>> there's an engineering change from a manufacturing change. it adds cost, it drives the cost of sort of for nothing. that is something we need to drive out and that will help us. >> what you see on these issues? >> again, i think there's a comment about this not being a static world. and our competitors are getting better and they have agreements that we don't have. senator kerry was talking earlier about the excellence in the u.s. higher education how that has always helped us and we train more and better engineers but those days are ending. and so, our natural design advantages i think are going to be harder to come by going forward. we need those things so that we are not starting with a ten to 20% cost disadvantage. >> we talked about this in the european context it is closer to

fruition. >> we have a huge business in asia growing that's probably the single largest opportunity over the next decade or so. we intend to lead that market like we do in so many others. but again i come back to the point that it's likely that a lot of those countries -- a number of those will give agreements with or without us if we don't get tpp done and we will be looking at a market that we ought to compete with. there's another 1i will move to africa because i'm kind of passionate about this. we watched the chinese really take over africa. they come in with their own financing and engineering, sometimes their own workers to take over minerals come extraction, hydroelectric power across africa. and i feel we can do better in this country and i know that is on your agenda and all of our agenda but i am so pleased to hear the crossover between commerce and state because that is what we really need. that is what china and others do so well when they work on the

market they combine all of their assets and possible these to go after business and try to win customers over. we can do that and i really admire and think the commerce and state combination can be fruitful. we would like to help with that. it's a great opportunity. >> ambassador, the promotion of for the was a big issue. what do you see as the prospect to get the authority to get fast-track what would it mean if you don't -- can you negotiate these agreements if that isn't a part of the equation? >> the president has made clear that he would like to get authority that it is a critical tool for being able to move these agreements, meek these agreements real and implement them. just this week there was a hearing in the senate finance committee on tpip where chairman bachus talked about the

importance of moving forward on the trade promotion authority and the finance committee and the means of the committee both democrats and republicans to try to move this forward as quickly as we can with a broad support as we can possibly have. we think it is a critical tool ultimately to getting agreements through congress and implemented that is what we want to try to get done. >> iso if you are rooting for some of these deals, you would like to see the government have a strong mission as possible. >> at the end of the day when of the things in tennessee we'll understand is government don't create jobs but we do set the conditions for that to happen so we have worked hard in tennessee. we have the lowest debt per capita and the lowest two or three tax rates and great infrastructure. we have done all the things we can do to help this to be a great and productive work environment but there are certain things out of our

control the dramatically impact jobs in tennessee when i hear all the manufacturers tell us we love being in tennessee and we love the work environment, but if we had this agreement in place, we could produce more jobs. well it's a little frustrating to me as a governor because it is out of my country but it's also critical for me to get involved to land that felice whether it is in washington or anywhere else. but like i said, we've worked hard to set up a work environment in tennessee and we think we have it but there are certain things that are beyond our control at this point. >> im stand everyone on the panel is an enthusiast to this agreement but we want to be clearheaded about some of the competitive costs. if the construction mining business, what do you see as the competitive threat that would come from others that -- imports would be less expensive. what are the competitive to when she would face from the deals coming to be and how had contador you caterpillar can fight them off?

>> that is a good question and one that we have on many other fronts that comes back to the competitiveness of the united states. things like the education system, taxing system and things that make u.s. companies competitive as competitors around the world and that is another subject we can spend days on as well what to have a level playing field between the bank and tariffs and the devotee to repatriate markets is kind of the foundation of all of this and it's up to the u.s. companies to be as competitive as we can and the american government certainly to help us be as competitive as we can to create manufacturing jobs and job growth. i kind of look at it in those three steps of foundational work. but the opening of markets is fundamental to starting the process. we can be competitive. we export an awful lot from the

united states. we work hard every day on internal labor agreement and we have spent a lot of time in the education system. but if we don't help the markets out, the rest of this is sort of benign. >> what you see as the competitive threats that would come to be from the imports? >> we love free trade and competition. that only made us strong over the last 50 years from a company with 4,000 employees in the early 60's. we have a successful manufacturer in the world which is market-based free trade to take the competition on. >> it's not by protectionism

that would be what we are looking for for the unilateral free trade. what are the advantages that workers and manufacturers and tennessee have any more liberal planning field that prevail? it's going to be about the work force and we are doing everything we can to make sure we have enough engineers and welders and i.t. professionals to provide the product. is there a downside to these agreements? they're probably are. we make cars and medical equipment and we grow a lot of tomatoes and they would tell you since nafta that tornadoes sales are down but they also say hours are better in the long term we are going to win. so, we realize you open up our markets to that process but like we said, we cannot believe in competition and we will take our

chances to read our job is to set the right structure and ensure we have the right environment to go predictable so they know what they are dealing with and make sure that we are training the right workers and we think we are doing that. >> do you see any way is that some of the losers in the deal, some of the industry that face more competition and more challenges, is there a way to help those workers and to ease some of the difficulty? >> absolutely. when president obama came into office, he wanted to make sure we were negotiating trade agreements that benefits would be broadly shared a and we recognized that we need to take care of anybody who is displaced. and that's why we've always insisted, for example, the trade assistance be part of the package. trade adjustment is a program that helps workers who are displaced. it expires in two months. it's always been linked to the trade promotion authority. our hope is when you talk about before the congress takes up the trade promotion authority that will vary with the tree assistance so that we can move

this forward. let me just say one more word about that if i can. the trade promotion authority, there is a lot of misinformation. it is the mechanism by which congress gives us our marching orders. they tell us what to negotiate, how to work with them through the negotiations and what the conditions will be under which they will consider an agreement to. we worked extremely closely through the negotiation and it's the way that that gets structured. the last thing i will say and this has been part of our overall agenda isn't just yet to negotiate peace agreements. we have to make sure that we monitor them and enforce them and we've dramatically increased in our enforcement efforts to wrap this administration by bringing more cases as necessary, bringing in the whole government approach to the enforcement efforts through something called the interagency trade enforcement center and i think that has helped convey to people that we want to make sure

that this works for american workers and farmers and ranchers across the board. >> you have a unique opportunity. you are here on the panel with a man negotiating these complicated agreements. there is inevitably trade-offs in the negotiations to push hard is what are you going to succeed on to make sure you get a deal done. from caterpillar and from the bmw would you urge the u.s. government to focus on as they make the trade-offs between the service industries and auto and farmers involved in these negotiations? >> i will start. i think in all of these it is a series of compromises and my encouragement would be -- and i will tell you that the ambassador is one of the best in the world with a tremendous background i have great trust on this that you start with the big chunks of things that make a

difference. and in the end, you make the compromises and the places that you have to compromise, but you have to be as broad as you can across many industries as possible to get it done and i know that is exactly how michael does it. but it's hard to say because unless you are in the room negotiating a deal would you can compromise on, but to me it is a very broad answer. as much as we can get broadly in these agreements as better off we are going to be and i am not going to stand because i have a long list of things that i would like to have done. >> i don't know that i have a lot to add to that. in any negotiation you start with how much is at stake and there is a lot at stake so my encouragement would be like doug. don't let the things that are the most difficult or only 10% of the things stop it from happening. >> i couldn't agree more. we should strive for the best of the agreements. we should put a good agreement

and the agreement would include that we can't do away with a different standards but we would accept the standards in the u.s. and europe and likewise and would make things easier for us. >> it's important to remember, too, there's a lot of change that has to come to the u.s.. i would go to agriculture has won that has frankly been a stumbling block for many years to get these things done. as a result, that has to be managed as well so it is a very difficult set of negotiations when you are going after the backbone that has made the country what it is. >> i'm afraid that is the same in europe. >> in the pathway from here, what those the time look like as you and your staff try to come to a deal? >> i think as this discussion

demonstrates and the challenge before us is that even within the u.s., we oftentimes have stakeholders with diametrically opposed interests. and our job is to figure out with the best approach is to support the greatest number of jobs and the most growth, the most benefit for the u.s. economy. sometimes that requires a balancing among the domestic interest and then even to go to other trading partners in the case of tpp to figure and a landing zone where it is a win-win for everybody. nobody gets 100% of what they want and 100% of the chapters that we have to be able to at the end of the day look at the package as a whole and that's why we try to take as comprehensive of an approach as possible. look at the package as a whole and make sure it is serving our interests and values and supporting what we need to support here in the united states in terms of job creation, growth and strengthening the middle class. everything we do is sort of tied

