On Wednesday, September 18th, the House Appropriations Subcommittee on Transportation, Housing, and Urban Development held an oversight hearing to hear from the Inspectors General (IGs) of relevant agencies. Subcommittee Chair Steve Womack (R-AR) and Ranking Member Mike Quigley (D-IL) welcomed the following IGs to provide testimony: 

• Eric J. Soskin, Inspector General, Department of Transportation (DOT) 

• Rae Oliver Davis, Inspector General, Department of Housing and Urban Development (HUD) 

• Kevin H. Winters, Inspector General, National Railroad Passenger Corporation (Amtrak) 

IGs generally get favorable receptions on Capitol Hill, because in addition to their job finding and reporting waste, fraud, and abuse, the law also charges each IG “to provide a means for keeping the head of the establishment and the Congress fully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress of corrective action.” In effect, an IG serves as Congress’s “inside man/woman” in the federal agency.

While there were a few more passionate exchanges from members, the general tone of the hearing was that of appreciation for what these individuals and their teams bring to government operations. Each IG emphasized their dedication to preventing fraud, waste, and abuse in agency spending and an overall commitment to using taxpayer funding to further the missions of their agencies.  

Within each agency, there were a few more sensitive issues which were touched on during testimony or during the Q&A period with members. Of all the agencies, HUD probably received the most “heat” (using that phrase loosely) – questions which Oliver Davis was well-prepared to field, but there were no major surprises as far as topics discussed.  

Eric Soskin and USDOT 

Soskin’s testimony covered his team’s job as well as that of the agency as a whole. He detailed some recent and ongoing audits and reports prepared or underway by his team in the aftermath of events including Boeing’s 2018 and 2019 737 MAX crashes and the company’s processes for 737 and 787 aircraft production in the wake of this year’s safety issues.  

He also discussed the immense growth in USDOT’s budget between fiscal year 2019 to fiscal year 2023 – a more than 50 percent increase, up to the FY2023 budget of $112.3 billion – primarily driven by COVID-19 relief funds and the Infrastructure Investment and Jobs Act (IIJA). Given the major increase in funding allocated, there is clearly a heightened risk for improper spending and money management which Soskin noted and reiterated his team’s obligation to curb any mismanagement.  

The Q&A segment was relatively smooth for Soskin and USDOT. Rep. Mario Diaz-Balart (R-FL) posed some questions related to a 2023 audit report released by Soskin’s office which found that the risk assessment process needed to be expanded to address the full spectrum of fraud risks across programs. While this has not been fully addressed yet, Soskin detailed a draft ordered circulated last month which would establish a policy and guidance related to this topic. The order would move USDOT in the direction of having a comprehensive operating administration oversee each different area (Federal Motor Carriers Administration, Federal Transit Administration, etc.) to help with consistency in approach across all operating administrations. Aside from this overarching agency-wide issue, other topics discussed included theft in trucking and freight rail, air traffic controller shortages, restoration of small community air service (Del Rio, Texas where all US Air Force pilots are trained was the specific case discussed), and state-level best practices for transportation safety.  

Rae Oliver Davis and HUD 

HUD’s Ms. Oliver Davis provided insight into the significant challenges faced by the agency during her testimony. She discussed the agency’s massive charge of doling out tens of billions of dollars in grants for rental assistance and the current approximately 30 open improvement recommendations their office has for HUD leadership. But the most eyebrow raising portion of her testimony was the mention of the agency’s inability to track and estimate improper payments in the two largest rental assistance programs administered. These two programs totaled more than $45 billion in payments for fiscal year 2023 alone, and they make up more than two-thirds of the agency’s total expenditures. The agency has been unable to estimate improper spending totals for the last seven years, limiting any possibility of devising a strategy to address instances of fraud, waste, and abuse.  

