spending of taxpayer dollars at a timeliness and level of detail that hasn't been seen before. and it would require us to in very quick order develop i.t. solutions, data definitions, coordinate across multiple stake holders, both grantees, contractors, and all host of recipients to make those very, very tough demands that both congress and the president put on the federal government to make the recovery act the most transparent bill that's ever been enacted. it was a historic effort and really set a new bar for the manner in which the public has transparency into where federal dollars are going. >> now, i like the majority. i'm troubled that the i.g. has not yet been appointed in state. and i hope that that appointment is made soon. but i think it's important to state for the record that the

work of the i.g.s' office within state continues unabated, and in fact, if i'm not mistaken, the budget of the i.g.s office in state has more than doubled from $31 million during president bush's term to $65 million under president obama's term. so would you say that the office has the resources it needs to get the job done? >> congresswoman, i'm glad you raised the question. from my vantage point where i sit at omb and my work with the inspector general -- and i have a very close working relationship with miss fong -- there are a variety of different areas where omb is in a position to help the i.g. community succeed. one of them is to work with them to better understand the resource needs of the inspector general community and to work with them to develop justifications that can survive

congressional scrutiny for the levels that the president requests for the i.g.s. i would note as a global matter that while the president working with congress has cut essentially a trillion dollars in discretionary resources in the budget, the i.g. community funding level has remained constant, has been across the i.g.s and has been somewhat protected from the other discretionary cuts that we're seeing. specific to the state department, the state department's inactive level in 2011 was $59 million. in '12 that went up to $62 million. and the president's budget request for 2013 is $66 million. this is the place where omb can step in and assist an i.g. in being as successful as possible in understanding what that resource calibration needs to be. i will add as a final point, from where i sit, i --

i think that the inspector general community is as healthy and as strong as i've of seen it in my 15-year career. at the office of management and budget. and i have not detected in any way, shape or form any diminution of those roles or responsibilities or impact when there's an acting ig in place. >> thank you. my time has expired. thank you, mr. chairman. >> thank you. let me -- oh. my colleague, would you have any questions? >> i do. thank you, mr. chairman. and i'd ask for the full statement be entered into the record at this point. >> without objection. i thank the chair. welcome, mr. werfel. how long have you been in government, mr. werfel? >> 15 years. >> 15 years. do you -- do you think we've made public service more and more attractive by the day? >> it's a challenging time to be a federal employee. i think -- i have two reactions to that question.

on the one hand, i feel that the challenges our country faces have never been -- never been more critical and never been more important. when i go to sleep at night, you know, i think about the immense challenge that the federal workforce has before it and how important that work is and it's energizing and motivating to know that when you're serving your country by serving the federal government that that has real meaning and purpose, and it can be a truly motivating factor. at the same time, it's important that we, that we are investing in our people effectively and by doing that recognizing the great work that they're doing. recognizing the important role that they play, and -- you know, there are circumstances in which sometimes the federal employee can be the punching bag. >> well, let me just ask about that.

i mean, do you think that an unrelenting verbal assault in the form of disparagement about the value of public service what federal employees do about the federal workplace itself coupled with a two-year pay freeze and the proposal of an additional three-year pay freeze and changing the terms of pension making it less attractive by requiring more up-front payment and fewer benefits at the other end for perspective employees to fund an unrelated piece of legislation, in this case unemployment insurance, and then asking another one for current employees, same thing. to fund an unrelated piece of legislation, transit funding. and now this committee just the other day marked up its piece of the reconciliation, which will cost federal employees something

of the order of magnitude of $78 billion, $79 billion. that combined with hearings sometimes entitled the government too big and bloated, our federal workers inefficient and incompetent, doesn't gsa's recent excess in a western division conference sort of characterize what we're saying that all federal employee, kind of like that? might that have anything to do with morale and our ability to recruit and retain skilled workers, such as, oh, i don't know. igs, for example? >> congressman, i think -- i think a couple of reactions. the president has asked the federal workforce to join others around the country in tightening their belts and making certain sacrifices. given the economic challenges that we have, and time and again, the federal workforce has -- has reacted and absorbed

that belt tightening in a manner that i think we can all be proud of. in terms of still staying focused and passionate about what we do. i think the president wants to make sure that any approach we have is balanced. any approach we take towards deficit reduction is balanced, and that we're not riding the entire cost on the backs of one segment of the country. with respect to your question about morale, it is really, really important for a healthy and sustainable federal government, federal workforce, and carrying out all the critical services that we do to make sure that we are recruiting effectively and attracting talented and effective people into the federal workforce. so i -- i understand your questions, and i appreciate them. i agree that it's very important that we -- that we recognize federal workers for their contributions and that we don't

disparage them unnecessarily. in particular if there's an isolated incident that raises the type of concerns that are yours. >> i have one more question i'm going to sneak in as a follow-up to something the chairman said in his statement with which i agree and that what do with maybe highlights the dysfunction on the senate as part of the problem here. we had one ig who was totally uncontroversial, michael horvitz at doj and it took eight months to get this confirmation through. in looking at the record through, roughly the number of vacant ig vacancies are comparable to those in 2004 as president bush was gearing up for his re-election, and i think that, perhaps, suggests something about how onerous and difficult the senate process has become, as the chairman suggested. if the chairman will indulge i just want to give the witness an opportunity to answer that, and i'm done. >> do you have any comments, disparaging the senate? >> i don't have any comments.

