Romney Leads Hearing on Cutting Waste, Fraud & Abuse in Federal Government

Highlights his Back to Work Act to get federal agency employees back into the office

WASHINGTON—U.S. Senator Mitt Romney (R-UT), Ranking Member of the Homeland Security and Governmental Affairs Committee (HSGAC) Spending Oversight Subcommittee, and Senator Maggie Hassan (D-NH), the Subcommittee’s Chair, today led a hearing to examine the 2024 report from the Government Accountability Office (GAO) on ways to reduce duplication, overlap, and fragmentation within the federal government and save taxpayer dollars. During the hearing, Romney highlighted legislation he introduced with Senator Manchin to require employees of federal agencies to return to in-person work after a recent GAO report found that 17 of 24 federal agency headquarters were operating at an average capacity of 25% or less.

In March, Senator Romney, along with HSGAC Chairman Gary Peters (D-MI), introduced bipartisan legislation to strengthen oversight of federal funds vulnerable to fraud. Their Government Spending Oversight Act passed out of HSGAC in April and awaits action on the Senate floor.

Senator Romney’s opening statement and parts of his exchange with Eugene L. Dodaro, Comptroller General of the United States and the head of the GAO, can be found below. Video can be found here.

Opening Statement:

Senator Romney: Thank you, Chair Hassan. Appreciate the chance to have this hearing, and Mr. Dodaro, appreciate your willingness to continue to serve after all the years. Greatly value your expertise and your commitment to our government and to our country. I simply can’t imagine what it’s like having your job and the job of your colleagues. Somehow the image that comes to mind is a honeybee coming to a mountain meadow filled with flowers, just like, “How do I begin? How do I start?” There’s so much waste, fraud, and abuse—duplication, fragmentation. It’s like, “Where do I begin?” And I salute you for finding many places to begin and making the recommendations you have. I’m cognizant of the many items that you have recommended in the past that remain open from various agencies, but also of the many areas that actually have resulted in savings having occurred.

I also would note that as a result of last year’s duplication report that you presented here, I introduced, along with Chairman Peters, the bipartisan Government Spending Oversight Act, which has made it through committee. I’d like to see it get to the floor. I appreciate your support for that legislation and hope that we finally get it done. I also am concerned about the ability to maintain a strong and effective workforce at the federal government level, given the telework policies that we have. The figures we’re seeing for vacancies in government buildings give me some concern. Wonder whether we’re really getting the productivity from our employees that we hope to do. Earlier this month, my colleague Senator Manchin and I introduced legislation to ensure that federal agencies are operating effectively by placing reasonable limits on the use of employee teleworking. I’d like to get your perspectives on that, but today we come to hear your report and hopefully to once again fashion legislation that will promote the ideas you bring forth, as well as create a bit of a hot seat under the individuals responsible for managing our federal government.


Senator Romney: The 2024 GAO report highlights ongoing fraud in the Employee Retention Tax Credit (ERTC) program, and the fraud was so extreme that the IRS basically said, “Okay, we’re going to stop processing these claims.” In your opinion, is the ERTC still a valid program. Has it outlived its usefulness? Should we basically say, “Enough already,” for the ERTC?

Mr. Dodaro: Yeah, it’s basically over. But they could still file amended returns over that period of time. I think that the program was a bit ill-fated from the beginning. There was confusion about it versus the Paycheck Protection Program, and whether there would be duplication. In 2022, we raised and made recommendations to IRS to better focus on compliance issues in this area, have a plan and document things. You know, fortunately, they’ve taken this action of put a pause in. But, there’s a lot of programs. So the program’s in effect over, but the tax implications are going on for a little bit. IRS needs to focus on this, document it and recover, you know, if they’ve overpaid in some of these areas, recover the money.

Romney: The numbers on fraud, particularly as it relates to government fraud perpetuated against the government, are just mind numbing. It’s in the many, many, many billions of dollars. And we’ve been going after this for years. And I wonder, is there something we could do in general? Should we be devoting more resources to identifying fraud? And then should we increase the penalties for people who basically steal for the government? And if so, where is a place to really to focus those kinds of efforts? 

Dodaro: Yeah, and we have a number of recommendations in this area. It’s a great question. First of all, I think the penalties are pretty severe. But the problem is that you have undetected fraud, which we’re not focused on as much as we should be, and that’s what our estimate includes, potential undetected fraud to try to point in that direction. But I sat next to, testifying before the House on Medicare and Medicaid programs, the inspector general from HHS, [he] basically said they have 300 to 400 viable, cases of fraud that they can’t investigate because they don’t have the resources. And then you have the statute of limitations. Now on the PPP program, Congress extended it from five to 10 years. The Administration’s trying to extend it on the unemployment insurance area, which I support—that should go to 10 years, too. So you need a little bit longer time, but then you need to give the ages more ability to settle administratively.

A lot of times they’ll do this, but then it gets to the prosecution sort of funnel. Unless it’s big dollar amounts, there’s not enough resources to prosecute the people, even though investigations might have been done. So, not enough investigations are being done, not enough effort on prosecution—there ought to be more tools given to the inspectors general.

Romney: I begin by noting that the federal workforce is in many cases extremely productive, hardworking. On the other hand, [I’m] concerned that some other people in the [agencies] are not working quite so hard, and all the burden is falling on the few rather than the many. And this revolved around the teleworking that we do following COVID. I mean, everybody went home and interestingly, not everybody’s come back to the office. Had the response time of consumer calls…had the response time been the same as before COVID, fine. But in fact, the lines are longer. People are having a harder time getting in touch with the government. And so, you wonder how well is teleworking working for us and do we need to oversee somehow in a better way, a more effective way, what happens when people are working from home?Do you have any sense of whether this is an issue we need to give consideration to?

Dodaro: Yes. We’re looking at that issue right now across government, at a number of different agencies—what effect it’s had on customer service, on the agency achievement of its mission, and those sorts of things on recruitment and retention, too. There’s issues there. I’d say the focus Congress ought to put on this, in my opinion, is on outcomes… So, I think more oversight would be effective. I think you’re right to be concerned about this. But the focus, in my opinion, ought to be on are they achieving their missions, and if not, why not? 

Romney: AI. You said the magic word that I want to talk about just briefly or get your perspectives on. It’s going to be extraordinarily disruptive. It’s going to be helpful, make us more productive…Will AI dramatically reduce the need for personnel, do you believe, in the federal government? Are there adjustments we’re going to need to make to usher in the capacity and capability of AI? What’s your perspective of where that’s going to take us? I mean, I’m very optimistic about how it can make us more effective and more efficient. I’m also scared to death about things it can do inappropriately. I don’t begin to believe we’ve thought about how to regulate it or manage it at all, but what are your perspectives on the advent of AI and the impact it’s going to have?

Dodaro: Looking at it broadly, beyond federal government, just for the country as a whole, I think it will have enormous implications for the workforce. Both in a positive and a negative way, and it could affect blue collar as well as white collar, broadly across government. You’re right, in terms of the government workforce. You know, we’ve done—since 2018, we’ve done 50 studies on AI. We’ve looked at AI in accelerating drug development, medical testing, diagnosis, and treatment on patients. We’ve looked at it as results to the algorithms used for DNA testing, for example, and other things. And we’ve developed the framework for how to audit artificial intelligence algorithms…But speaking on fraud, just one last point on that—we worked with Congress. There’s a Fraud Reduction and Data Analytics Act that implemented, in 2016, GAO’s framework for preventing fraud in the government, and agencies just haven’t implemented it, and Congress hasn’t held them accountable. And one of the things they’re supposed to do is do a fraud risk assessment of new programs.