back to those objectives. we will be working over the course of the next couple of months and as tpip gets running we will achieve those objectives. >> hopefully there are no more government shutdowns. >> a couple of you mentioned agriculture which isn't really represented up here today. governor, you have the tomato industry in tennessee so i will use you. what do you say to a tomato farmer and somebody that is being asked to make real concessions on what kind of subsidies they receive for agricultural work lacks >> that is a difficult piece. i don't know the number but i have seen the number of tennessee produced now versus pre-nafta and taking on tornadoes but we could do anything like that. a couple of things, number one at the end of the day i think food today is more and more about quality. kimber to it is about access to

markets and the farmer to table deal has become a huge opportunity for the local growers and i would say let's keep concentrating on the market you know you can do well on with quality and we will keep specifying that. i'm pretty confident your tomatoes can be better than those brought in. >> nafta has been mentioned a couple times in the context of all those that you can export to mexico quite easily in brazil there is a high tariff. what are the lessons over these last 20 years what implications do they have for how these agreements come to be the model of how we should move on but i would also like to stay in the american context to see how it works now with three and where we have free trade as well and we are doing great with south korea even though the the strong

automotive industry themselves. so, i think it really is about embracing free trade wholeheartedly. >> any lessons from caterpillar? >> i think all of the empirical evidence and the data will show that nafta has been a tremendous winner for all three countries and especially this one. for our company it's been a huge. we've been able to take advantage of a tremendous oil and gas business in canada. a lot of development in mexico, and a tremendous benefit to the u.s.. without nafta, i don't know where we would be frankly with our export and trade patterns to both mexico and canada. frankly i think the mexicans and canadians that i know what to do the same thing from their end. >> if you go back to specifically the exports to mexico they were up eight times and canada three times. so, are their winners and losers

in the process? yes. but the state is way ahead coming in with the other. stat let me add a metric that is basically only true because of the free trade agreements that we have around the globe in the last 20 years. our production the last seven years i would say this is usually a model cycle has gone up by 40% of the export has gone up by 70 percent so that really shows how free trade sponsors growth. >> i guess to close up, i would ask each of you to think freely and give just a couple of comments on what to expect the world trade to look at in the next year or two and what you would expect to see. what are the greater opportunities and risks and the most likely outcomes of things you'd expect to see both the letter of the european and the pacific agreements?

>> i have very high hopes we will see a deal on tpp fairly soon and tpip right behind that. then with of the job creation that we are all lacking even at this point in asia, and europe and the u.s. i would expect to see the benefits of that a year to two years later as we are starting to see with your leah today. it doesn't take a very long to open the spigot on exports and imports one fits those tariffs come down and the standards are synchronized. i would be optimistic that it would help job growth and gdp growth in all of those loans particularly this one because 95% of consumers or outside of the country and we have to learn to deal with that. >> i don't have the number on the pacific but with the tpip agreement exports will go up 35%

which is about $2 billion which is a lot of the other thing is you have to look at everything in context of what is happening in the broad market and there are things working to our broad advantage. energy costs in the u.s. are going down. that isn't true in a lot of other countries around the world. we can take advantage of that. the cost of transferring goods are a bigger piece of something relative to the labor peace so we can to get advantage of at as well. the market in so many ways is turning to the infant right now we are not having these agreements done. >> you should always keep in mind that maybe tpip, free trade supports growth, it supports new

jobs, foreign investment, innovation. so in the end of the consumer benefits from all that. it creates jobs and the world of free trade that will be production moving to those countries where there is free trade, and free trade will also foster exports. >> ambassador, what are we going to hear and what would you like to hear? >> i share the governor's optimism about where the u.s. will be in this global trading system and when we look around the world including sub-saharan africa and across asia and parts of latin america there is a real movement towards recognizing that opening markets provided that you are giving it in the right way, opening markets can help drive the job creation and growth innovation. look at what some of our partners are doing in sub-saharan africa, the leading

reformers. there is a desire to make sure that the trade is playing a major role in the development in their development and the u.s. stands to benefit hugely from this in the global economy provided we can do the things that we need to do here. our biggest risk is our political risk. getting the fiscal house in order and comprehensive immigration reform done starting with trade promotion authority which has reminded me every president had since 1994 but also ttp and tpip to make sure that we are at the center of the network of agreements. together with our legal system and education system, our access to energy to make this really the driver of the exports, the platform that every company around the world wants to be. that to me is a great potential for the united states economy and for job creation and growth here at home. >> with that we will close down.

thank you for all of these thoughts. well done. [inaudible conversations] [inaudible conversations] we will have highlights of the conference on sunday at about 2:30 eastern. also our web site, c-span.org has all of the panels covered over the last two days and you

can watch of those any time. a live picture of the white house on this friday where today president obama will be meeting with the iraqi prime minister nori al maliki to discuss the framework agreement and a number of regional issues. we will bring at a summit meeting as the ocher. coming up later this morning, a discussion on the director of the international atomic energy agency on the role of the agency plays in monitoring the national nuclear programs and what it does to promote the peaceful use of atomic energy. live coverage gets under way from the woodrow wilson center in washington that starts at 11:30 eastern on our companion network, c-span. wednesday health and human services secretary kathleen sebelius was before a committee to talk about the problems with the healthcare.gov website and the problem people losing their current plans. we will show you that entire hearing on sunday about 10:35 in the morning. until then come here is a portion of the meeting as it took place on wednesday to the

>> i want to go to the cost ofud the website and talk n about th website. this is what is happening right now. we hai ve had somebody in the bb trying to ousign on and it iswey down.ack it is not working. last night i asked for the cost from each of the contractors that were with us last week. so, can you give me a ballparkut of what you have spent on the g web site that does not work that individuals cannot get to, whatk is your cost estimate? >> so far, congresswoman, we have spent about $118 million on the website itself and about $56 million has been expended on other i.t. to support the web. >> would you submit a detailed accounting of exactly what has been spent and when do you expect constituents to stop

getting these kind of errortop messages? >> i talked to the president ofe verizon alana to locations. weed verizon hosts the cloud which ven't part of the website that is the host for a number of websites. fever rise in the lead to -- thr verizon system was taken almost all day sunday.unday. they had an additional problem they notified us about and itrom continues on. notif so i would be happy to talk to the president of verizon and get more t information. >> let me come back to that because i want to get back to this issue of exactly who is in i arge of this project because you are now blaming it on the in contractors saying that it's th rise in's -- verizon's fault. did you look at outsourcing the role of the systems integrator -- obviously, you did not from the contractors we had lastviou week. they all had several different

people, whether it was you weree garrey or meshaal snyder or henry that they thought were in charge. so who is responsible for overseeing this project? is it you or your designee? >> i am not pointing fingers att verizon. we own the site. the site has had seriousng how i problems. >> who is in charge, madameriou secretary?>> who iin >> the person now in charge as an integrator is qssi -- >> who was in charge as it was being built? a >> in charge of two -- was being built? of the team, who is the individual -- >> michelle snyder. >> michelle snyder is the one responsible for this debacle? >> excuse all of secretary sebelius testimony before the house commerce committee can be seen sunday at 10:35 eastern.

the head of the center for medicare and medicaid services testified the day before secretary sebelius. and her testimony and the secretary are available online at c-span.org. this is a tough time for nsa. everybody says what are you doing or why are you doing it? but here's what we do. when we get when we get together -- well maybe a couple of times we've wine, but we actually say it is much more important for this country that we defend this nation and take the beatings than it is to give up a program would result in a nation being attacked. we would rather be here in front of you today telling you why we defended these programs and having given them up and having the nation or the allies.

