract and Financial Assistance A ward Management 

The Department of Energy is the most contractor-dependent agency on the civilian side of the 

Federal government. The Department provides massive amounts of funding through contracts 

and other financial assistance awards to its own laboratories, for-profit companies, academic 

institutions, and non-profit organizations. In fact, the vast majority of Departmental funding is 

distributed through a combination of contracts, grants, cooperative agreements, and other 

financial assistance awards. Under these circumstances, successful contract management is 

essential. Numerous OIG reports have documented the barriers and missteps associated with 

successfully managing the Department's contracting process. Widely publicized concerns with 

the management of a number of major, multi-million dollar projects, all under the auspices of the 

Department's contractors, reflect the depth of this issue. For these reasons, Contract and 

Financial Assistance Award Management remains a significant management challenge. 

Cyber Security 

Given the importance and sensitivity of the Department's activities, along with the vast aITay of 

data it processes and maintains, protecting cyber assets has become a crucial aspect of the 

Department's overall security posture. As a whole, the Department invests about $2.1 billion 

each year in information technology. Although the Department has implemented numerous 

countermeasures in recent years, security challenges and threats to the Department's information 

systems continue and are constantly evolving. As such, it is critical that cyber security protective 

measures keep pace with these growing threats. As a result of the inherent risks associated with 

the sensitivity of much of the Department's work, we have identified Cyber Security as a 

continuing management challenge. 

Energy Supply 

Fundamental concerns related to the availability of energy in the U.S. have had a dramatic 

impact on consumers and the economy, with implications on national security. Through its role 

in areas of scientific discovery and innovation, there is an expectation that the Department will 

playa leadership role in ensuring that the Nation's energy needs are met through the 

development, implementation, and execution of sound energy policy. Providing the leadership 

to ensure a reliable, affordable, and environmentally sound Energy Supply represents a 

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significant management challenge for the Department, which will require both short-term and 

long-term solutions. 

Environmental Cleanup 

In the 1980's, the Department began an expedited process to dispose of large volumes of 

radioactive, hazardous, and mixed waste resulting from many years ofnuelear defense and 

energy research work. This involves remediation efforts covering millions of acres of land in 35 

states, the engagement of more than 30,000 Federal and contractor employees, and an unfunded 

Federal remediation liability of approximately $268 billion. The entire effort, perhaps the largest 

and most complex of its kind ever undertaken, will continue well into the future. While there 

have been a number of notable programmatic successes, significant difficulties have been 

encountered. As a result, Environmental Cleanup remains a management challenge that warrants 

attention by the Department's senior leadership. 

Human Capital Management 

Strategic management of human capital, recognized as one of the Government's most significant 

challenges, directly affects the Department of Energy. This applies both to the Federal and 

contractor workforces. The Department has endeavored to address these concerns. To cite one 

example, recognizing the importance of enhancing staff project management skills, the 

Department analyzed critical skills gaps in this area and developed a specific strategy to fill those 

needs. However, Human Capital Management remains a challenge for several reasons: (I) the 

Department and its contractors face a significant "baby boomer" retirement turnover resulting in 

the loss of highly skilled employees; (2) the reality of the current Federal budget environment 

will lead to potential job losses again having an impact on the Department's skilled workforce; 

and, (3) the intense public/private sector demand for a competent workforce has made job 

recruitment and retention a continuing concern for the Department and its contractors. This 

challenge represents a critical area that will affect nearly all of the Department's programs going 

forward. 

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Nuclear Waste Disposal 

Under the Nuclear Waste Policy Act of 1982, the Department is responsible for the management 

and safe disposal of high-level defense and commercial nuclear waste. For a number of years, 

the development of the Yucca Mountain Nuclear Waste Repository in Nye County, Nevada, was 

the centerpiece of this effort. The Department's FY 2010 budget request, however, included no 

funding for the Yucca Mountain Project, effectively terminating the project and the work of the 

Office of Civilian Radioactive Waste Management. Since that time, the Blue Ribbon 

Commission on America's Nuclear Future, created by the President and the Secretary, issued its 

findings and suggested new policies for managing the back end of the nuclear fuel cycle. 

However, despite the work of the Commission, solutions for the nuclear waste disposal issue 

have not yet been fully defined or approved and, at best, will take decades to implement. Given 

the importance of a nuclear waste disposal strategy that protects public health, safety, and the 

environment and the current uncertainties associated with such a strategy, Nuclear Waste 

Disposal remains a significant challenge facing the Department. 

Safeguards and Security 

The Department is responsible for safeguarding some of the Nation's most sensitive facilities and 

materials, including the nuclear weapons complex, the national laboratory system, a variety of 

sensitive materials, and other critical infrastructure assets. Recent events, including those at the 

Y-12 National Security Complex, have highlighted the need for a robust security apparatus with 

effective Federal oversight. Consequently, we have elevated Safeguards and Security to the list 

of significant management challenges. 

Stockpile Stewardship 

The Department is responsible for the reliability of the Nation's nuclear weapons stockpile. To 

help ensure that these assets are mission ready, the Department, using a science-based strategy, 

conducts stockpile surveillance and engineering analyses, refurbishes and updates selected 

nuclear systems, and maintains the ability to restore its aging weapons production infrastructure. 

This massive National Nuclear Security Administration (NNSA) undertaking involves the 

administration of three defense laboratories, management of the weapons production complex, 

and frequent interactions with the U.S. Department of Defense on related matters. Both OIG and 

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145 

Government Accountability Office reports have identified concerns with project management, 

delays in refurbishment efforts, and facility safety and security, all in an era of declining budgets. 

Even though the Department and NNSA have taken steps to address these issues, the Stockpile 

Stewardship challenge persists. 

Operational Efficiency and Cost Savings 

As part of our Management Challenges report for FY 2012, we concluded that Federal budgetary 

concerns made finding ways to optimize agency operations and reduce costs the preeminent 

management challenge facing the Department. 

In this context, our Management Challenges report suggested a series of large-scale, high-impact 

operational efficiency and cost reduction initiatives. Intended to provide a starting point for 

further discussion and examination, these proposals include: 

• Applying the Quadrennial Technology Review strategic planning concept to the 

Department's entire science and technology portfolio; 

• Eliminating costly duplicative NNSA functions; 

• Evaluating, consolidating, and/or rightsizing the Department's laboratory and technology 

complex; 

• Reprioritizing the Department's environmental remediation efforts with the goal of 

funding the work on a risk basis; and 

• Realigning the current structure of the Department's physical security apparatus. 

Additional details follow: 

Expand the Quadrennial Technology Review (OTR) strategic planning concept to the 

Department's entire science and technology portfOlio: In September 2011, the Department 

released its inaugural QTR, in essence a research and development strategic plan. In his message 

prefacing the report, the Secretary referred to the hard budget choices and fiscal challenges 

facing the Department, concluding that the Department must find ways to intelligently choose 

between the many technically viable activities it could pursue. The QTR, advanced as a 

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146 

mechanism to guide these difficult choices, provided quality analysis and important information. 

However, as beneficial as it may be, the scope was limited to the Department's energy-related 

technology sector. We concluded that the discipline of the QTR process should be applied to the 

Department's entire set of science and technology activities. This type of large-scale planning 

effort would enable the Department to better evaluate its multi-billion dollar per year science 

effort to determine whether its science initiatives are aligned with current priorities; identify 

metrics to help decision makers confirm that research dollars are used for the highest and best 

purposes; and, determine whether the work of its separate system of 16 FFRDCs are properly 

integrated. 

Eliminate duplicative NNSA (unctions: Created in response to national security concerns, NNSA 

was established as a separately organized agency within the Department of Energy under the 

Defense Authorization Act of 2000. NNSA maintains a set of distinctly separate overhead and 

indirect cost operations that often duplicate existing Departmental functions. These include 

human resources, general counsel, congressional and public affairs, procurement and acquisition, 

and information technology. These expenses are significant and parallel functions that exist at 

Headquarters as well as a number of field sites where Department and NNSA activities are colocated. In addition to cost considerations, these redundancies can complicate communications 

and program execution and cause different interpretations of core Departmental policy. The 

sustainability of this arrangement in the current budget environment is highly questionable. We 

recommend that the alignment be closely examined with the goals of consolidating overlapping 

efforts, preserving scarce resources, and improving operations. 

Establish a "BRAC-style" commission to analvze the Department's laboratory and technology 

complex: The Department operates 16 FFRDCs at an annual cost of more than $10 billion. I Of 

this amount, nearly $3.5 billion was spent on functions including executive direction, human 

resources, procurement, legal, safeguards and security, utilities, logistics support, and 

information services. In our view, the proportion of scarce science resources diverted to 

administrative, overhead, and indirect costs for each laboratory may be unsustainable in the 

current budget environment. We recommended that the Department, using a BRAC-style 

1 This figure excludes the sizeable "Work for Others" programs at the Department's national laboratories. 

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147 

fonnulation, analyze, realign, and consolidate laboratory operations to reduce indirect costs and, 

as a result, provide greater funds for science and research. 

Reprioritize the Department's environmental remediation efforts: The Department's current 

unfunded environmental remediation liability is approximately $268 billion. As a result of more 

than 50 years of nuclear defense and energy research work, the Department spends about $6 

billion per year on its environmental remediation activities. [n doing so, program costs are 

largely "driven" by 37 individually negotiated Federal Facility Agreements (FFA) at key 

Department sites across the Nation. The FF As involve no less than 350 milestones at these sites. 

The FFAs are augmented by numerous other local agreements with their own set of actions, 

requirements, milestones and due dates. The existing structure needs to be modified to reflect 

the realities of significant reductions in the Department's environmental cleanup budget. 

Consequently, we recommended that the Department revise its current remediation strategy and 

address environmental concerns on a national, complex-wide risk basis. This would result in a 

fonn of a complex-wide environmental remediation triage, funding only high-risk activities that 

represent imminent or ncar tenn danger to health and safety, or further environmental 

degradation. 

Re-evaluate the current structure of the Department's physical security apparatus: The 

Department spends more than $1 billion per year providing physical security for its facilities and 

related materials and data. Of this amount, nearly $700 million per year is spent on a complexwide protective force staff of nearly 4,000 highly trained professionals. The protective force 

staff is made up exclusively of contractor personnel retained through different mechanisms. 

These arrangements, which lack unifonnity and consistency, result in at least 25 separate 

contract instruments, all with costly overhead burdens. We concluded the new budget realities 

require change and we recommended an in-depth evaluation of available options. These include 

a "master contract" to provide security at all Department facilities or consolidating protective 

force contracts by region or Departmental entity. Perhaps of greatest importance, in our 

judgment, Federalizing the protective force is an option that needs to be on the table. Protective 

force contract realignment or some fonn of Federalization may reduce security costs and 

improve the Department's physical security posture. 

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Observations 

The Department of Energy faces a number of management challenges that require rigorous and 

sustained efforts. In our view, current and prospective Federal budget levels will likely make the 

job of resolving these challenges even more difficult. For this reason, we believe that the 

Department needs to undertake a comprehensive analysis of its operations with the goals of 

increasing efficiency and reducing cost. We are mindful of the fact that the proposals we have 

made in this regard are difficult to implement, highly controversial, and politically challenging. 

Further, to achieve 10ng-telID cost reduction, some near-term infrastructure investments may be 

necessary. We look forward to working with program officials, agency management, and the 

Congress in our effort to resolve the challenges facing the Department and protect the interests of 

the U.S. taxpayer. 

Mr. Chairman, this concludes my statement and I would be pleased to answer any questions that 

the Subcommittee may have. 

9 
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GREGORY H. FRIEDMAN 

INSPECTOR GENERAL 

U. S. DEPARTMENT OF ENERGY 

Gregory H. Friedman was nominated by the President and confirmed by the U.S. Senate as 

Inspector General of the U.S. Department of Energy in 1998. Mr. Friedman started his Federal 

career in 1968 and has been with the Department of Energy, Office of Inspector General, since 

1982. As Inspector General, he is responsible for a nationwide, independent program of audits, 

inspections, and law enforcement efforts related to the Department of Energy's programs and 

operations. In addition to his responsibilities as Inspector General, Mr. Friedman now serves 

as a member of the Recovery Act Accountability and Transparency Board and the Government 

Accountability and Transparency Board. 

Mr. Friedman received a Bachelor's degrec in Business Administration from Temple 

University and a Master's degree in Business Administration from Fairleigh Dickinson 

University. In 1979-1980, Mr. Friedman was selected as a Priuceton Fellow in Public Affairs 

and spent a year in residence at Princeton University's Woodrow Wilson School for Public and 

International Studies. 

In 2002, Mr. Friedman was named by the Comptroller General of the United States to serve as 

a member of the Advisory Council on Government Auditing Standards. In addition, be led the 

development of the "Federal Audit Manual," for the first time providing universal guidelines 

for conducting Federal financial audits. 

From 2005 to 2008, Mr. Friedman served as Vice Chair of the President's Council on Integrity 

and Efficiency. Mr. Friedman has been a guest lecturer on the topics of audit, integrity, 

government oversight and program evaluation. In addition, Mr. Friedman is a member of 

several professional organizations, and has served in leadership positions in the Association of 

Government Accountants and the Institute of Internal Auditors. Mr. Friedman has also been 

active in a number of community and philanthropic organizations. 

During his Federal career, Mr. Friedman has received numerous awards, including the 

Department of Energy's Meritorious Service Award, the Meritorious Presidential Rank Award, 

and the Presidential Rank Award for Distinguished Executive. 
150 

Chairman BROUN. Thank you, Mr. Friedman. Thank you for 

staying within the five minutes. 

Now, Mr. Elkins, you are recognized for five minutes for your 

testimony. 

STATEMENT OF MR. ARTHUR A. ELKINS, JR., 

INSPECTOR GENERAL, 

U.S. ENVIRONMENTAL PROTECTION AGENCY, 

OFFICE OF INSPECTOR GENERAL 

Mr. ELKINS. Thank you very much. Good afternoon, Chairman 

Broun, Ranking Member Maffei, and Members of the Subcommittee. I am Arthur Elkins, Inspector General of the U.S. Environmental Protection Agency, and I am pleased to appear before 

you today to discuss the significant management challenges facing 

the EPA that the OIG has identified in Fiscal Year 2012. Thank 

you for allowing me the opportunity to share with you our work 

and recommendations on how to improve EPA’s programs and operations. 

Before I begin, I would like to commend the expertise, dedication, 

and professionalism of the OIG staff whose exceptional work serves 

as the foundation of my testimony this afternoon. I also would like 

to mention that last year the OIG was a recipient of the Alexander 

Hamilton Award for its work related to the Deepwater Horizon oil 

spill. This is the highest award bestowed by the IG community. 

Although we are part of the EPA, senior EPA leaders can neither 

prevent nor prohibit us from conducting our work. In accordance 

with the IG Act of 1978, as amended, the OIG’s mission is to: conduct independent and objective audits, investigations, and inspections; prevent and detect fraud, waste, and abuse; promote economy, effectiveness, and efficiency; review pending legislation and 

regulation; and keep the agency head and Congress fully and currently informed. 

We identified five challenges which are detailed in my statement 

for the record. I will focus on two of these challenges: Oversight of 

Delegation to States and Limited Capability to Respond to 

Cybersecurity Attacks. 

To accomplish its mission to protect human health and the environment, EPA develops regulations and establishes programs to 

implement environmental laws. The Agency relies heavily on authorized state and tribal agencies to implement environmental programs, and the performance of state and tribal governments is critical to assuring protection of human health and the environment. 

Since 2008, we have designated oversight of delegations to states 

as a management challenge. For example, we reported that despite 

EPA efforts to improve state enforcement performance, state enforcement programs frequently do not meet national goals and 

States do not always take necessary enforcement actions. If these 

issues are not addressed, state performance will remain inconsistent across the country providing unequal environmental benefits to the public and an unlevel playing field for regulated industries. 

We reported that Georgia’s Concentrated Animal Feeding Operations program was operating without proper permits, inspection 

reports were missing required components, and the State was not 
151 

assessing compliance with permits. As a result of inadequate oversight and reporting, Georgia’s waters were vulnerable to discharges 

of animal waste from these facilities, which are associated with a 

range of human health and ecological impacts and contribute to the 

degradation of the Nation’s surface waters. 

As technology continues to advance and the Agency increases its 

use of automated systems, having a strong IT infrastructure that 

addresses security at the enterprise architecture level is critical to 

protecting the Agency against cyber attacks. It is imperative that 

EPA continue efforts to strengthen practices to guard against advanced persistent threats. 

While EPA has committed to making significant progress, this 

challenge persists. For example, we found limited assurance that 

data in the Automated System Security Evaluation and Remediation Tracking tool are reliable for decision-making. This tool is 

used to track the remediation of weaknesses in EPA’s information 

security program, as well as informs management about the adequacy of controls implemented to protect Agency systems. We reported that EPA neither developed a comprehensive deployment 

strategy for its Security Information and Event Management tool 

to incorporate all of the Agency’s offices, nor developed a formal 

training program to train employees on how to use the tool. This 

computerized tool is used to centralize the storage and review of 

computer logs or events to monitor or investigate unusual network 

activity. 

While the EPA’s senior leadership is taking the management 

challenges seriously and is making progress on resolving them, the 

Agency must remain focused on these challenges, especially in light 

of the difficult budgetary climate facing all Federal agencies today. 

