The Supreme Court appears poised to deliver a contradictory message to the American people: Some independent agencies deserve protection from presidential whim, while others do not. The logic is troubling, the implications profound and the damage to our civil service system could be irreparable.

In December, during oral arguments in Trump v. Slaughter, the court’s conservative majority signaled it would likely overturn or severely weaken Humphrey’s Executor v. United States, the 90-year-old precedent protecting independent agencies like the Federal Trade Commission from at-will presidential removal. Chief Justice John Roberts dismissed Humphrey’s Executor as “just a dried husk,” suggesting the FTC’s powers justify unlimited presidential control. Yet just weeks later, during arguments in Trump v. Cook, those same justices expressed grave concerns about protecting the “independence” of the Federal Reserve, calling it “a uniquely structured, quasi-private entity” deserving special constitutional consideration.

The message is clear: Wall Street’s interests warrant protection, but the rights of federal workers do not.

The MSPB: Guardian of civil service protections

This double standard becomes even more glaring when we consider Harris v. Bessent, where the D.C. Circuit Court of Appeals ruled in December 2025 that President Donald Trump could lawfully remove Merit Systems Protection Board Chairwoman Cathy Harris without cause. The MSPB is not some obscure bureaucratic backwater — it is the cornerstone of our merit-based civil service system, the institution that stands between federal workers and a return to the spoils system that once plagued American government with cronyism, inefficiency and partisan pay-to-play services.

The MSPB hears appeals from federal employees facing adverse actions including terminations, demotions and suspensions. It adjudicates claims of whistleblower retaliation, prohibited personnel practices and discrimination. In my and Harris’ tenure alone, the MSPB resolved thousands of cases protecting federal workers from arbitrary and unlawful treatment. In fact, we eliminated the nearly 4,000 backlogged appeals from the prior Trump administration due to a five-year lack of quorum. These are not abstract policy debates — these are cases about whether career professionals can be fired for refusing to break the law, for reporting waste and fraud or simply for holding the “wrong” political views.

The MSPB’s quasi-judicial function is precisely what Humphrey’s Executor was designed to protect. This is what Congress intended to follow in 1978 when it created the MSPB in order to strengthen the civil service workforce from the government weaponization under the Nixon administration. The 1935 Supreme Court recognized that certain agencies must be insulated from political pressure to function properly — agencies that adjudicate disputes, that apply law to fact, that require expertise and impartiality rather than ideological alignment with whoever currently occupies the White House. Why would today’s Supreme Court throw out that noble and constitutionally oriented mandate?

A specious distinction

The Supreme Court’s apparent willingness to treat the Federal Reserve as “special” while abandoning agencies like the MSPB rests on a distinction without a meaningful constitutional difference. Yes, the Federal Reserve sets monetary policy with profound economic consequences. But the MSPB’s work is no less vital to the functioning of our democracy.

Consider what happens when the MSPB loses its independence. Federal employees adjudicating veterans’ benefits claims, processing Social Security applications, inspecting food safety or enforcing environmental protections suddenly serve at the pleasure of the president. Career experts can be replaced by political loyalists. Decisions that should be based on law and evidence become subject to political calculation. The entire civil service — the apparatus that delivers services to millions of Americans — becomes a partisan weapon to be wielded by whichever party controls the White House.

This is not hypothetical. We have seen this movie before. The spoils system of the 19th century produced rampant corruption, incompetence and the wholesale replacement of experienced government workers after each election. The Pendleton Act of 1883 and subsequent civil service reforms were not partisan projects — they were recognition that effective governance requires a professional, merit-based workforce insulated from political pressure.

The real stakes

The Supreme Court’s willingness to carve out special protection for the Federal Reserve while abandoning the MSPB reveals a troubling hierarchy of values. Financial markets deserve stability and independence, but should the American public tolerate receiving partisan-based government services and protections?

Protecting the civil service is not some narrow special interest. It affects every American who depends on government services. It determines whether the Occupational Safety and Health Administration (OSHA) inspectors can enforce workplace safety rules without fear of being fired for citing politically connected companies. Whether Environmental Protection Agency scientists can publish findings inconvenient to the administration. Whether veterans’ benefits claims are decided on merit rather than political favor. Whether independent and oversight federal organizations can investigate law enforcement shootings in Minnesota without political interference.

Justice Brett Kavanaugh, during the Cook arguments, warned that allowing presidents to easily fire Federal Reserve governors based on “trivial or inconsequential or old allegations difficult to disprove” would “weaken if not shatter” the Fed’s independence. He’s right. But that logic applies with equal force to the MSPB. If presidents can fire MSPB members at will, they can install loyalists who will rubber-stamp politically motivated personnel actions, creating a chilling effect throughout the civil service.

What’s next

The Supreme Court has an opportunity to apply its principles consistently. If the Federal Reserve deserves independence to insulate monetary policy from short-term political pressure, then the MSPB deserves independence to insulate personnel decisions from political retaliation. If “for cause” removal protections serve an important constitutional function for financial regulators, they serve an equally important function for the guardians of civil service protections.

The court should reject the false distinction between agencies that protect Wall Street and agencies that protect workers. Both serve vital public functions. Both require independence to function properly. Both should be subject to the same constitutional analysis.

More fundamentally, the court must recognize that its removal cases are not merely abstract exercises in constitutional theory. They determine whether we will have a professional civil service or return to a patronage system. Whether government will be staffed by experts or political operatives. Whether the rule of law or the whim of the president will govern federal employment decisions.

A strong civil service is just as important to American democracy as an independent Federal Reserve. Both protect against the concentration of power. Both ensure that critical governmental functions are performed with expertise and integrity rather than political calculation. The Supreme Court’s jurisprudence should reflect that basic truth, not create an arbitrary hierarchy that privileges financial interests over the rights of workers and the integrity of government.

