Achieving Transparency And Accountability In Federal Spending (Part 1 of 2)


The committee will come to order. The Oversight Committee exists to secure two fundamental principles.

First, Americans have a right to know that the money Washington takes from them is well spent, and second Americans deserve an efficient, effective government that works for them.

Our duty on the Oversight and Government Reform Committee is to protect these rights.

Our solemn responsibility is to hold government accountable to taxpayers, because taxpayers have a right to know what they get from their government.

We work tirelessly in partnership with citizen watchdogs, to deliver the facts.

To the American people and bring genuine reform to the federal bureaucracy and today,’s, hearing more than any other hearing of this year, is in fact about delivering on that promise, something that both parties and the American people know needs to happen.

We need to create more transparency, more accountability in government this week.

There is a bipartisan consensus forming over a new way forward in spending transparency.

In recent months, I have had numerous conversations with Republicans and Democrats with Senate and White House officials about how we can fix this broken program, data transparency and the bill that I introduced yesterday.

The data act to establish an independent body to track federal spending, including grants, contracts, loans and end agency’s internal expenses on a single platform, with a consistent reporting standard. Vice President Biden also announced the administrators and administration’s intent to support bipartisan reform efforts to achieve digital accountability.

Let me make something clear: there is no difference in what the vice president wants to accomplish, and what I want to accomplish – and I believe will here today with chairman Devaney – wants to accomplish.

There are differences in how we get from where we are with a labyrinth of failed or partially successful programs to one single accountability that is less burdensome and more effective for all the participants and for the American people.

In a gallup poll released last month, the vast majority of americans blame the problems in government on too much spending for unneeded or wasteful federal programs.

Seventy three percent of american adults are convinced that spending is the problem in washington and i’m part of that.

Seventy three percent, in fact, if american taxpayers knew the whole truth about federal spending, that number would be much higher than seventy three percent.

Let us rest assured that when we get full accountability, when we reduce waste in government, we still will have a spending problem.

However, currently the data that is established on federal work sites, web sites is unreliable, inaccurate and, most importantly, incompatible and often opaque to those who need it most.

Recent analysis by industry experts Raziel reveal that usaspending gov has only thirty five percent accurate.

It was only thirty five percent accurate in fiscal year 2009, and that is only one federal spending database among many others to manage multiple databases and hope. Each of them get better is to assume that the tried and true failures of the past will be the tried and true successes of the future.

And while I oppose the president’s trillion dollar stimulus, both in my vote and in my rhetoric, I continue to believe the chairman Devaney and the efforts he has put into affordable trial technology is in fact the way forward and revolutionary accountability and transparency can be Achieved on building on top of a model that this committee asked for as part of our role in that stimulus and in fact the rat board has implemented, let us not make any mistakes, there have been errors, there have been failures that had to be corrected, and, Yes, of course often the figures were figures.

No one wanted to hear the cost of retaining a job might be artificially higher than we thought it was going to be.

But the facts are the facts, and many of those high costs were real.

Well, many needed adjustment and chairman Devaney got right on that and we have a record of mistakes that were made being corrected, but ultimately a single reporting system over time can become more reliable than then states and localities having to report to multiple agencies in different ways.

Today we will hear from chairman debate II and other advocates of transparency through checking technology, and, although our first and most important witness today will be chairman Devaney, I want to note that on the second panel we will have individuals who will talk about the burden that Reporting gives them and they will talk about it, because, ultimately, our goal of a single transparent system is to reduce the burden.

One system throughout government means you only have to learn it once multiple systems today mean that anyone who is accountable for more than one report and most entities are have to learn multiple systems.

We want to end that today on a bipartisan bicameral and in this case, by branches of government and without I yield to the ranking member.

When I thank the chairman for calling this hearing – and I want to thank and welcome our distinguished witnesses today – and I want to begin by congratulating you, mr Devaney, 41 years of service to our nation and very distinguished years – and he said something when you first appeared Before us, when you got this into assignment – and I will never forget it as long as I live, you said you know, I want to make sure the mechanisms are put in place so that people so that we prevent them from doing the wrong things, and I Thought that that was just such I said to myself that make sense, and thank you for doing it.

Dinner blessing congress created the board as part of the Recovery Act in 2009 to put in place some of the strongest transparency and accountability measures ever enacted. As a result, the ability to track federal spending has improved by leaps and bounds in addition to promoting job creation, economic activity and long term road.

The Recovery Act foster unprecedented accountability and transparency in government spending under the administration,’s, implementation and chairman of a nice oversight.

The recovery act that has had historically low levels of waste fraud and abuse.

Today, more than eighty percent of recovery funds have been awarded and less than half of one percent currently have open investigations.

I look forward to hearing from more from him on the board successes, lessons learned and best practices that could be applied elsewhere in government.

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

Yesterday the President signed an executive order that takes the model work of the board and extends it across the federal government.

The president’s executive order establishes new government accountability and transparency board to my strategic direction, for enhancing federal spending, transparency and eliminating waste fraud and abuse in federal programs.

The president directed the board to report on guidelines to integrate systems that collect government spending data, improve reliability and capitalize on the proven success of fraud detection technologies.

The executive order also directed the vice president to convene cabinet level meetings on agency efforts to make government work better faster and more efficiently. Under the White House, accountable government initiative, we’ve also seen remarkable improvements in other federal transparency efforts over the past several years.

Websites like us, a spending that gov recovery gov and the IT dashboard and put more information online than ever before about how federal dollars are being spent.

I applaud the president for continuing to advance the goals of transparency and accountability in government.

Unfortunately, budget cuts make force to White House to scale back plans for several open government initiatives to recently passed fy2011 continuing funding resolution.

The electronic government fund from a pro proposed 35 million dollars down to eight million dollars, putting some of those real websites.

I just mentioned at risk.

I noted a number of transparency advocates and good government groups have criticized these cuts, including some of our witnesses here today.

I look forward to hearing more from them on the potential of these cuts on open government and initiatives and efforts to root out waste fraud and abuse.

Mr Chen and I have said it many times already this year and I will say it again: transparency and open government should not be a partisan issue, and i know you agree with them, but protecting taxpayers hard earned money from waste fraud and abuse is one of The most important issues that we deal with on this committee, i want to acknowledge the legislation you’ve introduced in.

