we are supporting a lot of research in this area as well because for some patients the combination of nsaids and so forth -- >> apparently the situation contradicts what you are saying here today and i just want to be sure that we maintain the high vigilance on this problem. i'm out of time but i appreciate your efforts. >> thank you. >> thank you very much members. ms. brown has one final question. >> thank you mr. secretary. thank you for your service. i have one question. just a few minutes ago the congressional order came out and i don't know whether you have seen the article va health care and i guess they do this order for two years. seems like they were rehashing a lot of the stuff that is going on. i appreciate you going on television and we need to respond. in our town hall meetings we see 7 million people a year that

once they get into the system they are happy with the service. can you speak to the article that is just coming out today and whether or not you would be willing to do an op-ed piece because i think it's important that veterans are not -- we are definitely headed in the right direction. >> yes maam. i actually met with the comptroller general and we were talking about whether or not he should put va on the high-risk list. i encouraged him to and the reason i did that as we are a health care system and we are going through a large amount of change right now. during that time and the organization goes through a large amount of change we need to make sure that we have the appropriate oversight, the leadership as well as those responsible for it so while i think the va system is absolutely essential to american

medicine we trained 70% of u.s. doctors. we have developed innovations that are critical for american medicine, the first liver transplant, the first implantable pacemaker, nicotine patch and a bar code to connect patients with medicine. we have to make sure we have a robust bea and so is because the this change i am thankful that you and your oversight role and others will be helping us get through this change and develop this robust system that this country and our veterans need. thank you. >> i want to again thank you all for your service. >> mr. secretary and everybody at the table thank you for being here today. you are excused. [inaudible conversations]

[inaudible conversations] >> i invite the second table to the panel and welcome mr. carl blake the associate executive director of the government relations paralyzed veterans of america who is going to be testifying to the committee on behalf of the co-authors of the independent budget. accompanying mr. blake is mr. mr. joe vilante director of dav. mr. ray kelley director of national legislative service veterans of foreign wars ms. diane zumatto national legislative director of amvets. we are also going to be having testimony from mr. en's de planque legislative director of

the american legion. mr. blake you are now recognized for five minutes. >> thank you mr. chairman and members of the committee. on behalf of the co-authors of the independent budget city near the table i would like to thank you for the opportunity to testify on the 2016/2070 budget. our ask that our report of independent budget for the department of veterans affairs for fiscal year 2016 and 2017 be admitted into the official hearing record. >> without objection. >> thank you mr. chairman. let me begin by saying we believe this is probably the best va budget we have seen in my years being up here on the hill. that being said recent media reports have pointed out that the a's have hundreds of millions of dollars in resources carried over in recent years. the va has done a questionable job of managing and sufficient resources that have been given in the past that we believe the axis problems in the long waiting lists identified over the last year clearly affirmed that point.

however we also believe the va prior to this year has continuously requested and sufficient funds to adequate provide health care and benefits services to veterans. congress has given the administration virtually everything it has requested yearly but that certainly does not mean the va has requested what it truly needs. perhaps the office of management and budget would have something to say about this. this does not mean the va should not be properly scrutinized for what it does bender does not spend. we wholeheartedly support this notion but it should be screwed me grounded in facts not in rhetoric or poorly formulated assumptions. the independent budget recommendation represents our view of the actual resource needs of the va to provide services across the entire spectrum of programs and their views are not quantified by a particular gender politics. despite the closeness of our requirements development for the administration released its most recent budget request.

it is not bloated with unnecessary resources and ministries supported i'll call your attention to the clear differences between our recommendations for budget line items general administration an i.t. to affirm that point. our recommendations focus on areas for services medical services major and minor construction to veterans benefits administration national cemetery of administration and other key areas. the couple of those areas were identified in our policy agenda we released in january. those include women veterans programs and caregiver support programs and we appreciate the emphasis the committee is put on these two areas. we appreciate the fact that the committee held a hearing back in december to review the caregiver support program. it's a high priority for many of our members. those issues are particularly critical issues in this years budget. clearly they are wide-ranging opinions about how the va manages it's capital infrastructure.

we have no doubt the va construction contract management has been a disaster. the only people to suffer the consequences of these failures are veterans seeking care particularly in the denver area. none of this changes the fact that the va has a future backlog of valid building projects at various stages from initial planning to near completion. nevertheless we believe the va has not shown the level or degree of commitment in its request for resources to get all of these projects moving in the right direction or to complete them. we stand with the committee to resolve these construction management problems and we hope that will be done quickly. lastly i would like to comment on a couple of pointed and raised here. with regards to the question about costs for care we are certainly not expert but i would suggest in all of the briefings i've received about the bees help your role in projection model wanted to know how it caused a particular procedure in any region of the u.s. at that model would produce number. that is what we have been told

over the years when we have been briefed on this so what i would expect the committee would want to know how much to do a colonoscopy came up in the cost for care hearing that the va can produce a number. we appreciate the fact that the va is committed to providing better information with regards to cost for care and we look forward to having the opportunities to review that information and lastly the question about choice program which the va has brought out into light of day. i think independent budget probably agrees with the principle the secretary is laid out that it should be obligated to spend that money's been given for one singular purpose. i thought the secretary's analogy that he used about gas versus food to perfectly describe the need to shift money around. that being said i'm not sure we agree with taking a program now that is clearly in its infant stage predicted the program has to be given time to flush itself out and see what occurs. three months of circling out of

time to do a thorough evaluation of the utilization of the program. until there has been more time to fully evaluate what would happen i'm not sure we support what the administration has requested. with that mr. chairman i would like to thank you for the opportunity to testify that be happy to answer any questions you and the members the committee may have. >> thank you. mr. de planque. >> i would like to thank secretary mcdonald and his staff for their words today. i'm very fortunate to sit here and speak on behalf of the american legion for a national commander bicom for the 2.4 million members throughout the country that make up the backbone of the world, nations largest wartime organization. they focused on getting things right not just for members but 20 million members beyond that people struck by something secretary mcdonald said earlier today. this is a team sport. we can't do it by ourselves.

i think everyone agrees the country owes a great service to the veterans in the country owes a lot of things to veterans. i think everyone here at the table and everyone in this room know that we work together on this. i have spent two of the last four weekends at various grassroots in nebraska and kansas with blue cappers like myself who were there out there wanting to go out and go into the va hospitals and health out in whatever way they can. we had over 7000 legionnaires donating almost a 1 million hours of volunteer service to va. this only works if we are all on the same page and ranking member moran you mentioned earlier h.r. to 16 is an important resource and tool that would help with that. i think we agreed and in a legislative hearing there was a lot of agreement on both sides

of the aisle about that. we have to be able to look back to compare these things. i was speaking with a colleague of mine about strategic capital investment plans and whether or not they are putting enough money into these things. american legion four years ago was talking about looking at the ace construction figures. was going to take them 60 years to complete the 10 year plan if they went forward with those numbers for trying to compare the figures together you are pulling up a budget from one ear and trying to hold it next to another having it all laid out their before you were all the stakeholders can participate. chairman miller when that bill was up in the legislative hearing you spoke about the transparency and we need to have that same kind of transparency planning for the va budget so we can maximize the resources that everyone is putting into this. we have a lot of great organizations. we have a lot of great veterans

out there trying to make this a better system. we believe in the va system. we believe the choices are important because we have to get access to care for veterans but we want to make sure the veteran still have access to that system. secretary mcdonald talked about the demand expanding beyond b.a.s capability. we need to make sure the resources are allocated to meet those demands that we can't lose sight of the focus. the va that we want to be the leader in pioneering medicine that is the utmost expert in so many conditions. you look at traumatic brain injury preview look at post-traumatic stress disorder. you look at amputation injuries. there is no reason the va should not be the world's leading authority on that and we need to make that happen. that comes from everybody working together and everyone being on the same page. american legion is devoted to that.