on a personal level, they confirmed me pretty quickly. so i'm very appreciative of the senate. the only thing i would remark, i would go back to ms. fong's remarks in the first panel in which she talked about the complexity of the process of bringing an ig onboard. there's obviously the senate process. there's the desire to find highly qualified individuals, and so there's -- it's a complex terrain, and one in which probably should be evaluated over time. >> thank you. i recognize myself for more or less one question. >> please. >> first panel to my pleasure congratulated us for passing on a bipartisan basis the data act. the data act is fairly extensive. omb has not been the greatest proponent of it. under your predecessor. one of the questions is, do you have concerns you want to

share today? obviously, senator mark warner in the senate is the lead sponsor of an identical bill. the vice president has been supportive and a part of it at every point. chairman devaney has been part of it. i want to put you on the spot a little. i think mr. connolly did a good job of going completely off the first panel's discussion brilliantly and i'd like to do that because i think the data act deserves an understanding if you're prepared to make comments on challenges you see, if any, that need to be addressed. >> thank you, chairman. i will make a couple of remarks about that in response to your question. i'd like to first caveat my remarks saying we're reviewing the bill. the process to review the bill involves getting input from every agency and from a diverse segment within each agency including lawyers and accountants. >> are you going to let the accountants and lawyers worry me? >> well, we're evaluating, and we will certainly be able to

present to you a comprehensive reaction of both what we find as -- as promising and -- in areas where we think more work is needed. let me also emphasize up front before i go into specifics that the president and the administration are in complete agreement with the objective of advancing transparency and accountability. the president played a critical role in that when he served in congress on the senate and co-sponsored the transparency act. a bill that really is, had a monumental impact in thinking about federal transparency and one in which we're continuing to execute on today. i raise that, because there's a variety of different other bills we're executing on today that the president has signed and supported, like the modernization bill, i mentioned. i already mentioned the recovery act earlier. we continue to execute on these

various transparencies and in doing so are investing in technologies, in new solutions in growing our federal workforce to understand better how to raise their game in terms of transparency and all of those activities are in going and i want to make sure that people understand that we're not starting from scratch. we're starting with a very important foundation that has been built in advancing transparency. there's more information out there on websites like usa spending.gov and recovery.gov and where our dollars are going than ever in history and that's an important starting.. with respect to the data act. >> by the way, we would agree particularly as to recovery, which is really the only site i know of that has recipient reporting in a verifiable way. >> it's really transformative. and we're proud of the work that we did together with the recovery board and chairman devaney in achieving some of the results there. we're ready.

the final caveat is, we're ready to roll up our sleeves and work with this committee and with congress on solutions that can further advance these important goals of transparency and accountability. and while we'll get you a more comprehensive view on the data act, i'll start there. the first concern would be the data act as i understand it would create a new commission. and the question that we have is, in a time where government is looking to streamline the complexity of our bureaucracy is the way to move forward in enabling transparency to add an additional layer of potential bureaucracy by creating a new organization, and it's not just that that organization would exist and be, and make government bigger. it's the fact that that organization would have regulatory authority to issue

standards, and now as i'm a recipient already challenged by the complexity of having omb requirements and agency requirements and we work hard to try to dovetail those together and in effective ways, now you've added potentially a third entity. >> well, let me just stop you for a second, because i think that's a good point. and it's been one of the potential criticisms along with a pushback from those who would have to report, currently receive the money and have less transparency, because they don't actually have to tell us where they spent it. but the reason for the commission in the bill as it stands now is very straightforward. you haven't done your job. if you look at the transparency created, omb had the authority to bring groups together, to provide the common standard to make it all happen, the authority already was there. congress to a certain extent is saying, you can only wait so long with people saying we're going to do it. when you have a situation as all

of us in the dias, most of us beyond even people here today, we were here for the beginning of recovery act. chairman townes was critical in ensuring there was greater transparency and helping us, that there was a portion of the act that was earmarked for investigations and reporting, where initially we were just setting the money and then not giving them an unfunded mandate. so all of that we went through. the point is, chairman devaney and the recovery act showed us something that was a good model. we added on to it some other reforms. by the end of the day we believe that the reason that his model didn't spread throughout the government is that this administration and this government including career professionals who work for and with you simply have a lethargic view towards making this transition. now, some of it may be that it's very hard to tell career people at all these agencies, you've got to do it. my view would be, any bureaucracy that accomplishes