they defended the program and the house intelligence committee meeting. saturday morning at ten eastern. blasé sunday at c-span2 your calls and comments >> asad nassa's future goes, so too does that of america. if nassa is healthy, then you don't need a program to convince people that science and engineering is good to do because you will see it at large

on the paper. it will be called for engineers to help us go ice fishing where there is an ocean of water that has been liquid for billions of years. we will dig through the soil and look for life that will give me the best biologists. look at the portfolio today. it's got biology, chemistry, physics, geology, aerospace engineers, mechanical engineers coming electrical engineers. all of the stem fields. science to acknowledging engineering and math represented in the portfolio. it is a wheel that society has for innovations. >> the house oversight and government reform committee looked into the $6.1 million

spent by the veterans differs apartment on to conferences. department employees accepted massages and helicopter rides while planning the conference's according to inspector general who testified at the hearing. a former department official who has resigned over the matter was also present and refused to testify by pleading the fifth amendment. congressman darrell issa chairs the committee. >> the committee will come to order. the oversight committee exists to secure to fundamental principles. first, americans have a right to know that the money washington takes from them as well spent. second, americans deserve an

efficient and 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 the government and government officials responsible to the taxpayers because taxpayers have a right to know what they get from their government. it's our obligation to work tirelessly and the citizen watchdogs to deliver the facts to the american people and bring genuine reform to the federal bureaucracy. today we meet to discuss the department of veterans affairs. an organization whose essential duty is second only to the men and women who they serve and their obligation and their duties and other service to protect the country. if in fact we abandon our veterans, then we abandon our

men and women in harm's way. we cannot and should not ever forget that service begins by raising one's right hand but continues for a lifetime and the effects of that service often has a lingering effect on the men and women who in the voluntary army go in harm's way because they respect and love their country. congress exempted the department of veterans affairs from sequestration. so important is the obligation to get right that money hasn't been a problem. furthermore, even as we begin the opening of the government again after the latest effect, additional dollars for dedicated to the backlog that is inexcusable to those the serve our country. the department is second only to the department of defense spent

in an estimated 6.1 million on what was marked or considered to be training conferences. today we are here at a time in which many people would say didn't you already cover the gsa scandal, didn't you cover the scandal of wasting people's money on conferences. it's true that we did. it's true that these conferences or in fact historical, not current. there are several reasons we are here today not that these were lavish parties that the department spent, but that their own report finds it impossible due to the hopeless accounting act veterans administration to find out exactly how much was spent on the forensic audit only estimates how much was spent. this is a lot of walking around

money that has been left loose at the veterans administration that could have and should have been made available to our veterans and their needs. additionally, we can find no purpose for these conferences that justify it. i do not often reflect on confidential conversations i have, but there is one that i've made public in the past and i will continue to. the general in a conversation that the discovery of the scandal told me his greatest obligation and problem was to change the culture of the va. a culture he inherited that in fact talks about the veterans and in fact fails to perform a number of serious. the tax payers in this case got a lousy deal. it isn't just that there were lavish conferences and once again videos and mocking of

people's real obligations and seriousness, but in this case they had an opportunity and an obligation to train people to be part of that culture of change that the secretary so much said he wanted to get accomplished on his watch and failed to do so. by recreating the benefit using the few records that were available, the ig found at least $762,000 of unnecessary and unauthorized wasteful expense. how could this happen? there could be three-quarters of a million dollars of waste. how could it happen? it could happen because in fact this agency has deep pockets and money that is designed to have flexibility because we want that flexibility to be used for our veterans. the department senior leadership

effectively give the conference planners a blank check. and those planners took advantage of that. i in fact and not pleased with outside conference planners but let's understand $450,000 to market and hike the conference was a decision that didn't need to be made because the fact is these four employees, you are paying for them to come and you can order them to come and encourage them to come. you can make it clear that if you don't come it can reflect on the continued training requirement. so why do you need to advertise? these are not by years these are in fact recipients of a training that the needy and perhaps a bit of a curt to get away from the day to the job. $50,000 was spent on the movie or what we might call you to the

phenomenon on patents. the $98,000 was spent on promotional product such as notebooks, water bottle hand sanitizers, fitness walking kitts and the light. i'm not sure what part of the h.r. training that reflected. when the planners ask their managers about the budget, the manager's reply, and i quote. there's a large agency with deep pockets as a large agency with deep pockets. but the pockets were not intended to be picked by either contractors that were likely unnecessary and people that we hold accountable and pay to be accountable to the taxpayers.

they have activities for themselves than they did for planning and training activities. conference planners, visited dallas, nashville in orlando. just possible locations for conferences and e-mails that they raved about, what a great time they were having on what amounted to the taxpayers financed vacations. while they were on the speed vacations they accepted improper gifts from hotels competing for the host of the conference including small packages and room upgrades to show the tickets and flow rides and helicopter rides. to make matters worse, during the conference as when they were so busy getting the perks of being represented by a large deep pocket by year they in fact asked for and received overtime pay. that's right.

only in this kind of environment of not caring the enough about the taxpayers' money can you have somebody have what i grew up calling heads -- hudspa to use taxpayers' money and use the perks and say i need over time. the conference planners thought they deserved recognition for their hard work and efforts to say, quote, the department money and amazingly they did get recognized without doing any due diligence the department awarded over $43,000 in cash and one time awards to conference planners from a job well done. this is the pattern that we see that bonuses or an entitlement and automatic, the but in this case to see bonuses were basically there for providing perks to the people of granting it is a kind of quid pro quo

that we need to get out of government. and if we can't -- such as training and responsibility and real believe in what you do for the government that in fact undoubtably conagra's ligon pass additional walls that will be completed as restraining management but in fact if liberty is given to management to do the job right and the abuse it, they can accept nothing else. meanwhile, with the department having over 300,000 employees, 140 billion-dollar budget that was immune to the sequestration our veterans were abused. and i use that word carefully. but i used to deliberately. the number of pending veterans benefit claim currently stand at 700,000. one of the great abuses discovered in preparation for this hearing is that the stated number is 400,000.

why? because first we have to delay and not do anything for the first 120 or 125 days. and then we put them on the last with its 700,000 waiting were being abused by a backlog that no matter how much money is thrown it never seems to shrink. the department continues to fall short of its goals and as additional money occurs, they simply have excuses. in fact, the veterans administration missed its own target for processing claims buy approximately 100,000 last year. the number of appeals claims has continued to rapidly grow to over two injured 55,000. other committees have held hearings on the effects of those appeals claims. the inaccuracies and the likelihood that he claims if occur often enough would be

meritorious. the department's waste and its problems are primarily on the veterans affairs responsibility. however with the good work of the ig and the effects that we see doing the right thing and not being able to get to the right answer in this case 26 out of 49 recommendations remain unfulfilled. this committee has very little choice but to bring up this issue and make it very clear that we will not take our eyes off of the veterans administration for any of their practices until there has been meaningful change in the culture as the secretary has told us in the culture that he inherited. with that i will put the money in -- time and i will yield back. >> thank you mr. chairman. i want to begin by thanking

mr. griffin and the deputy inspector general at the department of veterans affairs and of work that he and others at his office conducted with respect to the conference is hosted several years ago in orlando florida the report that you issued was comprehensive and identifying the problems at the va and make concrete recommendations to remedy those problems. you do great work and i want to make sure that you take that our thanks to all of those that are working the office and contribute to this reporting. last november the department of veterans affairs held a hearing on these issues and respected the general's report in detail. the committee considered the significant problems associated with the va conference and examined many reforms that were being implemented to ensure the

controls and oversight for example the va has made significant changes in its planning and oversight policies one was to clearly define specific executives accountable for ensuring that the conference planning and spending complies with regulations on policies. to build in the fiscal controls. they also prohibited the conferences that cost more than $500,000 the approval from the deputy secretary that cost between $100,000.500 thousand to provide guidance to the office is about the applicable regulation requirements and the

mandated additional travel and purchase cards they also held accountable the employees who were involved in the 2011 orlando conference is for example. the va demoted deputy assistant secretary for the office of human resources management. removing her from the senior executive service a and at monished then the chief john gingrich whose role is authorizing the congress. the dean of the veterans affairs running the university also resigned in response to the other employees having administrative actions still pending. the officials also -- -- no