the a's request for an additional 770 full-time employees who work on the claims backlog it's important and it's a good point they have been given more staff and were supposed to have been increasing their productivity. you can't deny the fact that they have been on mandatory overtime for four years. go through four weeks of mandatory overtime so you might have a bit of a problem. for years on mandatory overtime you might not have enough people to do that. we don't know how many people we need and that is why we need to be able to look these at these figures on the same page together. working together we can do that and we are very committed to being a major partner in that in helping to drive that. we want the system to be the best it can be for veterans. i think the committee has been generous in giving budgets to the va to work with and we need to keep working on the same page we can accomplish that. thank you for having the american legion here to speak on

us and thank you to all the veterans and i look forward to for questions. >> thank you very much free testimony. i would like to ask either of you if you would the critical components and probably one of the toughest things to secretary is having to be confronted with is going to be closing outdated substandard or underutilized facilities. it's not easy politically. it's not easy as the secretary have already alluded but i would like to know if you feel like that's an important step that the secretary has to look at. >> mr. chairman i will to defer to my colleague. >> mr. chairman absolutely. if ea is holding property that it no longer uses orts underutilized they need to find out how to get rid of that property but in the process of figuring out how to get rid of

it they need to have that conversation with the community to ensure those veterans understand they are going to be services still there. my hospital is going away and therefore my services are going away. they need to understand that continuum of care was to be in the community and is just going to be the right size for that community. there's no need to spend $3 per square foot to maintain a building that is no longer being used. >> if i could dovetail onto that the thing that comes to mind is hot springs which the american legion has been involved in that community desperately wants to keep their medical center. i can absolutely understand if you have an unutilized building taking up into money and not serving veterans in the community. certainly there are probably regions words not affected but we have to make sure veterans are included as a part of the planning process and they are being listened to. there has been a tremendous

amount of frustration and hot springs that the community is vehement and has been organized and has tried to avoid it at every step along the way. we need this facility here. this is serving veterans in the area and they are concerned that is not being heard. it's important to be able to open up to some possibilities but let's make sure we are still serving the veterans. >> any other comments? >> mr. chairman i would only add one thing we would caution as they make a determination -- determination of where facilities are unutilized we have talked for years about using some of the base for the homeless veterans issues and one of the challenges of homelessness is having supportive housing that allows them to transition to finding a job and being able to become a productive member of society. before they choose to close a facility i would hope they would think outside of the box in some

of the areas where these facilities can serve a purpose. that doesn't mean some facility shouldn't just be closed especially if they are sitting empty and have been sitting empty for too long. >> mr. blake where specifically do you think the administrative costs within the va could be reduced and where could those funds be reallocated. specifically we are talking about page three in your testimony. >> i would suggest mr. chairman from the perspective of the recommendations we have made we have sort of stuck to the same principle over the last couple of years that we have directed most of our recommendations at the services line where the rubber meets the road for providing health care. there has been discussion about the general of ministers and line items have allowed the office here in washington d.c.. we have also had conversations with the committee staff about the administrative cost that

exist across the various layers that exist within vha. we are interested to see the plan to transition to the regional framework of the va. what we would certainly hate to see as we transition to a fiber channel and where we go from 22 with 150 staff to five regions that are just those people shifted into regional alignment and we didn't streamline your ministry of support at all. >> if i could the secretary asked mr. coffman to ask a question to the vso's and since mr. coffman is no longer in the room i will ask the question on behalf of the secretary. have you seen a difference in the va? >> mr. chairman the fact that the secretary and his leadership team are still here answers that question. i think we are all impressed of what he and deputy secretary

sloan gibson have done in the short time they they have been here. i would have to say yes we appreciate what he is doing in trying to do and hope you will work with them to make sure these changes happen. >> mr. kelley. >> we see a difference in spots. they are going to be areas that are slower to change than other areas but we are seeing pockets of improvement. just solving the problem in west l.a. but the plan management issue in a short time is something that has been around for years is an indication that he is hands-on and he's going to get things done and he expects people at all levels to do the same. >> my time has expired but could i just get a yes or no? >> i will give a yes. >> mr. de planque. >> definitely a yes. >> ms. zumatto.

>> i agree with my colleagues. >> i agree too there's a difference and i would also say ms. brown's h.r. 216 is scheduled to be marked up tomorrow and so we would expect to see that pass very quickly. ms. brown. >> thank you. i would like to associate myself with her remarks to the gentleman from florida. i absolutely think it's a change in va and it changed in a positive direction rude when you talk about va i remember going to l.a. and we have four brand-new units sitting for over two years that we have built those units, 400 units four separate buildings that stood vacant for two years because we built them but the state of california did not have the money to operate. we have got to make sure this

does not happen in future and i'm very pleased he was able to go in and resolve those issues. for the first time we have forwarded a budget in all categories. can you give me a response as to how you feel about how this is going to help the va move forward? i just want to hear from all three. >> i would say ms. brown we would offer support for legislative hearing at the legislative hearing it a few weeks ago. i think mr. de planque have an important point. allow more transparency as it develops needs going forward. i would also suggest that you know the secretary what i appreciate seeing as i believe it is the first time i've seen va takes areas is required as part of the preparation process. for the last several years until this past one of our chief

complaints has been that the congress passes an advance appropriation as requested by the va and then the next year there is no real adjustment or consideration given to how that should be adjusted. this is certainly the first year i can remember were a substantial analysis review and free estimate has taken place so we appreciate the fact that this leadership team in particular seems to have taken this requirement far more seriously than in the past. >> i also want to note, you're not going to have veterans who are worried about not getting their checks. they can get a budget passed and i'm not worried about that immediately but that's important down the road. i also think the planning component going along with your legislation is a critical handshake with that bill. the ability to plan the forward funding things and to look down the road at the anticipated

results. i think they are hand-in-hand with each other and helpful. >> let me mention when i first came here we were going per process and of course we support closing some of the va facilities but keep in mind as long as you don't in florida but that's the mentality of the members of congress. as we work through it we have to keep in mind it is a team effort and as communities need to have input and involvement and we evolve as to what we want the va to look like. we are sitting up here saying this is the best thing for the country but when they go to some little place in hot springs that community feels they are going to be disenfranchised so the question is how do we have

everybody involved in those decisions? don't think that politics doesn't play apart because when when you get ready to close it when they scent at weizen and we are interested in what is best for the country that is not isaac hayes. so i want to thank you all for your service and for your presentation and any closing remarks? i have 30 seconds. >> i would say this ms. brown. it's nice to see see some other folks have been more open to dealing with us on a more regular basis. i've had two briefings on the va model and their costs for care. since the cost for care hearing two weeks ago prior to that her last hearing with the va employees on the health care model was back in 2009. they are clearly in tune with the concerns of the committee