The OIG will continue to provide oversight and track the EPA’s actions on these challenges while looking to identify any emerging 

issues warranting attention. 

In conclusion, I would like to reaffirm the OIG’s commitment to 

vigorously work with the Administrator and Congress to ensure 

that the Agency’s programs and operations work efficiently and effectively for the benefit of the American taxpayer. 

Mr. Chairman, this concludes my prepared statement and I will 

be pleased to answer any questions you or the Members may have. 

Thank you. 

[The prepared statement of Mr. Elkins follows:] 
152 

Statement of 

Arthur A. Elkins Jr. 

Inspector General 

Office of Inspector General 

U.S. Environmental Protection Agency 

Before the 

Subcommittee on Oversight 

Committee on Science, Space, and Technology 

U.S. House of Representatives 

March 14,2013 

Good morning Chairman Broun, Ranking Member Maffei and Members of the 

Subcommittee. I am Arthur Elkins, Inspector General of the U.S. Environmental 

Protection Agency. I am pleased to appear before you today to discuss the significant 

management challenges facing the EPA that the Office of Inspector General identified for 

fiscal year 2012. Thank you for allowing me the opportunity to share with you our work 

and recommendations on how to improve EPA's programs and operations. Before I begin, 

I would like to commend the expertise, dedication and professionalism of the OIG staff 

whose exceptional work serves as the foundation of my testimony this afternoon. I also 

would like to mention that last year the OIG was a recipient of the Alexander Hamilton 

Award for its work related to the Deepwater Horizon oil spill. This is the highest award 

bestowed by the inspector general community, and highlights achievements in improving 

the integrity, efficiency and effectiveness of Executive Branch agency operations. 

Role of the OIG 

The OIG is an independent and non-partisan office within the EPA that is uniquely 

positioned to conduct audits and investigations of waste, fraud and abuse of agency 

programs and operations. Although we are a part of the EPA, senior EPA leaders can 

neither prevent nor prohibit us from conducting our work. In accordance with the 

Inspector General Act of 1978, as amended, the OIG's mission is to: conduct independent 

and objective audits, investigations and inspections; prevent and detect waste, fraud and 

abuse; promote economy, effectiveness and efficiency; review pending legislation and 

regulation; and keep the agency head and Congress fully and currently informed. 

EPA Management Challenges for FY 2012 

Today I will briefly summarize our July 2012 report on EPA's management challenges 

for FY 2012 that we provided to both the Administrator and Congress as mandated by the 

Reports Consolidation Act of 2000. This report, which was included in the Agency's 

Financial Report, is available to the public in its entirety on the OIG's web site. 

To prepare this report, we defined management challenges as program or management 

functions, within or across the agency, that have greater vulnerability to waste, fraud, 
153 

abuse and mismanagement where a failure to perform well could seriously affect the 

ability of EPA to achieve its mission or goals. 

The following are the five areas we determined were the key management challenges 

facing the EPA for FY 2012: 

• Oversight of Delegations to States 

• Safe Reuse of Contaminated Sites 

• Limited Capability to Respond to Cyber Security Attacks 

• EPA's Framework for Assessing and Managing Chemical Risks 

• Workforce Planning 

We deleted one management challenge that we had identified the previous year (Need for 

Greater Coordination of Environmental Efforts) because we recognize that cross-agency 

coordination is not something over which EPA has exclusive control. The OIG 

acknowledges the agency's efforts to coordinate environmental issues across the federal 

government and with state and local partners. 

We are currently in the process of identifying the most serious management challenges 

for FY 2013 and will issue our list to the EPA Administrator later this year. Following 

are details on the key management challenges we had identified for FY 2012. 

OVERSIGHT OF DELEGATIONS TO STATES 

To accomplish its mission to protect human health and the environment, EPA develops 

regulations and establishes programs to implement environmental laws. The agency may 

authorize state, local or tribal governments to implement many of these laws when they 

request authorization and EPA determines that governments are capable of operating the 

program consistent with federal standards. The agency relies heavily on authorized state 

and tribal agencies to implement environmental programs and the performance of state 

and tribal govemments is critical to assuring protection of human health and the 

environment. However, EPA dclegation does not exempt EPA from its statutory and trust 

responsibilities to protect human health and the environment. 

EPA performs oversight of state, local and tribal programs to provide reasonable 

assurance that delegated programs are achieving their goals. Since 2008, we have 

designated oversight of delegations to states as a management challenge. The agency has 

begun to improve its oversight by implementing the State Review Framework, which is 

intended to provide a consistent approach for overseeing state programs and identifying 

weaknesses and areas for improvement. However, this challenge persists. For example: 

• In December 2011, we reported that despite EPA efforts to improve state 

enforcement performance, state enforcement programs frequently do not meet 

national goals and states do not always take necessary enforcement actions. EPA 

data show that noncompliance is high and the level of environmental enforcement 

is low. Our report identifies various reasons for this, such as limited state 

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154 

resources, the management of enforcement resources, and the use of oversight 

authority. States and EPA are accountable for meeting enforcement standards and 

effectively curtailing weak and inconsistent enforcement. If these issues are not 

addressed, state performance will remain inconsistent across the country, 

providing unequal environmental benefits to the public and an unlevel playing 

field for regulated industries. 

• In June 2011, we reported that Georgia's Concentrated Animal Feeding 

Operations program was operating without proper permits, inspection reports 

were missing required components, and the state was not assessing compliance 

with permits. EPA records presented a misleading picture of the status of the 

state's program. Georgia and EPA's records reported a 100 percent inspection rate 

for CAFOs, but almost half of these inspection reports were missing information. 

As a result of inadequate oversight and reporting, Georgia's waters were 

vulnerable to discharges of animal waste from CAFOs, which are associated with 

a range of human health and ecological impacts and contribute to degradation of 

the nation's surface waters. 

We continue to conduct work in this area to provide recommendations to ensure that the 

agency provides stronger and effective oversight of delegations to states. 

SAFE REUSE OF CONTAMINATED SITES 

The EPA has placed increasing emphasis on the reuse of contaminated properties and has 

a performance measure to define a population of contaminated sites that are ready for 

reuse. The agency has successfully turned some problem sites into properties that 

reinvigorated communities and created jobs. However, EPA's primary duty is to ensure 

that contaminated sites are safe for humans and the environment. The agency faces 

significant and increasing challenges in this area due to: I) the common practice of not 

removing all sources of contamination from hazardous sites; 2) a regulatory structure that 

places key responsibilities for monitoring and enforcing the long-term safety of 

contaminated sites on non-EPA parties that may lack necessary resources, information 

and skill; 3) changes in site risks as site conditions change over time; and 4) weaknesses 

in EPA's oversight of the long-tenn safety of sites. In addition, the agency has noted in 

its 201 I 2015 Strategic Plan that it must incorporate emerging science into decision 

making. 

Since 2009, we have designated safe reuse of contaminated sites as an EPA management 

challenge. The lack of effective long-term monitoring and enforcement of reuse controls 

at contaminated sites can pose significant risks to human health and the environment. Our 

recent work highlights the potential risks involved. For example: 

In August 20 II, we reported the results of a review of conditions at five 

Superfund sites that had been remediated and removed from EPA's list of national 

Superfund priorities. At two of the sites we reviewed, we found new 

contamination and changed site conditions. At one former industrial site, we 

3 
155 

found that the site owner was building a residence on top of the site although 

levels of contamination detected at the site exceeded residential safety levels and 

the site contained buried drums and other potential human health hazards. 

• In February 2011, we reported that the EPA relies on the self-certification of a 

third-party environmental professional to determine whether statutorily required 

environmental due diligence has been performed at EPA-funded Brownfields sites. 

In a sample of environmental due diligence investigations we reviewed, 

environmental professionals failed to assure that a proper environmental 

investigation occurred. In addition, we found that the EPA conducts no oversight 

of the requirement to meet "continuing obligations" at EPA-funded Brownfields 

properties. Continuing obligations include land use controls and "institutional" 

controls designed to prevent unacceptable use of contaminated properties. 

Weaknesses or lapses in meeting environmental due diligence or continuing 

obligations requirements can result in undetected or undisclosed contamination 

and property reuse that may pose unacceptable risk to humans. 

• In February 2012, we reported on important improvements in EPA's review and 

oversight of Superfund Five-Year Reviews. The Superfund FYR process is and 

should be a "safety net" for detecting new contamination or changes in conditions 

at sites determined to have met cleanup goals. FYRs can identify new potential 

human health risks and changing site conditions. We found that the FYR process 

needs to be a stronger safety net. We also found no formal process in place to 

resolve differences when EPA headquarters and regions disagree on the 

conclusions ofFYR reports. Consequently, protectiveness determinations 

included in published FYR reports may reflect unresolved agency disagreements 

about site protectiveness. In addition, our review showed that the EPA did not 

always follow up to determine whether the regions implemented 

recommendations made in FYRs, and regions sometimes disregarded valid EPA 

headquarters comments about the quality of FYRs. 

We have ongoing work in this area that will provide recommendations to EPA on how it 

can provide stronger and effective controls to ensure the long-term safety of reused sites. 

LIMITED CAPABILITY TO RESPOND TO CYBER SECURITY ATTACKS 

As technology continues to advance and the agency increases its use of automated 

systems to further integrate EPA data and services with external users via the Internet, 

having a strong information technology infrastructure that addresses security at the 

enterprise architecture level is critical to protecting the agency against cyber attacks. The 

growth in computer connectivity places the EPA at increased risk of disruption to its 

critical operations as well as the possibility of unauthorized access to sensitive data. As 

such, it is imperative that EPA management continues efforts to strengthen practices to 

guard against Advanced Persistent Threats. 

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156 

The EPA acknowledges that Advanced Persistent Threats pose a significant challenge for 

the agency and has committed to making significant progress in enhancing situational 

awareness across the infrastructure and increasing visibility into network activities. EPA 

management stated that to address this challenge, it has identified specific automated 

tools to deal with cyber security concerns. Agency management also indicated it fully 

deployed a Security Information and Event Management tool to facilitate greater 

vigilance in log reviews and activity monitoring. Additionally, the agency indicated that 

its Computer Security Incident Response Capability team is working to build stronger 

relationships with internal organizations, such as the Office of Homeland Security, for 

threat intelligence sharing. However, this challenge persists. For example: 

• In June 2011, we reported that the EPA has taken steps to address cyber threats, 

but key actions remain incomplete. In particular, we found limited assurance that 

data in the Automated System Security Evaluation and Remediation Tracking tool 

are reliable for decision-making. This tool is used to track the remediation of 

weaknesses in EPA's information security program, as well as inform 

management about the adequacy of controls implemented to protect agency 

systems. In addition, we concluded that the Computer Security Incident Response 

Capability center lacks the skills and resources to promptly identify and 

effectively remedy ongoing cyber threats. Furthermore, the EPA had not 

established an agency wide continuous network security monitoring program to 

identify known vulnerabilities. In this regard, the EPA has not completed a key 

project that would provide its offices with the needed tools to implement an 

agency wide approach for identifying known vulnerabilities. As a result, the EPA 

continues to lack information necessary to make accurate information system 

security investment decisions, effectively monitor its network for suspicious 

activity or remediate known weaknesses on its network. 

• In September 2012, we reported that the EPA needed to make improvements in its 

network security monitoring program. We reported that EPA neither developed a 

comprehensive deployment strategy for its Security Information and Event 

Management tool to incorporate all of the agency's offices nor developed a formal 

training program to train employees on how to use the tool. This computerized 

tool is used to centralize the storage and review of computer logs or events to 

monitor or investigate unusual network activity. Furthermore, the EPA does not 

have a computer security log management policy to define practices for audit log 

storage and disposal, to include defined roles and responsibilities for log 

management. The agency also did not follow up with staff to confirm whether 

they took corrective actions to remediate known system vulnerabilities or steps to 

address weaknesses in its incident response program that were identified from 

internal reviews. As a result, EPA invested in a network monitoring tool that 

limited the agency's assurance of meeting organizational goals and user needs, 

increased risks that the EPA could not effectively respond to network 

compromises because data necessary to provide insight on suspicious activity 

would not be available when needed, and continued existence of known system 

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157 

vulnerabilities and programmatic weaknesses that undennine the agency's ability 

to secure its network and respond to network intrusions. 

We have ongoing work in this area and will provide EPA with recommendations when 

warranted for providing stronger and effective controls to sccure its network 

infrastructure and respond to cyber attacks. 

EPA'S FRAMEWORK FOR ASSESSING AND MANAGING CHEMICAL RISKS 

The EPA's framework for assessing and managing chemical risks has not yet achieved 

the goal of protecting human health and the environment. In 1976, Congress passed the 

Toxic Substances Control Act authorizing EPA to collect information on chemicals, and 

regulate the production and distribution of those chemicals. The agency's effectiveness in 

assessing and managing chemical risks is hampered by limitations on its authority to 

regulate chemicals under TSCA. 

Since 2010, we have designated the EPA's framework for assessing and managing 

chemical risks as a management challenge. It is a significant challenge as the TSCA 

inventory of chemicals in commerce now exceeds 84,000 chemicals, and there are other 

challenges. Specifically, chemicals that were produced for commercial purposes prior to 

TSCA were grandfathered, so manufacturers were not required to develop and produce 

data on toxicity and exposure that would be needed to properly and fully assess potential 

risks. Further, TSCA never provided adequate authority for the agency to evaluate 

existing chemicals as new concerns arose or as new scientific information became 

available. TSCA also lacks the broad information-gathering and enforcement provisions 

found in other major environmental protection statutes. For example, TSCA does not 

provide the EPA with the administrative authority to seek injunctive relief, issue 

administrative orders, collect samples, and quarantine and release chemical stocks, 

among other key authorities. 

In 2009, the Administration outlined core principles to strengthen U.S. chemical 

management laws. Congress has also made attempts to revise and modernize TSCA. 

However, in the absence of new legislation, we reported in 2010 that the EPA could 

better manage existing authorities and demonstrate results within its New Chemicals 

Program and Endocrine Disruption Screening Program. For example, the EPA does not 

have integrated procedures and measures to ensure that new commercial chemicals do not 

pose an unreasonable risk to human health and the environment. Oversight of regulatory 

actions designed to reduce known risks is a low priority, and the resources allocated by 

the agency are not commensurate with the scope of monitoring and oversight work. In 

addition, the EPA's procedures for handling confidential business information requests 

are predisposed to protect industry information rather than provide public access to health 

and safety studies. Finally, the agency's framework for assessing and managing chemical 

risks from endocrine disruptors is failing to show results. Despite establishing the 

Endocrine Disruption Screening Program in 1998, the EPA has yet to regulate the 

endocrine-disrupting effects of any chemicals. 

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158 

Other work we conducted in support ofthis management challenge includes: 

• In December 2011, we reported that the EPA does not currently have sufficient 

information or processes to effectively manage human health and environmental 

risks from nanomaterials. Though the agency has the statutory authority to 

regulate nanomaterials, it lacks the environmental and human health exposure and 

toxicological data to do so effectively. The EPA has proposed mandatory 

reporting rules for nanomaterials under the Federal Insecticide, Fungicide, and 

Rodenticide Act and is also developing proposed rules under TSCA. After the 

OIG reported that the EPA lacked a formal process to coordinate the 

dissemination and utilization of the potentially mandated information, the agency 

agreed to our recommendation to establish a process. 

• In July 2011, we reported that the EPA's Voluntary Children's Chemical 

Evaluation Pilot Program did not achieve its goals to design a process to assess 

and report on the safety of chemicals to children. The pilot's design did not allow 

for desired outcomes to be produced. Specifically, the pilot had a flawed chemical 

selection process and lacked an effective communication strategy. Program 

effectiveness was hampered by industry partncrs who chose not to voluntarily 

collect and submit information, and the agency's decision not to exercise its 

regulatory authorities under TSCA to compel data collection. We concluded that 

the EPA has not demonstrated that it can achieve children's health goals with a 

voluntary program. 

We will continue to monitor the agency's progress in assessing and managing chemical 

risks. 

WORKFORCE PLANNING 

Over the last 5 years, the EPA has averaged over 17,000 positions in its organizational 

structure with annual payroll costs of approximately $2 billion. For any organization to 

operate efficiently and effectively, it must have a clear understanding of its workload. 

While there is no one exact definition of workload, it is commonly thought to be the 

amount of work assigned to, or expected to be completed by, a worker in a specified time 

period. Workload that is set too high or too low can negatively affect overall performance. 

The main objectives of assessing and predicting workload are to achieve an evenly 

distributed, manageable workload and to accurately detennine the resource levels needed 

to carry out the work. The OIG has recently issued several reports examining how the 

EPA manages its workload and workforce levels. For example: 

• In December 2010, we found that EPA's policies and procedures do not include a 

process for determining resource levels based on workload as prescribed by the 

Office of Management and Budget. Further, the EPA does not determine the 

number of positions needed per mission-critical occupation using workforce 

analysis as required by the Office of Personnel Management. These conditions 

occurred because the agency has not developed a workload assessment 

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159 

methodology and has not developed policies and procedures that require workload 

analysis as part of the budget formulation process. As a result, the EPA cannot 

demonstrate that it has the right number of resources to accomplish its mission. 

• In September 2011, we found that the agency has not collected comprehensive 

workload data or conducted workload analyses across the EPA in about 20 years. 