I applaud you for it, which would be many of the same things that record by the president’s executive order. I understand the Democratic staff of the committee had worked cooperatively with your said in the last Congress on legislative efforts to improve federal financial data standards, and I supported those efforts in addition to your bill.

Every member on this side of the aisle joined together in March to introduce HR 1144.

The transparency and openness in government act.

A comprehensive compilation of five component pieces of legislation that passed the House last Congress were brought bipartisan support, including your own.

Since we introduced this legislation, 17 organizations supporting transparency and openness in government, including some testifying here today, have endorsed a bill and call for Swift bipartisan action by our committee.

And finally, mr Devaney.

It is quite a compliment to you to know that the work you’ve done will serve as a model, perhaps not only for tomorrow, but for generations yet unborn.

I look forward to reviewing your proposal and to working together on these issues.

Mr chairman and I yield back, I think the gentleman members will have seven days to submit opening statements and extraneous material for the record.

We now recognize our first panel. It says of witnesses I’ll say of witness.

The Honorable Earl Devaney is chairman of the recovery and accountability and transparency board and to get your title fully.

Are you still, in fact, an IG on loan to that position, an IG on loan and one of our favorite aiji’s from his previous work at interior? Pursuant to the committee rules, all witnesses will be sworn in.

Mr Devaney, will you please rise to take the oath? Do you solemnly swear or affirm that the testimony you’re about to give will be the truth, the whole truth and nothing but the truth? Let the record indicate mr Devaney answered in the affirmative chairman.

I won’t even give you the introduction.

You know the drill as well as anyone you’ve, been here many times.

If you go over, no one’s going to call the whistle on you, because in fact we’re here to hear what you have to say with that you recognized.

Thank You, mr chairman, ranking member Cummings for those kind remarks and members of the committee.

I want to thank you for the opportunity to appear before you today to share with you some of the Recovery boys.

Lessons learned, I’ll be glad to answer any questions you have after i finish my opening remarks, mr Chairman have given considerable thought. The lessons learned from what I sincerely hope will be my last government assignment.

What I would like to do today is to share with the committee ten very specific lessons learned that I feel could be incorporated.

The way our government does business going forward.

First, lessons learned is that nothing motivates bureaucrats to act faster than a law with concrete deadlines.

The long standing culture of federal agencies has been to take the path of least resistance and, to take the longest time allowed to enact any change.

I have found that agencies continually underestimate their capacities to get things done, pursuing pilot after pilot with few long lasting developments.

In fact, there are so many ongoing pilots that I sometimes think of our government is a giant airline.

Recovery Act addresses this problem head on, requiring recipients to report the use of recovery funds within 180 days of enactment.

This suggests to me that any new law imposing requirements on agencies should include firm and certain deadlines for implementation.

Second, that spending data can be collected directly from recipients with a high degree of accuracy. In the past data entry about federal spending was done solely by agency employees, the Recovery Act and it’s mandated recipient reporting change that dynamic, proving that recipients of federal funding could report just as accurately any future legislation should recognize this potential cost savings and call For the migration of all spending reporting from agencies to recipients, the third lesson learned is that this spending data can be quickly quality, controlled displayed and uniquely arrayed.

To achieve unprecedented levels of transparency in the past agencies in receipt of recipient reported data would have spent excessive amounts of time scrubbing that data in the basements of buildings all over this town prior to releasing it.

By the time of its release, the information would be outdated and meaningless.

The Recovery Act required real time reporting with results made public within 30 days four times a year in.

In the end, the data was not merely published as a jumble of numbers in a hardbound catalog that sits on a shelf somewhere, but was a ray geospatially on recovery, gov, making data available and understandable for all users.

The fourth lesson is that the federal government desperately needs a uniform government wide alphanumeric numbering system for all awards.

Currently, each agency uses its own unique numbering system for contracts and grants.

As we found during recovery transparency process, these disparate award numbers make tracking federal spending unnecessarily arduous and complicated every quarter.

There are mismatches when we try to align recipient reported award numbers on federal reporting gov to what the agencies have reported OMB in our efforts to see who did and who did not report as required.

The word ID numbering process must be simplified and standardized, perhaps akin to the credit card number exists. Aamir all accustomed to first Leslie is that new technology, particularly cloud computing, can play a critical role in the delivery and effectiveness of transparency and accountability.

In April of 2010, the board made the move to a cloud computing infrastructure for recovery, gov, a groundbreaking event that allowed for more efficient computer operations and reduced cost cloud.

Computing is a pay, as you go approach to information technology, permitting lower initial investments to start operations.

It is also flexible enough to allow IT staff to add or subtract computing capacity as needs dictate in an era of routing out redundancies and inefficiencies.

This condensing of systems could create an enormous savings for the American taxpayer.

The sixth lesson learned is that transparency can cause embarrassment which in turn causes self correcting behavior.

In February 2010, we began publishing on recovery gov a list of non compliance, a list of shame, if you will that states the names of recipients who have failed to report as required users can see who the report repeat.

Offenders are.

I’m happy to report that in the first quarter of 2011, the number of two time non reporters is down to 17 and the number of three times or not reporting on reporters is down to seven.

This is out of over 200 000 awards reported for the quarter, but perhaps the most important lesson learned is that transparency is a force multiplier that drives accountability. It has become abundantly clear to me that transparency is a friend of the enforcer and the enemy of the fraudster, with less with more than eighty percent of the recovery money.’s having been awarded less than half a percent of all reported recovery contracts, grants and loans currently have open investigations.

After nearly two and a half year, the years there have been only 144 convictions involving a little over 1 9 million dollars.

I’m often asked why why there has been so little fraud.

I have little empirical evidence to prove it, but I believe that it is largely due to the transparency embedded in the Recovery Act.

Number 8 is that the goal, if the goal of is prevention instead of merely detection agencies and IGS, both have a high degree of incentive to collaborate together.

The board strategy was to focus our efforts heavily on preventing fraud from occurring in the first place, not just detecting it.

After the fact.

That is why the IG community has provided training for more than 130 000 people since februari of 2009.

My observation has been that when fraught when the goal is fraud detection, I jeans come to the table with a great deal of enthusiasm.

While agencies seem less motivated in overseeing these recovery funds, the board has learned that when the common goal is fraud, prevention, agencies and IGS are equally enthusiastic and a remarkable collaborative effort takes place between the two. The 9th lesson learned is that most valuable accountability module is one that provides equal access to both agencies and enforcers.