and the concerns we have reason trying to get us involved in discussions with know what they are doing. whether we necessarily fully supported at least give a better idea of where they are going and what they're doing. >> i think i've been over there four times at 8:00 in the morning and i want to get the entire community over there to review like a town hall discussions that we have a better feel as to what's going on over there. i think it's very exciting to have the employees involved in what we are doing not from just the top down but the input of employees too and veterans. thank you mr. chairman. thank you for the hearing and i yield back the balance of my time. >> thank you very much. dr. abraham. >> as a new congressman and a new member of this committee i am honored to be here and six

weeks ago i was a practicing physician that was privileged to see veterans in my clinic. i am jumping up and down for this choice program. my question is on these guys levels are you getting feedback on the implementation of the choice? is it working? is it fairly seamless? where is it stand from your members perspectives? >> the vfw has commissioned a survey fair membership to get feedback and we are doing a two-part survey. we cut it off at the beginning of this month so for two months period we have found a good portion of the veterans who called for an appointment to va when they interacted with the va to get an appointment were not told they had a choice. now that we are in the second phase of this survey where finding more veterans are understanding they have a choice choice. va employees are being educated

to provide that choice so we are seeing that trend go up but at the same time early on the perception of choice was positive an experience of choice is positive. there seems to be a trend now that it has gotten more people and it that there is a slight downtick in people's opinion of it about the care they receive. it's something we'll continue to monitor and we will have a report sent. >> i wanted to touch on that because i recently talked a number of people. one of the biggest concerns there was a lot of confusion over whether people work eligible. we get calls from the office in d.c. as well. we have been working hard to educate better about that. the 40-mile straight line when you're in a rural area i am

close to the clinic but the clinics don't have the services they need as was mentioned by mr. shields camp in camp -- kansas. if you are driving 40 miles to get summer so there was a lot of concern about that but we have heard feedback from members. as far as to whether they want to use the choice program or the va we have people that have been happy with the care that they got at the va. they want to get back into the va. on the other hand some people were excited about the options. we are continuing to monitor that and the biggest part we have noticed early on is the confusion about eligibility particularly with the 40-mile circle and how that interacted with the condition they had. >> i think the playing field is unlevel and we are trying to evaluate it. we can say that won the va doesn't have to meet the demand

as we see it. the same time we don't know the private sector truly has the capacity's the private health care system that they might find challenges. we find challenges using private insurance now by trying to get an appointment for specialty at george washington university in town but be six months. there were challenges on the va at the private sector side. allow the va to get its footprint firmly planted by expanding its capacity and i think we can do real thorough analysis. >> from the dav standpoint we are getting ready to go out with a survey of her members to see what they're hearing.

we are not hearing complaints. there's some confusion as has been said. i get x amount of miles for travel but then i apply for this and they tell me i'm not that far away because that's the way the law was written. we are more concerned of being forced out of the system thinking if they live more than 40 miles away for have to wait longer than 30 days they wouldn't be able to come to the va and that concern them greatly. >> this information is available. i think what we envision here is the veterans who needs primary care and i don't mean to minimize going to choice dr.. he has the option to go to the va facility he wants. we just wanted seamless for the veteran but i guess my question was are we slowly attaining that goal? >> right now it's early and in

terms of making analysis about the utilization of the program is and understand the secretary stated before it wasn't so much about what the utilization was and trying to give a warning light that they might need to be appropriate. for us it's a little bit early to make decisions about that because people are just starting to get their feet wet with the program is something we are and the groups appear are watching closely to see how this interacts. >> i'm out of time. >> mr. or work. >> thank you mr. chairman. the secretary and his team are here and i want to make sure it's noted for the record. if we are going to be successful on this team approach is going to take all of this literally being in the same room listening to each other. i want to ask any table 2 --

anybody the table to respond to this. the president mentioned working collaboratively in terms of how we build medical care beyond this question of the choice act. an example we talked about last week in the hearing was as possible $604 million now 1 billion originally supposed to be affiliated with an academic institution and affiliation that was broken. i couldn't help but get the sounds veterans in the area and perhaps were insistent that be solely a va facility and that might have cost consequences. what is your openness or what are your thoughts in this idea of working collaboratively and involving non-va institutions in the provision of health care or development of facilities or organizing how they can live without health care in a community like el paso. i don't know that we need a hospital and i don't know if we can get a one million-dollar

facility so we may have to work collaboratively. if i could start with you and work the way down the table. >> we have mix feelings and we have seen other facilities particularly dod facilities where pov -- dod is coming together. the troops get deployed in the service to start lacking but some of the facilities in great lakes may be working fine but their federal va emphasis. depends on the area and how it's structured. >> we have to look at every option. we have to look at building stand-alone va hospitals. we need to look at public-private partnerships in intergovernmental partnerships. we just have to. it has to be right-sized in the services need to be in place for veterans.

every avenue not just with university hospital's partnerships but with county hospitals and city hospitals. as they start planning what they are going to replace for their needs if there is room for va at the same campus and it's a co-purchase and services are interoperable to include you mention sitting county but to include private sector in an area where there's a gap and va care. >> mr. blake. >> it would be unreasonable to think they shouldn't take advantage of the opportunities and partnerships to maximize the opportunity for health care. that being said you mentioned aurora. part of a the problem with that over the years was figuring out i can remember a time when the vision was a joint facility that

have a mix of veteran patients and non-veteran patients. he you ran into challenges with something as simple as identification of the two and then he got into more complicated issues like governance and prior give access to service they have to be careful when you get into that concept. the denver issue is clearly, think it's even more unique than las vegas and new orleans that are going on in orlando. the denver project has been going on for 20 plus years now. if nothing else veterans are being left unsatisfied because there are many promises that have been made and it's a clearly underserved population. >> i think it clearly is important and it clearly is a country that takes care of veterans. we have seen in the past work in

conjunction with va facilities and they are great partnerships that can be achieved there. obviously the va is at the core of that. there is a reason our veterans like the va. they understand them but at the same time if they are going to be innovative and if they are going to be leading the way like i was saying leading authorities on tbi and ptsd that's going to involve partnership in finding the best. >> mr. chicken i have 30 seconds for ms. zumatto? >> i would say well be a certainly has many doctors and experts they don't corner the market. there lots of people in the civilian community who could bring new ideas research and other possibilities. to say we shouldn't be considering public-private partnerships i think would be a

serious mistake. >> thank you all for your answers. >> thank you very much mr. brown. do you have any other questions? no sir thank you for this hearing. >> thank you very much for being here. we appreciate it. expect questions to the second panel post hearing questions and to the first panel. there are some issues we were not able to bring up given the time that mr. secretary thank you for staying through the entire budget hearing and without a request that all members have five legislative days to revise and extend their remarks could without objection so ordered. this hearing is adjourned. [inaudible conversations]