The court will issue its decisions over the next several months and when it does, it should remember that protecting democratic institutions is not a selective enterprise. The rule of law requires principles, not preferences. Because in the end, a government run on political loyalty instead of merit is far more dangerous than a fluctuating interest rate.

Raymond Limon retired after more than 30 years of federal service in 2025. He served in leadership roles at the Office of Personnel Management and the State Department and was the vice chairman of the Merit Systems Protections Board. He is now founder of Merit Services Advocates.

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The Small Business Administration suspended more than 1,000 companies in the 8(a) program. SBA made the decision after it deemed those small businesses non-compliant with its financial data request from December.

“Suspended firms have 45 days to appeal the suspension,” said Maggie Clemmons, an SBA spokesperson in an email to Federal News Network. “SBA will release further information on the suspensions in the coming days.”

The suspension comes after SBA sent a letter to more than 4,300 8(a) firms in December seeking 13 different data, ranging from a list of the company’s employees to bank statements for the last three fiscal years to a copy of all 8(a) contracts, as part of its ongoing audit of the program.

Data compiled by GovContractPros, an advisory services firm specializing in federal procurement, found that SBA admitted 753 companies into the 8(a) program in fiscal 2024. Of those 753 firms, the company says SBA suspended 156 of them.

In fiscal 2025, SBA says it admitted only 65 companies into the 8(a) firm. GovContractPros says SBA suspended 10 of those firms, including nine which joined the program after the Trump administration began leading SBA.

Lawyers that represent small businesses say SBA issued the suspensions on Wednesday based on the fact that the 8(a) firms either failed to submit their responses on or before the Jan. 19 deadline or submitted incomplete responses.

“At least some firms that submitted complete data call responses only one day late — on Jan. 20, and before any suspension notices were issued — often due to errors in the government-operated MySBA Certifications portal, nonetheless received suspension notices, indicating that SBA is taking a strict approach to alleged non-compliance with the filing deadline,” wrote Meghan Leemon and Matt Feinberg, partners with the law firm Piliero Mazza, on a blog post. “Firms subject to 8(a) suspension are not permitted to receive new competitive or sole-source 8(a) awards. However, firms are required to complete existing 8(a) contracts, and federal agencies may exercise options on those contracts, even while a firm is suspended, unless otherwise prohibited by statute or regulation.”

SBA’s new clarifying guidance

The suspensions are part of a broad Trump administration effort to audit the 8(a) program and address allegations of fraud and abuse. SBA’s data call was one of several ongoing audits to now include the Treasury Department, the General Services Administration and, as of last week, now the Department of Defense.

“The Biden administration expanded and then abused the 8(a) program to hand out billions in taxpayer-funded government contracts to favored minorities at the direct expense of honest small businesses, which is why we ended the practice on day one,” said SBA Administrator Kelly Loeffler in a press release. “Since then, the Trump SBA has been working to reverse the damage – and today, we’re reiterating one simple fact: the Biden-era practice of discriminating against white Americans is over, and reforms to enshrine that fact are well underway. The SBA is ending diversity, equity and inclusion (DEI) in federal contracting – and our programs will remain open to all eligible job creators in compliance with federal law.”

In addition to suspending nearly a quarter of the 8(a) program participants, SBA issued new guidance today clarifying that the small business development program “is open to job creators of every race – consistent with court orders, notices from the U.S Department of Justice (DOJ), and President [Donald] Trump’s broader effort to eliminate DEI across the federal government – and that any race-based presumptions of social disadvantage have been inoperative since 2023.”

The guidance outlines new ways the SBA will manage the program.

It says it will administer the 8(a) program based on race neutral requirements and there will be no presumptive preference given to anyone.

SBA also will no longer approve the use of “socially disadvantage narratives” as a way to get into the program. It removed from its website the Biden-era “Guide for Demonstrating Social Disadvantage.”

Finally, SBA will consider several factors when determining eligibility for the 8(a) program, including whether the individual has been a “victim of illegal or radical DEI policies or illegal affirmative action policies or has otherwise been the victim of discriminatory practices such as race-based quotas, set asides or hiring targets, in each case by government and non-government actors.”

SBA says these steps are in reaction to the “dramatic expansion” under the Biden administration of companies in the 8(a) program.

Since January 2025, SBA accepted just 65 new 8(a) firms into the program, compared to over 2,100 who were accepted during the four years of the Biden administration.

Undermining the 8(a) program?

Jackie Robinson-Burnette, a former SBA associate administrator in the Office of Government Contracting and Business Development during the Biden administration, wrote on LinkedIn that this change isn’t a small tweak, but it’s re‑anchoring of the program’s foundation.

“It’s important to reform the 8(a) program without crushing the firms the program was designed to help,” wrote Robinson-Burnette, who now is the CEO of Senior Executive Strategic Solutions. “Are we dismantling and putting a sledgehammer to the program to curtail spending $20 million-plus on 8(a) sole source contracts or is it about something else?”

John Shoraka, a former associate administrator of government contracting and business development at SBA and now the co-founder and managing director of GovContractPros, said the SBA and now DoD’s audits are part of a concerted effort to undermine the confidence in the 8(a) program.

“It seems to be one initiative after another initiative, sort of in a very sequenced flow of events to undermine the program and sort of put the brakes on the program,” he said. “I think there’s a perception, and, it’s the wrong perception, that the 8(a) program is, at its core, a DEI program. I honestly don’t think that the administration believes there is significantly more fraud in the 8(a) program than any other contracting program. In fact, the data shows, if you look at inspector general cases or if you look at Department of Justice cases, the instances of fraud in the set-aside programs and particularly the 8(a) program, are actually significantly lower as opposed to across the entire federal government. So when we focus on fraud, waste and abuse in the 8(a) program, I think it’s just raising the flag. They can’t really say we want to kill this program because it’s DEI, they need to identify some sort of red flag to point to and say, ‘Ah-a, we told you this program was fraudulent, and therefore we need to terminate or put the brakes on this program.’”