The new analytical tools and methodologies developed in our recovery operations center have proven to be as valuable to the agencies as they have been to the aiji’s.

I believe that a single repository for this accountability data, rather than many recovery like sin, is sprinkled around.

The federal government would be a better idea and present a significant cost savings to the American taxpayer.

Finally, there’s the lesson that articulating success for prevention is a lot harder to do than for detection.

41 years ago I began my federal career as a Secret Service agent learning how to protect our nation’s leaders.

How do you measure success in that role? Certainly failure is easy enough to see, but how does one measure the real effect on a potential assassin that the Secret Service presence has now towards the end of my government career? I admit i am still pondering the difficulties of measuring successes of preventing fraud or waste.

How can we know how much fraud has been prevented by what the board and the IG community did during the recovery program? Hi fraud losses accompanied by front page stories and nightly news segments, would have clearly signaled failure, but we may be left to wonder, as many of my former colleagues and the Secret Service do every day about what success really looks like.

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

Mr Chairman, I have recently written a white paper reflecting the board successes and some of the lessons learned. I’ve talked about here today.

More importantly, this paper also lays out a template for how these lessons could possibly be embedded in the government.’s business practices going forward.

I plan to put that paper up on recovery gov today, and this concludes my old remarks and I will now be glad to answer any questions you have.

Thank You chairman in a perfect world.

The first person to ask questions would probably be mr towns who, if not for his chairmanship, the the embedded role that you’ve played.

Wouldn’t have been in the law.

So I want to take an opportunity to thank him because it was in fact his leadership that caused the kind of accountability.

You have an opportunity to show us with that.

I’m going to wave going first and recognize the gentleman from Tennessee, mr Desjarlais.

If you’re prepared, Thank You, mr chairman, and by cute German Devaney, or sharing those thoughts and wisdoms with us, I’d like to start and ask you what some of the key differences between track and spending using recipient reporting as you and the RIT Board have done for stimulus, money and tracking spending using agencies reporting the way usaspending gov does well congressman. I think we have we’ve discerned that the recipient reporting is as accurate or more accurate than agency reporting.

I think, when recipients report directly, they have a parochial interest in getting it right.

We built into our systems opportunities for checks and balances for agencies and recipients to think about what they had reported and change it if they had to all those changes, are totally auditable.

So we know what was changed and when it was changed and we have a continuous open environment for people to change things sometimes quarters after they,’ve made a mistake and in our perspective, is that citizens do come back.

Recipients do come back and change things because they simply don’t want to be embarrassed.

Everybody gets to see what they put in and it’s been.

I never I don’t think I would have imagined that when we first started, but it’s been a great lesson.

I think I do believe that a permanent universal recipient reporting requirement is necessary to achieve transparency in federal spending.

Well, I think, given what i just said, i think the migration from recipient reporting to agency reporting with no loss and accuracy and potential savings cost would be a would be a smart thing to do.

It would make it more accurate, more accurate and save money. Do you think that this wouldn’t turn lead the greater accountability, then, on the part of federal agencies? I do the more accurate the data, the better the opportunity for those of us has been their time on accountability to get it right.

You’re talking about some of the successes earlier.

Can you please address the number of recipients who fail to report and explain how the board is managed to keep it so small? Well, when we first of the first reporting period, there were a lot of people that fail the report night and I take that to be a manifestation of a new system, a new idea and and people just not understanding several quarters later.

Those numbers were down dramatically and now, as I as I mentioned earlier, that the amount of recipients that actually haven’t reported two or more times as rather low and three or more times is down to seven and that’s.

Out of hundreds of thousands of awards, so you know it’s.

Ninety nine point nine percent, which is, I think, good.

Do you believe that if Congress instituted a board that tracks spending on a larger level and not just stimulus spending that the rate of failure to report would remain that favorable? I think it would, and I – and I took note of the Chairman -‘s legislation.

You say that it has enforcement teeth in it.

Unfortunately, the Recovery Act when it was created in a very short time period forgot to put the enforcement pieces in it, and i think the Chairman’s legislation fixes that no recovery board has recommended a government wide system of ward identifier.

Your testimony mentions uniform award IDs for all federal agencies. Can you explain how this would simplify the tracking of federal spending? Well, it became very obvious to us early on that.

Every single agency has their own unique numbering system, probably some dating back to George Washington.

So it was almost impossible for us to collect data from all those various agencies, so we had to design our own, our own data collection site, and then we have to every time the reporting takes place.

We have to deal with what we call mismatches.

The numbers from what the recipients report to us differ from the numbers that the agency tell us that they gave the money out, so it it’s a constant battle of trying to reduce those mismatches.

It’s very labor intensive and it doesn’t have to be that way if we had a common single alfin american numbering system like a credit card, but transparency would be enhanced tremendously.

Okay, Thank You, chairman devonian germanized.

I yield back the balance of my time chairman here.

The gentleman yields back.

We now recognize the gentleman from New York, mr Towns, for five minutes. Thank you very much.

Let me begin by saying to you, mr Devaney, thank you for the outstanding job that you are doing and, of course, I remember you saying that transparency is harder to practice than it is to talk about, and of course, I recognize that you talked about the fact That embarrassing, you know um.

Sometimes it brings about change in behavior.

What were the complaints that you’re getting from the ones that who did not cooperate? Are they saying they did not have the resources to do what you’re asking? You know.

What are they complaining about those few that did not comply? Well, the excuses were all over the board, sir.

They they they ranged from the ridiculous to those that, quite frankly, probably involve some hardships.

For instance, we had early on some tribes and some other recipients who simply didn’t have internet and couldn’t couldn’t comply that way, so we had to devise a system, so they could get their reports in as well.

I think the list of shame that we publish every quarter has has worked well in getting those numbers down.

We’re down to seven.

Some of those folks have filed lawsuits against the government for the the audacity of the government asking them to report about what they did with the money that the government gave them. So you know it’s.

It ranges from the you know absurd to some legitimate excuses right.

Let me ask you this: the enforcement legislation that’s being put forth.

Do you think that’s going to further help? I do i do.

I think the enforcement piece, if it’s in the bill, would be very helpful.

I think that there are some, as I read the bill last night, there’s some civil remedies.