[inaudible conversations] [inaudible conversations]

thursday in the u.s. senate members --

wednesday the government accountability office said minutes as high-risk lists looking at government waste and inefficiencies. the house oversight and government reform committee held a hearing to examine the report and hear from the heads of agencies cited in the assessment. this is two hours and 40 minutes. >> the committee on oversight and government reform will come

shorter. the chairman is authorized to declare recessive and 10. we have an important hearing today and we appreciate the people that are here to participate in that. we also appreciate the patience with those on the floor that will be called a little bit later. that always serves as the primary thing we do in the afternoon around here so we appreciate your patience. nevertheless we do have a very important hearing highlighting the general accountability office is high-risk report, five years of problematic practices. this year marks the 25th anniversary of the gao's high-risk list. i have a full statement but in the essence of time i will insert those comments into the record and with my other members to do the same. i would like to recognize the ranking member mr. cummings. >> thank you very much mr. chairman. i'm going to do the same. i want to thank all of our

witnesses and i will submit my statement for the record. i want to always as usual thanks you mr. dodaro and the gao employees to do a great job. with that i yield back. >> thank you. i will hold a record open for five legislative days when a member who would like to submit a written statement they would like to recognize our first witness. jean dodaro comptroller of the united states government comptroller office accompanied by a panel of experts and on behalf of both of us in his whole body we thank the thousands of men and women who served in the gao who work hard to create a work product and presented here today. we welcome all. pursuant to committee rules the chairman will be sworn in before he testifies and swear in the panel behind.

if you could all rise, please. if you rise and please raise your right hand. do you solemnly swear or affirm the testimony you are about to give will be the truth the holster the nothing but the truth? thank you. let the record reflect all the witnesses answered in the affirmative. mr. dodaro have testified before to me several times so we will give you great latitude that we would appreciate you summarizing your comments and then your entire written statement will obviously be made part of the record. you are now recognized. >> thank you mr. chairman to get afternoon to you ranking member comings and members of the committee. very pleased to be here today to discuss gao's latest high-risk update. we do this at the beginning of each new congress to identify areas we believe are at the highest risk of fraud waste and abuse and mismanagement in the federal government to need a broad-based transformation.

a report today discusses solid steady progress in most of the 30 high-risk areas that we have had on the list since our last update in 2013. of all the areas according to five criteria to get off the high-risk list you have to have leadership commitment top-level attention. you have to have the capacity to resource people with the right skills to be able to fix the problem. you have to have a good corrective action plan that addresses the root cause and good monitoring effort with milestones and metrics and engage progress and demonstrate you are fixing the problem. you don't have to be 100% fixed but we have to be convinced we are on the right path to rectifying the problem and reducing the risk and eliminating waste and improving government services. of the 30 areas 18 have at least partially met all five criteria and 11 of those 18 have at least

fully match one or more of the criteria and partially met the others. two areas where recognizing progress so that we are narrowing the scope of the high-risk area versus fda oversight of medical devices. we are pleased with their efforts to get the recall process under better control and discipline and also to have a good process to review the applications for new devices on a more risk-based approach. we are so concerned about the need to oversee the global marketplace for medical products and drugs. 80% of the ingredients of active drugs come from other countries. about 40% of finnish drugs than half of medical devices. we need to do more there and also it to address drug shortages. the secondary as contract management. we believe the department of defense is focused more attention on top leadership on

contracting techniques and reducing the risks associated with contracts where they start contract work without having a clear agreement that the contractor or they're using time and materials which is a risky approach rather than having deliverables. they still have to improve their areas in their opposition workforce, service acquisitions and improve their use of contracting and operational environments to support military operations in the theater. we are adding two new areas to the high-risk list this year. the first is the a's provision of health care service for veterans. we are very concerned about this area. there are five fundamental problems we have identified, ambiguous policies inconsistent processes inadequate oversight and monitoring of the activities activities.

i.t. challenges, inadequate training of staff and unclear resource needs and allocations. congress has passed legislation recently. we gave them an additional $15 billion to help address this problem and legislation had to be implemented properly. we have over 100 recommendations that we have made to the a that have yet to be fully implemented so this is an area that needs congressional oversight and continued attention. second their i.t. acquisitions and operations across the federal government too often the federal government and we enumerate this the senate report, there's a litany of efforts that have failed after spending hundreds of millions of dollars and many years. there is a longer list of problems with her cost overrun schedule slippage is where slippage is what they fail to deliver the promised functionality and make improvements in the program and delivery of services.

here again the congress has passed legislation late last year. this committee was benjamin told passing legislation of the federal technology reform act giving an additional authority to put in place better practices that have more disciplined approaches to i.t. management. here again in last five years alone we have made 737 recommendations and only 23% have been fully implemented. we believe this is a critical area. we are also expanding two areas in the administration's tax area. we have been focused on the tax gap which at last count was $395 billion. we are expanding that to include identity theft and the irs was able to stop about $24 billion in fraudulent returns potentially but they missed by their own estimates about $5.8 billion. we have fixes to this that we

can talk about in q&a. we are also expanding cybersecurity and critical infrastructure protection to include privacy issues. initially we designated computer security across the entire federal government, the first time we have ever done that in 1997. we had a critical infrastructure protection so most of the computer asked -- assets are in the 2003 and now there's a lot more incidents involving personally identifiable information. the number of incidents have doubled. the privacy law was passed in 1994 and is sorely in need of updating. we have a number of recommendations to protect the sensitive information. the american people deserve their information to be protected properly while we address the cybersecurity issues. thank you for the opportunity to be here today and look forward to answering your questions. >> thank you. we will now recognize the gentleman from georgia for five

minutes. >> thank you mr. chairman. one quick question thank you for joining us this afternoon. since enactment of the veterans access choice and accountability act i have a number of veterans in our district who because of their location where they live they have not been able to utilize the va medical center so they have opted to use non-va doctors and so forth. one of the issues they are facing are significant delays of the va pain goes medical providers. is there anything that the jal plans to do in the future to evaluate this issue and to report on it in the future? >> actually we have addressed that issue and issued a report talking about the problems they were having in paying providers in a timely manner.

we are also concerned about the fact that the va doesn't always have information to make sure they are making the right decisions in terms of whether they should be providing care for access purposes and for making sure it's a cost-effective approach. her secretary is expert in this area. we have already addressed this issue in the plan to follow up. >> we actually conducted work a year or so ago and we made a number of recommendations around infrastructure surrounding the non-va care. a lot of the issues were not paying claims promptly. we do have concerns about non-va care and we have concerns that it may not be the panacea that people envisioned it to be. there is not really the infrastructure in place or wasn't in place when we took a look at the work. you are talking about putting people, the va system is a difficult system to navigate so

now you are asking them to navigate another system outside of the va. there a lot of issues around non-va care and the other issue is wait times for non-va care is not on track so no one knows how long people are waiting to get care in their community. there a lot of issues and is something we'll be looking at. the choice that does have several mandates to look at non-va care. >> obviously the concern is that these payments are slow and i am fearful that her veterans will receive diminished health care across-the-board and that is my concern. i yield my time. >> i'm concerned gym will stay on top of that. >> i now recognize the ranking member mr. cummings from maryland. >> thank you very much mr. chairman. mr. dodaro one of my major concerns has been drug shortage and 99% of all hospitals in this country have drug shortages.