Leemon and Feinberg, from the law firm Piliero Mazza, said companies caught up in the suspension should consider sending an informal appeals to SBA to lift the suspension.

“If informal channels are unsuccessful, a suspended 8(a) company may — and should — appeal SBA’s decision within 45 days of the date of the Notice of Suspension to SBA’s Office of Hearings and Appeals. This process can be time consuming, and appeals decisions can be delayed for months or even years,” the lawyers wrote.

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Interview transcript

Terry Gerton The IRS Criminal Investigations Division just published your 2025 annual report, and there’s some really interesting statistics in here, including $10.6 billion in identified financial crimes. And that’s a big leap up from the 2024 numbers. What do you think is going on? What factors contributed to that increase?

Justin Campbell Well, IRS criminal investigation has approximately 3,000 employees. We hover around that number annually. The key difference this year that we’ve noticed is we brought in a large number of new special agents. So we brought, we graduated 14 different classes this year through our academy. That means those are agents that are hitting the field and opening up new cases and detecting fraud. That has a large impact on our measurables, such as fraud identified. I think that’s a big piece of it. The other piece of is there’s a lot of fraud out there and we are the best in the world at identifying it. And the folks we’re hiring are coming to us from all kinds of backgrounds, well suited for this kind of work in the finance field and legal field. And so when our agents do hit the ground from training, they are well equipped from their prior background as well as their training we give them at the academy to quickly identify that fraud.

Terry Gerton You mentioned a lot of fraud. One of the other numbers that jumps out at me is the seizure of 2.3 petabytes of digital data. So not only is fraud happening, but it sounds like a lot it is happening digitally. In addition to the extra agents, are there new tools that you’ve used or new methods that you have of detecting that fraud and indicting it?

Justin Campbell Well, what we’re learning is all law enforcement agencies are dealing with is, more and more, our society is becoming paperless. And so even on what we would consider more traditional fraud cases, more data is being pulled digitally as opposed to from filing cabinets. When I was an agent, we would plan to seize filing cabinets full of records. And nowadays, professionals, business professionals, third-party money launderers in some cases, others that are committing criminal violations, are really good at scanning evidence, right? And a lot of us do that, a lot of legitimate people do that. I do that in my own personal life. I try to keep as much digital records as possible. What the challenge that presents for us though is, as you saw, we have petabytes of data we seize now. And so when we do these enforcement operations, we do search warrants or search subpoenas for records. A lot of times they are digital in nature. One thing we’re doing is trying to lean into artificial intelligence, large language models to help us more quickly identify fraud and to be more efficient with it. One example of that is we modeled a program this year called our case viability model. And essentially what it does is it looks across the data from our case management system for the past decade plus and says, hey, what is the likelihood success on this case. And it uses large language model technology to give the decision makers some view into the likelihood of success on a given case based on the inputs. So yeah, we are using data or technology, I should say to our advantage. And we are also grappling with the increased use of digitized data by taxpayers on our investigations.

Terry Gerton In addition to your annual report, you’ve also just released your top 10 cases list. It’s the season for top 10 lists. But I was struck in relation to what you just described by a statement that says financial trails are the criminal’s downfall relating to your data comment there. When you think of the top 10 lists, are there one or two that really caught your attention?

Justin Campbell Yeah, there’s two of them in particular that really highlight our skill set. I’ll start with one that’s in the news right now, the Feeding Our Future Investigation based out of Minneapolis. That’s over $250 million in fraud. Our agents have been at the table since day one, along with the FBI and U.S. Postal Inspection Service identifying that fraud. We are very proud of the work that our agents have done on that case. It’s been going on for a number of years now, and it really highlights where our agents can impact program fraud in particular. Another case that I think really speaks to something that only CI can do effectively is large investigations involving financial institutions. This past year, TD Bank was subject to a $670 million investigation related to failure to maintain the anti-money laundering program, and they pleaded guilty, or agreed, I should say, to pay a record-breaking $1.8 billion in penalties associated with that case. That’s a very large, complex case that I think speaks to the work that CI can do. And then the last point I’ll make, a case that really gets my attention in the role I’m in now, and it should catch the attention of taxpayers because these types of cases compound and this is an unscrupulous return preparer. We had an individual by the name of Rafael Alvarez in the Bronx, New York, submitted false tax returns on behalf of his clients to the tune of $145 million in fraud. And that particular case was sentenced this year. Mr. Alvarez was sentenced to prison and he helped his company generate approximately $12 million in fraudulent proceeds over the duration of the fraud. So, you know, those kinds of cases really do have a big impact on taxpayers because that comes out of the treasury, it comes out of the taxes that they paid in, and it really gets our attention.

Terry Gerton I’m speaking with Justin Campbell. He’s the acting deputy chief of IRS Criminal Investigations. Well, speaking of tax fraud, I mean, this administration has made the uncovering of waste, fraud, and abuse one of its key tentpoles in policy and programs. Your report says you identified $4.5 billion in tax fraud in 2025. Are there trends that are driving that increase?

Justin Campbell I wouldn’t say a trend that we have detected that, we would say has caused an uptick in fraud. Look, fraud’s there. It’s always going to be there. As much as many of us are frustrated by that, we are very accustomed to it at the IRS. As I stated earlier, I think the uptick in-part is related to the number of agents that hit the ground running in fiscal year ’25. That enables us to identify fraud quicker. And I think there’s also the fact that the agents that we are hiring are really sophisticated. I’ve been really impressed with their backgrounds when they start. So we aren’t training someone with no background in finance, for example, or law. These are very sophisticated individuals that come on board with us. So I would attribute the uptick primarily to the agents onboarding in fiscal year ’25. I couldn’t necessarily point to a specific trend. Now, we all know that we’re seeing a lot of program fraud reference in the news. There’s been a number of program of fraud cases brought related to COVID, different COVID programs. That could be driving some of that up, but we haven’t necessarily detected what we would point to as a specific trend on a specific type of fraud.