The EPA does not require program offices to collect and maintain workload data, 

and the programs do not have databases or cost accounting systems in place to 

collect data on time spent on specific mission-related outputs. Office of 

Management and Budget guidance states that agencies should identify their 

workloads to help determine the proper workforce size, and federal accounting 

standards require that agencies establish cost accounting systems to allow them to 

determine resources consumed for work performed. Without sufficient workload 

data, program offices are limited in their ability to analyze their workloads and 

accurately estimate resource needs, and EPA's Office of Budget must base budget 

decisions primarily on subjective justifications at a time when budgets continue to 

tighten and data-driven decisions are needed. 

We made several recommendations to address these findings, including that the agency: 

conduct a pilot project requiring EPA offices to collect and analyze workload data on key 

project activities; based upon those pilot results, develop guidance for agency program 

managers for conducting workload analysis; and complete a workload analysis for all 

critical functions to support its budget request. 

While the EPA has and continues to take action to address the longstanding issue of 

workforce analysis, much work remains to develop practical methods that the agency can 

use to accurately estimate workload and staffing levels. 

Conclusion 

While the EPA's senior leadership is taking the management challenges seriously and is 

making progress in resolving them, the agency must remain focused on these challenges, 

especially in light of the difficult budgetary climate facing all federal agencies today. The 

OIG will continue to provide oversight and track the EPA's actions on these challenges 

while looking to identify any emerging issues warranting attention. In conclusion, I 

would like to reaffirm the OIG's commitment to vigorously work with the Administrator 

and Congress to ensure that the agency's programs and operations work efficiently and 

effectively for the benefit of the American taxpayer. 

Mr. Chairman, this concludes my prepared statement. I will be pleased to answer any 

questions you or the Members may have. 

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160 

Biography of Inspector General Arthur A. Elkins, Jr. 

Arthur A. Elkins, Jr. became Inspector General of the U.S. Environmental 

Protection Agency (EPA) on June 25, 2010. Before his appointment, Mr. 

Elkins served as Associate General Counsel within EPA's Office of 

General Counsel. While in that position, he supervised the delivery of 

legal counsel, opinions, litigation support, and other legal services for the 

Office of General Counsel's Information Law Practice, Employment Law 

Practice, and Intellectual Property Law Practice. 

Previously, Mr. Elkins served as the Chief Legal Officer and General 

Counsel for the Court Services and Offender Supervision Agency, an 

independent federal executive branch agency responsible for pretrial 

services and adult parole and probation community offender supervision; 

Counsel to the Inspector General of the National Science Foundation; 

and Counsel within the Department of Defense, Defense Office of Hearings and Appeals. 

Prior to joining the Federal Govemment, Mr. Elkins served as an Assistant Prosecuting Attomey 

in the Ohio Cuyahoga County Prosecutor's Office and as an Assistant Public Defender in the 

Ohio Cuyahoga County Public Defender'S Office. 

Mr. Elkins eamed a Bachelor degree in social sciences from Thomas A. Edison State College; a 

Master of Business Administration degree from Baldwin-Wallace College; a Juris Doctor degree 

from Cleveland-Marshall College of Law, Cleveland State University; and a Master of Laws in 

Law and Govemment from Washington College of Law, The American University. 

Mr. Elkins is a member of the bar in Ohio, District of Columbia, United States District Court for 

Northern Ohio, the United States Court of Appeals for the Sixth Circuit, and the Supreme Court of 

the United States of America. 

Mr. Elkins is the recipient of the Council of Counsels to the Inspector Generals Leadership Award, 

Federal Executive Council on Integrity and Efficiency Award for Excellence in Investigations, and 

the National Science Foundation Office of Inspector General Commendable Service Award. 

Mr. Elkins is the proud father of three children and resides in Bowie, Maryland, with his wife, Gail. 
161 

Chairman BROUN. Thank you, Mr. Elkins. 

Now, I recognize Ms. Kendall for five minutes. 

STATEMENT OF MS. MARY L. KENDALL, 

DEPUTY INSPECTOR GENERAL, 

U.S. DEPARTMENT OF THE INTERIOR, 

OFFICE OF INSPECTOR GENERAL 

Ms. KENDALL. Thank you, Mr. Chairman, Ranking Member 

Maffei, and Members of the Subcommittee. Thank you for the opportunity to testify about the major management and performance 

challenges facing the Department of the Interior and the approach 

the Office of Inspector General takes for providing oversight in 

these program areas. 

As you know, the OIG makes an annual determination as to 

what the most significant management and performance challenges 

are facing Interior. Historically, the OIG made this determination 

by looking at our recent past audit and investigative work to identify the major challenges. In the past two years, however, we chose 

to take a more prospective outlook. Utilizing a number of resources, 

the OIG identified the top challenges we see facing the Department. We then met with the department officials to gain their perspective on the challenges we identified and the areas we would report upon. In those areas that the OIG had not done significant— 

or in some cases any—audit or investigative work, we asked the 

Department to help us identify one or two program areas that 

present the most challenge or concern. 

Prior to issuing our report, we have done some limited analysis 

to better identify the scope of these issues involved in the greater 

challenges. We then used the major management and performance 

challenges to inform and guide our audit—and to the extent possible, investigative—work in the coming year. 

Last year, the OIG identified the top management performance 

challenges as: energy management, climate change, water programs, responsibility to Indians and insular areas, Cobell and Indian land consolidation, and operation efficiencies. Therefore, in 

planning our audit and evaluation work for Fiscal Year 2013 and 

determining the scope for this work, we were guided by these top 

challenge categories into developing our targeted categories. 

In energy, some of the program areas subject to review are mineral material sales, underground injection controls, offshore renewable energy, onshore oil and gas permitting, and pipeline management. 

In climate change, we were reviewing the various climate change 

requirements placed on the Department. 

In water, we are conducting a series of evaluations of the Coastal 

Impact Assistance Program and we will be looking at the Bureau 

of Reclamation Wastewater and Groundwater Programs. 

In Indians and insular areas, we have looked at the election system and Public Finance Authority of the Virgin Islands and are reviewing the Guam Memorial Hospital Authority. 

In addition to these top challenge categories, we have maintained 

additional targeted categories for audits and evaluations, as they 

are so integral to the mission of DOI and have been areas of con-
162 

cern historically. They are: asset protection and preservation; and 

health, safety, security, and maintenance. 

For investigations, we are necessarily more reactive. We cannot 

plan our investigative activities like we do our audits and evaluations. We are, however, guided by five investigative priorities: contract and grant fraud, energy, scientific misconduct, ethical violations, and public safety and security. Clearly, our investigative priorities overlap to a certain degree with our audit and evaluation 

priorities. This is a natural overlap, not necessarily intentional. 

But as an OIG of less than 300 employees that oversees a department with over 75,000 employees, we must focus our oversight activities on those areas of greatest concern and challenge. Although 

there may be many other ways in which to fine-tune this focus, 

using targeted categories and investigative priorities help us deploy 

our resources to the areas in greatest need of oversight in the Department of the Interior. 

Mr. Chairman and Members of the Subcommittee, this concludes 

my formal testimony. I appreciate the opportunity to be here today 

and would be happy to answer any questions. 

[The prepared statement of Ms. Kendall follows:] 
163 

TESTIMONY OF MARY L. KENDALL 

DEPUTY INSPECTOR GENERAL FOR THE 

DEPARTMENT OF THE INTERIOR BEFORE THE 

HOUSE COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

SUBCOMMITTEE ON OVERSIGHT 

MARCH 14,2013 

Mr. Chainnan, and members of the Subcommittee, good afternoon. Thank you for the 

opportunity to testify about the major management and perfonnance challenges facing the 

Department of the Interior (DOl), and the approach the Office ofinspector General (OlG) takes 

for providing oversight in these program areas. 

In accordance with the Reports Consolidation Act of 2000, the OIG makes a 

detennination as to what the most significant management and perfonnance challenges are 

facing DOl. In the past, the OIG would make this detennination by looking at our recent past 

audit and investigative work to identify the major challenges. In the past two years, we chose to 

take a more prospective outlook. Utilizing a number of resources, including budget justifications, 

program descriptions, press statements and coverage, congressional and public interest, the OIG 

identified the top challenges we see facing the Department. We then met with DOl officials to 

gain their perspective on the challenges we identified, and together agreed upon the challenge 

areas we would report on. In those areas that the OIG had not done significant (or in some cases, 

any) audit or investigative work, we asked the Department to identify one or two program areas 

that present the most challenge or concern to the Department. Prior to issuing our report, we have 

done some limited analysis to better identify the scope of issues involved in these greater 

challenges. We then use the major management and perfonnance challenges to infonn and guide 

our audit (and to the extent possible, investigative) work in the coming year. 

Last year, the OIG identified the top management and perfonnance challenges asEnergy management; 

Climate change; 

Water programs; 

Responsibility to Indians and Insular Areas; 

Cabell and Indian land consolidation; and 

Operations efficiencies. 

Therefore, in planning our audit and evaluation work for fiscal year 2013 and detennining 

the scope for this work, we were guided by these top challenge categories in developing our 

targeted categories: 

o Mineral Material Sales - Detennine whether BLM is obtaining market value for 

mineral materials on public lands. 
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o Underground Injection Controls - Determine whether the Department has (1) an 

accurate inventory of authorized underground injection sites and (2) adequate 

environmental safeguards. 

o Offshore Renewable Energy - (1) Identify ongoing and proposed offshore 

renewable energy projects. (2) Evaluate DOl's budget and resource planning to 

determine if the Offshore Renewable Energy program is sufficiently funded and 

staffed to conduct leasing and oversight activities associated with offshore 

renewable energy. (3) Evaluate the process for establishing renewable energy fees 

to ensure fees are well reasoned and ensure a fair return to the federal 

government. (4) Evaluate the inspection and enforcement of the Offshore 

Renewable Energy program. 

o Gulf of Mexico Energy Security Act (GoMESA) - Detetmine whether 

appropriate controls are in place to adequately ensure that GoMESA funds are 

being used only for authorized purposes. (The Act significantly enhances outer 

continental shelf oil and gas leasing activities and revenue sharing for the four 

Gulf oil and gas producing States of Alabama, Louisiana, Mississippi and Texas. 

Qualified revenues are transferred to the U.S. Treasury and to the Land and Water 

Conservation Fund (LWCF). From here, they are disbursed to the States. These 

funds are to be used for coastal conservation, restoration and hurricane 

protection.) 

o Osage Nation Oil and Gas Program - Determine (I) the level of oil and gas 

oversight expertise at the Osage Agency and (2) what oil and gas oversight 

procedures exist as the Osage Agency (both in writing and in practice). 

o Onshore Oil and Gas Permitting - Determine the effectiveness and efficiency of 

reviewing and issuing drilling permits on Federal and Indian oil and gas leases. 

o Pipeline Management - Determine whether DOl has adequate inspection and 

enforcement programs to ensure that critical security and maintenance measures 

are effectively planned and implemented. 

Climate Change 

o Climate Change - Determine whether funding for climate change related projects 

are being effectively utilized and properly managed at the bureau level. 

o Coastal Impact Assistance Program (ClAP) - To (I) determine whether ClAP 

grant recipients have complied with ClAP's authorizing legislation, Federal 

regulations, DOl policies, and grant terms and conditions; and (2) identify grant 
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management challenges that FWS should address as it assumes responsibilities for 

ClAP management from BOEMRE. 

o Bureau of Reclamation Wastewater and Groundwater Programs - Determine 

whether (1) grants awarded under the WaterSMART programs contribute to 

sustainable water resources and (2) the WaterSMART grant program is being 

effeetivelyadministered. 

Indians and Insnlar Areas 

o Election System of the Virgin Islands - Administration of Election LawsDetermine whether the activities and functions of the Joint Boards of Elections 

are in compliance with election rules issued by the Office of the Supervisor of 

Elections. 

o Evaluation of Guam Memorial Hospital Authority - Determine the ability of 

Guam's Memorial Hospital to meet the medical care needs of the citizens of 

Guam in light of the planned increase in popUlation from the military relocation. 

Further, determine whether opportunities exist to enhance medical services 

provided. 

o Public Finance Authority - Monitoring of Capital Improvement Projects, 

Government of the Virgin Islands - Determine whether the Public Finance 

Authority adequately monitored the release of funds for its intended purpose in 

their capital improvement projects. 

DOl Business Processes and Operations 

o GovTrip Use and Monitoring Determine whether proper management steps are 

being taken to use and monitor GovTrip 

o Wildland Fire Controls - Determine whether the Wildland Fire program costs 

comply with applicable laws, regulations, policies and procedures. In addition, 

evaluate the effectiveness of internal controls over fire suppression and 

preparedness funding and the safeguarding of assets and resources. 

o Wildland Fire Suppression Aviation Usage - Determine whether DOl is able to 

adequately justify its use ofInterior-owned and/or contracted aircraft and related 

costs during wildfire land suppression activities. 

o Recreation Revenue - Determine whether bureaus are obtaining market value 

(where appropriate) for recreation activities and amenities on public lands. 

o USGS Requirements Under the National Earthquake Hazard Reduction Program 

(NEHRP) - Evaluate the effectiveness of the program, including the change from 

a discipline-focused organization to "science strategy" mission areas. 
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o Safety of Watercraft and Diving Operations - Determine whether bureaus are 

compliant with Federal and Departmental requirements. Specifically: (1) are 

watercraft operators and divers properly trained; (2) are required records kept; and 

(3) are safety incidents properly reported and investigated with causes mitigated? 

In addition to these top challenges categories, we have maintained two additional targeted 

categories for audits and evaluations, as they are so integral to the mission of 001 and have been 

areas of concern historically 

Asset protection and preservation; and 

Health, safety, security, and maintenance. 

For investigations, we are necessarily more reactive. We cannot plan our investigative 

activities like we do audits and evaluations. We are, however, guided by five investigative 

priorities 

Contract and grant fraud; 

Energy; 

Scientific misconduct; 

Ethical violations; 

Public safety and security. 

Clearly, our investigative priorities overlap to a certain degree with our audit and evaluation 

priorities. This is a natural overlap, not necessarily intentional. But as an OIG of less than 300 

employees that oversees a Department with over 75,000 employees, we must focus our oversight 

activities on those areas of greatest concern and challenge. Although there may be many other 

ways in which to fine-tune this focus, using targeted categories and investigative priorities help 

us deploy our resources to the areas in greatest need of oversight in the Department of the 

Interior. 

Mr. Chairman and members of the Subcommittee, this concludes my formal testimony. I 

appreciate the opportunity to be here today, and would be happy to answer any questions you 

may have. 
167 

Mary L. Kendall 

Deputy Inspector General 

Department of the Interior 

Mary Kendall spent much of her career as an attorney for Federal law enforcement 

programs and as a State and Federal prosecutor. She joined the Federal workforce 

in 1986 as an attorney for the Environmental Protection Agency's Office of 

General Counsel. In 1990, she transferred to its Office of Criminal Enforcement, 

where she served for 9 years. Ms. Kendall became Deputy Inspector General at the 

Department of the Interior in the fall of 1999. She played an instrumental role in 

transforming the Office ofInspector General into an innovative organization 

dedicated to detecting Departmental fraud, waste, and mismanagement. 
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Chairman BROUN. Thank you, Ms. Kendall. 

I congratulate all three witnesses for staying within five minutes. 

I greatly appreciate it. And I thank you all for being available for 

questioning today. 

Reminding Members that Committee rules limit questioning to 

five minutes, the Chair at this point will open the first round of 

questions. And the Chair recognizes himself for five minutes. 

Ms. Kendall, you have refused to comply with a Congressional 

subpoena and obstructed at least two Congressional committees’ inquiries into the Deepwater Horizon Offshore Drilling Moratorium 

Report. You have also adopted a policy to work more collaboratively 

with the Department. One of the most important qualities of an IG 

is their independence. How can this Committee trust your work, 

particularly when even your testimony today states that you collaborated with the Department and to quote you, ‘‘together, agreed 

upon the challenge areas we would report on?’’ Ms. Kendall? 

Ms. KENDALL. Yes, sir. We did take a collaborative approach with 

the Department primarily because the—I am going to say the Association of Government Auditors made a recommendation to the Department of the Interior that the way that the top management 

challenges had been reported in the past did not give a good sense 

of sort of where the Department was and the position the IG took. 

It was more a sort of debate between the—— 

Chairman BROUN. Ms. Kendall, I am sorry to interrupt you because I—my time is very limited. The point is when you collaborate 

with the Department, that is not your job. Your job is to be a 

watchdog, to oversee them, to report things that they are doing 

that are wasteful or abuse, fraud, other types of oversight that you 

are supposed to be doing. That is what we have in this Committee’s 

responsibility is being an oversight Committee. And if you are 

working in collaboration with the Agency, I don’t know that we can 

trust your independence. I don’t know that we can trust what you 

tell us. The IGs have to be independent. It is absolutely a critical 

part of what you guys do. 

Mr. Friedman, the Administration’s attempt, which I think was 

very misdirected—the attempt to permanently shutter the Yucca 

Mountain project is still in the process of being litigated. In spite 

of the possibility that the courts might require DOE to continue 

pursuing the license, which hopefully that will happen, DOE has 

eliminated all semblance of a Nuclear Waste Management Program, and that affects every single nuclear facility in this country, 

including the Georgia Power Company in my own State, including 

the legislatively created Office of Civilian Radioactive Waste Management. Has the DOE IG examined DOE’s ability to reconstitute 

the Yucca Mountain project? Should the court—should the—well, 

let me ask that question. Have you all looked at reinstituting the 

Yucca Mountain project? 