knowledge about the patterns shown at the conference and revise the statement about his actions. his constitutional rights to do so. today's hearing i believe it is important to hear from our witnesses to be completed to all the implement the recommendations. for example, i would like to

hear about the status to help collect information about the conference spending which is running later than scheduled but also i can update on the status of the handbook on the conference planning and execution and oversight which the inspector general believes will satisfy many of the recommendations that remain open. i would also like to hear about the progress and being benchmark to satisfy the obama administration. november 2011, obama gave an executive order 589 which required agencies to reduce the total expenditures and other items by 20% below the 2010 spending. the next year the office of management and budget issued a memorandum directing agencies to reduce the travel budget even

more by 30% and to maintain that spending level until 2016. finally, i want to thank our witnesses from the department for a hearing today. i know some of you are very new to your job. i understand that you have been serving in the role of the assistant secretary for human resources in the administration for only about a month. although you were not here when these mistakes were made. some will look to you to complete the implementation of the inspector general recommendations and to prevent the waste that occurred in 2011 from being repeated. with that mr. chairman, i yield back. >> i might note that mr. murray has been in his possession since 2005 so perhaps the long serving kid on the block will be a good

combination for today. will have seven days to submit information for the record. i now ask unanimous consent, that the oversight committee staff report entitled u.s. department of veterans affairs 2011 human-resources conference a culture of mismanagement and reckless spending to be placed on the record. without objection, so noted that the copies will be distributed to all members so they may use the material. mr. chairman, just one clarification. that is the republican report, is that right? if you have a minority report i would love to see that. >> the staff report for the majority. >> thank you.

>> i would like to welcome our panel of witnesses at this time and introduce the honorable gina farrisee. one of these days he will be introducing and i look forward to seeing you make similar mistakes at times. it's what happens. it could happen. mr. edward murray -- sari, the assistant secretary of human-resources and its administration for the united states department of veterans affairs. mr. murray is the deputy assistant secretary for finance at the u.s. department of veterans affairs as we said

since 2005. the honorable john is with human resources and administration at the u.s. department of veterans affairs. the honorable richard griffin is the deputy inspector general for the u.s. department of veterans affairs. and his chief deputy, mr. garrey abby is the inspector general for audits and evaluations of the u.s. department of veterans affairs and i & the chief person responsible for this work. pursuant to the committee rules, would you please rise, raise your right hand to take the oath. do you solemnly swear or affirm the testimony you're about to give will be the truth, the whole truth and nothing but the truth? please be seated. let the record indicate all witnesses answered in the

affirmative. when we began i understand that we will have farrisee, ms. farrisee and mr. griffin will be giving their opening statements. as the ranking member said, mr. sepulveda, you may not be willing to testify; is that correct? >> [inaudible] >> okay. then -- right. we will go through the obligatory questions with you before opening statements so we have no intention on having anyone remain longer than appropriate. would you please turn your microphone on to answer his not provided us with any written testimony today. do you wish to make an opening statement? >> i respectfully decline to answer based on my fifth amendment constitutional privilege. >> which is the privilege not to

incriminate yourself by answering; is that correct? >> it's a privilege to remain silent. it's our understanding from your counsel that you may reserve that constitutional privilege, and you have to read mr. sepulveda, today's hearing will address the planning and execution of to department of veterans affairs conferences held in orlando florida in 2011. as the assistant secretary of human resources and administration during the period in question, he played a lead role in the conference planning process. you were uniquely qualified to assist the committee and investigating -- in the investigation into the waste that may have occurred at this event. in your name appears in more than 80 times in the inspector general's report on the conference's if i must ask you to consider answering the committee questions and i am going to ask you if you right

now to see if he will answer any questions. mr. sepulveda, you are no longer an employee leaves of the va; is that correct? and on the advice of my counsel i respectfully refuse to answer based on a constitutional privilege. >> mr. sepulveda, when did you resign from the va? >> under the vice of my counsel i respectfully decline to answer based on my fifth amendment constitutional privilege. >> mr. c7, are you receiving full retirement benefits? >> on the advice of my counsel i respectfully decline to answer based on my fifth amendment constitutional right. >> mr. sepulveda, there was an article in the federal times october 1st, 2012 that discussed at the conference is we are here to talk about today. the article contained a statement attributed to you. the statement addressed your resignation from the veterans administration. the statement was, quote, i

resigned because i did not want to be a distraction to the administration, secretary sebelius -- secretary shinseki i mean. and the va, as they work each day to address the urgent needs of the nation's veterans. mr. sepulveda, why did you resign? >> on the advice of my counsel i declined to answer based on my fifth amendment constitutional right. >> mr. sepulveda, is the statement attributed to you in fact your statement? >> again on the advice of my counsel i respectfully decline based on my constitutional privilege. mr. sepulveda, i'm disappointed that you are not willing to give a statement, you are willing to give a statement apparently to the federal times about your resignation but you won't do so here today. additionally, when the oig

investigators asked you whether, you viewed the video parody before it was shown publicly, you answered no; is that correct? >> on the advice of my counsel i respectfully decline to answer based on my fifth amendment constitutional privilege. >> mr. sepulveda, i have many more questions on the list but it appears you will answer no initial questions. is there any question i can ask you today that will -- that is germane to our discovery that you are willing to answer? >> on the advice of my counsel i respectfully decline to answer based on my fifth amendment constitutional privilege. >> in that case i won't say that you are excused, but you are dismissed. >> thank you mr. chairman. >> you are most welcome. we will take a very short recess so they can reset and remove his

name plate. this looks like a divided now between the ayachi and the administration but we will leave it this way to be exhibitions. we now continue with our hearing. ms. farrisee, such time as you may consume but if you can't stay within approximately five

minutes. >> good morning mr. chairman -- >> i apologize, you have to get a little closer if we are going to hear. >> good morning german. and you are correct it is farrisee to the ranking member comings and distinguished members of the committee on oversight and government reform, thank you for the opportunity to be with you today to discuss the department of veterans affairs commitment to transparency, oversight and the training of its employees to deliver the highest quality service to the nation's veterans, family members and survivors while ensuring the accountability of the tax payer funds to buy and joined today by edward murray for the finance and the office of management. sitting behind the carjacked hamre assistant of the secretary for procurement policy systems and oversight office of the acquisition and logistics and i know that many of you are interested in talking of the 2011 human resources conferences held in orlando. the issues identified by the inspector general and about our department has done over the

last year to ensure that such issues do not occur again to be having taken the position last month, when the va and began implementing the corrective actions to further strengthen oversight of the conferences. but i look forward to discussing the results and the reviews that they have conducted and while the findings of the report were troubling, we also recognize the critical the importance of the training. it states that the va and the resource conferences in orlando were held to fulfill valid training needs and that the offer legitimate substantial training courses making clear that the focus on legitimate required training is not in question. learning of the evin failures only makes it a fact that the mission to serve our veterans must be at the core of our work all the time including when we are planning on attending and managing training conferences. the va begin taking actions immediately after learning of the ig report. in september of 2012 we issued a conference planning a oversight policy. this policy established the

standards to ensure senior executives exercise due diligence in the planning and execution and management of the sponsored training conferences. in summary it demands three things. first of retraining conference will have a point of accountability at the senior executive level. second each training conference will have four phases, concept, development, execution and reporting each with its own objective. ..