Terry Gerton That helps clarify the background here. I want to shift gears just a little bit because your annual report also talks about some new partnerships initiatives that IRS Criminal Investigations is undertaking, both with global partners and with financial institutions. Can you tell us a little about how those partnerships work and how they impact the findings that your agents make.

Justin Campbell Yeah, one of the partnerships that we’re really proud of is, we call it CI First, and it’s a program with banks where we work closely with them to provide them feedback on their regulatory responsibility to report certain types of transactions. And we have found over the years and working with our partners at the financial institutions that they are seeking feedback. They want to comply with the law, but they also want to know how well they’re doing in certain areas. And so we have a specific effort called CI First that provides feedback to them to ensure that they’re getting the feedback they need, and it ensures we get a high quality product from the banks as a result of their contributions.

Terry Gerton And how does that help amplify your reach, your enforcement reach?

Justin Campbell When we get strong relationships with financial institutions, we get great results. I’ll give you an example. So as an agent, I had personal relationships with certain bankers after years of conducting financial investigations. And they knew I was an IRS special agent. And so when someone walks into their bank and one of their lobbies and says, hey, I have a six-figure treasury check, I want to cash, their spide-y senses went up, right? And they called me directly and said, hey, this doesn’t seem right. Can you look into this? We’re filing an SAR on this. This doesn’t seem right, so anyway, that’s the kind of example I think that I would point to, strong relationships result in better cooperation from the banks.

Terry Gerton You’ve described a pretty busy environment with your agents and the level of fraud. As you look towards 2026, are there any particular trends or areas that are on your radar for enforcement?

Justin Campbell Well, we want to focus heavily on tax gap efforts. What I mean by tax gap is at the IRS, we know that there’s a certain amount of taxes owed as opposed to what is actually paid. And so that difference is what we call the tax gap. And some percentage of that is criminal in nature. We of course would never investigate someone for an unintentional failure to report income, but when there’s intentional failure to report income and intentional filing of a fraudulent return, that’s when an IRS criminal investigation is absolutely going to get involved. And so one of our big efforts this year is to look at where we can impact the tax gap more effectively. We are looking at high income non-filing, particularly. We would really want to focus in on that, as well as a few other case program areas, I should say that we have noted in the past, require constant policing. Employment tax fraud is another great example of an area that is subject to fraud based on our experience and we’ll continue our efforts this year in policing employment tax fraud.

The post IRS CI posts a record year: $10.6 B in financial crimes uncovered and cyber seizures soaring first appeared on Federal News Network.

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Interview transcript:

Terry Gerton A couple of months ago, we covered your first report in this disaster assistance high-risk series where you looked at the federal response workforce. You’re back with report number two, looking at state and local response capabilities. Talk to us about the headlines.

Chris Currie The headline for this report is that the capabilities of state and local governments across the country vary drastically for a disaster or other type of event. You know, what we did is we actually look at data that the states prepare and provide to FEMA as part of their justification for federal preparedness grants. It’s meant to be a very, very honest self-assessment of capabilities. And for that reason, we actually don’t provide states individually, we sort of roll it up and wrap it up anonymously because some of that information, as you imagine, could be sensitive. We looked at states that have been involved in major disasters over the last two to three years, and some of these states are very experienced, large states, and even they vary in terms of their capabilities. There’s actually 32 capabilities that FEMA sets in the National Preparedness System that you want to achieve to be prepared to respond for a disaster or a large event. And states vary. Some of the areas, they were less than 10% prepared — met less than 10% of those capabilities — and others, they were much more. So the reason that’s important right now is to understand that if you were to change the support that FEMA and the federal government provide to states quickly, then they’re going to have capability gaps that are going to have to get filled.

Terry Gerton Let’s talk about some of the support that FEMA does provide. One of the ways that they support the states is through preparedness grants, and those help build local capacity. What did you find as you dug into the preparedness grants?

Chris Currie Those preparedness grants started after 9/11, and since 9/11, there’s been over $60 billion provided to states. It’s the main way that the federal government transfers funds to state and local governments to get them ready to handle something bad that could happen, not just a natural disaster, but it could be a terrorist attack. And those grants have built capabilities tremendously over the years. But those capabilities change over time, and we identify through real-world events and exercises the gaps that still need to be addressed. So I’ll give you a great example. After Hurricane Helene and after other disasters, housing for disaster survivors is always a perennial challenge. Housing is a capability area that is assessed and we want to build up through these preparedness grants. It’s an area that states, even very experienced disaster states, still fall short of in terms of their capabilities. And the federal government kind of comes in after a disaster and provides a lot of that support because states don’t. So if the federal governments not going to provide it, then someone else is going to have to provide it. And that’s going to be someone at the state or local level.

Terry Gerton Talk to me about the flexibility and the allocation framework for these grants. Is it meeting requirements? Does it seem to be focused on the places that have the greatest need?

Chris Currie There’s a couple different ways they’re given out. There’s a portion of the grants that are supposed to go towards certain national priorities, and FEMA sets those targets. So think about things like election security or other national priorities. But then a large part of the grant, they’re discretionary, and the states can use them and they’re supposed to use them in the areas where they assess they have gaps. And that’s the data I was talking about earlier that we provided. For example, certain states may have gaps in their ability to handle a mass casualty situation or may struggle to house disaster survivors because they don’t have a lot of housing stock or rental. So those are things they’re supposed to identify and then target those grants towards those specific areas, which makes sense. You want to close your gaps so you’re ready to go when something happens.