Mr. FRIEDMAN. We have not. First of all, Mr. Chairman, nuclear 

waste disposal and the termination of the Yucca Mountain project 

is one of our management challenges, which I referred to earlier. 

Chairman BROUN. Yes. 

Mr. FRIEDMAN. This is a $15 billion tunnel to nowhere in the 

middle of Nevada. So it is one of the worst cases of how not—or 
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the best cases actually of how not to make public policy from my 

perspective. And we have been outspoken on that. 

In terms of reconstituting the office, the expertise—this is by observation; we have not done a report—by observation, the expertise—large parts of the expertise have left the office and I am not 

sure—could it be reconstituted? I am sure it could. Would it be extremely difficult? The answer is yes. 

Chairman BROUN. Well, obviously, you think the courts should 

not require them to reconstitute that, is that correct? 

Mr. FRIEDMAN. No, I have no position on the courts’ position with 

regard to reconstitution at all. 

Chairman BROUN. Okay. Has the DOE IG examined the CRWM’s 

data retention plans to preserve the relevant records and documentation? 

Mr. FRIEDMAN. Well, it is interesting you asked that question because when the Administration made the decision that it made not 

to fund the Yucca Mountain project and the office, we did do a review and we indicated that we were concerned that after the expenditures of nearly $15 billion, that there would be no appropriate 

means to maintain that information so that it could be used as a 

planning tool if nothing else for nuclear waste disposal decisions in 

the future. 

Chairman BROUN. So were you maintaining those records? 

Mr. FRIEDMAN. There is a system. We determined that there was 

a system to maintain those records. We have not looked at it in the 

last two, two and a half years. 

Chairman BROUN. Well, my time is just about up, but this is a 

huge issue for us in Georgia and South Carolina and the Southeast 

and all over the country. And it is something I have been very interested in. This Yucca Mountain project has been studied at great 

length. We had hearings here and the general—and the full Committee about the safety of it, and it has been shown that this is 

the best repository—it is not a disposal; it is a repository, in my 

opinion, of this nuclear waste. 

My time is expired. I now recognize Mr. Maffei for five minutes. 

Mr. MAFFEI. Thank you, Mr. Chairman. 

I am just wondering if each of the Inspectors General could very 

briefly tell us if—how the sequester is affecting their own offices, 

so not the Department but your own office. We will start with Mr. 

Friedman. 

Mr. FRIEDMAN. Well, Mr. Maffei, we have canceled a very important training meeting that we had. It is not really a conference; it 

is a meeting. We were required to meet certain professional standards and training our auditors specifically. We had to cancel that 

and we are looking at alternatives. We are limiting travel, we are 

limiting training, and we are going to institute a hiring freeze in 

the not-too-distant future. So at this point, we have the resources 

to continue. We have—we are anticipating a reduction, but we have 

planned carefully and we think we will be okay in terms of furloughs and other job actions. 

Mr. MAFFEI. Mr. Elkins? Thank you, Mr. Friedman. 

Mr. Elkins? 

Mr. ELKINS. Yeah, thank you. I will echo Mr. Friedman’s comments. Generally speaking, we are pretty much in the same boat. 
170 

We have to take a look at training and travel. Over 80 percent of 

our appropriations are in FTEs. In order to do the IG’s work, you 

have to have people, and the people need to get out and travel to 

do their investigations and audits. 

I would like to say that there is also an opportunity cost that is 

missing here as well. The IG community is probably one of the few 

organizations that actually produce a return on investment. We 

pay for ourselves. And at the end of the day when we have to cut 

our resources to do the work that we need to do, that has an impact on the bottom line, because we are not out looking at fraud, 

waste, and abuse. So yeah, it is going to have a big impact on our 

ability to do our mission. 

Mr. MAFFEI. So if I understand you correctly, you are saying that 

cutting the resources at the oversight level may lead to more waste 

and therefore, overall, may end up costing the taxpayer more 

money than if we had the appropriate resources at the IG? 

Mr. ELKINS. Absolutely. If we don’t do it, who will do it? 

Mr. MAFFEI. I agree. Ms. Kendall? 

Ms. KENDALL. Yes, sir. I would echo what Mr. Friedman and Mr. 

Elkins have both said. We are also operating right now at about 

90 percent of our full FTE and we have slashed training, we have 

slashed travel. We are trying to limit travel to as close to our office 

locations as possible for the work that we are doing. Like Mr. Elkins said, about 80 percent is in salaries and benefits and the rest 

is really in support of our mission. So it is quite a significant effect. 

Mr. MAFFEI. Thank you. 

And then very briefly, Mr. Friedman—and the Chairman may be 

surprised that I am going to ask a question on this, but I am very 

interested in the LG Chem case in Michigan and what you were 

able to find there. I do believe that these are important programs, 

and when they are abused, it is an extremely detrimental effort to 

our attempts to green the economy and make sure that we can sustain the planet. So I would like an update on where you are with 

that. 

And I would note that these need to be competitive programs. I 

have a battery company in my district that applied and was not 

granted these grants, and we are actually making batteries at my 

plant. So could you just give me an update as to where that investigation is and what you have found? 

Mr. FRIEDMAN. Do you want me to synopsize what our report 

said, Mr. Maffei? 

Mr. MAFFEI. Sure. Nothing—— 

Mr. FRIEDMAN. Oh—— 

Mr. MAFFEI. —since the report? 

Mr. FRIEDMAN. I am sorry. Essentially, it was a grant to build 

a plant in Holland, Michigan, designed to produce lithium ion batteries primarily for the Volt. It went to LG—it went to a predecessor of LG. LG purchased the predecessor. We found that the— 

there were allegations that employees, because there was no demand for the product, that employees were in fact playing board 

games and volunteering for Habitat for Humanity, as important as 

that may be, certainly on the government payroll. We found that— 

we confirmed that’s the case. We identified at least 1.6 million in 
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inappropriate payments of which the Department recovered from 

LG Chem $840,000. 

But more importantly, actually, is the fact that the—that this 

650,000 square-foot plant is idled because there is no demand for 

the product at this point. One of the important—one of the conditions precedent to granting the grant was that the LG production 

of lithium ion batteries in South Korea would be transferred to this 

plant. 

Mr. MAFFEI. Yes. 

Mr. FRIEDMAN. That component was never—although it was conceived—it was part of the conception of the grant, it never made 

its way into the written product. As a consequence, the Department 

had no leverage, so they told us to force LG to meet that term, 

which is—was extremely unfortunate. 

Mr. MAFFEI. Realizing I am out of time, Mr. Chairman, but Mr. 

Friedman, is there any update—have you concluded the investigation? Are you continuing to look at how this so-called competitive 

decision was made? 

Mr. FRIEDMAN. We have completed the audit component of the 

investigation. There are other aspects of it that are currently under 

review. 

Mr. MAFFEI. Okay. We will be very interested in those. 

Thank you, Mr. Chairman. I apologize for going over. 

Chairman BROUN. Mr. Maffei, I will always give you some leeway here on that. 

Okay. Thank you, Mr. Maffei. 

Let us go to Mr. Schweikert, my friend from Arizona. You are 

recognized for five minutes. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman. 

And to—is it—and forgive me for asking. It is properly pronounced Mr. Maffei? 

Mr. MAFFEI. It rhymes with buffet so—— 

Mr. SCHWEIKERT. Buffet? 

Mr. MAFFEI. —yeah. Think of everything you want—— 

Mr. SCHWEIKERT. Now, you will have just made me hungry. 

Mr. MAFFEI. —to eat for 12.95 except with an M, of course. 

Mr. SCHWEIKERT. Yeah, and that is in New York? 

Mr. MAFFEI. Yes. 

Mr. SCHWEIKERT. All right. 

Mr. MAFFEI. Yes. 

Mr. SCHWEIKERT. Hey, but Mr. Friedman, actually, my friend 

from New York here, who is my brand-new friend obviously, was 

basically going down a path that I know it is not your job is ultimately to audit, analyze policies that we make here in Congress 

and where we are going to have maybe some differences is was this 

actually a place that we should have been putting capital or instead of designing, you know, sort of tax and mechanical codes and 

those things that—with—maybe the benefits should have gone to 

the battery factory in his district because they were producing and 

working. 

But when you are looking at this LG example in Michigan, your 

department or the department that you oversee has dozens and 

dozens of these grants, assistance, loan guarantees. What method-
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ology do you reach out to? How do you grab data sets? How do you 

stay on top of it to know that you don’t have bad actors out there? 

Mr. FRIEDMAN. Well, understand, Mr. Schweikert, that I give— 

I am giving you an answer from the IG prism. The Department has 

a fairly extensive mechanism for managing the grants process and 

the contract process and other financial awards process, for making 

priority decisions, for evaluating what proposals make sense and 

what proposals don’t make sense. Our role, as I see it, is to probe 

those processes to make sure that in fact they are using the structure that exists in the Federal acquisition regulations and good 

logic and good common sense. 

Mr. SCHWEIKERT. But my concern is how do you catch them 

quickly? I mean have you embraced enough technology or the agencies you oversee so they are getting monthlies? You are actually 

seeing purchase orders that are attached to the grants, that you actually can see production? I mean this drives me insane because it 

is close to planned economy and that, we know, doesn’t work. But 

if we are handing out the money, how are you—how does it ultimately get overseen and mechanically, how do you do quickly? 

Mr. FRIEDMAN. Okay. Are you asking from—again—— 

Mr. SCHWEIKERT. You are the IG. Purely from the guy that is auditing—— 

Mr. FRIEDMAN. From an IG perspective—— 

Mr. SCHWEIKERT. In many ways you are auditing the auditors. 

Mr. FRIEDMAN. Well, we are auditing those who are responsible 

for managing these contracts—— 

Mr. SCHWEIKERT. Yes. 

Mr. FRIEDMAN. —and instruments. And the answer is we try our 

best, Mr. Schweikert, to be proactive and preventative in nature 

rather than reactive and come in after the fact. And we have done 

that in a number of cases where we are getting essentially—looking at the—looking—invoicing on a real-time basis to try and—to 

try to prevent unallowable costs before they occur—— 

Mr. SCHWEIKERT. Okay. 

Mr. FRIEDMAN. —rather than after the fact. I don’t know how— 

I hope I am answering your question, but I am more than happy 

to go beyond—— 

Mr. SCHWEIKERT. This is classic design controls setup, you know, 

we had in our Accounting 101 and 301 classes. 

Ms. Kendall—and this one may be tainted because of some personal experiences when I was Maricopa County Treasurer. Is there 

a mechanism—does it hit your audit standards, your review standards, litigation settlements where Department of Interior is being 

sued because of a certain quarter, certain flood, certain this, certain that, and the mechanics within the decisions to either settle— 

do those hit your desk? 

Ms. KENDALL. We have not had any issues really with the litigation in the Department that I can think of right now. It just hasn’t 

been something that has come to us. 

Mr. SCHWEIKERT. Okay. It is one of our folklores out West is sue 

the Department of Interior, sue the Forest Service, sue them, because that is how you get what you want. Because you basically 

sue them and they will agree and that way you actually get the 
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court order that sort of circumvents much of the rule-writing mechanics. 

Ms. KENDALL. Interesting. It is not something that I was familiar 

with. I am glad you brought it to my attention. Thank you. 

Mr. SCHWEIKERT. Okay. Mr. Chairman, with that, I yield back. 

Chairman BROUN. Thank you, Mr. Schweikert. 

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

Mr. PETERS. Thank you. It is much easier to pronounce, too, I 

suppose. Thank you, Mr. Chairman. 

Mr. Elkins, I had some questions for you. Last month, your office 

released a report calling for EPA to improve its air emissions data 

for oil and gas production, and it said that the sector had various 

pollution processes emit large amounts of harmful pollutants that 

affect air quality at local, regional, and global levels. States and the 

EPA rely on this air emissions data to guide this decision. And putting aside for the fact how we even know what the amounts are, 

how would we—how could EPA improve its directly measured air 

emissions data, and is there anything that Congress can do to help 

that process? 

Mr. ELKINS. Well, as I recall, the import of that report really addressed the fact that EPA didn’t have the—enough data to be able 

to make decisions as to whether or not it was problematic or not. 

I am not quite sure just exactly what the recommendation in terms 

of what Congress could do to assist. This is more of a data quality 

issue that EPA has, an investment that the Agency needs to make 

in order to strengthen, bolster its ability to make decisions with the 

data that it has. But that was the issue related to that report. 

Mr. PETERS. But does EPA have the sufficient authority to be 

able to get that data if it wanted to get it? 

Mr. ELKINS. I would have to say that they do. It is a matter of 

just being—you know, they need to accumulate the data. They 

clearly have the expertise to be able to do that so, yes, the data 

is available; they just need to collect it. 

Mr. PETERS. So there is no need for Congressional authorization 

to EPA to get them to collect the data that we would all need to 

evaluate whether this is a problem as far as you know? 

Mr. ELKINS. As far as I know. I don’t see that that would be necessary, but of course, the Agency may have some constraints that 

I am not aware of. 

Mr. PETERS. Do you know whether the drilling companies keep 

this data themselves or whether they are required to? 

Mr. ELKINS. I do not know. I don’t recall that that was brought 

out in our report. 

Mr. PETERS. So is it possible that drillers—I have to concede we 

don’t know whether it is worse than we think or better than we 

think because we don’t have the data, but it is possible, I suppose, 

that a driller at a particular site would be emitting exceptionally 

high levels of methane but not know it? Or what they—would you 

expect that they would know that? 

Mr. ELKINS. Well, you don’t know what you don’t know. So that 

is kind of hard to say. I really wouldn’t have an opinion on that. 

I mean if you are not looking for it, if you don’t have any mechanisms or tools to identify it, I am not quite sure you would know 

it. I would think the science would suggest that based on the type 
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of reduction and the type of work that you are doing that it is going 

to produce certain byproducts. And if methane is based on the 

science, it is one of those byproducts; I would suspect that you 

would know that. 

Mr. PETERS. So I would just observe from the answer a lot of the 

use of the words ‘‘I don’t know’’ and the use of the word ‘‘guess.’’ 

It strikes me that we would be better off in terms of evaluating the 

need for environmental regulation, and I start from there because 

I don’t necessarily assume it if we knew what was going on. And 

if they have the power under existing law to collect that data, it 

would seem to me that that would be kind of something that you 

would want to encourage them to do. Otherwise, they can’t very effectively be regulating air emissions, could they? We don’t know? 

Mr. ELKINS. I wouldn’t want to go there. I mean in terms of what 

their statutory authority to do, in terms of regulation, I mean that 

is again totally up to the Agency to make that interpretation. That 

is an Agency call. 

Mr. PETERS. Okay. So we should talk to the Agency about that, 

I guess. 

Mr. ELKINS. That would be a good idea, I think. 

Mr. PETERS. All right. Well, I appreciate your time, Mr. Chairman. Thank you. I yield back. 

Chairman BROUN. Thank you, Mr. Peters. I hope I did pronounce 

that correctly. 

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

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

Mr. Friedman, in your written testimony you indicate that the 

Department of Energy ‘‘contract management remains a significant 

management challenge.’’ You also highlighted the fact in your testimony that the Department of Energy is the ‘‘most contractor-dependent agency on the civilian side of the Federal Government.’’ 

Ironically, you know that numerous Department of Energy Inspector General reports have documented missteps I think they call 

them associated with successfully managing the Department’s contracting process. 

Just a couple of examples: a February 2013 report from your office confirmed that LG Chem employees at the Michigan facility 

had little work to do and were spending time volunteering at local 

nonprofit organizations, playing games, and watching movies at the 

expense of the Federal Government and taxpayers; also, number 

two, a review of the July 2012 security breach at NS—NNSA’s 

2002—or Y–12 National Security Complex, a site which processes 

and stores uranium identified ‘‘troubling displays of ineptitude’’ 

that were chalked up to a lack of contractor governance and Federal oversight which failed to identify and correct early indicators 

of multiple system breakdowns. 

And number three that grabbed me, your October 2012 report on 

foreign travel highlighted the fact that Department of Energy contractors, for some reason, are not bound by travel restrictions that 

DOE government employees have to adhere to. And so this suggests, of course, that the Department of Energy does not just have 

an isolated issue with some of its contracts but rather suffers from 

a systemic problem in the Agency’s procurement system and what 

actions you would take I think we would all like to hear or would 
175 

you recommend that DOE take to ensure effective contractor oversight to address those issues and similar issues, which could conceivably be wasting billions of billions of taxpayer dollars every 

year? 

Mr. FRIEDMAN. Well, Mr. Posey, we had almost a whole inventory of recommendations to address the contracting, granting, cooperative agreement, financial assistant awards, management in the 

Department of Energy. It is a—the weak underbelly, from my point 

of view, of the Department. We do a huge amount of contracting. 

Virtually everything we do actually, with obviously some exceptions, is done by contract, including work with regard to the nuclear weapons, the management of our national laboratories system, and I could go on and on and on. What needs to be done, it 

seems to me, we need to seriously revisit the question of finding 

the right balance between oversight of the contractors and, at the 

same time, encouraging the contractors, incentivizing the contractors to do the right thing. And it is a balance. It is an issue which 

has not been resolved in the many years that I have spent looking 

at the Department of Energy’s system. That is, to me, the prime 

recommendation. 