It doesn’t preclude any remedies, but that’s that’s, something that usually motivates people to comply with the law and lacking that enforcement mechanism and the Recovery Act.

I think some people took advantage of that right.

Let me just say to the Chairman into the ranking member that you know.

I really appreciate you know your leadership and keeping this alive until you, mr Devaney, for your outstanding at work. I noticed you made a comment on thinking.

Maybe some people – didn 39, t quite hear it.

You know.

Well, you said this might be your last government assignment.

You know I heard that you know, and I want you to know that I hope that your next assignment will be teaching those to do what you’ve done so well.

Thank you very much, mr chairman, that note and I’ll be lied to yield to the ranking member.

What a second! I second, that hey we’re back.

I I the just just two questions, mr Devaney.

The democrats in congress passed the American Recovery and Investment Act of 2009 to promote job creation, encouraged long term growth foster unprecedented accountability and transparency in government.

The Recovery Act establishes and granted brought authorities to the recovery, accountability and transparency board among them is the authority to issue testimonial subpoenas section 15 24 says the board may issue subpoenas to compel the testimony of persons who are not federal officers, employees and then for such Subpoenas in the same manner as provided for inspector general subpoenas under section 6 of the inspector general Act of 1978, you familiar with that or not I am, and mr Devaney have you ever exercised that authority. No, I have given the fact that you’ve never issued a subpoena for testimony that you clearly been very successful in identifying and eliminating and preventing fraud, waste and abuse.

Did you ever feel as though you needed that authority to appropriately achieve your mission? I never personally have felt that way.

I’ve been very fortunate to have in my federal career, rather sizeable numbers of investigators, and we worked very closely with the Department of Justice and always use the grand jury subpoena power.

So I’ve never felt that way.

I think there are some I jeez who do feel that way that it’s needed, and I respect their views.

I have stated before publicly that I’ve never used it and don’t feel like.

I would the would you support the legislative efforts to establish a permanent board modeled on the rad board to lead government wide efforts, improve federal spending, transparency and accountability.

That does not include testimony Oh subpoena thorn.

I would probably support it either way.

I think it it really doesn’t matter to me. I’ve never used it.

It’s in the Recovery Act, so I’m very anxious to see legislation creating a board.

That would do this very thing and it would be up to the members of the board tor users or not use it.

Thank you very much.

I yield back.

I thank the gentleman.

We now recognize the gentleman from Utah for five minutes and with the gentleman yield for just a second yes, mr Devaney, do you know whether or not the having that has ever been threatened or used? In other words, if any of your people working for you ever said, you know we could compel testimony if you’re not willing to give it volume whether that’s ever occurred on your watch.

Now we’re in the past when you had it.

I don’t think so I i think that there’s other ways to get to that goal.

Okay, thank you yield back. Thank you for your service, appreciate coming to the committee number of times and being so available.

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

Maybe it’s just by simple way, but things like that, just driving crazy, that that seems like something that could happen within an hour to okay, maybe a week what is holding back, whose responsibility is this to do that.

Well, of course, each agency, as I mentioned earlier, has developed these systems numbers of years 30, 40 years, so they have their own.

You numbering systems.

It means a lot to them.

They are very reluctant to give it up.

They would argue the agencies would argue that it might cost a lot of money to retrofit their systems to adapt to a new numbering system.

I think going forward.

We would like to do a feasibility study to see exactly what that problem is, whether it’s as big as they think it is, and try and convince the agencies and OMB that this is a. This is an issue that’s way past its time.

So the core responsibility for executing that putting that in place would be the OMB OMB in conjunction with the agencies.

If you have any idea how massive a problem is this I don’t underestimate the the fact that some agencies are going to be outliers and I’m going to have to retrofit their systems to adapt to a new number problem, as people try to Make it out to be a the sunlight foundation has been very good at clarifying and bringing some things out this.

This statistic they threw out, though, is quite stunning.

This sunlight 325 programs had no reported information for all of fiscal year 2008.

Also stating that usaspending gov reported accurate information for only thirty five percent of federal programs.

Do you find that to be true, and how do we solve that? Well, I can only speak for our site and I think our site is extraordinarily accurate.

I know that USA spending has had problems from the very beginning.

I think the day they launched they were.

They were talking about fifty percent error rate, so it so they make a good effort and I think they’ve improved, but I think, as long as they depend on the agencies to send them information that’s been scrubbed and changed and – and I’M not coming directly from recipients causes some of that in accuracy. So what’s? What how do we solve that? But it should it be more penalties for non compliance.

How do we solve ax? Well, i think i think the enforcement penalties are very helpful.

I think the single alfred american numbering system would be helpful.

I think migration from recipient reporting to agency reporting would be extraordinarily helpful, and I think that the reporting under the recovery program can be replicated and other spending.

Okay thanks, mr Chairman, I yield back.

I think the gentleman we we now recognize the gentleman from Virginia for five minutes.

Mr Connolly, Thank You, mr chairman, and welcome mr Devaney.

Ah, mr davinier, the Chairman’s, introduced some legislation on sort of creating a new layer of oversight.

What’s your understanding of what that would do and how it would relate to the current structure you head up.

Well, my my impression of the legislation is it is. It is meant to replace as you as you probably know, the recovery board sunsets in 2013.

So I’m, assuming that it would, if the legislation were to pass earlier than that it would replace the board that I chair.

But if it, it certainly continues the work of the recovery board and it makes a aboard a permanent or as 2018 and permanent board that will carry on the the work that we’ve done and and how well do you think the work you’ve Done has gone, I think it has gone very well.

There have been as noted earlier, some mistakes along the way, but I think we’ve been able to correct those right away and I think we’ve brought transparency and accountability to this money.

It’s a huge amount of money.

There are low levels of fraud.

I happen to think the transparency is the principal cause of that and I think when you put transparency and accountability together, you get a great combination and we’ve also used no tools.

We’ve created what we call a recovery operations center, which has used sophisticated analytical tools that heretofore have been used, principally in the intelligence and law enforcement sectors, and the novelty of what we’ve done is that those tools are now being used on government Spending and the result has been quite quite remarkable.

It turns out that when you use those tools and when you put together good competent analysts, you can actually interrupt fraud and prevent fraud from happening in the first instance of the model I mean this model is unique.