>> online training portals not as our talent, and that the national telecommunications system to cut costs. in fy 2012, one organization realize $33 million in cost avoidance as a result of increased usage of these systems, an increase of 29% usage on 2011. september 2012 policy strengthened the development of cases that must be prepared in advance of training conference. the sponsor must show the training conference is a part of the strategy to develop employee skill sets and measure outcomes help develop more relevant and focused training in future. as a result of surveys conducted after the orlando training conference we learned 70% of supervisors stated their employees job performance had

improved after training conference. continues workforce development are critical to delivering the timely, quality care and services our veterans have earned and deserve. our departments nation and sacred obligations are to our investor of our veterans, their family members and survivors. incumbent is a nonnegotiable requirement to manage our resources carefully and ensure that there's always appropriate oversight and accountability for our taxpayers dollars. mr. chairman, the va panel at i would be glad to answer questions this morning. thank you. >> thank you. mr. griffin. >> mr. chairman, ranking member cummings, and distinguished members of the committee. thank you for the opportunity to provide testament today, and for your continued support of the work of the men and women in the va office of inspector general. today marks the 61st time over the past six years that ig

manages have provided congressional testimony. during these hearings we've covered a wide variety of challenging topics, including mental health program management, military sexual trauma, i.t. security and protecting veterans private information, physician staffing standards, vba claims processing issues, and internal controls for va fee basis payments. in addition to these hearings, featuring the work of our audit and health care staff, our investigative team in fiscal year '13 made 498 arrests, including a former the agency director for wire fraud, bribery and complex of interest. a fiduciary who still to $.35 million from 54 veterans,

and a service disabled veteran owned small business fraud of $6 million to include a kickback of $1.2 million to the agency engineer. in addition our office of investigations achieve $718 million in fines, penalties, restitution and civil judgments. during fy '13 our office of contract review report monetary benefits of 678 million in potential cost savings and recovery. overall, monetary benefits for fy '13 was 3.6 billion, representing a return on investment of $36 for every $1 in the ig budget. our hotline handled 27,000 contacts generating more than 1225 open cases.

it was actually a contact with our hotline in april 2012 that triggered our review of the orlando training conferences. as you know, our report identified the issue areas as follows. number one, the leadership failed to provide proper oversight. number two, va employees improperly accepted gifts. number three, h.r. in a exceeded chief of staff authorization for the conferences. number four, va inappropriately conducted preplanning site visits. number five, lack of accountability and control over conference costs. number six, inadequate management of in the agency agreement terms and costs. number seven, contract violations, lack of oversight

led to excessive costs and illegal and wasteful expenditures. and finally, number eight is the inappropriate use of government purchase cards. to address these shortcomings we made 49 recommendations to the va secretary, who agreed to take corrective actions. mr. chairman, this concludes my statement. we will be pleased to answer any questions members may have. >> thank you. i think will have a great many questions. my opening question, ms. farrisee, as i said in my opening statement, the secretary told me many years ago that he inherited a culture that he had to change. a culture that did not encountered in u.s. military, and was shocked that it existed in the premier agency to take care of u.s. military after they

leave active duty. in your short time have you observed problems inherent in the attitudes at veterans affairs that are part of the activities such as this waste, such as the seemingly impossible task of ever catching up to the backlog and the backlogs backlog? >> mr. chairman, in my short time i have not noticed this. what i have noticed is that people seem to understand very clearly that there have been more processes put in place, that there is a requirement for accountability in this department. they also understand why that has happened, recognize it. >> let me follow up then because you've only been on board since your confirmation in september. mr. murray has been on board a long time. if i told you, yo you, you haveo produce an book and you agreed to do so, and you spent millions of dollars every month without

that handbook, and you can before congress and you told us about all these things that sound like they're right out of a handbook, would you be surprised that my question to you is, why did your organization ms. and agreed on deadline to produce a handbook? and how hard can it be to produce at least a draft handbook so guidance can be available for millions of dollars are being spent every month? >> mr. chairman, the guidance they came out in september 2012, a policy that the secretary rushed to ensures put out as soon as he was advised of the ig's recommendations in august of 2012 is the current policy that has been -- >> but where's the handbook? >> a handbook is still in developing and it -- >> where's the handbook? can you make a copy of the draft of the handbook for us to reconsider much work has gone on? we're talking about millions of dollars being spent every month. we are talking about a kind of a, maybe almost inappropriate way to reduce travel by saying

we will cut it 20% when, in fact, the right number might be the%. and is unlikely to be 20% -- 80%. the question is will you make to this committee available all traffickers related to this handbook that are in place as of today so we can understand why it's so hard? you understand most companies produce a handbook almost immediately so as to limit litigation. and in the h.r. business, and books of conduct are routine and yet this seems to be so vexing that mr. griffin has to say he doesn't -- i suspect he wasn't, he doesn't understand why it's so hard to get it out. do you have a note of there? >> idea, mr. chairman. it says the handbook was made a part of our response. >> handbook draft? >> draft. >> okay. and that's current as of today? >> as of today.

and it will not be complete until, our goal is december. >> december. that's a lofty goal. mr. griffin, you may be ig overall, you made 49 or so requests. some of the most important ones, 27, 26 or so, were unkept today. can you find a valid reason that this could not comment there could not be greater implementation or at least partial implementation as of today? >> i can't speak to the level of effort that has been brought to bear against the 49ers items. i can't say that any area of the personnel actions that we thought were in order, all but two of the people that we felt should have some personnel action taken have, in fact, been completed. the personnel action in this case represents the loss of pay. people either retired or are

still being paid. they said they don't have the jobs they had come is that correct? >> that's the decision that's made at the department, mr. chairman. >> i appreciate it. you are very important us but want to make sure i've explained simple. in this case like and every other case, practically, nobody gets fired in the sense that the private sector understands it to everyone still gets a pay unless they choose to retire and then they get the retirement pay. so no one lost a day's pay as a result of their failures to protect millions of dollars of taxpayers money, as far as you know, is that correct? >> that's correct. >> my time is expiring but i would like to the second video, not the patent, but the other video quickly shown to get into record. >> and then we'll immediately go to the ranking member.

>> i want to note that this has been edited to make it shorter, but it's all original material. and i want to thank the ig for their efforts to get as much of this material as they have. >> oh, clock those fans out there. come on. >> i was busy twittering. i almost miss my key. you all saw it, right? ♪ >> this is a very hard-working group of people. you are our champions. ♪ we are family >> i'm so proud to be a great

part of this family. ♪ we are family ♪ i got all my colleagues with me a note. >> you, the h.r. practitioners in the field, are the ones sending a message for us. ♪ get up everybody and saying they note. >> i feel like a movie star of the. this is a fantastic stage. >> i repeat again, general shinseki's statement that there's a problem with the culture. i yield to the ranking member. >> the inspector general's report stated that more than year after the orlando conference, the a was unable, inspector general, took out for all conference costs. the va's original estimate was that the two conferences cost by

$.8 million, but when inspector general's office reconstructed the expenses they found about $300,000 in additional cost, is that right? >> that's, that's a partially accurate -- they were actually eight or nine different attempts to come up with a number by the department. we came up with the 6.1 figure as the best we could determined based on the available records that va had. >> so did the va know how much the conferences cost? >> no. >> why do you think that was? it seems as if, you know, if you are doing conferences, you would logically keep some type of accounting. i mean, you look at you bills, you look at your invoices and whatever. can you try to explain as best

you can, first of all, the difference between what you found and what they were saying? and then wipe it is, and what recommendation did you make to go to that problem? >> well, there were a number of different issues that led to the eventual lack of oversight and the lack of having an ability to come up with a precise figure. the original budget numbers that were presented to the chief of staff that he approved changed radically. the number of people to be trained was moved down by 1200. it was supposed to be 3000, or $8 million. it became 1800 were going to be trained, and based on a service-level execute a month before the hearing, the total cost was projected to move up

the 9.3 million. the problem is no one was in charge. it was an h.r. conference. accountability started with the assistant secretary. they are to sds employees and between the three of them they never had a single meeting to discuss the conference planning, conference calls, et cetera. so the budget that the chief of staff signed off on, after that day, it vanished and there was no spend plan. there was no cost tracking. there were credit card purchases made above the authorized contract level of the purchaser. one individual made 10 purchases at the valley over $100,000. when his contract in allow him to make purchases above 3000.