Mr. POSEY. Well, this is my first year on this Committee, and so 

this is kind of shocking to me. And I get the feeling from what else 

I have read and from hearing you that this is not a new problem 

at DOE. And apparently, there have been proposed solutions before. Can you give me a little bit of insight as to how they were 

received or taken? 

Mr. FRIEDMAN. Well, this is not a new problem. It has been going 

on for years. The fundamental structure of the way the Department of Energy manages really goes back to the Manhattan 

Project. It has many of the same elements that existed in the late 

1940s, early 1950s and 1960s. So it is a long-standing issue. And 

finding—as I say, finding that right balance is extremely difficult. 

A number of Administrations have tried and made valiant efforts. 

The contractors frequently pushed back. Sometimes their interests 

and the Department’s interests—of course, when it comes to national security, I am not quarreling with that, but their interests— 

it is not always exactly parallel to that of the Department. 

So, as I say, finding the right balance is tricky but it seems to 

me that is the avenue we need to pursue. 

Mr. POSEY. Well, but besides the obvious waste of billions of dollars of taxpayers’ money, my next point was the threat to our national security to have such ineptitude, such incompetence, such 

belligerence, obviously that they seem to be refusing to comply with 

the Inspector General’s recommendations to remedy this situation. 

Mr. FRIEDMAN. Well, in fairness, Mr. Posey, the senior leadership 

of the Department and the senior leadership with regards to the 

Y–12 matter, which is extremely—which is fresh and raw and very 

troubling. And you are absolutely correct. The Department’s leadership—and I am not here to support them; I am not here speaking 

for them—they have gone to great lengths to make sure that the 

issues that we identified at Y–12 have been addressed. And at 

some point in the future, in the not-too-distant future, we will be 

going back in there to see if in fact the remedies are as effective 

as they have been portrayed. So you have my commitment with re-
176 

gard to that, but you have struck a chord on the issue that is extremely important. And national security is of the highest priority, 

of course, and Y–12, presumably, prior to the intrusion last summer was thought to be the Fort Knox of the weapons complex. 

Mr. POSEY. Yes. Thank you. 

Chairman BROUN. The gentleman’s time is expired. 

And now, we will start our second round of questions. 

Mr. Elkins, one challenge facing the EPA is its transparency. In 

fact, to me, it seems like that is a huge issue for this whole Administration. We were promised by the President that he would have 

the most transparent Administration in history, and it seems that 

he has redefined transparency to be obscurity. EPA’s use of alias 

emails appears to corrupt the Agency’s records by not tying an individual’s name to an email account. This Committee sought your 

help in reviewing whether EPA followed relevant Federal records 

laws, regulations, and policies, and for that I thank you. 

Understanding that EPA could hypothetically follow all relevant 

requirements and still frustrate records transparency, will your review address whether the current policies are sufficient to maintain the integrity of agency records and allow public transparency? 

Mr. ELKINS. Yes, Chairman Broun. The focus of our review—and 

as you know, we are still in the process of doing that review—is 

going to take a look at whether or not the Agency’s policies, regulations, and guidance was followed. Based on that review and based 

on the findings, we will be making recommendations if we find that 

the Agency has not followed its policy regulations and reviews and 

make recommendations how they can do so. 

But yes, we will be definitely addressing any issues that arise 

and we will keep you informed. 

Chairman BROUN. Well, I would appreciate that. The public deserves to know and use of alias email accounts is obviously a way 

of trying to get away from Freedom of Information Act and other 

ways of holding people accountable and responsible, and I think it 

is absolutely critical that—and I understand that this is not the 

only Administration that has utilized that type of activity, and I 

think it is deplorable that Administrator Jackson did do so and I 

hope that you will follow very closely and give this Committee 

some input. 

But before you were confirmed as EPA IG, you worked for the 

EPA’s Counsel’s office under Administrator Jackson. Were you 

aware of Administrator Jackson’s use of email aliases? 

Mr. ELKINS. No, you are absolutely right. I did work in the Office 

of General Counsel, and no, I was not aware. This issue only surfaced as far as my awareness level is when it was raised as a result 

of the issues that we have had discussion on here at this hearing. 

Chairman BROUN. Well, I think there is a potential appearance 

of a conflict of interest here, and what are you going to do to protect against a potential conflict of interest related to this review in 

view of the fact that you were in the counsel’s office? 

Mr. ELKINS. Yes. I mean that is a good question and it is something that when we embarked on doing this review, I raised the 

issue quite frankly, as to whether or not there was any conflicts. 

And I had a detailed discussion with my staff to determine whether 

or not I should recuse myself. But after going through that discus-
177 

sion, you know, a) it was determined that I had absolutely no 

knowledge about any of the issues that we were going to take a 

look at; 2) the focus of our review is again going to take a look at 

whether or not the Agency followed the law, and if that is the case, 

that it either did or did not, and so, you know, it didn’t seem based 

on that sort of review, it didn’t seem that I should recuse myself 

from that because—— 

Chairman BROUN. When can we expect the report of that review? 

Mr. ELKINS. I am sorry, sir? 

Chairman BROUN. When can we expect a report of that review? 

Mr. ELKINS. I would say probably within the next couple of 

months at least—— 

Chairman BROUN. Well, please get it to—— 

Mr. ELKINS. —we are in the early phases of it—— 

Chairman BROUN. —us as quickly as you can. My time is 

just—— 

Mr. ELKINS. Absolutely. 

Chairman BROUN. —about up. 

Mr. Friedman, after receiving anonymous complaints alleging improprieties in the Department’s Loan Programs Office, you initiated a special inquiry and issued a report that identified weaknesses in the administration of loan programs at DOE. These findings parallel similar conclusions to a March 2011 report from your 

office on DOE’s Loan Guarantee Program for clean energy technologies, as well as findings in a GAO report on DOE Loan Guarantees. 

Your testimony states that the Loan Guarantee Program is on 

your watch list as you termed it. I recently received a letter from 

DOE’s Loan Programs Office that seems to indicate that everything 

was just fine. Can you explain why you listed the Loan Guarantee 

Program? 

Mr. FRIEDMAN. Mr. Chairman, there are aspects of our work in 

loan guarantee that I can talk about. There are aspects that I cannot talk about in public session that there are law-enforcementsensitive. The cumulative body of work that we have done and that 

we have seen indicates to us in the obvious number of problems 

within the program that are in the public domain in and of themselves are sufficient to cause us to raise concerns about the program, its management, the selection process, the documentation 

that is maintained, and those sorts of issues. So that is our basis. 

I hope that is a satisfactory answer. 

Chairman BROUN. Well, the American hard-working taxpayers 

need all you guys to be very diligent. The Loan Programs Office 

has certainly come into a lot of criticisms, and I hope you will continue that process. 

I now recognize Mr. Peters for five minutes. 

Mr. PETERS. Thank you again, Mr. Chairman. 

I just had one more question for Mr. Friedman. I think you had 

indicated that the Department might establish a process to look at 

whether they could save money by consolidating their labs. This 

may even lead to closing some facilities. So I just wanted to see if 

you can explain for us maybe kind of what you thought the magnitude of the savings we might realize might be without undermining the missions of the Department’s labs. And I also under-
178 

stand it is something like a $3.5 billion ticket. And then adopting 

any process, do you have principles that you believe should guide 

the Department’s review for sort of a lab BRAC kind of process? 

Thank you. 

Mr. FRIEDMAN. Yes. Thank you for the question. Excuse me. Just 

to make sure we are clear, this is our recommendation as part of 

the management challenge process. The Department has not adopted it. 

Mr. PETERS. No, I understand. 

Mr. FRIEDMAN. It is—in fact, if—we are realists, Mr. Peters, and 

we are talking about jobs here and people and states that—in 

which these laboratories play a very important economic development role and they are extremely important. The basic framework 

of the laboratory system as it is currently established—and there 

has been some tinkering at the margins—is a remnant of the 1950/ 

1960s model. It has not changed. There are 16 FFRDCs spending about $11 billion a year, and of 

that amount, 35 to 40 percent is for administrative costs. Our view 

is that, given the current economic times, there ought to be a 

thoughtful approach—taking politics out of the mix if that is at all 

humanly possible—to determine whether all of those labs makes 

sense, whether there are ways of consolidating so that more of 

the—what is currently devoted to administrative costs could be devoted to direct science would be possible. That—our recommendation has not been adopted, and I might say, there are a number 

of Members of Congress who said it was dead on arrival. 

Mr. PETERS. Um-hum. 

Mr. FRIEDMAN. So we we made the recommendation because we 

thought it was the right thing to do, and the time has come for a 

reevaluation, but it was not received with a great deal of acceptance. 

Mr. PETERS. Just to follow up—— 

Mr. FRIEDMAN. No white smoke, you might say. 

Mr. PETERS. No, just to follow up, did you suggest a process by 

which that might be—might take place? 

Mr. FRIEDMAN. Well, we believe that the BRAC—something patterned after the Department of Defense BRAC style is exactly— 

BRAC Commission is exactly what we would recommend. 

Mr. PETERS. Okay. Thank you, Mr. Friedman. 

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

Chairman BROUN. Thank you, Mr. Peters. 

And now, Mr. Posey, you are recognized for five minutes. 

Mr. POSEY. Thank you, Mr. Chairman. And thank you for asking 

about Yucca Mountain earlier. I was really concerned about that. 

And you kind of got some of that air cleared for me. 

Mr. Friedman, I appreciate your comments that it is not the top 

leadership at DOE, but clearly, some of the contractor oversight 

personnel need to have better accountability or need to be more accountable. What tools do you, the IG, need, do you believe, to help 

that be more effective? 

Mr. FRIEDMAN. Well, I hope this doesn’t disappoint you, Mr. 

Posey, but I actually think we have a bag of tools available to us 

currently that allow us to do what needs to be done. 

Mr. POSEY. Okay. 
179 

Mr. FRIEDMAN. So I am comfortable with the status quo. 

Mr. POSEY. What would you think Congress needs to do to make 

them a little bit more accountable? 

Mr. FRIEDMAN. Well, I am—having been in this position for a 

long time and participated in a number of hearings, the sunlight 

that a—hearings and Congressional oversight forces is, to me, the 

most—single most important thing that Congress can do. So having 

hearings, having those involved in actual oversight and administration of these contracts appear before you it seems to me is the way 

of clearing the air, making it transparent, and holding people— 

maximum—achieving maximum accountability. 

Mr. POSEY. Okay. That didn’t work in Financial Services with 

the Securities and Exchange Commission after they let Madoff 

steal $70 billion. Nobody lost their job, and the answer to that was 

supposed to make us feel good is that, well, at least half the investigators and half the examiners who dropped the ball don’t work 

here anymore. So maybe they are at DOE. I don’t know. 

But Mr. Elkins, one of the challenges facing EPA is that of public 

trust. I am sure you know that. The American people deserve to 

know that the regulations created by the EPA are informed by 

science and not special interest or activism. Your office received a 

request to conduct a review of the Clean Air Act Advisory Committees in August 2011. Can you tell me where that stands now? 

Mr. ELKINS. I don’t have that information right off the top of my 

head. I can get back to you on that, though. One second. Okay. My 

subject matter expert tells me that you can expect it in late summer. 

Mr. POSEY. Okay. Please keep the Committee appraised. 

Mr. ELKINS. I will do so. 

Mr. POSEY. Thank you. 

That is all, Mr. Chairman. I yield back. 

Chairman BROUN. Thank you, Mr. Posey. 

I have got a few more questions that I would like to ask. And 

I want to go back to the Loan Guarantee Program. Mr. Friedman, 

you all oversee over—the—that program oversees over $38 billion 

for 40 loan projects. Does your office plan on conducting any reviews on the loan selection process? 

Mr. FRIEDMAN. Well, we have looked at the documentation. We 

have already published a report on the documentation that was 

maintained on the decision-making associated with the loan-granting process, Mr. Chairman. I admit to you that I am not as up to 

speed on the current status of the program as perhaps I should be, 

but my impression is that the vast majority of the loans have already been effectuated, if not all of the loans have been effectuated. 

But if there are loans to be granted in the future, we will be looking at that process. 

Chairman BROUN. I hope you will be a very strong watchdog on 

that. 

Mr. Elkins, I will come back to a question that Mr. Posey was 

asking you. The President has stated that if he cannot get his radical environmental agenda pushed through Congress that he is 

going to go around Congress. What is the IG office doing to try to 

maintain that we follow the Constitution and follow what should 

be done where the President is saying he is going to take Congress 
180 

out of the decision-making process? He is going to do whatever he 

wants to do. He is going to push his agenda and he doesn’t care 

whatsoever what Congress does or doesn’t do. What is the IG’s office going to be doing to keep us in Congress and the American 

public aware of what is going on and make sure that the EPA does 

not promulgate regulations that are not authorized through Congressional action? 

Mr. ELKINS. Well, Mr. Broun, our responsibility and mission, as 

you know, for the Office of Inspector General is to provide oversight 

and to make sure that the Agency follows its laws, the regulations, 

and guidance. We will continue to do that. We will continue to provide that oversight, and in areas where we determined that the 

Agency is not following the law, we will shed light on it and we 

will make it aware through our work products. So you can be assured of that. 

Chairman BROUN. Well, we are counting on you. And the American people—the hard-working taxpayers of America are counting 

on you to do so. And I just trust that you will do so and look forward to your report in this Committee. 

Ms. Kendall, as I said in my opening statement, I am concerned 

with how the DOI and the DOI IG handle allegations of scientific 

integrity and scientific misconduct. And I believe that this is a serious challenge facing the Agency as it moves forward, as we move 

forward. Given the allegations facing not only the Department but 

also the IG, I am not sure we can trust the Department’s decisions. 

While some scientific integrity and misconduct cases seem to have 

been handled appropriately by the IG, it appears as though allegations from a scientific integrity officer have gone ignored. How do 

you decide when to pursue an allegation of scientific integrity or 

misconduct? 

Ms. KENDALL. Well, we will look at any allegation of scientific 

misconduct. We are not, however, in a position to make a determination really on scientific integrity. The Office of Inspector General does not have any kind of scientific expertise in it. So we have 

to draw a fairly clean line between integrity of science and misconduct. When there are allegations of misconduct, we can investigate those factually. We cannot make a determination about the 

science, however. 

Chairman BROUN. Well, I am real concerned. As I mentioned already, when you are working in collaboration with the folks that 

you are supposed to be overseeing, I am not sure that that is going 

to occur. 

Mr. Elkins, in response to my earlier question, you said you 

would review whether EPA followed current policies regarding the 

integrity of maintaining agency records. I want to clarify my question. Will your review also address whether EPA’s policies are sufficient? 

Mr. ELKINS. We will make—if we find that the EPA’s policies are 

not sufficient and that additional internal controls need to be implemented in order to make them sufficient, we will make that recommendation. Yes, we will be looking at that and—yes, we will be 

looking at that. 

Chairman BROUN. Okay, Mr. Elkins. My time is expired. Mr. 

Posey—I think he is gone. And I appreciate Members being here 
181 

and I appreciate you all’s testimony. And I appreciate all the—your 

forbearance with us and flexibility also. Again, I want to thank 

you. 

Members of the Committee may have additional questions, and 

I ask you to respond to those in writing. Please do so very expeditiously. The record will remain open for two weeks for additional 

comments and written questions from Members. 

The witnesses are excused and the hearing is now adjourned. 

[Whereupon, at 1:45 p.m., the Subcommittee was adjourned.] 

(183) 

Appendix I 

ANSWERS TO POST-HEARING QUESTIONS
184 

ANSWERS TO POST-HEARING QUESTIONS

Responses by Mr. Gregory H. Friedman 

Enclosure 1 

U.S. Depal'tment of Energy 

Office of Inspector Genel'al 

Responses to Questions for the Record 

Following the Hearing Entitled, 

"Top Clwflellges /01' Sciel/ce Agel/cies: Repol'ts /1'011/ tile 111specI0l's Gellel'lll- Pal't 2" 

House COIllmittee on Science, Space, and Technology 

Subcommittee on Oversight 

March 14,2013 

Questions for the Record Submitted by Chairman Paul Broun, M.D. 

1. A December 2012 eyber security audit identifies duplicative capabilities for cyber 

security incident management between DOE aud NNSA at a cost of more tban $30 

million per year. How is DOE planning to resolve this issue of duplicative 

capabilities? 

In response to our audit report on Follow-lip AudU a/the Department's Cyber Security 

Incident Management Program (DOEIIG-0878, December 11,2012), the Depal1ment 

noted that it plaIl1led to take action to address duplicative capabilities, In palticu\al', 

management noted that the Joint Cyber Security Coordination Center (JC3) 

Implementation Plan will provide direction on how existing capabilities and resources 

fl:om across the Depaliment will be leveraged to accomplish the JC3 mission. 

Management noted that leveraging such investments should improve infolmatioll sharing, 

bettcr coordinate incident response, and improve iucident reporting, thus reducing the 

duplicative services to the extent possible. 
185 

2. It appears that DOE is incapable of ensuring contractors compliance with DOE 

regulations, leading to majO!' safety concel'ns in some instances. For example, a 

review of a July 2012 security breach at NNSA's Y-12 National Secul'ity Complex, a 

site that processes and storcs uranium, identified "troubling displays of ineptitude" 

that wcre chalked up to a lack of "[c]ontractor governance and Federal oversight 

[which] failed to identify and correct early indicators of ... multiple system 

breakdowns." Additionally, your review of DOE's storage and maintenance of 

explosives, which the Department keeps for research and development, as well as 

security purposes, I'evealed "problems with handling and storing explosives at each 

of the four contractor-operated sites [you] visited, potentially increasing the risk of 

harm to personnel and infmstructure." What do you attl'ibute these failures to? Is 

there a cultural problem at the Department? 