Terry Gerton FEMA also provides a great deal of training and technical assistance. How effective has that been in helping states be ready?

Chris Currie This is, I think, one of the biggest success stories since Hurricane Katrina. If you remember Hurricane Katrina, the issue was the role of various levels of government was not clear, and thus, nobody stepped up and was proactive in responding to that event. And people lost their lives. Since that time, the National Preparedness System and FEMA leading that has been extremely effective through exercises, through training, through just regional relationships in taking care of a lot of those problems. So today we are way more proactive and responsive to disasters than we were 20 years ago in Hurricane Katrina. So that’s a huge success story. Having said that, a disaster is a disaster. There’s always going to be things that happen that you don’t expect. And there’s areas where states still have major gaps and require resources and people to address those. And the federal government comes in fills a lot of those gaps. Here’s a great example. Hurricane Helene happened and devastated a very remote part of our country in places like rural Tennessee and North Carolina and Virginia. States and localities don’t have the search and rescue assets for such a large swath of that kind of terrain. Federal government provided a lot of that. They provided a lot of the air support, the land support, the temporary bridges — Army Corps of Engineers. You know, the federal government really kicks in when something’s too big for a state or locality to handle.

Terry Gerton I’m speaking with Chris Currie. He’s director, Homeland Security and Justice at GAO. So Chris, all of this begs the question. This administration has been very clear that it wants states and localities to pick up more of the disaster response mission and that it wants a much smaller FEMA. Given what you found in your first study about the federal response workforce and the impacts of downsizing there, and now the variability in state and local readiness, what are the implications for national disaster response?

Chris Currie I want to make one thing really clear, because all I know is what we know now and the data that we’ve looked at. And I want it to be clear that nothing has changed in terms of FEMA’s responsibilities today. There’s been a lot of talk about it. There’s the president’s council that studied it. But there has been no change so far. So FEMA is still responsible for what it was responsible for two years ago. They have lost some staff. We looked at that in our first report, as you mentioned. They have lost about 1,000 staff, and maybe a little bit more than that, at this point, but they haven’t been cut drastically or cut in half as has been discussed. So they still have the same responsibilities and they’re still performing the same functions on disasters throughout the country, even though last year we didn’t have a huge land-falling hurricane. So what’s important about that is that everybody’s waiting to hear what the next steps are going to be and what’s going to happen to FEMA. One of the things we wanted to do in this report is we wanted to provide a comprehensive picture of preparedness to show what’s going to be necessary if that FEMA support is pulled back or FEMA is made smaller. And the bottom line is that states and localities are going to have to do more. However, it’s going to be critical that they have the time to prepare for that. For example, a lot of the assistance that’s provided to individual survivors, like cash payments and housing, that comes from the federal government. It does not come from the state or local government. So if FEMA is not going to be providing that, the state of the locality is going to have to fill that need. And that requires a lot of money and a lot preparation and planning that you can’t just turn on in a heartbeat. You don’t want to start figuring out programs to help people after a disaster happens.

Terry Gerton You bring up a good point on that time to prepare. As you did the survey, you talked to lots of state and local response officials. What did they tell you, beyond time to prepare, that they were going to need to be effective?

Chris Currie Very simple: Just tell us what we need to do. Tell us what were going to expect from you, the federal government. Nobody knows right now. The FEMA Council has not finished its work. There has been reform legislation introduced in the House and in the Senate, but nothing has passed yet. So the key message is, tell us what the roles and responsibilities are going to be so we know what to prepare for, so we don’t get caught flat-footed in the case of something really bad happening. One of my fears is that last year, like I said, we didn’t have a large land-falling hurricane. It was the first year in a long time we did not. We did not have a catastrophic disaster, other than Los Angeles fires early in the year. So my fear is that folks are going to look at last year and say, hey, things have gone pretty well. We don’t need to be thinking about it. And that is an absolute mistake. Because we’ve seen in years like 2017, 2018, 2024 — my fear is we’re going to have another situation this year or next with multiple concurrent disasters, and we’re just not going to the resources to deal with them.

Terry Gerton So what will you be watching for in the next few months to see if Congress and the federal government and the states have taken your recommendations on board?

Chris Currie Well, when the FEMA Council report comes out, I would like to see, in whatever the execution is for FEMA reform or the changes in how the system works now, an understanding of how this needs to be rolled out so states and localities can prepare and have as clear roles and responsibilities as possible. We’d also like to see them address many of the problems that we’ve pointed out. And to be clear, we’ve pointed out a number of issues with FEMA, particularly in the frustrating recovery phase. I want to see that they’re making sure that we don’t break what’s not broken and we fix the issues that are broken. And there are a number those things.

The post Readiness gaps may leave communities vulnerable when the next disaster strikes first appeared on Federal News Network.

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The 8(a) small business contracting program is coming under the microscope of its biggest user.

The Defense Department is joining a growing list of agencies auditing the use of sole source contracts through the 8(a) program.

Experts warn that DoD’s decision to launch this new audit signals that this 40-year-old small business development program is teetering further on the edge.

“It’s not a death knell, but it’s absolutely going to leave a mark. It’s absolutely going to hinder our ability to bring some of that new technology, that new manufacturing capability to the federal marketplace. That’s probably my bigger concern,” said Norm Abdallah, executive vice president at Hui Huliau, a Native Hawaiian-owned firm in the 8(a) program, in an interview with Federal News Network. “We’re behind in terms of the ability to manufacture here in the U.S., and have outsourced that beyond what one should in the defense of their own country, and so hindering the ability for us to help bring some of that to bear in the U.S. marketplace is probably the biggest concern.”

Abdallah said the 8(a) program is an avenue for companies to enter the market, obtain past performance experience in the federal sector and learn the ropes so DoD, and really every agency’s, ongoing distrust and scrutiny of the program is likely going to impact the government in bigger ways than expected.