>> did they have a budget? >> they had a dollar figure that they put in front of the chief of staff, but after that, no one paid much attention to that. >> well, according to the va's september 20 memorandum, the offices have been planning a conference to fully integrate their budget officers into conference play and decisions in order to ensure fiscal discipline. can you tell us whether this has been implemented and discuss what difference it makes to the conference budgeting process? do they have budgets now? >> thank you, representative, for that question. indeed, they do. responsible -- a conference certifying executive has to review the business case, rationale, the outcomes for any proposed conference. if it's about $20,000, a second executive has to serve as the

responsible conference executive and certify and from those costs in writing and an action -- after action report. so i feel that the discipline is very strong in the process now. i might add that my expectation, and i do this everyday with the auditors, because we get an external audit, and we have 14 clean audit opinions which may surprise some, but fiscal officers, accounting professionals, budget officers are required to keep documentation to support transactions, whether they're a travel obligation, a travel transaction, contract transaction, you name it. purchasing payroll, so, so, so. but it's in place now, representative. >> finally, let me ask you this. the 2012 memo also directed aggression of a web-based portal in order to and i quote, accomplish the data collection and reporting activities associated with conference

activity october 1, 2012. has that been taken care of? >> that automated portal is not complete. we are collecting the data, but the portal the actual clicks but it is not complete. >> it's already a year after the deadline. what's the problem? >> we are working with the office of information technology on the portal. >> winportal. >> winky expected to become? -- when do you expect it to be done? >> we will have to get back to you. >> can you give us something in writing when you expect it to be done? we are already over a year late, and it, it's a bit much. i think we can do better. thank you very much, mr. chairman. >> i thank the gentleman. recognize myself for five minutes. ms. farrisee, you were there -- you weren't there while this took place, right? >> no, i was not. >> mr. murray, you were there

when this took place? >> i was. >> what's your title? it looks like it's deputy assistant secretary for finance? >> yes or. >> so you are overseeing dynamics for va during this period when this took place? >> i was -- yes, sir. i was deputy assistant secretary for finance. >> this is a list, ms. farrisee, 25 pages, 399 conferences, $86.5 million that was spent. mr. murray, are you aware of this? in 2011 for conferences. were you aware that this was taking place? >> wwe've aware that there werea lot of -- >> ms. farrisee, did they need 399 conferences and spent almost $87 million, the a? >> i can't answer if they needed the money. i wasn't there.

>> again, right now for the first nine months of 2012, i had the information you spent $7.5 million for nine months. could that be all of the more in line with what you would recommend? >> i think you have to look at the types of training that -- >> again, you so far, nine months this year he spent 7.5, and they spent 87 million for this entire year. just outrageous. you know, i think the american people are sort of fed up with this. these of the $20,000 drumsticks from gsa that they spend. we had a guy in a hot tub with a conference in las vegas on his nose -- thumbing his nose in las vegas. we conducted the irs, this squirting fish the cost thousands of dollars in gifts to employees. now we have va.

i have no problem with a conference in orlando. i don't represent the tourist area, north of there, i have no problem with the conference in las vegas where gsa got in trouble. it's the spinning and the amount of spending that goes on. now, you testified, inspector general, that people accept it gets, right, and three re-signed. i'm told also that there were $43,000 in bonuses to conference planners, is that correct? >> that is correct. >> and they're still people who to mr. murray was better and he was someone in charge of finances, paying the bills for this while it went on. many continue to were involved, many continue to receive salary and benefits. would you say that's correct?

>> that's correct. >> they spent almost $100,000 in gifts. this is 20,000 outrageous -- bring the teddy bear in. am i correct? was it over $97,000 in gifts for employees and trinkets and stuff? and were some reported with -- i'm told this is the teddy bear, told that some were rewarded with big stuffed teddy bears. maybe not this one. but is that direct? >> i can't speak to that. >> the information that we have is this is one of the prizes that was given. so taxpayers not only paying for drumsticks, squirting fish and now with the a teddy bears. it's absolutely outrageous that, again, people are sending their money to washington asking us to be good stewards. and particularly offensive for the veterans administration where we should be spending every penny for our veterans.

i'm offended by this. and then the cleanup act is all, almost just as offensive. when you were made aware of this, what did they do, mr. murray? do you know they hired some contractors to look at the spending, is that direct? >> they were contractors hired to look -- >> to contractors. one got about 188,000, the other over 200,000, right? $400,000 to look at the spending. outrageous spending to look at the outrageous spending. do you think this is in line? we had inspector general look at this. you offered, what? 49 recommendations for improvement, right? >> that's correct. >> how many have been implemented? i been implemented? i went a step about have come is that right, ms. farrisee? >> congressman, yes, the personal --

>> about half. >> and the directed an handbook will complete -- >> what did you do with the $400,000 worth of reports that were paid for contract reports to look at the spending of the spending? >> those reports were actionable to how we complete our policy. it was an objective review that was completed by an outside organization to look at all the a and not just look at hrna. >> some people are -- isn't there at least one criminal referral, mr. griffin? >> there was a criminal referral and it was declined for prosecution by the department of justice. >> so that person is not going to be prosecuted. >> that's correct. >> we had one witness here who refused to testify of three who were implicated in wrongdoing. and i believe that was accepting gifts also, is that right? >> that's correct. and the one that we had the declination on, he accepted a number of gifts.

>> again, it's sad. i know my members feel the same way when you see the waste into gsa, irs, and now va. it's pretty offensive to us, to taxpayers, and particularly to our veterans. let me recognize now -- who's next? ms. norton. mr. lynch eric i'm sorry. we'll go to mr. lynch, if you are ready. >> sure. thank you, mr. chairman. i want to thank the witnesses for coming forward and helping the committee with its work. i do realize that this is a 2011 conference and there was an extensive investigation previously done by the committee on veterans affairs. so this is not exactly a timely hearing, but it does point out some examples of waste, fraud, and abuse that this committee has certainly side with

responsibility to eradicate. i have to say though that i have three va facilities in my district. i have the brockton va hospital. i have the west roxbury va hospital, and had the jamaica plain va hospital. and i am a frequent flier to my va hospitals. i visit them on a regular basis, as well as walter reed and bethesda. and the people that i see there that care for our veterans on a daily basis are not at all reflected in the investigation that is ongoing here, and it is sad. i agree with the chairman's statement. it is sad to see the attacks -- or the allegations, excuse me, on the va in a broad stroke. i would hate to think that the american people think that my

doctors, my nurses, my staff, my therapists who are working at the va hospitals, their services is indicative of what we are hearing today. it is not. the doctors, nurses, the staff, the therapist at the va, the city of boston, they are staying and working at the va, number one, a lot of them are veterans. as i go through the corridors of those hospitals, a lot of the folks that are serving our veterans, especially those coming back from iraq and afghanistan, as well as a lot of world war ii veterans who have never in their life had to rely on the va but do now, korean war veterans, vietnam veterans, those docs, those nurses, those

staff, therapists, they are working for less than what they could earn if they walked across the street and worked at a private hospital in the boston area. there are some hospitals there that are very generous in their benefits and their pay. but our va employees, they do the right thing because they believed in their service. they are intentionally staying at the va so that they can, we all want to spend our life in a meaningful cause. i think a lot of our va employees do so because they believed deeply in serving our veterans. and they do so for all the right reasons. and it pains me greatly to see the administration of the va caught up in this crap, and diminishing the excellent service of those employees at the va. that's what pains me more than anything. now, i know that the va adopted

a lot of the recommendations of the office of inspector general and i'm happy to see that. there is a problem here. i'm not trying to sugarcoat this ago. there's a problem here, and we have to make sure that the way the va is administered at the top is reflected -- it is reflective of the way those docs and nurses and therapists serve every single day in the va hospitals and the va facilities around this country. and, indeed, reflect the honor and dignity that is due to our veterans. that's the bottom line here to that's the bottom line. the job that is being done at the va should be reflective of the dignity and the sacrifice and the noble intent of those who have served.