Is it not, I mean you were in a sense of experimental model, a new paradigm for transparency and oversight. I think that’s, true, I think we were an experiment, and I think if you talk about proof of concept, I think we’ve done it and that’s, why? I think this legislation makes them off a lot of sense.

I also think that vice president’s, the president’s executive order yesterday makes sense as well.

Do you does your group? The also I mean you,’re tracking to make sure money is not Miss Benton there, isn’t fraud or waste, but do you also look at the other side of the equation? Effectiveness? Efficacy? Well, we’re.

Certainly, we’re certainly trying to make sure that waste doesn’t occur as well as fraud.

Achieving Transparency And Accountability In Federal Spending (Part 1 of 2)

I mean we don’t we don’t about concentrate solely on fraud.

A lot of the information that we develop in the recovery operation center, for instance, makes makes for good audits.

But do you also look at milestones in terms of achievement, so in other words, if X, number of dollars are meant to buy three locomotives in some kind of time frame that, as a matter of fact, that goal is met.

No, but my sense is that the individual aiji’s and those agencies do that job and but we don’t as a board take that on.

You talked a little bit in your testimony, I think, about cloud computing and how it could actually lead to some savings for the federal government, including, I think, rental, space and other kinds of savings and more efficiencies.

Could you just expand a little bit on that and how cloud computing could help the government be more effective and to enhance transparency? Oh, I think you, there’s an obvious money savings to be had. I think when we first looked at it, we thought we could save.

Our little operation could save about three fourths of a million dollars right away and we could repurpose some of that equipment that we had into other areas.

So there’s a savings.

The other thing I would say about cloud computing is: it allows you to be more flexible and to expand almost like an accordion.

If you need, if you need to do more, you can do more readily you don’t have to go out and buy more equipment.

Rent space hire more people, so it’s a it’s, a technology that I think as time has come, and I think the government ought to move there.

We were the first government enterprise to actually move to the cloud, the that was heralded by the folks at OMB and I think other agencies are followed and real quickly in the ten seconds I got, do you believe the private sector can do this more efficiently? Maybe then we can in the public sector.

Well, I don’t know I think they’ve.

They certainly have been a leader there, but I think the government is is slowly recognizing that we ought to be there.

Thank You, mr Chairman. You’re most welcome the gentleman from Pennsylvania.

Mr Kelly, Thank You, mr chairman, and only take a minute mr Devaney.

I’m going to go.

Thank you.

I’ve only been here five months.

I’m over here right away.

I’m the guy with the southern it’s really refreshing, and I like to sure your background.

I love the fact that you’re in a leadership coaching program for some is over been here five months.

It is really a pleasure to sit and listen to somebody who’s used great common sense and understands what a stewardship is.

Surely it truly is, and in our business there’s no saying you got to inspect what you expect in which you’ve been able to shed light on today and that both your written testimony in your verbal. I just want to.

Thank you.

I’m sorry.

This is great value to the American taxpayers, which is why we’re all here.

So I’m going to thank you for that, and I just want to tell you it is really most refreshing one of most refreshing testimonies.

I’ve had since I’ve been here.

Thank you for your service, and I heard what you said earlier, the other gentleman to mention this.

Hopefully this is your last you asked work.

I understand that there is something to be it to be said for that, but thank you so much for your leadership and having said that, I’m going to yield back my time to the Chairman.

Thank you, sir. Thank you.

I thank the gentleman for yielding chairman, I think, to make the record straight.

I want to go through a line of thought.

You said that with the vice president is proposing and when you – and I both had meetings with Vice President, you approve of the president.’s executive order, you approve of and – and I appreciate that you you like all or most of what’s in our draft legislation now, how do you envision that we get from the president’s executive order, which, if I understand it correctly, is a Study to do x over the next six months, our legislation, which is intended to be pushed toward a particular set of goals with some specificity.

Vice President Biden -‘s, history and oversight of your role.

How do we bring that all together so that we get a permanent executive orders, are not permanent and well defined and bipartisan solution in that let’s say six months time that the president has put out there.

I think the I think both efforts move the ball down the field and that’s, what I’m really excited about.

I think the goal is common between the two.

I think we’re talking about eliminating redundancy saving money and doing it in the most transparent, accountable way we possibly can so.

Otherwise. I look at both things.

I came away thinking they’re both good.

I think the as I mentioned earlier today.

I think that nothing works better than legislation with very firm dates in it.

I really truly believe that that’s an observation, not just from my time at the recovery board throughout my federal career, I’ve seen bureaucrats change their mind about change and and agree to do it once there’s a law and they have firm Day so I’m very excited about your legislation.

I think the vice president is trying to get the ball moving and I think in large part, the president’s executive order establishing this board is so we can do some things now, so we can take some lessons learned, so we can adopt some of the Ideas I have, and others have about, trying to export what we’ve done, the throughout government, because it really would make things more efficient and it really would save money, and I think the country needs that right now.

Well, thank you.

How does it Sears this past weekend and like you, I’m old enough, not that you’re old, but I’m old enough to to remember how Sears used to work.

How may Macy’s all of use to work used to have a tag either pinned or hanging from every piece of clothing and everything else you bought and it had a noun nomenclature.

It said something, and sometimes it had a number and every department had tags and when you bought something you had to put it, take it to a department where the person was knowledgeable of how to add that item up and price it and you couldn’t Check out in one place, because ultimately each department had the expertise, they knew what was unspecial and so on. Last weekend I went through and like we all have come to expect there’s a standard bar code on every product.

You can go to any check out.

You scan that barcode.

They know what the prices they know.

What the discount is.

They know all the aspects it relieves it from inventory and and you leave the store with one credit card receipt.

Isn’t that really what you’re asking for, all of us who are ultimately customers and vendors of the government, is that we get to that level of uniformity so that in fact, everything gets to be easier to do with the government.

Whether you’re, if you will a vendor or customer yes, I’ll, take that as a yes and with that I go to the ranking member for five minutes.

Thank you very much.

As shown the Konami suitability, I told myself at some point. We move from student to teacher and listened to your testimony.

I find it interesting that you even go to that port.

You were going to go, but I saw you going there um when you talked about the Secret Service and prevention, making sure that the president, the others, are safe.


One thing to read a headline today: accurate talk about what happened.