there are people mr. dodaro as you know who are unbeknownst to them getting second and third rate roads and even my own district 1 of the number one hospitals in the world johns hopkins they have told us that they have those problems. can you comment briefly on that and where we are and what we can do about that? >> is very important issue congressmen to one of the things we have suggested to congress and they have ads on that board drug manufacturers didn't have to notify fda if they would have potential shortages and now they have to provide adequate notice ahead of time. that was one step in the right direction. marcia cross or expert in the area will talk about work is done in recommendations we have made to address the issues. it's one of the reasons the va is on the high-risk list. >> congressmen we agreed it's a big concern and one of the areas that's keeping fda on the high-risk list.

as the comptroller general mentioned congress to take action to require dense notification to fda if the manufacturer was going to produce a drug. congress a little over a year ago and acted the drug quality and security act that we believe can help particularly with this issue of substandard drugs because it is enacted requirements for tracking of drugs to the system that can help reduce the possibility of the grey market drugs that i know you have been concerned about and counterfeit drugs getting into the system because there will be a system of tracking. it's not implemented and it will take a number of years to go into effect. that act we think also has potential to address that. we are continuing to track drug shortages and we have ongoing work. we no the number of shortages are coming down but there are still some better persisting for

long periods of time for multiple years for certain drugs. >> i'm glad that her committee plan to locate generic drugs. again every single member of congress has this problem and many don't know it. the drugs are going up some times as much of -- as much as 800 times. a lot of it's it is about. the book may go into another issue. the whole issue of cyber you know i just want to read from your report mr. dodaro and you say quote increasing accuracy with malicious intent and the extent to which federal agencies and private companies collect sensitive information about individuals have increased the risk of personally identifiable

information being exposed and compromised. that is inaccurate statement come is that right? >> yes. >> your report goes on to say that quote number of security incidents involving federal agencies increase significantly in recent years the number of high-profile pieces have occurred in commercial entities. for these reasons we had a at protecting the privacy guide in this area end of quote so your report highlights the fact that both public and private sector entities. one thing these attacks seem to have in common is that hackers want access to personal information as many americans as possible. that's a major problem come isn't that right? >> that's exactly right and that is why we are adding -- though they are projections by informed parties that the amount of

information collected stored and disseminated will double and triple every two or three years so this problem is on a trajectory to get a lot worse before it gets under control. >> so this could be anywhere in new orleans come is that right and they could be state sponsored or international criminals? they could be domestic actors or any of the above. is that right? >> yes. tonight i see you have your fellow cyber expert handy here. what can we do about that? please identify yourself. >> my name is greg wilshusen and i think they're a number of things we can do to collect information first with the federal agencies. agencies need to implement security programs that adequate protect the confidentiality and integrity of their information to include not only identify

information but other information. we have found over the years that they have not done a very good job. for example in fiscal year 2014, 17 out out of 24 agencies covered by chief financial officers have reported either a material weakness or significant deficiency in their information security controls for financial purposes. ig had 22 of the 24 agencies identified cybersecurity or information security is a major national challenge for the agency. >> thank you mr. chairman. sin i now recognize osama from texas mr. hurd for five minutes. >> i enjoyed reading your report report. one of the questions i have 80% of the administration knows to maintain legacy systems. many of those system most

americans would be incredibly out of date. ..

spinning the 15 billion on new developments put operations and maintenance. maintenance. we have inefficiencies consolidation. about $10 billion on the table as we consolidate data centers appropriately. >> the report highlights 10,000 data centers. on the major federal agencies right now. focused. probably not going to be another $0.5 billion. move the inefficient spending.

>> thank you. my question play an important role and oversight governments. >> others that aren't. that's why the the conventional issues, instrumental in passing the time. the been instrumental going forward. they need to be held accountable. it is to be more uniform we should achieve those goals. on the area area of accountability, how long is the with gal? >> this year and 43 years.

>> people have benefited been picture was a result of it. i can't believe any specific personnel actions of them but they're have been people suddenly retired. so i yield back. >> with my colleague you'll just for a 2nd? brought up an important.on cios and other legacy. the bill does address all three things. the mande status in the consolidation also requires 3rd 250 people spend out.

so rather be. accountable. so that's what hopefully with the implementation of the bill we will see progress. >> thank you. the gentleman yields back. the gentlewoman from the district of columbia. crossover on at the defense department will be gone. >> am very interested in this i was closed. eleven listening for a long time and i never knew much about how you get on it how you get off it. considering that gal must

look at what must be hundreds or thousands of agencies in order to drive's list. i must say whatever there's good news it seems to me this committee are to be the 1st to know, but i didn't no our study your 1st page commences progress has been made in the vast majority of high-risk areas. i don't believe of significant language for your reports. you say that so i would like to no how you get on it and how you get removed. >> via publish criteria published criteria that we very with the executive branch years ago. how you how you get on as we look at in quantitative

terms for at least a billion dollars in risk. there have to be issues that either a public safety issue important to national security economic security of the country risk of program failures, programs actually not achieving their objectives and so there is a long list of factors. we also look as to whether or not the agencies have corrective action plans in place. if they have a plant that looks like it we will be good it may be successful we may hold off. the agency sustained. the numbers and resources to be able to fix the problem.

interim milestones and metrics and demonstrate that you are fixing the problem. if if you meet those five criteria come off the list. part of the high risk area winner of that. likely mentioned this year we did in two areas. areas. so that's how you do that. >> i noticed the 2nd criteria mentioned the word resources. would it be fair to say that a a significant challenge for getting off the list would be a scarcity of funding? >> well, my resources we mean the skills necessary. >> i doesn't mean funding at all. is funding a significant challenge.

>> it could be. it could be that they are using the funding may have very well. it doesn't necessarily mean that they need more funding. >> could i ask you what congress can do assuming that congress is not going to do much we will well taken area of specific interest to me real estate. that is the area the federal government's government's handling of its real estate portfolio has been under constant criticism. can you tell me how considering the leasing and construction how real estate portfolio is formed.

>> first, i would say in the high risk list we have asked ruggeri is whether congress is to take action in order to help address the area. there is a substantial a substantial number of the 32 areas that we have already designated. postal service is one, cyber security is another. financing the nation's transportation infrastructure is another. we have designated major areas where congress needs to be part of the solution to the problem. problem. and the real property area where congress can do one of the areas on the list is the overreliance on leasing. we have tried to convince the agencies to put forward a case to the congress this is to one welcome our it would be cheaper to own this particular property rather than release these properties, but they have been reluctant to do so. we think the congress often mandate that they do that were also underutilize the properties that the congress could give additional authority in pilot areas to try to provide these things.

there are a lot of barriers we have identified that the congress to help alleviate for the agencies to do this, but they need a good strategic plan. they have not yet presented the congress with a good strategic plan. we have have recommended it. there working on it right now. there are hopeful to see it. hopefully it we will provide a good for them in the congress. >> thank you. very useful. >> where it's warm >> and rather be from florida right now. have you ever seen the movie groundhog day? >> yes. over and over. the seven. >> well welcome i'm sitting here and i swear a lot of the recommendations are the

same recommendations you brought us before. i segue from this mortons and your comment. frankly, i just read the chairman myself. we have been interested in excess property. and you can't get people to move on dealing with excess property. i think we found 14,008 gsa then we did the 1st hearing. but an extra 13999. we got about six more in we got about six more in vacant property. but am only going to be hear so long. even this guy is young. we can do a hearing on every property. what concerns me, and you just said it in your report file in the in conjunction

with landholding agencies could improve its capacity in action by implementing this report we will to see

where the flaws are know problem with the data property. >> that's right. one, they didn't no what property they had. they didn't no the condition of the property they had. you didn't no the status of the keep in. i downline.

they gave us lists that we checked that showed that what they were giving us was totally incorrect. >> that is correct. this is something's happening for some requirements for these agencies. if omb won't do what we can do it statutorily. i know he's committed to get the bill through the house and the senate that we will would get a handle on this we have to have triggered from milestones, some measure of them achieving a goal or performance. >> like any major mental form that has been successful over time as a statutory underpinning. that will transcend administration. >> coming soon.