its goal, if you then want to reorganize to eliminate it, because it now can be taken on by a consolidation, that's great, but i would propose to you that senator warner and myself are pretty strong along with my ranking member that we don't see it happening if we simply say, thou shalt do it but with existing assets. your comment? >> i understand that perspective. obviously, i would bring a different perspective to the table in terms of our pace and accomplishments. the point i was raising was simply a suggestion that we look at different alternatives, you know. you're in an environment where the president has been pretty clear. he submitted a proposal to congress to give reorganization authority. we're looking for different ways to streamline government. so i think it's a worthy question to explore whether the types of accountability that you're looking for can be achieved through existing instruments and existing organizations within government. it may be so.

maybe not. that's the type of dialogue we want to engage with you, because of the importance we're placing on streamlining the complexity of government bureaucracy. let me add just one more point. the other question i think is worth raising, again, without having a monopoly on what the right answer is, but just a question worth raising. it has to do with what measures can we take within a bill like this to ensure that the impact and burden that is placed on the community, state and local governments as an example, universities, businesses that do work with the government, both small, medium and large what kind of measures can we put in place to make sure that we're balancing the important goal of transparency with the regulatory information collection reporting burden that would be imposed on them as we advance this objective? >> sure. i appreciate that. >> that's the type of question

that we -- >> and we look forward to working with you on it. i will say, of course, although we fully paid for the data act on this side, we're all aware that we're asking in very few cases for all new reporting. in almost every case what we're doing is saying we're going to consolidate reporting so that if you do multiple reports, it's actually gets easier than it is, because we're looking at not having to report and report in different formats to different agencies which is one of the reasons for the data act. with that, i believe we go to the chairman emeritus for five minutes. >> i don't think i'll take the full five minutes. first of all, mr. werfel -- okay. i think you've been a very good witness and i appreciate your forthcoming. we invited mr. zants down and for some reason he couldn't make it, and as i understand it, he is responsible for handling the ig portfolio for the white house. as i understand it, he's the executive chairman of the

executive chairman of the sigie, and the president's liaison to the ig community. what i'd like to know is who makes the recommendations for new igs to the president? i mean, somebody has to say to the president, and the reason i think we asked mr. zants to come up here is because he's charged with the responsibility of this coordination process. so i think that many of us thought that maybe he was the one or somebody working with him was the one that made these recommendations to the president. do you have any idea who makes the recommendations? because i'm sure the president with a vast bureaucracy we have doesn't have time to go through everything and try to pick out somebody that's qualified. so somebody's making those recommendations. do you know who that is? >> well, first of all let me clarify, congressman, that mr. zants is not the -- >> excuse me. >> right. is not the official within the white house that makes recommendations to the president on filling ig vacancies.

it's as the acting director and leader within the office of management and budget that is not within his set of responsibilities. >> who does? do you know? >> as i mentioned earlier and i think as ms. fong testified, there's -- there's one of two ways, i think, in which recommendations can be made to the president. one is that the, the siggy, the council has an inspector format developing a list of qualified candidates for the president to consider, and then there is a presidential personnel office within, within the white house, which recruits and explores a variety of different candidates for positions throughout government, including inspector generals, and they can identify candidates and make recommendations to the president as well. so there's a separate function within the white house that omb is not involved in and particular not with respect to inspector generals.

>> since you and mr. zients? >> zients. since you work in the coordinating process between the various ones, you know when a new ig is taking office and you know the process and everything else. why -- and i just don't understand this, because i've never been a president, and never been to any of the executive branch. but when a president takes office and this vast bureaucracy has to be filled with people appointed and confirmed by the senate, i would presume that organizations like sigie makes recommendations rather quickly so that the president can get on with his job of being the chief executive. i guess the thing i don't understand is how there could be a number of vacancies, whether it's under republican or democratic administrations that

go on for, say, three or four years, when these recommendations are made relatively soon after the president is sworn in. and i don't know if you can answer that or not, but it just seems to me that these recommendations are made by the office of personnel management, or omb or whoever it is, or this organization sigie, relatively soon. so why is it it takes so long for the president to make a recommendation to the senate? >> again i don't have the particular subject matter expertise or experience with respect to any given vacancy, because i'm not involved in that role. what i will say -- >> well, when you coordinate, and mr. zients coordinates between various igs, he obviously is working with some who are acting and some who are permanent. it they're acting i just wonder if there's any question that