The Department delegates extensive responsibility for opel'atiOllS, safety, and security to 

its large stable of contractors. In this vein, in oUl' recent reports on the Y-12 matter, we 

attributed the issues to inadequate Federal oversight oflhe contractor workforce and the 

various operational decisions they routinely make. Specifically, we found particularly 

troubling the lack of Federal involvement in oversight and thc "eyes on, hands oft" 

approach taken by site officials. 

Additionally, we attribute the explosives-related issues, in part, to the fact that 

Depalimellt officials had not provided adequate oversight to ensure that responsible 

contractors propedy implemented policies for handling and storing explosives. Also, 

contractor officials charged with managing and safeguarding explosives had not ensured 

compliance with various aspects of the Department's Explosives Safety Manual. 

Although various reasons were offered by contractor officials in support of their 

approaches, the actions taken did not conform to the best protective and preventative 

explosives safety protocols established by the Department. Failure to properly implement 

safety protocols for explosives handling and storage procedures Ulmecessarily increases 

the risk of harlll to personnel, infrastructure and equipmcnt. 

Performance and compliance issues, compounded by a lack of robust contract 

management and oversight by Federal officials, in our opinion, contributed to the 

environment that permitted these problems to occur and nofbe identified, corrected or 

prevented ill a timely maimer. These issues, and any attendant cultural issues that may 

exist, are of concern and, in our opinion, mmeccssarily expose critical national security 

assets to all increased risk of harm or compromise. 

2 
186 

3. In October 2012, your office issued a report on DOE's management of foreign 

travel, noting that tbe Department had not made a "concerted effort to reduce 

contractor international travcl costs," which for FY 2007 througb FY 2102 equals 

$306 million (out of a total $360 million for all federal and contractor international 

trips). 

a. Did the Department provide an adequate response to explain why 

contractors were excluded from the tl'llvelrestrietions placed on DOE 

employees? 

No. The Department told us that it did not interpret the Office of Management 

and Budget's requirement to reduce travel costs to apply to contractors. However, 

in our opinion, the Department missed an opportunity to make meaningful cost 

reductions by excluding contractor foreign travel. 

b. What follow-ull plans do you have to monitor the Department's bandling of 

this issue? 

In addition to periodic discussions with agency officials, we monitor the 

Depaltment's progress on c011'ective actions through the Departmental Audit 

Reporting and Tracking System. As often as possible with available resources, 

we attempt to schedule follow-up reviews in specific areas of interest, if we 

identify the area as high risk and particularly if we learn that promised cOll'ective 

actions were not completed or effective. 

4. Your February 2013 report on LG Chem Michigan Inc, succinctly summal'izes 

problems that appeal' to exist Department-wide in other programs tbat benefited 

from an influx of stimulus spending. Specifically, regarding LG Chem, your report 

confirmed the allegation that "employees at the Michigan facility bad little work to 

do and were spending time volunteering at local non-profit ol'ganizations, playing 

games and watching movies at tile expense of the Federal govel'llment and 

taxpayers." Despite the expenditures of$142 million in Recovery Act funds, LG 

Chern Michigan has not yet achieved the objectives outlined in its Departmentapproved project Illan. Is the Department going to recovery these funds from LG 

Chem? 

The Department recovered $842,189 from LG Chem Michigan, hlC. related to the 

questionable labor costs identified in our report. At the time of our review, however, the 

Department had no plans to attempt to recover the entire $142 million in expenditures. 

3 
187 

5. DOE has awarded ECOtality approximately $125 million in stimulus flluding to 

install electric vehicle chargcrs across the United Statcs - some of which was 

provided nearly a year after the SEC (U.S. Securities and Exchange Commission) 

issued a subpoena to the company. 

II. Last year, at a Science, Space, and Technology Committee healing, your 

office identified a number of conccrns associllted with ECOtality's award, 

and informed tbe Committee an audit would be forthcoming in the second 

qUllrter of 2012. Given YOUi' bl'OlId concerns about DOE's Transportation 

ElectrificlItion Progrllm, lind previous statements, when can we expect your 

l'CPOl't on ECOtality? 

We began our audit in the first quarter of20l3. We are currently in the process of 

drafting the report of this review. 

b. Have you received all necessary information required for yOUl' review? 

Yes. We received all of the necessary information required for OUI' review. 

c. Can you describe some ofthe elements of this audit report'! (Your answer 

should include potential abuse of mandatory cost-share, accounting 

problems, and extensive project delays). 

Our report is currently in the drafting stage. We can provide additional 

information once that process is complete. 

6. In testimony before the Energy and Environment Subcommittee last July, your 

colleague explained the need for improvements in financial management for the 

Clean Cities and Transportation Electrification Programs, In Febl'Uary, you issued 

a repol't about LG Chem Michigan, Inc., which has received nearly $150 million of 

taxl>ayel' funds, but bas yet to achieve objective outlined in its Depal'tmentapproved project plan even as it paid employees to watch movies and play board 

games. 

A number oryout' reports on the Clean Cities and Transportation Electrification 

Pl'Ogram found stunning waste lind mismanagement. What do you ath'ibute this to? 

During our reviews for the rep011s listed, we found that inadequate policies and 

procedures, ineffective oversight, and a lack of clear guidance contributed to the findings. 

4 
188 

7. Regarding the Clean Cities Program, you could state in your most recent 

Semiannual Report to Congress that DOE" also asserted that competition was not 

required." What criteria did the Department use to evaluate proposals and identify 

award recipients? 

To clarify, the Department used competition to select award recipients for the Clean 

Cities Program. The Depat1ment uses 10 CFR 600 as the criteria for all financial 

assistance awards. During our review, however, management asserted that competition 

was not required for procurements by recipients. However, we emphasized that 

recipients had procured services after their award had been granted and therefore, due to 

requiremellts established in the award, should have complied with Federal procurement 

regulations, 

8. How often does the Department use other transactional autborities sucb as 

Cooperative Agreements (CA)? Wltat are they mostly used for and wltat oversight 

wOI'k does your office conduct on thcse CAs, which typically are IIOt subject to the 

same rigor and !'epol,ting mechanisms as a contract? 

Cooperative agreements are Ol1e type of financial assistance agreements utilized by the 

Department. By definition, cooperative agreemel1ts are to be used when "substantial 

involvement" by the Department in the project will be necessary. Periodically, these 

types of agreements are selected as pat1 of our reviews. The reporting mechanisms and 

requirements vary on projects as well as programs. As far as frequency of use is 

concemed, responsible Department officials may be able to provide such information. 

9. A repol't issued earlier tltis month by another Committee noted that "open and 

unimplementcd IG I'ccolllmcndations could save taxpayers $67 billion" in 2012. 

a. How many open and unimplemented recommendations do you have with 

DOE? 

As of the date ofthe hearing, March 14,2013, approximately 300 Office of 

Inspector General recollUllendations remained open, The Chief Financial Officer 

(CFO) is the Depat1ment's designated audit follow-up official and maintains the 

agency's audit follow-up system, known as the Depatimental Audit Report 

Tracking System. The CFO works with the responsible program and 

administrative elements to ensure that audit recommendations and corrective 

actions are appropriately tracked. 

5 
189 

b. How much could the Department save if your recommendations were 

incorporated, and how have these numbers changed over the years? 

The 300 recommendations noted above have an associated potential monetary 

benefit of approximately $1.6 billion. Please note that in terms of potential 

monetary benefit, these figures are representative ofl'eports with open 

recommendations rather than individual recommendations themselves. These 

amounts include funds that could be used more efficiently by implementing 

recommended actions as well as other unresolved or questioned costs. 

10. Are certain issues more likely than others to be on the "open and unimplemented" 

I'ccommendations list for DOE? If so, can you please elaborate on them? 

Over the last 10 years, the Office of Inspector General has issued more than 3,000 

recommendations on a val'iety of Department programs and operations. These 

reconunendations include, but are not limited to, issues such as contract administration, 

cyber security and information technology, environmental cleanup, national security, 

project management, internal controls, and operational efficiencies. Looking at the 

inventory ofrep0l1s and open recommendations in its entirety, we have not identified any 

trend or pattei'll suggesting that cel1ain issues or review topics are more likely than others 

to remain unaddressed by the Del)atiment. 

6 
190 

Responses by Mr. Arthur A. Elkins, Jr. 

HOUSE COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

SUBCOMMITTEE ON OVERSIGHT 

"Top Challenges for Science Agencies: Reports from the Inspectors General- Part 2" 

Sequestration 

Questions for the Record, Mr. Arthur A. Elkins Jr., Inspector General 

U.S. Environmental Protection Agency 

Ouestions submitted by Dr. Paul Broun. Chairman 

1) You made some comments in an interview last montb about how sequestration cuts may 

force you to Umit some of your office's planned projects for this year} Your office has a 

couple of projects it is working on for this Committee that were submitted and initiated last 

year - are they in danger of being delayed? 

Based on the Committee's request, the OIG initiated an evaluation of EPA 's research on human 

subjects in October 2012 to determine whether the EPA followed applicable laws, regulations, 

policies, procedures and guidance when it exposed human subjects to diesel exhaust emissions 

and concentrated airborne particles. As stated in the February 22, 20B,Inside EPA article, 

although sequestration cuts may eventually cause us to cut back on discretionary work, this 

evaluation has not been delayed due to sequestration cuts experienced by the OIG thus far and we 

do not envision it being delayed due to these cuts. It is taking longer to complete this evaluation 

than initially estimated, due largely to the amount of information received from the EPA and the 

University of North Carolina at Chapel Hill's Institutional Review Board. For example, we 

reviewed and evaluated over 6,000 pages of documents received from the review board alone. 

We plan to issue a draft report to the agency for comment by September 2013. 

Based on the Committee's request, we also initiated in December 2012 an audit of the EPA's use 

of private and alias email accounts, to determine whether the EPA follows applicable laws and 

regulations when using private and alias email accounts to conduct official business. We still plan 

to complete that work this summer. 

Cvber Security 

2) Your 2012 Federal Information Security Management Act report highlighted several 

serious deficiencies in the EPA's information security program. What has the agency done 

to mitigate these failings? 

On March 6, 2013, the OIG issued a draft report containing 10 recommendations that the agency 

should undertake to address deficiencies reported in our 2012 Federal Information Security 

Management Act Report. We anticipate issuing the final report in May 2013. 

1 Anthony Lacey, "fO Warns Budget CUIS Could Hamper Effort To Ensure EPA 'Transparency,'" InsideEPA.com, 

February 22, 2013, available at: http://insideepa.coml201302222425536IEPA-Daily-NewsIDaily-Newslig-warnsbudget-cuts-could·hamper-effort-to-ensure-epa-transparencyfmenu-id-95.html. 
191 

3) Are EPA's system security plans up-to-date, and do tbey reflect current policies and 

procedures? 

During our.2012 Federallnfonnation Security Management Act audit, we reviewed a sample of 

13 agency information system security plans. Of those plans, 12 were up to date and reflected 

current policies and procedures. While the EPA sufficiently categorized the sensitivity of the data 

that resides in all its systems, one security plan lacked documentation of the controls 

implemented to protect the data processed by the system. This security plan lacked details related 

to continuous monitoring activities, such as security impact analysis, system audit log storage and 

response to audit processing failures. 

Duplicative Programs 

4) Tbe management cballenges report states that your office bas begun work tbat "could 

identify d':!licative programs tbat warrant consideration as a future management 

cbalJenge. In the nine months since that report was released, wbat advances bas your 

office made on the project? 

We completed the project ("Catalog of Environmental Programs 2012") in October 2012. 

The catalog is a browsable online database of interagency environmental activities which helps 

describe the extent to which federal agencies playa role environmental protection. The EPA's 

success in protecting the environment depends on the efforts of many federal, state, local and 

tribal partners. 

Our audit and evaluation work also may involve identifYing potential duplicative programs. 

We have ongoing audit work related to the Science to Achieve Results (STAR) grant program, 

for which we are looking at whether the EPA is effectively monitoring grant recipients to ensure 

the EPA is not funding costs also funded by another federal agency. 

In September 2012, we issued a report ("Environmental Job Training Program Implemented 

Well, But Focus Needed on Possible Duplication With Other EPA Programs") that examined 

whether the EPA's Environmental Workforce Development and Job Training program is 

addressing its program goals and whether duplications may occur with other EPA job training 

programs. We found that the EPA effectively established and adhered to competitive criteria that 

resulted in the selection of job training proposals that addressed the broad goals of the 

Environmental Workforce Development and Job Training program. However, EPA did not have 

internal controls to identifY and prevent duplication with other EPA job training programs. 

S) In your office's effort to identify duplicative programs at EPA. bave you coordinated with 

tbe U.S. Government Accountability Office given tbe work that office conducts on 

duplicative federal programs? 

On an ongoing basis, the OIG coordinates its work with GAO. During meetings, we discuss our 

respective audit work involving duplicative programs, and also our respective planned, ongoing 

and completed audit work. 

2 Introduction to 20 12 EPA management challenges report. 

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State Oversight 

6) As part of its responsibilities, EPA assesses whether a state government is "capable of 

operating [a] program consistent with federal standards"'f To that end, EPA has 

implemented a State Review Framework, but, as noted in yonr office's management 

challenges report, EPA has uot "implemented [the framework] in a consistent manner."" 

Why is that and what work has your office done to oversee this process? 

[n the OIO's 2011 report, "EPA Must Improve Oversight of State Enforcement," we conducted a 

review of the enforcement programs in all 50 states, including a review of the State Review 

Framework - a national system for reviewing state enforcement performance under the Clean Air 

Act, Clean Water Act, and Resource Conservation and Recovery Act developed in 2004. We 

found that EPA enforcement officials generally found enforcement programs beneficial. We also 

determined that making the State Review Framework public helped to put pressure on states to 

perform better, and the process overall brought the enforcement discussion to a higher level in 

state agencies. However, our review of all available State Review Framework reports indicated 

that despite the Office of Enforcement and Compliance Assurance's guidance on conducting 

framework oversight reviews, EPA regions did not consistently conduct or report on their 

reviews. This was in line with an overall finding that state oversight was inconsistent across EPA 

regions. We have not reviewed that State Review Framework since this report. The EPA is 

currently working on reports for several state reviews from its Round 2 review (2008.2012). 

State enforcement performance and oversight has been an ongoing interest of the 010. In 

addition to the 2011 state oversight report, we conducted a review in 2009 on EPA oversight and 

policy for high priority violations of the Clean Air Act, and a review in 2007 on long-term 

significant noncompliance with discharge permits under the Clean Water Act. We are currently 

working on a project looking at the EPA's Watch List. 

7) This Committee has a long history with its oversight of EPA's IRIS (Integrated Risk 

Information System) program. Moreover, GAO lists IRIS as a high-risk program and even 

your office identifies it in your management challenges report. What do you have planned 

in terms of conducting oversight of this program at EPA this year? 

We recently completed the audit report, "Congressionally Requested Information on EPA 

Utilization ofIntegratcd Risk Information System" (Report No. 13-P-0127), issued on 

February 1,2013. We currently do not have further plans for reviewing IRIS in FY 2013. 

Science Advisory Board 

8) EPA's Seience Advisory Board (SAB) and Clean Air Scientific Advisory Committee 

(CASAC) play critical roles in reviewing the scientific foundation of EPA regulatory 

decisions and advising the agency broadly on science and technology-related matters. Yet, 

according to tbe Congressional Research Service, as of last year, almost 60 percent of the 

members of EPA's scientific advisory panels had directly reeeived reeent grants from tbe 

agency. Further, private sector expertise is often entirely excluded on panels, despite an 

3 P.l of2012 EPA management challenges report. 

4 P.! of2012 EPA management cballenges report. 

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existing statntory reqnirement that advisory committees "be fairly balanced in terms of the 

points of view represented." 

How does yonr office condnct oversight over the SAB, and ensnre a fair and balanced 

membership that equally represents viewpoints of environmentalists, industries and 

everyone else? 

In response to a congressional request, the orG has an ongoing assignment reviewing the EPA's 

management of the CASAC and tbe Advisory Council on Clean Air Compliance Analysis. The 

EPA's SAB Staff Office is responsible for managing these two committees. Our review is 

assessing whether the EPA has managed the CASAC and Council in accordance with applicable 

laws, regulations and guidance pertaining to potential contlicts of interest, appearances of 

impartiality, rotation of members, balance of committee viewpoints and perspectives, and peer 

review. We plan to issue a draft report to the agency in May 2013. The orG does not routinely 

conduct oversight of the SAB but may periodically review the SAB as we do other EPA programs 

and activities. 

9) EPA SAB meetings also limit pnblic participation, and virtually no ability exists for interested 

parties to comment on the scope orSAB reviews. What projects do you have ongOing regarding 

EPA's SAB rules and ensuring that It be an open and transparent process? 

Our office does not have any ongoing reviews of the SAB's rules. The orG review identified in 

response to question 8 is addressing the SAB Staff Office's management of the CASAC and the 

Advisory Council on Clean Air Compliance Analysis, not SAB committees. 

Bristol Bay 

10) Has EPA previously issued a draft watershed assessment in the context of a potential 

mining project in advance of a permit being filed for mine development? 