Secretary Pete Hegseth posted a video on X on Friday explaining that the Pentagon is worried about two main things: The 8(a) program is a diversity, equity and inclusion (DEI) program, and it’s wrought with fraud.

We are taking a sledgehammer to the oldest DEI program in the federal government—the 8(a) program. pic.twitter.com/c9iH8gcqG7

— Secretary of War Pete Hegseth (@SecWar) January 16, 2026

“Providing these small businesses with opportunities is a laudable goal, but over the decades, as it happens, the 8(a) program has morphed into swamp code words for DEI, race-based contracting. And here’s the worst part, in many, many instances, these socially disadvantaged businesses, they don’t even do work. They take a 10%, 20%, sometimes 50% fee off the top, and then pass the contract off to a giant consulting firm, commonly known as beltway bandits. For decades, this program, 8(a) has been a breeding ground for fraud, and this administration is finally doing something about it,” Hegseth said. “Effective immediately, I’m ordering a line-by-line review of every small business sole source, 8(a) contract that is over $20 million, and we’ll look at everything smaller than that too. The Department of War has the biggest chunk of 8(a) spending by far, 10 times more than any other agency. So our cleanup, it’s going to be 10 times tougher.”

DoD’s audit will include two phases. Hegseth said if a contract doesn’t make meet the DoD’s goal of increasing lethality, they will terminate it.

“We have no room in our budget for wasteful DEI contracts that don’t help us win wars, period, full stop. Second, we’re doing away with these pass through schemes. We’ll make sure that every small business getting a contract is the one actually doing the work, and not just some shell company funneling your money to a giant consulting firm,” he said. “This approach is, of course, not meant to hurt small businesses, and that’s not the point. America is full of great, amazing small businesses. This is part of a larger effort to transform our acquisition ecosystem into one that makes sense for the threats we face in the 21st century.”

An email to DoD seeking more details about the audit and a timeline for the audit wasn’t returned.

Experts say Hegseth’s decision to review sole source contracts worth at least $20 million is directed at Native American, Alaskan Native, Hawaiian Native and other tribal companies. Congress raised the sole source threshold for these firms to $100 million from $22 million in 2020. Firms not belonging to one of these groups have a sole source threshold of $5.5 million for manufacturing and $8.5 million for non-manufacturing contracts. These non-tribal or native firms can receive a sole source contract up to $20 million with certain justifications and approvals.

While experts say Congress may not act to change the law, the ongoing audits by the Small Business Administration, the Treasury Department, the General Services Administration and now DoD are sending signals that, at least for sole source contracts, the program doesn’t work.

A former DoD acquisition executive, who requested anonymity because their current company still does business with DoD, said he believes federal small business goals are at risk across the board, and while they may not be affected this year, in two to four years, agencies will see a huge reduction in their industrial base.

The former DoD executive said the administration is sending an inconsistent message to the federal contracting community. The audits and the reduction of staff in small business offices are sending one message that small businesses aren’t important. But then the White House, and DoD particularly, are expressing the desire to attract new participants to the federal market, including non-traditional companies. The executive said these companies typically depend on small business offices and programs like 8(a) to help them get a foot in the door.

John Shoraka, a former associate administrator of government contracting and business development at SBA and now the co-founder and managing director of GovContractPros, an advisory services firm specializing in federal procurement, said DoD’s audit is part of a concerted effort by the administration to undermine the 8(a) program.

“I think if you look at the dollars in the 8(a) program, especially at DoD, some will point to the fact that they actually went up in 2025. But the challenge that we saw across a lot of our clients was that offer letters that have to go through the district office in order for a sole source award to happen were being held up and or never being processed. So we saw a slowdown in sole source awards,” he said. “I think given what we’ve seen with respect to the SBA audit, given what we’ve seen with respect to the number of 8(a)s being approved, in 2024 there was something like 500 plus 8(a)s approved. In 2025, I think the last count I saw was 66 approved. So given the audits, the slowdown in processing, I think contracting officers are looking over their shoulders. I think in the short term, given the current administration and the current congressional makeup, if you will, we will see a trend away from the 8(a) program.”

DoD’s decision to audit the 8(a) program comes after Treasury and SBA announced similar audits earlier this fall. SBA is looking at the entire program and companies had to submit data to the agency by Monday.

The SBA general counsel’s office is driving the audit, which is unusual because usually these things are either done by the inspector general or program office.

Fraud, DEI concerns unfounded

Shoraka said while the questions being asked by SBA, and now eventually DoD, are legitimate questions, the approach is causing some chaos.

“A lot of our clients reached out to their district office and the district office was actually unaware that those letters had originally gone out with respect to the audit, so there was a disconnect there. The field offices aren’t sure how the data is going to be used, or who’s going to use it, or what they’re looking at,” he said. “From my perspective, given the types of questions that were asked, I think it leads to the question, are there pass throughs happening? Because there was a lot of questions with respect to, who are your subcontractors, who are your vendors, et cetera. So the question is, and I think what SBA was looking at is, are there pass throughs and who’s really in control? Is the disadvantaged individual really owning, operating and benefiting from the 8(a) company? And I think those are legitimate questions. But again, there are legitimate processes and mechanisms to monitor that, including the annual review, which occurs every year on every single 8(a) company.”

The former DoD acquisition executive said while there are concerns about the use of sole source awards over $20 million to tribal companies, the allegations of fraud and the belief that the 8(a) program is a DEI program are unfounded. He said DoD should go to Congress and change the law to reduce the risk of large sole source contracts turning into pass throughs.

Experts agreed that while no program is perfect and there probably are some challenges, the 8(a) program is typically well overseen and maintained.