If harm came, it’s another thing and you don’t get a headline for this to make sure they say, and I was thinking I was wondering: how did you get there? In other words, i also saw my staff that there comes a point in time when you begin to face your own mortality.

Not you just target in general, and you begin to ask yourself: how do i make sure that i’m most effective and efficient, and what I do, and I guess what I’m trying to figure out is: how do we? It sounds like you have arrived at a point of effectiveness and efficiency, and I think you said it seems as if I don’t know what you referring to accountability and agencies.

He says something I was like a big plane or something that like that, and it seems like so often we don’t think we can get our arms around this, because there’s so many moving parts, and so I’m trying to figure out What the executive order would with the Chairman,’s, legislation um: how do we get folks actually moving in that direction of effectiveness and efficiency and and and and getting away from it can’t be done? This attitude or cultural, mediocrity and this kind of broad question, but can you help us with it? Well it’s how’d you get there i don’t know if i’m there i would add.

I’ve made observations over the years that that change in government is a difficult proposition.

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

I don’t believe in change just for change sake, but when it makes sense when you can save money or eliminate redundancy, it strikes me that you have to change and particularly in the circumstances we currently live in, so I think that both the executive order And the legislation are going to cause people to understand that changes at hand, and we happen.

We are moving in this direction, smartly, so I’m.

I’m, encouraged by that.

I had wondered whether or not the lessons learned in the recovery board would have been thought well enough to have been indebted and legislation and also in the executive order, and I think I’m pleased that they they seemingly have been, and I’m excited About the opportunity to see some of those things spread out, the old government spending this issue of you see any lessons learned.

You talked about concrete deadlines, and – and I want you to tell us how significant that is, because I agree with you on that, and the other thing that you talked about was technology, and do you think that we do you think there’s a technology that Can even go further and be even more effective than what we now have and what suggestions would you have to us for improving? I mean if you had to make some suggestions for improving the bill, what improving the executive order.

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

I probably will have some thoughts later on.

I think the technology opportunities are profound right now and advantage of things like cloud computing or the geospatial technologies that we are using in recovery.

Gov opens opportunities for the American public to actually, for instance, in the recovery program to drill down into their own zip codes of their own congressional districts and see exactly how that money is being used. I don’t think that’s ever been possible before the American public as an IG.

If I wanted to understand where the money went at, for instance, that the Department of Interior, I could have gone to the CFO and asked, but I doubt very seriously whether that person could have responded, certainly quickly.

So this, the new technologies have enabled the government to to begin to show the public of how their money’s being spent.

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

Thank you very much for sharing.

Thank you.

The gentleman from Oklahoma, mr Lankford, for five minutes.

Thank You, mr chairman.

Mr Devaney, welcome glad you’re here and thank you for your testimony in your wisdom that you’re bringing your experience and background in this talk.

Talk me through a couple things here: the differences or the problems that you would see associated. We’re trying to transition this from a one time specific set of events that is stimulus as rapid, as that was to ramp up to learn quickly.

To do it figure out how to do it and do it, but it’s still a one time event and an ongoing every year you know type program.

What do you see is the differences between those during the reporting process.

Well, I think maybe I’ll answer it this way, i think the and it’s a partial answer to the ranking members question as well: the the fact that we had a deadline, the the Recovery Act called for this, these websites and the reporting to All be done in six months.

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

Getting the agencies OMB and the recovery board to be marching towards that goal, probably would have not been accomplished had that deadline not been act.

So I see legislation with concrete deadlines, as they are embedded in the Chairman,’s, legislation as being a very good thing, because it it leaves.

The discussion is about whether we want to change out of the picture.

Change is going to happen and you only have a certain amount of time to do it right.

Do you see an issue, though, with a one time event like a stimulus versus an ongoing year year after year type program, anything that you would be able to say to us? I think this works well, regardless of its you up two year, programs or one time grant it works the same well. I think that, as I mentioned earlier, i think the recovery program was.

It was a proof of concept.

I think for those that had doubted that it could be done, we’ve now shown that it has been done and it probably bodes well for future efforts.

Okay, burning recipients.

Obviously, this is a new layer of something that they have to be able to take on my my well, I desperately want more transparency.

I agree completely with your statements about fraud that the more you allow people to be able to look in and be able to look over someone else,’s shoulder and say what.

Why exactly? Does that grant funded that way, and what is that that that helps tremendously? I also don’t want to reduce the number of people competing for a competitive grant, nor have reduced the number of bidders in a contract situation, something about the burden on those recipients.

Having to self report, do you think that’s going to draw a competition? Is it a reasonable amount of burden? I think it’s a reasonable amount of burden.

I I it was a giant question when we first started when we first were talking about recipient reporting versus agent reporting.

I think the burden on recipients was the number one issue. It was an issue for the state’s.

It was an issue for the recipients.

It was certainly was an issue for Owen bein for the board and we were very worried about that and, as a result, we stood up a very robust help desk so that when recipients came in to report for the very first time and several reporting periods after That they had a lot of help, but after two or three reporting periods we began to see that our helpdesk, wasn 39, t being used anymore and anecdotally.

We hear from states and from recipients that they like reporting on federal reporting gov.

I think what they would like best would only be to report to one place and instead of multiple places.

So I think if we get down to one place where they can report and we use some of the technologies we used in when we built reporting, gov or use that infrastructure we won’t have much of a burden on recipients a terrific.

What are the data would you suggest could be reported on that, for instance, if you complete a grant the funnel research that the finished product is that something of your reported there’s Wilson only tracking how much was spent, but what the final product is, that The federal taxpayers paid for where the progress, as is mentioned before, is their way to be able to track only how much has been allotted to this, but what’s happened so far, so people can see this much has been allotted.

This is what’s been accomplished so far.

Absolutely we do that.

We do something like that right now we ask recipients to tell us what stage the projects in we could certainly collect. Almost any data you wanted to collect.

You do get to a point where how much is too much right? On the other hand, if that’s an important feature, we can build it in.

We have the flexibility on the infrastructure.

We have right now to scale up to almost any amount of data to be collected, so if we’re doing a grant for a certain project that’s denote some research to something out there at the end of it, we could also say this was A lot of here’s how it was spent, and here’s the final paper that was presented at the end of it and when the research was done here, it is really an issue to be able to collect all together.

We could terrific.

Thank you very much.