The EPA has not done any review on the EPA's draft Bristol Bay Watershed Assessment, nor is 

this topic addressed in the OIG's annual plan for FY 2013. 

11) Regarding EPA's draft Bristol Bay Watershed Assessment, bas your office received any 

complaints about wbether this docnment is compliant with (a) OMB guidelines regarding 

peer review; (b) Highly Intluential Scientific Assessment guidelines; and (c) the 

Administrative Procedure Act guidelines? 

No. 

12) Regarding EPA's draft Bristol Bay Watershed Assessment, have you received any concerns 

about the fact that this document is undergoing two peer reviews, yet EPA does not 

consider it a regulatory document? 

No. 

13) Regarding EPA's draft Bristol Bay Watershed Assessment, bave any ortbe peer reviewers 

contacted your office about the peer review process or about any inappropriate contact from 

the agency meant to influence the second peer review of this document due later this year? 

No. 

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14) Concerning EPA's draft Bristol Bay Watershed Assessment, have you received any 

allegations regarding conflict of interest associated with the watershed assessment peer 

review? 

No. 

15) Regarding EPA's draft Bristol Bay Watershed Assessment, have you received any 

allegations of scientific integrity violations by EPA in either the way the watershed 

assessment was drafted. or over its inclusion of non-peer reviewed publications? 

No. 

Sustainability 

16) Has your office conducted any work 00 EPA efforts io the area of sustainability practices 

and approaches? Specifically, what steps has EPA taken to Implement recommendations 

from the 2011 National Academy of Sciences report, SustainabiJiIy and the U.S. EPA, 

commonly referred to as the "Green book," for which EPA paid NAS nearly $700,000?5 

Under what statutory authority is the agency pursuing this agenda? 

The EPA has not done any review on the implementation of the National Academy of Sciences' 

recommendations, nor is this topic addressed in the OIG's annual plan for FY 2013. 

Open and Unimplemented Recommendations 

17) A report issued earlier this month by another Committee noted that "~n and 

unimplemented IG recommendations could save taxpayers $67 biHion in 2012. 

a. How many open and unimplemented recommendations do yon have with EPA? 

The OIG semiannually prepares a Compendium of Open and Unimplemented 

Recommendations as an appendix to its Semiannual Report to Congress. For the 

Compendium of Unimplemented Recommendations report as ofMarcb 31, 2013, we are 

reporting 127 open recommendations (whose agreed-to completion dates have not yet 

expired) and 23 unimplemented recommendations more than 1 year past the agreed-to 

completion date, for a total of 150 open and unimplemented recommendations. 

b. How mnch could EPA save !fyour recommendations were incorporated, and how 

have these numbers changed over the years? 

The OIG performs a variety of audits, including, financial statement, grant/grantee, 

contract, information system, risk assessment and complex program audits and 

evaluations. Our recommendations involve quantifiable monetary benefits, as well as 

non-quantifiable non-monetary benefits. 

j David John Marotta, "EPA: Green Gone Wild," Maretta on Money, January 13,2013, available at: 

http://www.marottaonmoney.comlepa-grcen-gone-wild. 

• Committee on Oversight and Government Reform report, March 5, 2013, available at: 

http://oversight.house.gov!wp-eontentfuploadsl20 13103fStaff-Repon-0pen-Unimplemented-lG-Recs.pdf. 

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For those audits and evaluations that contain monetary benefits, the OIG has identified 

over $400 million in potential savings in the form of cost efficiencies and questioned 

costs in FY 2012 that are subject to final management decisions and actions by the 

agency beyond the control of the OIG. Additionally, the vast majority of 

recommendations the OIG makes for which there are agreed-to corrective actions are 

performance and qualitative recommendations. While they are not quantifiable in 

monetary terms, if implemented they will result in significant savings, reduction of risk, 

and better delivery of EPA's environmental programs to improve the environment and 

public health. These benefits translate into cleaner water, air and land, and subsequent 

health and quality oflife benefits. 

Since the OIG began publishing its Compendium of Unimplemented Recommendations, 

the number of past due recommendations has steadily declined by about 75 percent. 

18) Are certain issues more likely than others to be on the "open and unimplemented" 

recommendations list for EPA? llso, can you please elaborate on them? 

There are no specific recurring issues that appear on the "Open and Unimplemented" 

recommendations list for EPA. The recommendations that appear on the list are very diverse and 

cover a myriad of topics. The recommendations relate to topics that range from information 

technology security, the EPA's financial statements, and EPA grantees (including tribal grants). 

as well as issues that affect EPA's programs like air, water and hazardous waste. Due to the very 

complex nature of the EPA programs, 01G audits and evaluations have similarly developed 

complex recommendations involving a wide array of stakeholders with scientific. policy and legal 

implications. As a result, complete implementation of complex program recommendations 

frequently requires many years, and some require continuous action. 

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Responses by Ms. Mary L. Kendall 

HOUSE COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

SUBCOMMITTEE ON OVERSIGHT 

"Top Challenges for Science Agencies: Reports from the Inspectors General- Part 2" 

Questions for the Record, Ms. Mary L. Kendall, Deputy Inspector General 

U.S. Department of the Interior 

Ouestions submitted bv Dr. Paul Broun, Chairman 

Scientific Misconduct - Drakes Bay 

I) Your office has done some work on the issues surrounding the Drakes Bay Oyster Company 

(DBOe), but has it looked into why former Secretary Ken Salazar based his decision to deny 

DBOe a Special Use Permit (SUP) on a policy and legal argument instead of on a scientific 

basis? 

Answer: No. 

2) The former Secretary's DBOe decision has the appearance of the Administration choosing 

when it can ignore science in order to further a pre-established decision. This contradicts 

what the President said in a March 2009 memorandum about the scientific process: "Science 

and the scientific process must inform and guide decisions of my Administration on a wide 

range of issues, including ... protection of the environment." I am further concerned by the 

amount of money wasted on multiple studies that in the end the Secretary "deemed optional 

and tangential to his decision." 

a. If the decision to shutter DBOC operations was a policy decision, have you done any 

work to determine why DOl invested so much time and resources to discredit the 

company's continued existence? 

Answer: No. OIG has not examined the Department's expenditure of funds relating to 

DBOe. 

b. Have you done any work to determine how much 001 spent on studies related to Drakes 

Bay? If not, can you provide the Committee with an estimate of how much the 

Department has spent so far on the DBOC issue, including all studies, reviews, 

environmental impact statements, NAS studies, etc.? 

Answer: OIG has not done any work to determine how much DOl spent on studies 

related to Drakes Bay, and it does not have an estimate of how much DOl has spent. The 

National Park Service should have this information. 

3) Do you know of other examples where DOl initiated scientific studies on an issue but then 

made a decision on policy grounds instead of on the results of the scientific reviews? 
197 

Answer: No. There may be other instances where DOl initiated scientific studies on an issue 

but then made a decision on policy grounds, but 010 has not received allegations of 

wrongdoing in this regard. The science bureaus in the Department would be better positioned 

to answer this question. 

4) Your offiee's February 7, 2013 investigative report ofDBOC provides some discussion over 

the definition of best available science pertaining to soundscape, and when it is appropriate to 

use best available data as opposed to collecting new data in order to produce a report of the 

highest quality. In previous DOl Environmental Impact Statements (EIS), how many used 

best available data (or referenee data, or proxy data) pertaining to the issue of soundscape, as 

opposed to new data collected from the sites or projects subject to the EISs? 

Answer: 010 does not have the data to answer this question. It would be best answered by 

the bureaus that conduet EISs. 

5) Please provide the Committee with complete and unredacted copies of all attachments that 

accompany the February 7, 2013 DBOC report. 

Answer: A copy of the unredacted report and all attachments will be provided to the Chair, 

but these documents should not become a part ofthe rccord as they contain personal privacy 

information and/or other information that is exempt from disclosure under the Freedom of 

Information and Privacy Acts and would not be released to the public. A public version of 

this report was posted to the 010 Web site in February 2012. 

6) Please provide the Committee with all records of correspondence, including e-mails, amongst 

all staff in your office including you, and betwecn all staff in your office and all staff at the 

Department, regarding the Fcbruary 7, 2013 DBOC report. 

Answer: Thc requested correspondence, including emails, is being compiled and will be 

provided (0 the Chair as soon as it is available. This correspondence also should not become 

a part of the record as it contains personal privacy information andlor other information that 

is exempt from disclosure under the Freedom ofInformation and Privaey Acts and would not 

be released to the public. 

Scientific Misconduct- Dr. Charles Monnett 

7) According to Public Employees for Environmental Responsibility's (PEER) website, your 

office has an open investigation into Dr. Charles Monnett, a senior scientist with DOl's 

Bureau of Ocean Energy Management (BOEM), and lead author of a research paper on 

sightings of polar bears drowned in open water following a storm. Your office has been 

reviewing Dr. Monnett for a few years now. 

a. What is the Department's response to your investigation? 

Answer: DOl's responses, and the 010 memo seeking clarification will be provided to 

the Chair under separate cover, but these documents should not become a part of the 

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record as they contain personal privacy information andlor othcr information that is 

exempt from disclosure under the Freedom ofInfonnation and Privacy Acts and would 

not be released to the public. 

b. What ongoing work do you have regarding Dr. Monnett, and when will you release the 

results of your review? 

Answer: The OlO file on this matter is closed. No further work is anticipated. The public 

version of the report ofinvesligation was posted to the OlO Web site in February 2012. 

Scientific Integrity - Klamath 

8) The Department of the Interior has been the subject of at least one major allegation of a 

scientific integrity violation, related to the removal of the Klamath River Dam, claiming that 

Department officials skewed the reporting of scientific findings to fit previously stated 

Department priorities. In this specific incident, the Scientific Integrity Officer was the 

individual who brought the complaint against the Department, and alleges that he was subject 

to retaliatory efforts because of his statements. 

I have serious concerns about DOl's scientific integrity policy when it is the Scientific 

Integrity Officers who are filing complaints. Further, in this case, the Scientific Integrity 

Officer's pleas for assistance from your office also went unheeded. 

Answer: DOl Scientific Integrity Officers (SIOs), like all other DOl employees, have a 

positive duty to report scientific integrity violations and scientific misconduct. The SIO to 

which this question refers received considerable attention from 01G. 

As background, Dr. Paul Houser was hired by DOl on April 10, 2011, to work as a science 

advisor for the Bureau of Reclamation (USBR). He also served as the SIO for USBR and 

worked on establishing scientific integrity policy for DOL Dr. Houser was required to serve a 

I-year probationary period through April 10, 2012. 

On February 8, 2012, Dr. Houser contacted the 010 Assistant Inspector General for 

Whistleblower Protection (AIO for WBP) to report that his supervisor, Ms. Kira Finkler, had 

told him that he had the option of resigning or being fired by February 10,2012, for 

unsatisfactory performance during his probationary term. 

Dr. Houser believed that Ms. Finkler's action was in retaliation for a September 15, 2011 

email he sent to her expressing his opinion about the content of a draft press release on the 

Klamath River Dam removal. He believed that the draft press release demonstrated a biased 

view of the science and tended to present only the positive without the uncertainties or 

negatives. Dr. Houser advised the AIO for WBP that the Klamath Dam issue was politically 

charged and that there were people on both sides of the science on this issue. Notably, Dr. 

Houser was not on the Klamath River Dam team. Nonetheless, the draft press release was 

modified to address the majority of Dr. Houser's concerns. 

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Prior to February 8, 2012, Dr. Houser had not filed a scientific integrity complaint with OlG, 

nor did he follow the procedures set out in the DOl scientific integrity policy (305 DM 3) in 

connection with his concern that the draft press release demonstrated bias. It was not until the 

AIG for WBP inquired whether Dr. Houser had filed a complaint under 305 DM 3 that he 

started to draft one. He filed a complaint on February 24, 2012, more than 5 months after he 

provided his input on the draft press release. 

In the 2 weeks following his contact with OlG, the AIG for WBP spoke directly with Dr. 

Houser to advise him on his rights under the law, administrative proeess and procedure, and 

possible informal and formal venues for resolution of his reprisal complaint. He was advised 

that he had several options available to him: 

1. He could work to informally resolve the issues he had with Ms. Finkler personally or 

through DOl's alternative dispute resolution program. 

2. The AIG for WBP could intervene informally to achieve informal resolution of his 

complaint. 

3. Hc could immediately file a formal complaint with the U.S. Office of Special Counsel 

(OSC) and request a stay order through the Merit Systems Protection Board (MSPB) 

to prevent his firing. 

The AIG for WBP discussed MSPB case law and the merits of being fired rather than 

resigning so that Dr. Houser might fully protect his rights at OSC and MSPB. Because time 

was of the essence, the AIG for WBP also recommended filing an immediate formal 

complaint with OSC and request for a stay order. 

The AlG for WBP advised Dr. Houser that he had three major hurdles to overcome in his 

complaint to the OSC: 

1. his status as a probationary employee; 

2. whether he could present sufficient information to conclude with a substantial 

likelihood that he had made a disclosure as required by statute; and 

3. the fact that he would need to explain why he did not file a scientific integrity 

complaint in September 2011, but waited until his proposed removal to file one. 

This was problematic because as an SIO, he had helped create the DOl scientific integrity 

policy and was responsible for its implementation in his bureau. Section 3.8(A) of the policy 

governs procedures for reporting and resolving allegations regarding loss of scientific and 

scholarly integrity. Dr. Houscr did not comply with this and other provisions of the policy. 

Dr. Houser chose first to attempt informal resolution with Ms. Finkler. This was 

unsuccessful. A formal complaint to ose appeared to offer the most productive and 

immediate outcome given OSC's statutory authority, and to afford Dr. Houser the 

opportunity to request a stay order from the MSPB. On February 24, 20 J 2, Dr. Houser told 

the AIG for WBP that he would file a formal complaint with OSC and request a stay order. 

The AIG for WBP advised Dr. Houser that she would providc any information or support 

necessary to the OSC attorney or investigator assigned. 

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If there was a science issue between September 2011 and February 8, 2012, that merited a 

fonnal scientific integrity complaint, it was not a priority for Dr. Houser. His complaint came 

more than 5 months after the "discovery of alleged misconduct," and advanced outside the 

established process that Dr. Houser helped to develop. Dr. Houser told Ms. Finkler that ifhe 

could retain his position, then the science issues could be resolved internally. When this 

could not be achieved, Dr. Houser filed the scientific integrity eomplaint. At the same time, 

he filed it with several members of Congress as well as sending a copy to the Siskiyou 

County Board of Supervisors, which, he believes, leaked it to the press. This temporarily 

usurped the process for his complaint to be properly addressed under the DOl scientific 

integrity policy. 

9) 0l0, through the AlO for WBP, responded to Dr. Houser's pleas for assistance by guiding 

him to the most appropriate forum for his allegation of reprisal to be addressed-OSC. It is 

our understanding that Dr. Houser is satisfied with the settlement he achieved through OSC 

on his reprisal complaint. 

Is anyone responsible for scientific integrity at DOl? 

Answer: DOl has a nascent program to ensure scientific integrity, which was launched when 

it issued its scientific integrity policy in 20 II. See 

www.doi.gov/scientificintegritylindex.cfm. 

10) Besides the Klamath River Dam situation, have there been other allegations at DOl of 

scientific findings being manipulated or otherwise incorrectly or inaccurately reported in 

order to confonn to a predetermined policy goal? 

Answer: Since 2001, 010 has investigated several other allegations of scientific 

wrongdoing: the case of lynx fur being "planted" during a study; two cases involving 

allegations of scientific wrongdoing relative to Endangered Species Act (ESA) decisions; and 

allegations of scientists deliberately misleading the court in an ESA litigation case. 

11) Is this part of a larger cultural problem within the Department of the Interior? 

Answer: Even if the above instances are combined with the Klamath, Monnett, and DBOC 

matters, as well as the matters identified in #12, below, 010 has not concluded that this is a 

large cultural problem in DOL 

12) Besides the Klamath River Dam situation, have you identified any other cases offalsification 

of scientific findings, and do you have any ongoing work on them? 

Answer: 010 would not consider the complaint about the Klamath River Dam draft press 

release a case of "falsification of scientific findings," nor would the following fall within that 

category, but 010 has identified several other matters that fall within the category of 

allegations of scientific misconduct. The lynx case and the two cases relative to ESA 

decisions identified above would fall in this category, as would 010 findings in its first 

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investigation concerning DBOC. OIG has three open matters that have scientific 

implications, but we have not yet determined whether they are scientific misconduct. 

Scientific Misconduct- General 

13) Understanding that DOl has challenges with scientific misconduct as well as scientific 

integrity issues at the Department, how does your office: (a) distinguish between the two at 

DOl, and (b) ensure rigorous oversight in pursuing both types of claims at DOl? 

Answer: (a) For the past several years, the OIG Office of Investigations has attempted to 

address complaints of scientific misconduct and scientific integrity by reviewing the 

incoming complaints on a case-by-case basis. OIG has never considered itself positioned to 

adequately examine whether the science itself is sound or a "proper" scientific decision was 

made. As a matter of practice, OIG generally seeks to determine whethcr an established 

process exists and if that process had been properly followed. If the process was deviated 

from, we attempt to determine why the deviation occurred and what resulted from the 

deviation. 