In fact, Abdallah, from Hui Huliau, said most 8(a) firms spend a lot of time meeting the compliance requirements. But he said it’s also a shared responsibility for oversight with the government.

“There are several folks that have responsibility in there. The first one is the contracting officer. In some cases, they’ve got to approve subcontracts. But more basically, with SBA, we go through a review every year where we have to submit our financials, what work did we do and what work happened?” he said. “They worry about the business mix, how much of your work was set aside versus not set aside? Quite honestly, what means you got the work by some means other than the 8(a) program, be that a subcontractor to another straight commercial, et cetera. So there are lots of hooks to watch it. Do they audit the books, per se, to check for percentages? That’s less common. But it’s part of your overall review.”

Shoraka added there are a significant number of regulations or requirements to mitigate the risk of pass throughs, and most rules allow for legitimate subcontracting.

One thing all of the experts pointed out is that the program is set up to help the 8(a) firm grow and learn, but they still have to do at least 51% of the work under services contracts and 15% of the work under construction contracts.

Shoraka said what is being lost in this entire discussion is there is more fraud in non-small business socio-economic programs across government than there are in the 8(a) and other small businesses initiatives.

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Interview transcript

Terry Gerton The industrial base and supply chains are getting a lot of attention these days, whether it’s from tariffs or recovery still from the pandemic. You’ve got a recent report out that suggests we need a better definition of the national defense and national security industrial base. What do you see as the problem with the current definition?

Michael O’Hanlon Hi, Terry. Well, thanks for the question. And my co-authors, Marta Wosinska and Mark Muro and Tom Wright, what we wanted to do was to look at areas where the country’s basic functioning and basic safety of its people could be threatened, even if the military or the military’s manufacturing base per se was not. So we define national security to be something that could threaten the basic functioning of the country or its territory or large numbers of its people in a physical way, real, you know, real acute danger and so we try to make that definition broader than just defense but also fairly tight we didn’t want everything to be labeled national security. For example, I don’t think it’s that important where my flat screen television is made that’s not national security. And I don’t even think it’s that important that we dominate every single industry because unless being denied access to foreign goods could quickly put Americans, large numbers of Americans, at acute risk and unless there is a single potentially hostile foreign supplier that dominates, I don’t think we have to use the term national security to deal with that concern. There may be other reasons to want to promote a certain industry or certain part of our economy, but not for national security. So we’re trying to broaden it, but within reason. And so that led us to a certain specific methodology.

Terry Gerton It sounds like you might say that things both like shipbuilding and pharmaceutical manufacturing would be included there.

Michael O’Hanlon Yeah, those are good examples. So for shipbuilding, I don’t really think that it matters that much where the United States gets its commercially traded goods from and what ships are carrying those goods and where they’re built. But in the event of a prolonged conflict or even deterrence of conflict, like right now, when we’re trying to build more ships than we currently own and the size and capability and capacity of the ship building base is one of the constraints on our ability to, let’s say, build more attack submarines, then yes, I do think the shipbuilding manufacturing sector should be considered part of the national security industrial base. Commercial shipbuilding can sort of be your backup, your latent capability that you can transform into military shipbuilding in the event of prolonged need. And therefore, even commercial shipbuilding can be encompassed within this definition of a national security industrial base. With pharmaceuticals, it sort of all depends, you know, in the sense that if the medications are made, we buy them from abroad and they’re crucial to keeping Americans alive, let’s say antibiotics, and they are made in Germany or Canada, I don’t have any concern that we’re going to be cut off in a crisis. But if large numbers are either made in China or depend on precursor chemicals made in China, then we could be in trouble. As my colleague, Marta Wosinska, who’s really an expert on this stuff — she really did the hard work for us and taught the rest of us, as well as, you know, authoring the key part of the paper on this subject — and China indeed is the source of a lot of generic medications because it’s good at making things at low cost. And actually, it produces a lot of the precursor chemicals. Often, the final medications are produced in India or someplace else, but China is still potentially the bottleneck if they chose to be. And some people might say, well, would China really ever cut off medications or chemicals for medications upon which millions of American lives depend? Let’s say, again, antibiotics being a good example. And I think in a war, they might. I mean, in a war, we bombed cities in World War II. In war, as the saying goes, all the rules are off. There are no rules in love and war. And if you’re really pitted in an existential struggle of two countries duking it out — heaven forbid we ever have that conflict with China — but of course, here we’re thinking about deterrence and being a credible way to deter the war as our goal. There’s no reason to think China would supply those medications just out of the goodness of its heart. So I think that’s a vulnerability. Maybe not for Excedrin or aspirin or things that, you know, are really medications of convenience. I mean, sure, they’re important to keeping people comfortable. But I’m talking more about medications that keep people alive. And on those, I don’t think we want too many foreign dependencies when it involves a country like China.

Terry Gerton Your paper talks about three specific criteria for identifying critical supply chains. Walk us through those and how they fit together.

Michael O’Hanlon Well, we say that, and this builds on what you and I have been discussing, are large numbers of lives potentially at risk? Is there a dependence on foreign supply where one potentially hostile foreign supplier in particular could choose to cut off supply? And then could we react quickly and find alternatives, substitutes, or build up our own manufacturing capacity within the relevant time scale to avoid serious harm? And if you can’t do that, and you do have a dependency on a potentially hostile foreign actor and a put-off or an interruption of the supply could lead to many thousands or even millions of Americans lives being at risk or the economy breaking down or the military being non-functional, then you’ve got a problem. So if those three criteria give you sort of the wrong answer on each point you need to take remedial action for your own manufacturing base and your alternative sources of supply right now rather than wait for the crisis

Terry Gerton I’m speaking with Michael O’Hanlon. He’s a senior fellow and director of research and foreign policy at the Brookings Institution. You looked at 16 critical infrastructure sectors, which emerged as perhaps most vulnerable.