While there was no ire directed toward Oliver Davis, or really HUD as a whole, some of the Q&A was gutting to hear. Multiple members raised questions of issues with asbestos, infestations, and lead contamination – emphasis on the last one. Perhaps the most difficult topic discussed was the prevalence of predatory behaviors like sexual harassment by landlords in positions of power over these vulnerable tenants.  

HUD faces particularly difficult circumstances in administering programs. The agency is reliant on tens of thousands of community partners to administer funds, and recipients are often from underrepresented communities. Last year alone, they received 15,000 hotline complaints and the agency is stretched thin to investigate the number of claims they would like to look into. When sincerely asked by Rep. John Rutherford (R-FL) if HUD has simply gotten too big, Oliver Davis did what she could with the question and talked about how her team simply has to look at what is in front of them and take on the tasks they are able to handle. But she was sure to mention that HUD is large and highly decentralized with resources flowing through programs to partners and out into the community, creating difficulty in tracking.  

Kevin Winters and Amtrak 

Given some of the recent Amtrak headlines, there have not been many instances where Amtrak has come out of a hearing unscathed, but that is largely how this hearing played out for Mr. Winters. In his testimony, he talked about the historic influx of funding for transportation and Amtrak specifically, noting that the agency has access to as much as $66 billion from the IIJA for modernizing its fleet, tunnels, bridges, and technology systems. 

His small but mighty team of about 100 total including auditors, investigators, and support staff is focused on ensuring the funding is spent responsibly to provide excellent, safe, and efficient service to customers. The three challenges he laid out for Amtrak and his team specifically right now included running a safe and secure railroad that effectively and efficiently serves customers, responsibly executing historic capital improvement plans, and reducing the ever-present threat of fraud, waste, and abuse. Coupled with the three major rolling stock procurements at hand (replacing the legacy Acela, procuring new intercity trains, and replacing long distance trains), Amtrak and Mr. Winter’s team have their work cut out for them.  

While Q&A was more focused on USDOT and HUD operations, Winters did receive one question from Chairman Womack about the overhaul of the northeast corridor’s Acela fleet. The plan was initiated in 2014 with a plan to launch service in 2021, but what used to be referred to as “Acela 2021” is now just called “New Acela” as the public continues to await the new fleet roll out. Winters responded in a very direct manner detailing how his team has been critical of Amtrak’s ability to deliver capital programs like these for over 10 years, but he also provided a status update as well as insight to what Amtrak is doing to improve the process.  

As of now, Amtrak has contracted for 28 train sets for this project. Of these, 14 have been built by the contractor. A major issue is that the Federal Railroad Administration (FRA) does not have a computer model that would allow the prototype for these trains to go into testing, which has left Winters and Amtrak with concern that the trains being built and those sitting in the lot now will have to be retrofitted. Regardless of the actual logistics on the current project, in 2022, Amtrak dedicated a section of staff called the capital delivery unit to help manage projects of this nature moving forward. This group is made up of acquisition professionals who know how to run programs, track costs, set business cases, create and monitor budgets, and provide overall accountability. The company intends to use these lessons learned to improve future capital program processes.  

Takeaways 

Spoiler: Administering billions of dollars of taxpayer money is hard. And fraud, waste, and abuse prevention is no small task. Unfortunately, there is no shortage of work for each of these teams. Oliver Davis reiterated this during a back-and-forth with Rep. Ben Cline (R-VA) when she stated, “There’s enough fraud to go around always at any given time, and enough bad actors unfortunately.”  

While a few members had some particular sticking points to hash out with these IGs, like the HUD Secretary following through on a promised visit to San Antonio, Texas or failed HUD inspection practices for communities like Eureka Gardens, most members were acutely aware of how difficult it is to perform this work. Members questioned IGs on their ability to cover all areas at this time and what they needed to better perform their jobs, which was a question typically met with the same response – more resources. With funding trickling into projects and communities through various channels, it is essential that fraud, waste, and abuse prevention be conducted and monitored at all levels of each agency.