Romney Leads Senate Hearing on Reducing Government Waste, Fraud, and Abuse

Romney’s opening statement and excerpts from his questioning can be found below:

Opening Statement:

Senator Romney: Thank you very much, Chairwoman. I appreciate your leadership of this Subcommittee, and I appreciate the chance to speak with you, Mr. Dodaro. I want to thank you and the GAO for the extensive work that you do in, if you will, accounting for what’s happening in our government.

Those things that are measured are those things you can control. If they’re not measured, you can’t control them. And I appreciate the work that you’re doing, particularly that identifies waste and duplication in government, of which there is plenty. This annual duplication report, I understand, was first created as part of a debt ceiling deal. It’s become essential reading, and I appreciate what you’ve uncovered and the improvements you brought to government already.

I think, like many that serve with me, we’re discouraged by the high levels of waste and fraud and abuse that were associated with our COVID relief efforts. I understand by some reports in the media, as much as $400 billion may have been wasted. I hope that’s not accurate, but obviously of great concern. Back in March, I led a letter with some 30 of my colleagues to President Biden requesting more information on this extraordinary waste of taxpayer funds.

I’m also interested in discussing how the government could be fumbling taxpayer money in other ways, like through federal work at home policies, and wonder to what extent we’re less effective, less efficient, by virtue of allowing those to continue. I’m also curious about the duplicative lines of effort that go on in government, particularly as they relate to one area in particular: disaster prevention and mitigation. I’ve worked with a number of folks to help put in place a Wildland Fire Mitigation and Management commission. We’ve seen great success from that group so far, and hopefully we’ll be able to do a better job in fighting wildfires in the American West and apparently in Eastern Canada as well.

So, we obviously rely on you to help us spend our money more wisely. I look forward to hearing your report today and thank you and your entire team for the dedicated service you provide for our country.

Questioning:

Senator Romney: I thought that I had an eye-popping statistic when some years ago I noted that there were some 49 different federal job training programs and thought the duplication was outrageous. But you’ve blown that away with, what did you say? About 140 different broadband expansion programs? And I try to understand why that happens. I presume part of it is that all of us who want to get elected, and that’s the people up here, want to show that we’re doing something about something our voters care about. So, we fashion a bill, we get it passed. We don’t really spend a lot of time asking whether there’s already something that deals with that. We get that passed and the Executive Branch dutifully sets up an agency or department or whatever to take it on. And there’s never a cleaning up and I don’t know what potential there is for actually cleaning it up. I mean, these 140 out there…So what, what’s the process? … How do we actually consolidate and eliminate and put together efforts so that it’s easier for us to be able to address the issue that we’re talking about without having tons of people and departments and wheels spinning and money being wasted? How do you get from here to there? Do you have a sense of when that has worked? When have we been able to consolidate?

The Honorable Gene Dodaro: Yeah, well, this happened in the STEM area—science, technology, engineering, and math. We had over 160 some programs in that area. We were able to work with Congress to reduce it by having the White House and others have a strategy to look at the programs and make proposals to the Congress.

And we’re suggesting in the broadband area, that the Administration come up with a national strategy. I mean, what’s the plan here? You have a number of these programs to build infrastructure, a number of them to provide devices to people. Another one to help [another set of the] programs afford to be able to purchase the broadband authority. None of them are really coordinated over a period of time. Some of them have different speeds associated with it. And this is an issue that’s not going to be static. If we do it one time, you’re going to have it all fixed. There’s about 13% of the population right now, about 42 million people, that don’t have any access. And everybody’s always trying to chase that. But then there’s the question of once you have, you know, 4G, now you need 5G…that’s going to continue in that path.

So, we need a strategy to say, what are our goals? How are we going to measure? You don’t really have that now at a national level andwe’re committing $65 billion to the Infrastructure Investment [and Jobs] Act on top of about $40 some billion that’s already been spent. And if you date back to the Recovery Act days in 2009, we were spending money then on broadband authority. So, it’s going to be an endless federal investment. And who would make an investment long-term over time without a strategy and a way to check the strategy. So, that’s what we’re calling for in this case.

And I think, you know, Congress can require the Administration to do it. They’ve kind of balked. They’re still mulling it over. They didn’t agree or disagree to do it. But I think Congress can require them to do it. And then you can have a debate on something right now rather than just all these individual programs going.

Romney: I must admit I’m a little frustrated sometimes. We’ll call for the Administration to do something, the Executive Branch to do something, and we ask it to do so much stuff that it just doesn’t happen. This might be a big enough topic, particularly with $60 billion in the infrastructure bill that that might motivate an effort to really make sure that we develop a strategy.

Dodaro: Absolutely. I mean, I think they’re on the precipice of potentially agreeing, but it’s not an easy thing to do. But there’s also potentially some statutory limitations to coordinating the programs. So, you need somebody to be able to advise and say, well, here’s our strategy, here’s what we need to implement it, but we need some changes, legislative changes, in order to make it more efficient and effective, to be able to coordinate, you know, over time…

Romney: The vulnerability of our various governmental systems for fraud is substantial, obviously. But I my impression is that relative to the private sector, the fraud that is perpetrated against the government is much greater. And I don’t know why that is precisely, but my expectation is it’s going to get a lot worse with AI. That the capacity of bad actors to hack into our system, our systems will be greater…Do we need to dramatically up our game to prevent fraud?