ever arises, why haven't we pick a permanent person for this and went through the senate confirmation? >> i have never raised that question, and i'm not aware, and i can't speak for mr. zients whether he has. as i testified earlier, i have not and never experienced any dim munition in the effectiveness of the ig whether acting or not. >> i guess my final question is there's a list of people that are vetted, and they're recommended for various positions like the -- the -- what's the -- and they're presented to somebody. maybe it's the chief of staff at the white house who says to the president, this is a guy that ought to fill this job over at state. and you don't know who that person is? >> i'm -- me personally, i've never been consulted or asked regarding a particular -- >> mr. chairman i think that's one of the things we ought to find out at some point. who is making the recommendations to the

president, and why there isn't any action taken, especially after a period of two, three years. with that, i yield back. thank you for that. i yield myself for five minutes. mr. werfel, welcome back again. glad you're here on that. it is my same question on that. why would we not try to press, whether it be omb or the executive office, not try to go back and say you know what? we haven't filled the post of the secretary of state's ig ever. been here 3 1/2 years. there's never been a nominee for that. the interior position, if i remember that correctly, it was a month after the president took office, that went vacant. there's never been a nominee there. what's the process of acknowledging, and we've got a big hole here. who, then, takes it from there? to make sure that gets pressed that that gets done? >> well, it's an interesting question. and i feel i can only speak for myself and my role at omb, and i have a very particular focus

with respect to the manner in which i interact with inspector generals, and believe me. i'm very busy, and the inspector general community keeps me very busy in terms of identifying new areas for me to be coordinating across government. the mere fact and the practical reality is that as part of that footprint it has not historically involved advising on candidates. in some measure -- >> not just candidates. getting it done at all. i'm not saying your office would select the next person. just saying you know what? this has not been filled in 3 1/2 years. we probably should get a person. i mean, that is the watchdog for the organization. the reason i bring it up -- just let me mention a couple of things. when i was in afghanistan last august, we met with some folks from the state department, and we met with some folks from usaid, projects happening on the ground in afghanistan. for instance, a hospital that was constructed that after they constructed it they said you know what? this region needs a hospital and then determined we really don't have doctors or nurses to man

this long term. we don't va hospital administrator. so we spent millions and millions of dollars constructing a building in afghanistan that now can't be used. and that they can't transition it over. a power plant that can't be transitioned. and so they said we've now shifted our focus now from actually constructing to just trying to maintain what we have constructed. well, that's really the job of the inspector general to jump in in the middle and say we have an enormous amount of waste that's happening by the millions of dollars in some of our usaid programs. we just had a hearing with the ogr several, what, three months ago, discussing the human trafficking that's happening with the state department and d.o.d. that is something uniquely the ag can rise up and say, in some of our embassies with state, we have employees there that are actually in debt bondage that we're bringing in from third world countries that are coming into this spot. now no one denied it.

it's just a matter of what do we do with that. those are issues we need an ig in place that can help go after that. the question becomes, that's out there. we know about those things. what do we not know about, because we've never had a permanent ig in those areas? so it's the unknown. obviously you can't answer that either. someone has to raise the flag to fill the position saying we have to have a watchdog in place. one other issue. one that surprises me. i have other concerns on usaid, and i'm sure there is no political ramification for usaid to have a theme of forward. but for that program that is out there that is intentionally focused on transitioning money to other governments and to nongovernmental organizations, 30% of their budget. so now we have usaid that doesn't have an inspector general transitioning 30% of its funds in this new forward program to people that don't

have a watchdog. we're in trouble on that. we have a giant risk of an enormous amount of fraud and waste that's happening with no watchdogs now in two layers of that. does that raise a red flag to you at all? >> actually it does not raise -- i wouldn't characterize it as a red flag and here's why. because i challenge the premise of the question that there's no watchdog. the inspector general's office has been talked about throughout this hearing. there are thousands of civil servant, talented individuals that step in and often step in with great effectiveness in the event of the inevitable vacancies that occur. my work as controller at omb focuses on a set of activities, such as financial management, the financial statements, improper payments, internal controls, and from my reflection, i have not observed any reduction in effectiveness of the ig community.

in fact, if anything, they're keeping us as busy as ever in terms of the aggressiveness of their approach. there was charts that showed the increasing nature of their investigations and their -- >> the post office things. i noted that. >> they're at effective as i've ever witnessed an ig community from the perspective i have as controller and the terms of the specific areas that i focus on. >> right. i understand that. but i also hear every time there's an issue that comes up in any department and it's a position that's being, that the senate is dragging their feet on confirmation, the first thing the other side of the aisle rises up and says you know what? this wouldn't be an issue if we had a permanent chair in that spot a permanent leader in that spot. this is a problem because we've never confirmed someone. and the flip side, no one nominated, oh, it's trickling along, it's doing fine. in some ways we're trying to have it goethe ways. when the senate hasn't confirmed, that's the cause of this. going back to things even like atf. we've never had a permanent