and this is such a departure. it's disgraceful. it is disgraceful. so we've got to get at this thing. and you know, i know some heads have rolled, and that's good. they deserve to go. there's a real disconnect between the wonderful, gracious, noble service of our veterans and what's going on that we are uncovering in this hearing. and i think it's a disgrace. and so i think that the administration of va should take a look at their va hospitals, look at the people who are working their look at the dignity and the sacrifice and the dedication that they exert in caring for our veterans, and look at the veterans who are lying in those hospital beds. they the administration ought to go visit. they out to make it mandatory that you walk through maybe once a week, a couple times a month,

walk through that the hospital so you know who you are working for. i think that would change your attitude 100%. you know who you work for because those are america's best. those are america's best who did what they did for all the right reasons. and the service of the va should be, as i said, reflective of that wonderful service. mr. chairman, i yield back spent i thank the gentleman and i'm going to ask unanimous consent of myself and the committee here to put the figures in. i just want the members who know what they're doing today and what you done to date. the gsa spending went from 37 million in 2010 to 4.9 million on conferences. gsa from 10.9, the 1.3 last year. and then we heard today from nearly $87 million the 7.5 million. so far.

so these hearings are having an impact. let me yield -- without objection, this will be made part of the record. and let me recognize mr. walberg spent i thank the gentleman. and it is important work that we are doing, and i think it's good at you mentioned those figures and the changes that take place but it's kind of ugly work as well that we do, but it's necessary. and especially in context, and i certainly would identify him my thoughts and emotions with the previous member, mr. lynch. about the concern of what's taking place here. and ms. farrisee, i certainly wish you all the best in attempting to lead to get to the bottom of this. and deal with the recommendations, all 49 of them, plus many more would be helpful that will go on.

number two concern that's brought to my district office, my office here in washington, from my citizens back in my district our va issues. and the frustration that we continue to have with the backlog that makes it difficult to get the information necessary or the records necessary for our veterans that are expanding with the present war situations that we are in. and i, too, have the privilege to visit veterans, wounded warriors at walter reed, then back in my district at the ann arbor va hospital, and c. care that they're receiving that's second to none. i think quality upgrades of facilities that are taking place. so to think that we are wasting resources not on necessary planning and upgrading of

skills, but on things like we have had come across our desks in recent history with departments that are spending for videos of dr. spock, now we see a parity of patton, and attempt to get the washington redskins cheerleaders for the event. i mean, it's just -- shouldn't happen. i'd like to queue up an e-mail that specifically refers to one of the lead planners of this conference and her concerns. and especially stated, if the e-mail could be queued up, if you'll notice that she expresses concern where she says obviously the money is not an issue. that's, that's a stark statement we talk about $6.1 million spent

on this conference. while the das exempted from sequestration because of our concerns that veterans issues to be addressed and at 1.6 billion increase to deal with the backlog that right now has over 700,000 benefit claims backlog. summon my district are ms. farrisee, why were conference planners unconcerned with budgetary constraints? from which he found that in your short period of time already. >> congressman, i believe it was a lack of leadership and oversight come and any kind of good direction and purpose given to the planners. >> is this from what you've seen so far an overarching attitude toward expanding throughout the department speaks no, it is not. i have seen the policies put into place and the account but that now exists at the

department. >> a second slide i would like to point out was a concerned employee who stated, please know that i'm willing to help where iican buy the scope of the kickf has grown immensely in the work necessary to ensure that the kickoff is a success beyond what i can balance with my regular work. why were planners allowed to forgo their normal work tasks for the department in favor of planning conferences? >> congressman, i can't answer that question because i was not there but i will go back to, i did not think it was good leadership, oversight and what was happening. i do not think that the leadership even new at these levels everything that was happening. >> were they ever told? were employees ever told that they were to forgo work? have you found out to be biggest? >> i have not but he didn't know what happened during this time.

>> 717,000 backlog, benefit claims backlog. there's work to be done. that does not send a positive message. mr. griffin, i would ask you a question relative to the 49 directives. i would assume the majority of those are considered high directives. they are 20 success for the first of this month that we know of that have not been addressed. could you describe the potential cost savings that could come about by addressing these 26 unmet directives that have been given for improvement, priority improvement? >> i think what our work was able to demonstrate for these two conferences was that there was at least $762,000 that could have been used for better purposes than trinkets and some

of the other excesses that occurred. the application to all the a conferences, clearly there is money to be saved. i think some of the numbers that were mentioned by the chairman reflect that there has been a huge reduction. >> significant, significant reductions. >> frankly, at september 2012 memo from the chief of staff was very thorough. i thought it was aggressive. we just need to get to the finish line, the the book published so everybody has it. there's a certain protocol and process it has to go through to a handbook on the street in va. we need to finish that to make sure that all of the good plans get enacted. i did think that the memo of the end of september which was issued a couple of days before the release of a report was an

aggressive attempt to rein in costs. i think it addressed one of the principal shortcomings in the h.r. conferences and that nobody was in charge. >> thank you. >> mr. davis. >> thank you very much, mr. chairman. and let me first of all associate myself with the remarks made by mr. lynch, and mr. walberg, relative to the services of va medical facilities. i have to in my district. one hinds va in hines illinois closely affiliated with loyola university medical center what they provide both combined some of the best medical care in the world. or any person certainly the veterans that we serve. i also have the pleasure of having the jesse brown va medical center, which is named for the former secretary who had

a very distinguished career in both military and as secretary of veterans affairs, and his service to the country. so we certainly want to extol the virtues of those facilities and what they do. i think it is most unfortunate that this kind of hearing is necessary. mr. griffin, let me ask you, the ig report highlights inappropriate and unauthorized use of government purchase cards to spend more than $200,000 at the 2011 conference. basically when conference planners want to spend money on the conferences, they just charged it to the government credit cards, even when they went over there authorized limits and didn't have approvals, is that correct?

>> that's correct. >> and at least seven employees did this? >> i'm sorry, how many? >> seven. >> yes. >> the report also indicated that the primary event planner was able to circumvent his $3000 purchasing limit by making 10 separate purchases totaling more than $100,000, is that correct? >> that's correct. >> can you explain how this employee was able to circumvent federal and va acquisition regulations? >> well, they're supposed to be a review process in place where someone looks at purchase card activity and makes sure that, first of all, that is for the purpose of serving our nation's veterans and not for something else. that review process is supposed to happen every cardholder.

but if you have a card and you have a contract that says you are not authorized to make a purchase over $3000, and you do anyway, the vendor doesn't know that va put a $3000 limit on you. they will just take your card and hit it for $10,000. so the problem is that in actuality the person you're talking about, his contract was not even valid because he had moved from veterans health care over to this new assignment, and his authority didn't transfer with them. it's one of the areas that the department is addressing to tighten down. and, frankly, we are doing some additional work in the area of purchase cards to make sure that things are in order. >> ms. farrisee, let me ask you, what has the department done?

what is the department doing to correct this? >> i am going to turn it over to mr. murray from the finance office. >> thank you for that question, representative. we did, upon immediately learning that this had occurred, and let me be clear that there was an approving official that should have reviewed each of those, as was a more senior agency program coordinator i should have looked at those purchases. so i mean, it was quite dismayed, disappointing. i think we were shocked as anybody that it occurred, that that many folks could do the wrong thing. but what we did immediately was not just look at the h.r. purchase card transactions. we look at the entire department of veterans affairs purchase card transactions. we immediately got with the office of acquisition and said we need to know definitively who has the elevated purchasing authorities and who does not.

and for those who do not have the elevated purchasing authorities, we check every monday, if they don't have a we reduce those cards to the $3000 maximum purchase limit. so oversight controls when strong, when quick, went in vast. >> thank you very much. and let me just ask mr. griffin. did you find the steps to be adequate? >> i haven't reviewed the entire response in that area. i'm not sure if our follow-up team has felt like it meets the requirements of the recommendation or not but i would be pleased to give you an answer for the record on that. >> thank you very much. i yield back. >> we will be keeping the record open. will have an announcement on that later. mr. farenthold. >> thank you very much, mr.