Dodaro: Absolutely. Absolutely. You know, the fraud that occurred during the pandemic programs was epic in my experience. You know, I’ll have been in GAO, in two weeks, I’ve been in GAO for 50 years. I’ve never seen it as bad. Now we’re throwing a lot of money at the issue.

But we harmed ourselves by allowing self-certification in the beginning in the PPP program, Paycheck Protection Program, Economic Injury Disaster Loan Program, unemployment insurance forms, I think it was well-intended. We’re trying to get the money out. But, you know, these types of emergencies, the best in human nature comes out and the worst in human nature comes out. In this case, you had organized fraud. It wasn’t just national. It was international. We’ve estimated that a minimum, at a minimum, unemployment insurance fraud, $60 billion. We’re making a higher estimate now. And then we’re going to do a government-wide estimate by the end of the year of fraud across the federal government.

We worked with the Congress back in 2015 and 16 to pass the Fraud Reduction and Data Analytics Act, which is again, best practices for preventing fraud. Too many people in the federal government, program managers, think it’s the responsibilities of the inspector general or GAO to combat fraud. It’s their responsibility to prevent it in the first place, and they need more guidance and assistance to do this.

If that Act had been implemented properly, SBA and Labor Department would have been much better prepared to deal with the fraud issues during the pandemic. So that’s still on the to do list—to get the agencies up to be better prepared for fraud. We need better identity verification approaches, more careful approaches. We need better data sharing. Now, our problem in the government is that there’s a tension between sharing of information to catch the fraudsters and the protection of privacy on the number of people, you know, a number of programs and not wanting to share the information under the guise of privacy.

And there are legitimate privacy issues, but they could be dealt with. On the IRS, identity theft fraud, we suggested to the Congress years ago that they expedite the W-2 data coming from employers. You know, employers…had to give it to their employees by January…and then they didn’t have to give it to the government until April. So, the government didn’t have the form to compare against the submission of the information return. So, we got Congress to change that. That’s helped a lot, but there’s still some gaps in that area and we have some open recommendations.

Romney: Do we need to upgrade our capacity to defend against fraud in a much more substantial way as a result of the advent of AI? And are you recommending that? Are you talking to various agencies saying, “Okay look, you guys got to, you know, dramatically increase the kind of protective measures that are employed or the consequences could be quite substantial?”

Dodaro: Yeah, we definitely need to upgrade as a government in order to prepare for artificial intelligence and then ultimately quantum computing, you know, as well. We haven’t done as much detail as your question implies. We have come up with a framework for how to audit artificial intelligence algorithms to make sure that they’re done properly as well. So, we’ll take more of a look at that issue, Senator, going forward on that. Because we’re looking at a lot of artificial intelligence, for example, in the Defense Department, where we haven’t looked at it specifically as it relates to the fraud area, but we should.

Romney:  Let me also just ask a question that’s maybe smaller bore, but that is with regards to at-home employment by our federal employees. Did that result in a reduction in services and inefficiencies of a substantial amount? And if so, were you able to audit that or evaluate that? Does that continue to plague our government agencies?

Dodaro: It definitely caught a number of agencies off guard because a number of them were moving in the other direction, where they weren’t allowing telework, particularly during the Trump Administration. And so, when the pandemic hit, they weren’t well-prepared with technology as much as they should, or policies, or whatever. It definitely had an effect where people were dealing directly with the public. You know, those agencies that do that. You know, Social Security, IRS, etc., because a lot of the technologies enabled them to do things, you know, electronically.

But still a number of people don’t have access. And we talked earlier about people that don’t have broadband or people that don’t have devices or whatever. So, they need to walk into an office. And so, we’re looking now at, “Okay, post-pandemic, where are you? What are your plans? How it’s going to affect service delivery?” And we’ll have a report on that going forward.

We’re also looking more broadly at the private sector—what the experience has been in the private sector of telework and remote work, etc. That report will be out soon. So, we’re looking—we’re studying the issue. It definitely had an effect…Then there’s the question also related to Chair Hassan’s question about, you know, you asked about personal property, but there’s the real property aspect of the government too. Do you need all these facilities? We’ve said for years before the pandemic you have more facilities than you need—you ought to get rid of them. And we haven’t been doing such a good job at the government level to do it. Congress passed a law in 2016 trying to create a board and the board would recommend properties. There’s four rounds. So far, we’ve been through three. The first round, I think we sold ten properties so far for $194 million. And then the proceeds were supposed to fund additional rounds and then some of the board members quit. Some of the sale strategies changed.

And so, one of our recommendations is that GSA do a “lessons learned” and try to figure out what went wrong, you know, and what can be done to improve it. Now, there’s one more round left in 2024. So, we’ll be back with an update on that. But that’s on our high-risk list because they’ve made some progress in getting out of costly leases, which is good.

But this whole question about where the employees are going to work and how much office space they need, I think has those implications too, as well as, you know, but the main thing has to be on effectively accomplishing your mission. That’s got to be the primary goal. And the question is how best to do that and what kind of policies you need to have your employees where and doing what.