>> the german from virginia. >> thank you, mr. chairman. this is maybe five i actually really look forward to this hearing every year. i congratulate jail for the intellectual underpinning of identifying these risk categories. it's an incredible helpful public policy document. i hope it's a youthful management tool. so much of what you're talking about is all about our agenda. agenda. hopefully it we will also take it to heart and respond accordingly. you actually endorsed our bill. how important is it to that that get implemented? >> it's very important. as one of the reasons

actually that we put it acquisitions of operations on the list in order to elevate attention to make sure the bill is implemented effectively. >> if it doesn't have attention and am also concerned going to the last two years of this administration, it has to be sustained in the next administration is critically important. it it gives us in the congress needs to hold people accountable. it's absolutely critical to rectify this problem we have identified. >> and there are real potential savings. >> absolutely. and the billions. >> in the billions, mr. german and original work on a bipartisan basis to have oversight hearing with

respect to this whole subject you're familiar with the 25-point implementation program that was issued september 9 2010. >> yes. i'm familiar with it. it. i'm joined by our it expert. >> and i assume that you both -- was that a helpful document in terms of laying out goals and objectives. >> sets the foundation going forward. >> and for example when it talks about funding of major it programs on they would at least three basic criteria the program team use a modular approach with functionality delivered every six months. the huge multiyear complex

systems integration so that there easier they are easier to manage and use specialized it acquisition professionals. do you do you think those are three helpful criteria? >> absolute. >> did we follow that advice from the white house itself when the website for the healthcare rollout was occurring? >> no, we did not. >> so hopefully the guidance that was issued from the white house in an embarrassed. >> was issued nine factors that are critical to successful efforts that have been put in place. there's guidance best

practice. the basic problem that i've seen over the years is a lack of discipline to follow good practices. we get off the rails. no one is held accountable. think of mental development. one of the basic tenants of 1996 1996 legislation. i hope congress work on passing it. it just hasn't been implemented. i commend this committee for your recent legislation look forward to working with you, but it we will require congressional oversight. >> a lot of what we did was codify recommendations and so hopefully it we will be seen that way delays management tool.

some very significant efforts. >> efforts. >> better services to the public. thank you, mr. chairman. >> the gentleman yields back. >> the work for the gal. been very helpful to me on this committee. a been hear 26 years. when i tell the newer telling your members they look at me like him from outer space. my my main committee has always been transportation and infrastructure community >> he seems like a good man. i just want to say that i think the gal does a great job, and i appreciate what you all do. >> thank you very much my

know they're are other witnesses you want to no what his magic is. >> recognize the gentlewoman from the virgin islands apartments. >> thank you, mr. chairman. good afternoon, sir. i really wanted to thank you for all the work for your agency does and to talk to you about one of the primary things that you all do uncovering waste and fraud and abuse and identification of the risk of integrity of the federal program. we know however, that there is also best practices that your agency tries to identify that only for the public sector but for the private as well. and we understand now that the cyber attack is not just on the federal agencies but also on private. private. we know we have heard about home depot and the

compromise is about 50 6 million companies in credit card and debit card information as well as anthem, the nation's second-largest health insurance company with more than 80 million records that may have been compromised. i see that one of your colleagues. >> or cyber expert. >> great. >> we sent the cyber question. >> you sense very well. one of the things i want to talk with you about is this notion of segregating duty. if you could explain what that concept is and how it works. >> yes. it has been been one of the major problems identified over the years. greg can explain the importance. >> it is vitally important. protected from unauthorized modification and basically relates to the activities of one individual or group are

countered by the activities were overseeing, if you will, by the activities of another group. one group. one group does not have full control of the transaction or of a process in which you can then perform unauthorized activities without protection. within the cyber realm and often relates to having, for example, software developers being able to operate in the production environment where real-life actual data is being processed because it could potentially make undetected changes to the software processing that data and you don't want that to happen. software developers in this case should be confined to a development environment. >> my understanding, and i'm not -- my children will tell you i have 25 i am a lead eight, i have no technological knowledge, but kind of like a submarine when there's a leak in one area you can close off at section and then another area where the leak occurs does not affect the other areas of the segregation of

duties. is duties. is that occurring now in the federal agencies? >> yes. there are instances where they have weaknesses. i think it's about 14 agencies that have weaknesses in segregation of duty controls. in the example you highlighted actually also speaks to defense in depth and that's another security defense possible, that agencies should put layer upon layer of security controls so in the event that one layer may be circumvented penetrated that other controls help to protect the data. >> one of the reasons i mentioned home depot and anthem, we know this has occurred and other private sector areas what is the relationship that you all have with trying to assist

those private sector individuals and best practices? because of the and of the day all of the systems connect with one another. >> yes. for the department of homeland security that has an overriding role within the federal government for helping in assisting with individual infrastructures. it would provide assistance and guidance. >> exhorting for years more dialogue and information sharing between the public sector and the private sector. both have been reticent for additional reasons to share information, but that is really the only way to this problem is eventually going to be solved. congress has made some overtures in this area. we believe more legislation can be helpful. >> i'm hopeful this body we will continue to assist you in making sure that that

happens, and i yield the balance of lifetime. >> and now recognize the gentlewoman from massachusetts for five minutes. >> thank you, mr. chairman, linking member. good to see you again. i agree with the remarks of this may not be the most sexy hearing of the year. >> objection. >> i think it may reflect the mission of this committee. i do notice in your list of areas of concern you have a list of the 2015 high risk that the va health is on that list for the 1st time. as one of the two new areas. this designation comes in light of a long-standing and systemic witnesses -- weaknesses, excuse me inaccessibility and quality of care. we saw the problems we had down at the phoenix va my

terrible situation and we also have a quite frankly, i huge increase in the number of veterans that are now for the 1st time in their lives relying on the va for the healthcare. 6.8 million veterans in 2,002 to 9.4 million enrollees in 2,015. put a huge amount of pressure on the system including 1.4 veterans from operation iraqi freedom and enduring freedom in afghanistan. and mindful that most of those folks to multiple tours. i was in kandahar province but long ago and asked how many folks run their 1st tour, 2nd tour. il the way

up to seven tours of duty before i ran out of things. most of them most of them had been there three or four tours of duty. that repeated cycle does a lot of damage to the psychiatry of serving among our young men and women find that they were going to see reverberations in the healthcare system. actually the ranking democrat on the national security subcommittee that will address those. i like forward to your good work continuing in that area especially especially with some of the new implementation and we have had allowing veterans to be treated at non-va facilities if we do have a backup an appointment on command that has been a constant a constant problem for us not just in the northeast but all across america. florida america. florida is all backed up because of the number of retirees. they have had a very long

backlog. some of the areas in texas as well. virginia, my friend mr. connolly. and also we we have got another provision that allows them to go to non-va facilities where there travel to a facility is more than 40 miles. so it all builds up to a greater reliance on our ability to conduct oversight i look forward to working with you. you have a great staff, our good cohort of people behind you have worked tirelessly. we have no shortage of issues to work on. i just appreciate the work that you do every single day >> how many times have you been to afghanistan?