My data you about the gym yield absolutely would, as you compare the grant application process with your reporting, which one’s harder to do the applications for competitive grants that you’ve seen over the years or your reporting application for grants.

Thank you.

I kind of knew the answer to that one.

We now recognize the gentleman from Pennsylvania, mr Mian, for five minutes. Thank You, mr chairman, and thank you, mr Devaney, not just for your presence here today in the great work you’re doing for the recovery board, but for the great work you’ve done a number of year inspector general.

I had the good fortune to work as the United States Attorney and spent much time with some of your colleagues and appreciate the significance of their efforts, but oftentimes as well struggled with the reality that we’d be off to touching the corner, sometimes of what We believed was out there and I’ve been intrigued by your testimony about some of the tools you’ve been discussing.

That can greatly enhance our ability to to search not just where we’ve been, but in real time, because I your words, I think, to focus on preventing fraud from occurring in the first time rather than detecting it after the fact.

So can you tell me a little bit about the recovery Explorer tool that you have been implementing and how that works? Well, the recovery operation center, which we established fairly early on after about six months, utilizes analytical tools that, as I mentioned earlier, been used here, 24 in the intelligence world and the some law enforcement settings and applying them to spending.

And if you think of, if you think of fraud on a continuum where, on one end of the timeline, the fraudsters thinking about stealing money and the other end is sort of sort of when he has it, he’s running down the street.

What we’re trying to do is we’re trying to push the ball further up towards the front end so that we’re either preventing fraud in the first instance or at least interrupting it in the middle, so that countless times we’ve Been able to detect a company or an individual that’s gotten money that probably shouldn’t have been it.

Doesn’t mean that they’ve committed a crime.

It just means that we need to stop and look so.

We’ve asked the agencies to stop the flow of money so that it all doesn’t go out the door before we’re able to prevent it.

Now, as I mentioned earlier, it’s. It’s difficult to articulate success in this area.

How much you’ve prevented from happening! It’s a lot easier for me to stand here and talk about the number of arrest or a number of referrals to the Department of Justice and that’s.

What I’ve done for most of my career and played that sort of stat game – it’s, it’s harder to articulate success in the prevention business.

I struggle with it myself, but I know that I know that I think we prevented fraud in this instance, and I think transparency has not a lot to do about it, but it’s also about sort of a mind, shift that I GS and other enforcement Entities are having about not just detecting and preventing it from happening.

What kind of data does it display when you’re talking about the broad spectrum of information that’s out there? Is there an intelligent aspect to this and which it’s? Looking for particular indicators, or it makes available data that then somebody can can mine with a specific purpose.

Well, we do have.

We do have formulas and algorithms that we use to to run against the database.

The 15 12 database, the recovery database, if you will that that identifies anomalies for us once again, this doesn’t mean necessarily that a crime has been committed, or even the fraud has happened.

It might mean, for instance, this would be a good candidate to audit to have an IG do an audit on not an investigation button on it.

On the other hand, it might identify, as we do countless times, money going to somebody that’s on the excluded parties list, because we have that database in house. I happen to think that one of the issues that’s underway in government right now being managed by OMB is the do not pay list.

I happen to think that that our platform could do the do not pay list fairly soon.

I think we have three of the databases of the five right now.

If we got the other two, we could probably stand that up, maybe in a month or two, so there’s great opportunities here to have a centralized in one place so that both agency personnel can come into the recovery operations center before they give the money Out and it enforcers like IGS or the FBI or Gao, can access information and maybe, on top of some of the other databases we have the law enforcement databases that they would have access to, and so you’re talking right now about work that’s Done within your data system in monitoring the dollars that have been part of the Recovery Act, but my assumption here is this: has tremendous applicability across the various agencies would be able to look at somebody that’s on a do not pay lists? That might be doing work with two different kinds of agencies.

I think it does have that application and that’s – what I’m excited about, that we take.

We take what we’ve done here and apply it to all.

Government spending will be preventing billions of dollars of fraud and we may be putting investigative bodies and US Attorney’s out of business.

Now there’s plenty of work for all of us to do when you talk billions of dollars.

That makes a big difference and thank you for your service and your your forward thinking.

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

I thank the gentleman.

We now recognize the gentleman from Illinois, mr Quigley, for five minutes.

Thank miss chairman.

Thank you for being here.

They raised the issue of tax expenditures as it applies to these issues.

If that’s, all right with you, your thoughts on whether tax expenditures should be incorporated into this sort of executive order or into the new bill that the Chairman is proposing, or perhaps a separate bill, such as a transparency in government, act.

Your sense of the best way to move forward in that.

Well, I’m.

I’m reminded of a recent event where we had a an ID. I believe we’re Gao come out with a report that basically said that taxpayers who, who owed a lot of money, were actually getting some of these awards, and the first question asked of us was well why didn’t you detect that and that’S because you know there are prohibitions from the IRS of sharing with us taxpayer information.

So I think perhaps the time has come for some waivers from that from that act, and I would love to see that the ability for us to have a database that had the individuals that owed tax money.

We could keep that in a very secure environment and and we would have prevented money from going to tax tax Rousseff, is a total tax money and the best way to do that in terms of your sense of this bill or in the executive order.

Well, I think it could be.

It probably would be better done in legislation, because I think it’s a law that causes the IRS to to be prevented from sharing it with law enforcement.

There is a there is a proviso that it’s, that that kind of information can be shared with Gao, and I quite frankly I think you know even Gao would would say that the aiji’s are just as just as responsible enough to have.

That kind of information.

Thank you thank mr Chairman.

I will the gentleman yield.

Yes, I just perhaps you can clear something up on mountain, clear on there:’s tax expenditures and then there’s tax, cheats or detected tax cheats. If I understood correctly, the database that you potentially legislation would give you would be access to tax cheats, people who not not tax expenditures per se, you it’s a more narrow definition right.

Thank you, oh and I the gentleman reclaims this time, yes and if I could yield to the ranking member.

I thank the gentleman for yielding mr Devaney as part of the continuing resolution for fy2011, a budget negotiators last the electronic government fund from a proposed 35 million dollars down to eight million from websites such as data gov, usaspending, gov performance, gov and the IT Dashwood it Risks of being shut down are you aware of? Is that I am I just yesterday, a coalition of transparency and open government groups wrote to the leadership of the House of provisions, committees, Financial Services Subcommittee, urging them to restore our funding for the electronic government fund.