chairman. i've been actively involved in conference overspending and have actually sponsored bills with respect to this, but they va spending on conferences to me seems more egregious than any of the others, especially when you look at the backlog of claims some of our veterans are facing. we're looking at 717,000 backlog claims in excess of 125 days in some cases. so i'm going to digress for a second on those backlog claims to set the stage for some conference questions. secretary shinseki sought to -- when he testified before congress on october 9. i'd like to ask you, ms. farrisee, is it true that the department only furloughed 4% of its employees during the government shutdown? >> at the time of the shutdown, yes, there would've been more employees for load had the

government not come back on spent only 4%. let me ask mr. murray censure the finance guy, they va has pretty much been extended from cuts in sequestration, correct? >> it depends on the program. we did furlough information technology employees. >> isn't true that congress has pretty much met every request from department to increase its funny to process the backlog claims? i believe the department received about 300 million in the continuing resolution and that would've ended the shutdown. so it seems that the has the money to reduce the backlog of claims. why haven't we seen a significant decrease, and where do we see this problem getting solve? >> congressman, the secretary's goal is 2013 for the backlog on those records. it made significant progress. they've used the use of

overtime. they have trained the employees, training is critical to the nation. training is critical to us being -- >> let's talk a second about backlog. i'm sorry, about overtime. because during this process and during these investigations of the conference spending, the committee found the department in place received overtime pay for days in which they participate in activities entirely unrelated to the conferences. i have a problem with overtime to plan the competence to begin with, but we're looking at helicopter rides and spa treatments. wouldn't that overtime have been better spent on employees were actually processing veterans claims of? >> absolutely right. that is extremely disturbing, and i would expect my leaders in the future to have and execute good, fiduciary responsibilities. >> earlier this year the house passed h.r. 313, the government spending and a candidate act of

2013 which caps non-military spending on conferences and requires a detailed itemized report on federal conference spending. that is designed to ensure that conferences are for training and work purposes rather than taxpayer-funded vacations. it also adds transparency's and measures to remove loopholes from the president's executive order 13589 entitled promoting effective spending. earlier this year i sponsored that bill and it was passed. unfortunately, it appears at least in this case, and this is before the bill, they va people lost sight of what the purposes of these conferences were for training. we have no itemized expense report for those. mr. griffin, you've testified you don't think there's way to actually find out how much was spent, is that correct? >> we did the best we could to review available receipts and that's where we came up with a number, but we are not confident

that is 100% of the expense. >> don't you think it's important we keep detailed information on what we are spending the taxpayers money on? >> it is extreme important, and it policies that were put in place in 2012 will allow us to keep this information. when the handbook and directives are out we will complete that, but we've been doing that kind of accountability. >> i understand you all are working on a web portal for some of this information. do we have any idea -- we're not going and healthcare.gov $609 range, are we? >> we can take a look at that spent its in the government has a bad habit of spending too much money on websites. that being said, is there a process in place to try to move some of his training accident that these high dollar conferences to online? look at what the general trend

is in the drinking and enough. you look at sites like total training.com. you have got cody meeting and bill kling appeared all sorts of opportunities to do this online. can you give me a quick overview of what you all are trying to do to move more of this stuff online? >> yes, you're right. we have a talent management system which has numerous courses online. we do webcasts. we do other virtual blended training and we are looking into the future to do more of that training because we agree, training can be accomplished in other forms. >> i see that my time has expired. >> let me recognize that jump from virginia, mr. connolly. >> thank you, mr. chairman. by the way, you are looking really good with that teddy bear up there. very nice spent anything is an improvement, thank you. [laughter] >> ms. farrisee, tammy duckworth, congresswoman duckworth wanted me to point out

that you here after a 30 year career in the united states army retiring as a major general, is that correct? >> yes, it is. >> on behalf of certainly congresswoman duckworth and myself and i know my colleagues, thank you for your 30 year service in the u.s. army and to your country spent thank you. it's been my privilege. >> let me ask the question of -- first of all, mr. murray, you and get something i think to mr. farenthold on furloughs. he asked whether only 4% of the veterans workforce was for load and which parts were furloughed. and you said our i.t. people spent furlough notices did go out for information -- not all of them, not the ones about the medical centers but some that did not meet the necessary implication that's the high bar

were furloughed spent this committee particularly that has a resonant tone to it because we are very struck by the fact that i.t. has properly deployed and invested in can really make a difference in terms of adding capability and capacity, especially in a resource been there. one of the things that i.t. capacity for the veterans administration was being deployed for was too deep into the notorious backlog of applications and claims, is that correct? >> that is one of the programs they support. >> those people were furloughed for 16 days. >> i do not specifically know the status of those individuals. >> ms. farrisee, do you know the status of those individual? >> i know all the only nike were not furloughed. somewhere in what we considered and accepted status to be able to continue to support. >> did it disrupt are eating into the backlog? you've made progress about 30%,

is that correct? >> we have and it did and it did make a difference because the employees were furloughed also. >> yes. so we in congress can't have it both ways. we can't beat up all -- beat up on you for the fact have a backlog and then we shut the government down. hampered but otherwise had been showing significant progress. mr. griffin, new conferences have any management out at all from your point of view? >> absolutely. in our report we indicated that we determined that the training was valid training. and that the previous training that had been conducted, which was in 2009, hit a small percentage of the h.r. staff.

so we felt that the actual training was justified. >> and there was a lot of training going on even at the conferences where the we are family video was just shown. >> we included the training agenda as an appendix to our report so people could see what the courses were, how long they lasted and so on. >> and i didn't understand your answer to mr. davis. this happened two years ago, the particular incident we're talking about, have you reviewed new procedures given we have a lot of new people, including ms. farrisee, in place to clean up what happened. are you satisfied that the our new protocols and policies and procedures in place to prevent excess spending, frivolous spending from occurring, from legitimate training conferences and other parts of conferencing that can really help in terms of networking and the like?

>> i think that it's a work in progress. i know that previously the memorandum that came out four days before the issuance of our report laid down a lot of very important markers that people would have to meet at future conferences. but we need to finish up about half of the recommendations, which are still in various stages of completion. >> briefly, ms. farrisee, could you address that? how confident are you that develop articles, procedures and policies that would satisfy the ig's office? and more important satisfy the market people that investments we do make in legitimate training and conferences is wisely invested? >> i am confident that the policy that was put out in 2012 which was the first, large step in doing that, included in the gulf is a form called the conference certification form which prohibits many things that have happened at that

conference. prohibits things like purchasing of entertainment and many of the waste, fraud, and abuse that you all have discussed here today. and so we've already put those into place. it will be in a directive. but it will be in the handbook by december but it has evolved over this last year, and we look forward to her hand about. >> is the chairman would just allow one final just technical. in answer to chairman issa's question about would you be willing to provide a draft of the ken buck, you said you've already provided it. -- draft of the handbook spent it was one of the responsibly provided. >> when was that provide? >> in the oig report october 23, it was one of speed is so just about a week ago. think is a much. thank you, mr. chairman. >> thank the gentleman. we have had trouble is we haven't gotten a lot of information late in july,

unfortunately, and then just before the hearing. mr. bentivolio, you're recognized. >> thank you very much, mr. chairman. ms. farrisee, thank you for your service. i, too, spent some time at fort knox. i was medevac out of iraq in ' '07. michigan we set iraq for some reason. i was at the warrior transition unit in october of '07. were you there at that time? >> i was not, but you would not recognize the new warrior transition center. it opened up a new wonderful facility at fort knox. >> when? >> 2013. >> that's good her to hear becae when i got there everybody within a holeable the it as a soldier that died in america.

it's a warrior transition unit for wounded and injured soldiers from afghanistan and iraq. they say you don't understand the they didn't find his body for four days. the army said 12 hours. the newspaper said today's. the boots on the ground said he opened his beats of on a friday and they found him monday night. my own experience there, i waited six hours for the pharmacist to tell me they didn't carry the prescription, come back on thursday. when i went back on thursday, they had forgotten to requisition that medication or might injured neck injury. so when i got out i went back from -- you get discharge from active duty, you go back to her national guard unit. i was ordered to go and apply for va benefits. ordered. because being a vietnam veteran, 30 years ago with my extremes with va, i didn't want anything to do with it. do you understand? ..

locally, and be an old soldier, i made hardcopies. so i took them down to the detroit va and stood behind the gentleman at the photocopy photocopied a stack about eight inches tall of medical records. it was within 60 days i had my disability 50%. as a congressman, i toured