>> iraq about 14 times from afghanistan about 12 times. often times with folks that mr. todaro works with them a special inspector general's iraq construction afghanistan reconstruction as well. >> i just want to say for me you have been a model of oversight and commitment to the work in both countries. >> i would just say that only we have more veterans going back, back, but there going to be living water thanks to modern medicine. this problem will occur over decades. we need to get a a handle on it. more veterans coming back. this is a very significant long-term issue which is one

of the reasons we put on the high-risk list. >> thank you. the gentleman you back. [inaudible conversations] >> late to the community because i was at a meeting on cyber security which is one of the biggest challenges we face as a nation and an area that we will work together to address. i want to mention today the assessments that you found dealing with cyber attacks. the report found that many agencies and and consistently implement the policies and procedures for responding to a data breach involving p1 one. can you explain those areas in which jail found that agencies were inconsistent in they're implementation of policies for responding to data breaches and what we do about it. >> our expert will address the.

>> we conducted a review of several federal agencies over their procedures and policies for responding to security incidents. one of the things we identified is that agencies did not consistently identify the risk to the affected individuals and the harm that could occur the impact that occurred. in addition they're were inconsistent at what.they provide additional services to those. for example, whether or not to provide credit monitoring services or other types of services in order to help information is being compromised. >> and to the.of what can congress do to assist in advocating that federal agencies are being consistent in carrying out policies that respond to these breaches? >> we believe that the privacy act originally

passed in 1974 is to be updated and congress should take that upon their responsibility. the privacy act deals with records and information. the definitions are very broad which leads to inconsistent application. there is not enough notice. typically in those those days it was through the federal register. so the carcass is to update the privacy act._be happy to work with this committee or other committees to do so. >> finally you state agencies may not be consistently taking action to limit the risk of p1 one related data breaches.

so what specific actions agencies can take right now to improve their ability to respond to data breaches? >> one of the actions they can take is making sure that they have appropriate policies and procedures in place before incidents occur so that they no how to act. indeed, our workers on the number of incidents is climbing and every agency is affected can include having a dedicated team available that has the roles and responsibilities previously identified and trained in order to act appropriately and timely. >> finally, how can congress be most useful in ensuring that this is fulfilled, that agencies consistently take the necessary actions needed >> the comptroller general mentioned and update the

federal laws protecting privacy and personal identifiable information and another is holding oversight hearings and holding agencies to account and assuring that they appropriately implement proper projections of the personally identifiable information that may be compromised. >> thank you. if no other member have a question they would like to thank the gal specifically mr. todaro and the great work that so many of you do. i asked that the clerk change the table and i would like to mention something as we do this in the absence of. thank you. go ahead and make the change. on what to talk about the artwork you see in i like to make a bit of a statement as we change out the names. if you're on the 2nd panel please come take a seat.

when i became the chairman made some alterations to the artwork. i felt it would be best to highlight the people that we serve rather than the past committee chairman. i feel strongly that we should be inspired by the american people. that's we serve. they have done great things over generations of time when those of the of people we should be inspired by. we get this next panel ready i will tell you that they are all real photography real photos. i would like to start here with this one. taken by a photographer, the name a photographer, the name of charlie lantz, the ben franklin bridge. contrasting the urban setting we have this new photo that was taken in my

congressional district in utah. it looks like like a painting, but it's an actual photograph. there in the distance and went to live in a very beautiful spend. the urban setting and the moral setting is part of what i want. going here on this side of this is a photo that is taken 1st published in march 1966. the photographer for u.s. news & world report. a good number of people for decades, generations of and doing good work. utah copper miners. people in the mining industry.

using a rock drill machine. this next photo was taken in afghanistan. the american flag flag capturing the morning's 1st rays of sunlight forest posted from one of the peaks of the mountain. on the outskirts of galveston shot november 112010. not a professional photographer. the saga that photo that he took that day honoring veterans day. outside kabul. surgery & send in afghanistan and we honor them and should be thinking about. one of three marches.

people gone to a lot of hardship. i appreciate them providing at us as well. taken on may 10. while stanford to join israel's to form the 1st transcontinental railroad across the united states bridging the east and the west together. the next photo is really the only portrait that i i would consider but interestingly enough this was 1st

published in 2,006 from the library of congress, the lincoln memorial is obviously one of the best we have in this country and certainly in the united states. when he was congressman lincoln he served on the post office and post roads committee and the expenditures of the department of war committee. what is now known as the oversight and government reform committee. we have two more. this this photo comes from the library of congress. it it was published sometime between 1914 in 1918. it's of women making and cramping fiber powder containers. the company facility in chicago illinois.

again can migrate to sacrifice in this country. i love the patriotic nature that we will. finally i want you to look closely at this photo of you have a chance. excuse me. this is the steel worker on the framework of the empire state building high above the city with the chrysler building, the building probably displacement back. i work. my apologies. first published in 1930. not exactly kosher wine. that gentleman sitting on the precipice of death working hard to build this country without the safety harness, without the types of things that our workers have now. a good deal of people and make these kind

of dedications and sacrifices, and i'm glad that they captured a photo of it. these are the type of people i think should be on this committee weather than just the committee chairman. we made those those changes. i hope the committee appreciates that. i am honored to have these photos in here and think the members remind indulgence. >> i did know what you're going to do. but i must tell you all of those who had anything to do with selecting these photographs the absolutely beautiful. i used to say a father who had a second-grade education

to my used to say that i was inspired by his aspirations and when we look at these pictures the working americans and the pursuit of happiness should inspire almost be the very best we can other ones that show our environment and it should be a reminder. the environment is is just good as or better our

environment from our ancestors same thing about our democracy. mr. chairman, you really did a hell of a job. i'm right they're because it just reminds me every time i look at it for four years before that in baltimore and the rising of us little kids marching trying to integrate the pool called riverside pool. and it was all white. we were beaten so we marched in the pursuit of happiness.

i am hoping that these photos will be an aspiration, and inspiration because of his aspirations of these folks that made america what is. >> the gentleman and joined us, and i would like to recognize his panel of witnesses. i am pleased to on the honorable john costigan and alan f estevez principal deputy to under secretary of defense for acquisition acquisition, technology, and defense of the united states department of defense. mr. john mcwilliams senior advisor at the united states department of energy and shouting arbor will.