Their letter said this, and i quote: cuts to the e government fund in fy2011 have already urged successful projects needed up ways to increase transparency and improve data, quality have been delayed or abandoned, and two projects have already been terminated.

These cuts uh, penny wise and pound foolish.

The e golf fund supports powerful tools for reducing waste fraud and abuse and for creating private sector jobs and given appropriate funding.

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

Mr Value of some practical experience with the technological tools are really have waste 400 reviews.

You just talked about it.

You talk about the cloud system. Recovery gov is one of our best examples of transparency.

Enabled accountability.

Do you agree on the importance of these websites for generating accountability? I do I’ve become a very aggressive advocate of transparency.

If you believe, as I do, the transparency drives accountability.

Ultimately, you save money and that money is far in excess of whatever, whatever we’re talking about here and how big of a role do you believe resources to be? In other words, how important was it that the rad board had the kind of resources it did to start from scratch, build out a good system and then continue to enhance and improve it? Well, I think was it was, I think, the I think it was a guess as to how much money we would have needed – and I think, was a very on the spot cast and I think we were going to come in under our budget for two and A half years, but having said that, I think that I think the penny wise dollar foolish might be apropos in this particular instance and looking back the recovery GOG of what are the resource limitations.

If any and extending this kind of system coming wah wide and how tall and order is that, well with respect to money, I don’t think it’s.

It’s actually much money, it’s, far below what people might imagine it to be.

I think, with a little extra money, the board would be able to use its existing infrastructure and sit some of these other systems on top of that and create a one platform, as the chairman mentioned earlier, that would would do essentially the same thing that countless websites To get collection display web sites across the government do now.

Thank you.

I’ll recognize myself. I guess I’m what’s left chairman Devane, I’m, assuming that your you’ll, never forget this chart.

No, I it’s memorable well as I look at this chart and not to be countered to the to the ranking member, because I I share with him the frustration that, in this basket of cuts, we seem to be cutting before we in fact Phil.

If you will but your proposal and what is intended out of our legislation and, quite frankly, what’s intended out of the president’s executive order will ultimately save money on two fronts: won’t it one is.

If you move to cloud computing, if you tell essentially all the agencies that we’re going to, have this single check out place that’s really good at checking out that sets it up that relieves that burden other than transition costs, no matter what that Cost is in you,’re right.

We shouldn’t sit here and try to say it:’s, 51 million or it’s – 5, 1 million isn’t it inevitable that that cost post transition is less than we spend on this labyrinth of information.

Today, absolutely let me go through a couple of quick questions, just in closing, because I think we should make the record clear on where we are today as government.

Okay, thank you.

We may have one mortgage questioner some years ago and you’ve been in government for 40 plus years well.

This was about 30 of those years ago.

If you remember the scandal, when they found out that the federal government, the largest purchaser of IBM Selectric typewriters in the world, paid more than the state of California paid for IBM, Selectric contract electrics to or select ryx ones, and there was no fraud, they simply did Two separate times and California apparently was just a little better in the bid and IBM came in less and the government didn’t know about it until a whistleblower found out that in a combined agency that the state paid less for the same typewriter and that Person tried to buy for through the state to save money. It is now 30 years later, if we’re paying for a dell computer if we’re paying 20 different amounts, hypothetically based on bids and Dell computer, to be a bad example.

But if we do have these discrepancies between hundreds of different purchase prices on the substantially or identically the same thing, do you have the resources in government or do you know of those resources that would call that out so that we could get the best and lowest Price well offhand, I would say that you know the buying power is enhanced when you, when you do things when you centralize your you,’re buying, and and so if we, if we take that map that you have up there and we reduce it to a Reasonable picture with one platform, it would strike me that we could do it a lot cheaper, because we would eliminate all the myriad of buying opportunities that are going on right now across the government and centralized in one place and achieve the leverage that we would need Over the vendors, so even though that’s not the first generation of what you’re, doing the idea that, when people roll up what they’re, paying that you can look and say where the anomalies and how much we’re paying.

Where are the best values that’s pretty easy to do over the entire government, but only if you collect it in one place right.

Let me ask one last question and it’s.

I want a long answer.

I’m not setting you up for the yes, sir, okay.

Historically, these reporting’s have been done by essentially cabinet positions and sub cabinet positions.

Both the president – and we are talking about a single point – are we talking in the best case, about a single point that is independent, or is there any other conceivable way? That would be as good as an agency that did one and only one thing, which was to run this collection enforcement and analysis.

I think, if you’re, if you’re referring to the membership of the board or how what that would look like.

I think that one of the observations I made is I look back on the two and a half years is the all IG board clearly indicates the independence that we all strive for and and probably raises the public’s perception tremendously that they’re. Getting a you know an honest shot here.

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

You have to have a synergy between a board and the federal agencies and OMB and a board that has that kind of mix on it.

I think would be a good idea.

I think that if a majority, or at least half of the members, our IGS, it presents that sort of optics of Independence.

That I think is important as well.

So I think the board that’s contemplated in the law that you’ve proffered and also my understanding – is the vice president.’s of the president’s executive order, the vice president’s intention is to try to achieve that balance on that board as well.

So what you’re saying is no matter how we achieve the board as long as its independent and perceived legitimately be independent.

It can work if it becomes captured by any one agency or entity.

It loses its effectiveness. I would be very careful about it being captured by any particular interest group.

Thank you, the gentleman from Idaho, mr Labrador, mr Chairman, I yield back the time.

Okay, he meant to me.

I’m going to use this because I’ve asked my questions and I appreciate the gentleman yielding.

This is not the last time you come in before this committee.

You may be out of office, but we will use our subpoena power to bring you back to get educated.

You know there’s just some things we can’t live without, and one of them is your advice and counsel.

I know we would never have to use that you’ve been very generous with your time, both at these hearings and any time we’ve called on you for advice.

So I want to thank you publicly for that.

I want to pledge, on behalf the ranking member myself, both this. You’re one of the few people that we agree on.

We don’t have arguments about the job you’re doing.

We want to see you succeed and we want to see you have a legacy.

So, on behalf of the committee, thank you for your service and we look forward to continuing to work with you in the future and with that we we stand adjourned and I’m.

Sorry, I stand in recess.

I was really getting choked up.

We stand in recess as we set up for the second panel .

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