As the development of the scientific integrity policy took place in DOl, OIG began refining 

its procedures and practice. Efforts were made to distinguish between misconduct and 

integrity by defining scientific misconduct as "misconduct by scientists" and scientific 

integrity as whether the methodology and processes were followed in accordance with 

established protocols. Over time, however, the terms "scientific integrity" and "scientific 

misconduct" have been used interchangeably, causing confusion both internally and 

externally. 

OIG is currently reviewing the OIGs of science agencies to identify best practices and to 

improve upon our own policy and procedures for handling such matters. 

(b) Rigorous oversight of scientific misconduct and scientific integrity will be hampered by 

diminishing resources. Staffing gains made in the previous 5 years have been lost due to 

sequestration and other budgetary cuts. Our budget has been reduced to 2009 levels, and we 

have reduced our staff by over 20 FTEs. We must rely, to a great cxtent, on voluntary 

compliance and adherence to the scientific integrity policy and the reporting of violations by 

scientists and other employees in the field. We will continue to promote our Whistleblower 

Protection and Complaint Hotline programs. In addition, we will periodically conduct 

program evaluations to determine adherence to established policies and procedures. 

When c.omplaints of misconduct are received, we will conduct investigations when warranted 

and provide DOl the information it needs to take corrective action. We will continue to 

require notice of administrative action taken by DOl and will routinely report on our 

investigations into this area in our semiannual reports to Congress. 

14) Have you or any of your staff in any way discouraged or intervened to prevent a DOl 

investigation of scientific integrity or misconduct from going forward? 

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Answer: No. In fact, it was the OIG evaluation entitled "Interior Lacks a Scientific Integrity 

Policy," issued in April 2010, which caused DOl to fmally issue its scientific integrity policy. 

Endangered Species Act 

15) According to a recent news story, the Administration received a handful of proposals from 

environmental groups on how it could improve implementation of the Endangered Species 

Act. Has your office scen these proposals, and do you have any plans to monitor how the 

Department responds to these proposals, particularly ifit decides to incorporate any of them? 

Answer: OIG is charged with preventing and detecting fraud, waste, and abuse in DOl 

programs and operations. With approximately 250 employccs, we are one of the smallest 

Cabinet-level OlGs, and so we simply cannot monitor everyone ofthe many programs and 

over 70,000 employees that make up DOL DOl manages more than 500 million acres ofland 

and 700 million acres of subsurface minerals, and has jurisdiction over 1.7 billion acres of 

the Outer Continental Shelf. It also manages 401 units of the national park system, 561 

national wildlife refuges, 73 fish hatcheries, 21 national conservation areas, and 19 national 

monuments. It collects billions of dollars in revenues. It is the largest supplier and manager 

of water in the 17 western States. It is responsible for 476 dams and 337 reservoirs that 

deliver irrigation water to 31 million people. It also has a responsibility toward the 483 

million annual visitors to its lands, parks, refuges, and recreation sites. In addition, it is 

responsible for maintaining relationships with 566 federally recognized Indian tribes, for the 

largest land trust in the world, and for managing nearly $4.4 billion of trust funds held in 

accounts for more than 250 tribes and over 387,000 Individual Indians. 

Absent allegations of fraud, waste, or abuse, OlG does not intend to monitor DOl's response 

to the Endangered Species Act proposals identified above. 

Collaborative Approach 

16) Your office has a different approach to its responsibilities in that you coordinated with the 

Department to collaboratively identify performance and management challenges at DOl? 

a. What made you embrace this approach, and do any other IG offices follow the same 

protocol? 

Answer: From fiscal years (FYs) 2007 through 2010, OlG was reporting, and DOl 

management was disputing, the statu~ of seven major management challenges: 

l. financial management; 

2. information technology security; 

3. health, safety, and maintenance; 

4. responsibility to Indians and Insular Areas; 

5. resource protection and restoration; 

6. revenue collections; and 

7. acquisition management. 

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Given the disputed status, little progress had been made in addressing these and other 

challenges and was reflective of the contentious relationship between DOT management 

and OTG. The approach to resolving the management issues was not constructive and did 

not contribute to a resolution. Information was not shared between staffs in a manner that 

allowed reconciliation of facts or resolution of specific problems, and this made the 

communications and ongoing working relationship among staffs strained and less 

productive than they could have been. 

The contentiousness of this relationship was noted in an assessment by the Association of 

Govemment Accountants (AGA), an independent party that reviews agency fmancial 

reports annually. AGA had been commenting on the issues surrounding the major 

management challenge reports and management's responses since 2007. In AGA's 

review ofDOI's 2010 agency financial report, AGA noted that DOT management and 

OIG were clearly not in synch, did not agree on facts, and repeated other facts, and that 

readers ofthe report (e.g., Congress, the Office of Management and Budget [OMBJ, and 

the public) could casily be confused or misled. In addition, AGA cited that the 

management challenge reports and management's responses were not meeting the intent 

of the Reports Consolidation Act and OMB Circular A-136 for OTG to "assess and report 

all aspects ofDOrs progress addressing the challenges, and management adding 

additional comments only when it believes the Inspector General's assessment is less 

than complete." 

In 2011, OTG and DOT management accepted AGA's recommendation and changed the 

process for addressing and reporting management challenges by openly discussing the 

issues, the status of those issues, and the bcst approach for addressing them. Not only has 

this approach directly addressed the AGA comment, which did not appear in the 2011 

review, it further complied with the Reports Consolidation Act and OMB Circular A-136 

and has resulted in a more effective communication of current issues. 

This statement is supported by the fact that the 2012 management challenges report 

includes five new challenges compared to 2010, and that six of the 2010 challenges (most 

of which dated back to 2007 and carlier) are no longer considered major. Ongoing highlevel dialog between OlG and the Deputy Secretary and Assistant Secretary - Policy 

Management and Budget, as well as dialog at the staff level, all contribute to more 

meaningful corrective actions. 

This more constructive approach and improved relationship have allowed DOl to work 

with OlG to design processes for more effective oversight of programs and process 

throughout DOL For example, DOT issued stronger grants and financial assistance 

guidance that incorporated lessons learned from working with OTG to review and monitor 

financial assistance programs. 

Because of this approach, DOl management is now seeking orG investigation, feedback, 

and input on issues instead of hiding the issues. As a result, orG is better situated to 

conduct reviews or investigations, and can offer an independent perspective and objective 

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recommendations. This has directly contributed to more accurate assessments of current 

management challenges, their severity, and the status of corrective actions. For example, 

in 2011, a new Director in a smaller DOr office had issued a disclaimed assurancc 

statement on the status of his office's intemal controls. Management could have kept the 

statement quiet and for internal use only. Given the new working environment, however, 

management met with OlG, shared the disclaimed statement, and asked OlG to 

investigate the status and extent of the issues raised. OlG's independent feedback gave 

DOl the information and insight necessary to determine if and how the issues should be 

reported and identify the corrective actions needed. 

We do not know if other OlGs take this approach. 

b. How do you (a) ensure independence over the agency and (b) ensure that you don't end 

up doing the agency's own work of implementing its programs efficiently and conducting 

its own intemal oversight? 

Answer: (a) OlG is govemed by independence standards in the realm of audits, 

inspections, and evaluations, as well as investigations. OrG and its staff take these 

standards very seriously and take great care to adhere to them. OIG is peer reviewed 

periodically, and independence is part of that review. OlG has not been found in violation 

of the independence standards. 

(b) OIG also takes great care to draw a clear line between oversight and implementation. 

The independence standards provide very clear guidance in this regard. 

Open and Unimplemented Recommendations 

17) A report issued earlier this month by another Committee notcd that "open and 

unimplemented IG recommendations could save taxpayers $67 billion" in 2012. 

a. How many open and unimplemented recommendations do you have with DOl? 

Answer: 010 and DOl are cnrrcntly tracking approximately 600 open recommendations. 

There is approximately $40.5 million in questioned costs and $36.5 million in funds that 

could be put to better use. Only about 50 recommendations are awaiting a management 

decision as to their plan of resolution. 

b. How much could the Department save if your recommendations were incorporated, and 

how have these numbers changed over the years? 

Answer: At the start ofFY 2008, OIG was tracking $16.3 million in questioned costs and 

$28.2 million in funds that could be put to better use without management decisions. 

Sinee FY 2008, OlG issued reports that have questioned costs of $55.2 million and an 

additional $4.7 million in funds that could be put to better use. At the end ofFY 2012, 

OlG is tracking $516,000 in questioned eosts and $8,500 in funds that could be put to 

better use without management decisions. 

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18) Are certain issues more likely than others to be on the "open and unimplemented" 

recommendations list for DOl? If so, can you please elaborate ou them? 

Answer: Recommendations that cross mUltiple bureaus take longer to resolve and issues that 

need legislation or regulation changes. Recommendations are also more likely to remain as 

open and unimplemented for grant and Insular Area audits where implementation of the 

recommendations is not completely under the control of DOL The following is a list of a few 

long-term issues that OIG provided to the other committee (mentioned in question #17 

above): 

Report Numberl Term of Description 

Issue Date Reo. 

C-EV-MOA-0009-2008 Long Evaluation Report on Oil and Gas Production on Federal Leases: No Simple 

Issue Date: 0212712009 Answer - Both MMS and BLM employ inconsistent procedures and definitions 

and BLM's records are often incomplete and inaccurate, all of which call into 

question both the integrity and the usefulness oftheir data. These data integrity 

issues are exacerbated by multiple, incompatible systems utilized by BLM and 

MMS. We found that due to incompatible data tracking systems used by BLM 

and MMS, DOl is at risk oflosing millions of dollars in royalties. In one case, a 

breakdown of communications between BLM and MMS could have resulted in a 

loss of nearly $6 million in royalties over a 5-year period, had the company 

holding the leases not sent its flfst production report to both bureaus and not just 

BLM. The existing process relies heavily upon companies doing the right thing. 

We recommended DOl work with BLM and MMS to identifY the best existing 

system (either bureau's system) for lease management and develop the capability 

for both bureaus to access and use this system, thus eliminating multiple systems, 

the need for mauual reporting between the bureaus, and the attendant dataintegrity problems that arise. 

2002-1-0045 Long Recreational Fee Demonstration Program - National Park Service and 

Issue Date: 08/19/2002 Bureau of Land Management - Both NPS and BLM have generally done a 

good job in managing their Fee Demo Programs. Fee Demo expenditures were 

generally reasonable and appropriate aud used for the intended purposes. 

However, we did identifY opportunities to enhance Program benefits. A primary 

concern was the completion rate ofNPS Fee Demo projects. We believe that 

translating fee revenues into visible improvements is the major factor in ensuring 

the success and public acceptance ofthe program, and we have identified several 

areas in which NPS could improve its ability to complete Fee Demo projects. 

C-IN-MOA-0049-2004 Long Department of the Interior Concessions Management - DOl has established, 

Issue Date: 0611312005 as part of its strategic plan, a goal of providing for and receiving fair value in 

recreation, However, in our opinion DOl is not receiving a fair return in its 

concessions program. Although DOl has some of the most spectacular resources 

and wilderness areas in the world) it is still receiving a very low rate of return 

(about 5.7 percent) compared to other Federal and State agencies operating 

concession programs. In addition, DOl controls only $26.7 million offees 

generated by the concessions program. (This amount excludes fees held in 

concessioner special accounts.) Thus, the program return is even lower than the 

estimated 5.7 percent. If we were to subtract the program cost (at least $11 

million for National Park Service salaries and benefits), DOl actually nets less 

than $15 million from a program that grosses over $850 million to coneessioners. 

We recommended DOl develop and implement an integrated manoaement 

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Report Numberl Term of Description 

Issue Date Recs 

infonnation system for maintaining and reporting concession data. 

WR-EV-OSS-OO12- Long Evaluation Report on tbe Department of tbe Interior's Appraisal 

2009 Operations. The Appraisal Services Directorate (ASD) is not the strong and 

Issue Date: 12/23/2009 independent appraisal organization envisioned by the Secretary at its inception in 

2003. From the outset, both external and internal obstacles have impeded ASD's 

ability to fulfill its mission and provide 001 with timely, independent appraisals 

and valuation services. In its October 2009 House Report (111-316), Congress 

directed 001 to revisit the appraisal services consolidation to immediately 

address delays in obtaining adequate appraisals for the acquisition of Federal 

lands. Based on our findings as well as the concerns recently voiced by Congress, 

we believe that DOl's appraisers must remain organizationally independent of 

the realty personnel in the bureaus. We made recommendations designed to 

ensure that ASD has full control of the contracting process, strong and effective 

leadership, and an organizational placement that enables it to provide timely, 

independent appraisals and valuation services. 

CR·IN·BIA-OOOl·2011 Long Final Evaluation Report - Oil and Gas Leasing in Indian Country: An 

Issue Date: 09124/2012 Opportunity for Economic Development - The Bureau oflndian Affairs (BIA 

or Bureau) reviews and approves oil and gas and other mineral leases on Indian 

lands, which represent billions of dollars in overall annual economic benefits, 

significant to Indian Country. Insufficient guidance and oversight of oil and gas 

leases by 001 agencies have frustrated tribal officials and members, bureau 

employees, and the energy industry in Indian Country. In addition, Federal 

attempts to support tribal sovereignty through tribal energy resource agreements 

under the Energy Policy Act of2005 have been hampered by complex 

regulations, insufficient funding, and tribal concerns about assuming increased 

responsibility. These problems contribute to a general preference by industry to 

acquire oil and gas leases on non-Indian lands. As a result, oil and gas leasing in 

Indian Country is not achieving its full economic potential, and frustration with 

leasing inefficiencies has led Indian landowners to take legal action against BIA. 

We made recommendations to strengthen BIA's management oflndian oil and 

gas development and help DOl fulfill the intent of the Energy Policy Act of2005 

by supporting Indian self-determination through oil and gas lease development. 

Question submitted by Rep. David Schweikert 

1) Since you were unaware of the Department ofInterior's practice of using advocacy group 

lawsuits to craft regulation via court-ordered consent decrees, colloquially referred to as 

"sue-and-settle," I wanted to draw your attention to a letter from Senators David Vitter, John 

Boozman, James Inhofe, and Jeff Sessions (Attachments A and B). As you can see from the 

letter, Congress has previously raised the sue·and·settle issue several times. Since taxpayers 

are often ultimately responsible for the attorney legal fees associated with these sue-andsettle cases, moving forward, what steps will your office take to ensure proper auditing and 

oversight of all lawsuits that the Department of the Interior settles out of court? 

Answer: During the audit of DOl's financial statements, the auditors, DOl financial officials 

and OlG review the listing of potential liabilities (including lawsuits) that will or could 

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adversely affect DOl (also called contingent liabilities). DOl financial officials and OIG 

review the contingent liabilities listings for reasonableness and consistency. Thc financial 

auditors ensure that the amounts reported by DOl are accurately and completely represented 

on the financial statements or in the statements' footnotes. If the amount reported for a case 

is significant, the auditors discuss these matters with DOl officials to determine if the 

outcome of the possible liability is probable. If this is the case, the amount should be reported 

on the financial statement balance sheet. If the outcome for the significant amount is 

reasonably possible, the event is disclosed in the footnotes to the financial statements. In 

addition, during the financial audit process, OIG is required by OMB to obtain and send the 

interim and final legal letters and schedule of possible liabilities to the Department of Justice, 

OMB, and the Department of the Treasury. 

Last year, for FY 2012, DOl identified 360 reportable administrative proceedings, legal 

actions, and tort claims, which may result in settlements or decisions adverse to the Federal 

Government as high as $4.6 billion. This was down from $4.9 billion in FY 2011. In 

addition, DOl estimated up to $ 1.2 billion in environmental and disposal liabilities in 

FY 2012. 

Clearly, with approximately 250 employees, OIG is one of the smallest Cabinet-level 0I0s, 

and thus simply cannot monitor everyone of the 360 reportable legal liabilities facing DOl 

absent allegations of fraud, waste, or abuse. We do plan, however, to look at a cross section 

of settlements to determine if there is a pattern and practice of sue-and-settle that can be 

identified and reined in. We appreciate having this issue brought to our attention. 

Questions submitted by Rep. Randy Neugebauer 

1) As you know, last year the Fish & Wildlife Service (FWS) settled a major lawsuit with 

environmental groups involving hundreds of candidate species for the Endangered Species 

list. This lawsuit settlement was agreed upon behind closed doors and has resulted in an 

arbitrary structure of listing proposals, including the Lesser Prairie Chicken in my district and 

across a total of five states. This settlement agreement required no public comment and even 

the details ofthe back-room deal remain locked away from public scrutiny. If the Lesser 

Prairie Chicken were listed as threatened, as proposed by FWS, my district would face 

drastic economic consequences. It is utterly unacceptable that the Service refuses to release 

the details behind the settlement that led to this proposal. 

a. To what degree can the Inspector General of the Department of the Interior get involved 

with oversight or investigation of this and other settlement agreements? 

b. How do you perceive these types of closed-door agreements affecting the transparency, 

integrity, and scientific justification for listing these species? 

c. How can Congress help to improve the openness of this type of agreement in the future? 

d. What other suggestions do you have to improve the transparency, scientific integrity, and 

unbiased justification for proposed listings of species under the Endangered Species Act? 

Answer: 01G was not aware of this issue and does not routinely monitor listing decisions 

absent allegations of fraud, waste, abuse, or misconduct. Although we have met with 

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Committee staff several times, this issue has not been brought to our attention. It does not 

emanate from DOl's top management challenges, and is not envisioned in our targeted areas 

for future audits, inspections and evaluations. 

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