>> the deputy administrator and director of the center of a program integrity of the centers for medicare and medicaid services. robert amway for junior. we thank you for your patience. it's been a while to get in his this panel that we appreciate you here. all witnesses be sworn before they testify. raise your right hand to use all is well worth the testimony are about to give will be the truth, the whole truth, and the truth? thank you. i'll witnesses answered in the affirmative. you may be seated. we will start with you. your. you. your full statement will be introduced into the record of the we ask that you and your testimony to five minutes.

>> thank you chairman ranking member of members of the community. thank you for the opportunity to discuss the government accountability office is high as high-risk list as it pertains to irs operations. i'm delighted to announce that one of our programs was removed from the list in 2013 after being on the list since 1995. its removal came about because of the advances the irs is made of many years and the dressing with citizen of technology and financial management. turning now to tax enforcement that jail has identified this as a high-risk area because of the size of the tax and the difficulty of her time in narrowing the gap. the most recent irs study of the tax released in 2,012 the tax is $389 billion. the irs is. the study dollars. the irs is. a study of the tax that next 2010 and will be based on august on between 2,082,010.

ongoing research on the tax and of the compliance rate is high for income that is subject information reporting. income subject to 3rd party reporting only about 8 percent of the time not subject to any 3rd party reporting over the old. the underreporting of business income by individual taxpayers with total $122 billion in 2,006. the lack the lack of reliable and comprehensive reporting and withholding of this type of income is the main reason for such a high level of reporting. a good example of a recent efforts to improve compliance involves a legislative requirement to send this information from business credit card receipts on a

knew form ten 998. the 1st were filed in 2012 for transactions in 2011. am 2011. am pleased to report we really is a positive impact compliance. the useful not only because they help the irs to collect the collective mount attacks the because they encourage voluntary compliance. the importance of voluntary compliance cannot be overstated. a 1 percent increase in the level of voluntary compliance brings in about $30 billion annually in tax receipts. i would note that it is not possible to eliminate the tax debt completely. getting to 100% tax compliance would require a

huge increase in knowledge and be significantly greater for 3rd party reporting and withholding have now. realistically would not work because the burden on taxpayers and the strain irs resources will be far too great. our our budget situation represents a serious challenge to ability to keep making progress. the number of difficult steps in 1800 enforcement personnel. these 2 billion in revenue that otherwise would have been collected. additionally the reductions in our findings have forced us to make taxpayer service. if we can't provide the services taxpayers need to need to fulfill there tax obligations voluntary compliance. this concludes my statement and i'm happy to take your questions which thank you. >> thank you, chairman ranking member members of the community. specifically supply chain management and weapons

acquisition. improving our supply chain the weapon system acquisition are complex. complex theories are by there nature entails level of risk. the best system to have the best weapon system in the world and logistics capabilities unparalleled. due to the scale and complexity of these functions inside the department of defense even the six sigma levels of tolerance there we will be some deficiencies. we must continually strive to improve. we must simultaneously sustain forces in afghanistan, supporting the war a complete the mission to controllable. at the height of operations we provided 1.1 billion gallons

of fuel for a 35000 euros to deliver medical supplies at record levels for us. dod manages over five items valued over $9. actions to improve network performance will maintain overarching performance and help reduce substantial results that have been acknowledged by jail. implementing a comprehensive inventory management. since 2012 and reduce government managed inventory by $14.4 billion, the 1st reduction in government inventories of the 90s. implementing a new forecasting methodology which is producing improved material availability decreased backorders and produced germans. with that said, there is more work to be done on our supply chain performance command we

remain focused on doing so. second area of high risk of want to address his weapon system acquisition. it's important to recognize the weapon system acquisition process has provided the united states with dominant military get booties. the rise of foreign ability coupled with ongoing, operations from commitment and reduced budget is jeopardizing our technological superiority. i weapon system acquisition process must deliver combat capability to war fighters as effectively as possible. our program for continuous process improvement that we call that are buying power is focused on medical. gal cost and schedule to grow. the department sets and enforces the affordability's we are tracking performance against established to ensure compliance. affordability's guide to requirements.

the drive active engagement between acquisition of requirements leadership. during weapon system development to ensure the requirements associated with programs address the war fighter needs in a cost effective and affordable way dod instruction 5,002 which formerly institutionalized and the improvements resulting including emphasis on systems engineering, cost analysis and testing. in addition to the actions already mentioned we were formerly measuring our own performance. the 1st two provided data that the department is using to increase the performance of the acquisition process. process. the gal is also using those reports. they will continue to work with the jail to address the underlying causes that have resulted in high risk designation. we are and continue to be focused on removing ourselves from these lists.

thank you for the opportunity. >> thank you. i appreciate the opportunity to appear before you today to discuss the department of energy's efforts at improving. this is the topic of great importance to the secretary and know deputy secretary. manages some manages some of the largest most complex and technically challenging projects. the public with the private sector. the portfolio the portfolio of large projects undertaken by doe is unique not only from other projects in the public and private sectors but also each doe project is unique from other. one-of-a-kind with uncommon challenges in light of these

challenges doe has historically struggled with projects contract management only been on the jail high-risk list since the inception in 1990. we've made some important progress that has been recognized by gal and others in 2009 moved from the office of science. in 2013 the jail again narrowed its doe focus to projects over $750 million in the department's office of environmental management and the national nuclear security of ministration. the the department remains very focused on getting business. to to meet this challenge the secretaries instituting changes to the department performance. performance.

one of the 1st actions he took when he became secretary was to create an undersecretary for management and performance to focus specifically on improving project management and providing direct supervision of many of doe's most challenging projects. the secretary also established a working group that she asked me to leave to conduct an in-depth analysis of project-management. this working this working group was comprised of doe seniormost project management experts. the group divided opinions as to why projects either fail or succeed in the doe. the working group's findings were findings were issued a report which was released in december, and that report, report, if you can find on our website.

the report by the several reasonable mentation of several efforts to improve project management. restraint in the energy system acquisition advisory board. all our view all projects with an estimated cost of a hundred million dollars not. and the board which is chaired by the deputy secretary and comprised of the seniormost department officials will now me at least quarterly and focus on projects that didn't be at risk of not reading performance baselines. second we established a knew committee. this is comprised of the senior project managers who are the same folks that wrote the report. and that is providing risk assessment and advice to the department senior. baseline change proposals and providing peer reviews

and in-house consultant to projects across the departments. finally, the sec. has taken a series of actions aimed at improving lines of responsibility and improving peer review process. the apartment is improving accountability by ensuring that for each project the appropriate undersecretary must now designated a clear owner. there must also be a clear line of responsibility that extends from the undersecretary to the project on the federal project director. in addition word doesn't exist already each undersecretary is now establishing a project assessment. the reforms and processes that were instituted a critical steps to meet our solemn responsibility to be responsible stewards of taxpayer dollars. we are encouraged by the work that has been done

which has been focused on affecting permanent structural and cultural change. thank. thank you. i'm pleased to answer questions. >> without results. the intention is to have the next two gentlemen give their opening statements but we we will not get the questions until after votes. we anticipate that that will happen sooner than 515. each of you two gentlemen have up to five minutes. please be swift in your. it will be entered in the record. >> chairman, ranking german, ranking member, members of the committee. best