Michael O’Hanlon Yeah, well, the Department of Homeland Security helped us out here, specifically the Cybersecurity and Infrastructure Security Agency, CISA, because they had created this framework of 16 areas of critical infrastructure, basically the same kind of criteria being used to develop that that we use. Where are their large numbers of lives potentially at risk from damage to that infrastructure? Where could the economy become nonfunctional or the military become nonfunctional, or the country be vulnerable? So we went through, and there are some areas, let me just give a couple examples, like for example, stadiums and gathering places. You know, no one really cares in terms of national security if, let’s say, you’ve got a dependence on China for huge flat-screen TVs for, you know, the Washington Commander Stadium, and then that’s cut off in a crisis. Well, heaven forbid, you know. We don’t have to see as many replays of our beloved commanders losing for a few months. I’m being a little facetious, but you see my point. The reason why that kind of a category is established is because terrorists could strike it and a lot of lives could be quickly lost and that’s why it’s critical infrastructure. But it’s not the supply chain, it’s not the manufacturing or the sourcing of key equipment that’s going to potentially be interrupted and therefore put the nation’s security at risk. But an example of where you could have that kind of a vulnerability beyond pharmaceuticals or military manufacturing that we’ve already discussed might be, let’s say, agriculture. If you really depend on foreign suppliers for fertilizer, insecticide, pesticide, etc., and then that was cut off, you might not have people starving the next day, but within a few months, fundamental disruption could occur to crop production here in the United States and you could have big shortages. Now maybe there are ways to substitute potatoes for corn or what have you, but you need to do some detailed analysis because if there are certain chemicals upon which we depend heavily on China’s manufacturing base and then if you can then determine that those chemicals, if cut off, the absence of them would produce a crisis in food production within months, that’s pretty serious. And that’s, by the way, an example where there’s nuance and shades of gray, and we don’t claim to have definitively answered that question in our study. We didn’t have the capacity to do that with the four of us. But we did say there do seem to be some chemicals, especially with some insecticides, pesticides, where we have a high dependence on China. And we probably need to do some more work to see, in a hypothetical scenario, what would result if China cut off those pesticides and insecticides due to a national security crisis. How fast could we build alternative supply? How could we do crop rotation or substitution so that we didn’t depend as much on those chemicals, etc.? So that’s an example of where there probably is some excessive dependency. Maybe not enormous, but worth looking at.

Terry Gerton Your report suggests some action steps. Can you walk us through those and who would be responsible for them?

Michael O’Hanlon Well I think you would do it a little bit sector by sector and so I just mentioned agriculture. I would think the Department of Agriculture would know how to assess, you know, these kinds of hypothetical disruptions to supply chains much better than I would, as a more traditional national security analyst, for example. The Pentagon already does its own assessments, and they’ve gotten much better at the assessments. I’m not sure they fixed all the problems, but they’ve done much better with the assessments in the last few years. Of course, we’ve had big national debates in recent years on semiconductor production, and I think that’s been led by a number of agencies, probably the National Science Foundation and probably the Department of Energy and places that have some expertise in this kind of manufacturing and this kind of high precision, you know, technology. And so with that one, and maybe National Institutes of Standards and Technology. So there might be three or four. And with health and pharmaceuticals, it might be HHS, you might be CDC, NIH. So for each one, you would designate a lead agency within the federal government and try to work through, starting with this broad framing approach that we suggested or something similar, sort of narrow down your realm of more detailed investigation and then try to look through and see where you’ve got these dependencies that really could put national security at some risk. And then you use a common — if you find something you’ve gotta fix, you use combination of subsidies and various inducements and maybe direct regulation to try to change that situation and create alternative sources of supply, either here in the United States or from friendly nations. And that’s sort of the toolkit.

Terry Gerton Is this all an administrative approach in the executive branch or would you need the legislative branch to get involved here too and create some statutory frameworks?

Michael O’Hanlon I think you certainly need resources from the legislative branch, so you need appropriations. And you also would want state and local governments to help out in thinking about certain kinds of either vulnerabilities to their manufacturing sector or places where they could contribute to helping create new capability. And by the way, we’re looking at supply chain interruption. There are two other big ways in which critical infrastructure could be threatened — at least two, but one would be cyber attack. Whether you got the technology from abroad or not, if a foreign actor is able to access the technology through the internet, as we know China has with its Volt Typhoon malware that it’s implanted in a lot of infrastructure, you got to worry about that vulnerability too. So states can look into where they might have those sorts of vulnerabilities and could improve their resilience. And then, so you’ve got cyber, and then you’ve supply chain, and then, you’ve the possibility of physical damage either from natural catastrophe or from terrorist attack, so let’s say a dam or a single production facility where we make a lot of our IV fluid, for example, has happened during one of the hurricanes in 2024 in a facility I think in North Carolina was rendered incapable of producing that and it accounted for more than half the country’s total supply. So states and localities and the private sector can look into where they might have vulnerabilities of one of those types. Again, not the main focus of our paper, but you want to look at this all together and try to develop a national strategy for greater resilience in supply chains as well as against catastrophe or attack.

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Interview transcript

Terry Gerton We’re talking about something that might be a little esoteric, but is certainly in the air these days, agency investigations that enforce various statutes. The Supreme Court has had some things to say about it recently, and you’ve recently written a paper. Before we dig into the details of your recommendations, just kind of give us an overview of how agencies are taking on administrative investigations.

Aram gavoor Fair, well, administrative investigations, which would be agency non-criminal information gathering procedures, are the bedrock of any forthcoming action that would be an enforcement action. And they’re actually one of the most unregulated spaces in federal government enforcement. There is no one statute that actually controls how those should be conducted. So it’s based on each agency having very general, broad authorities, then deciding how to apply those authorities on an individual basis. And then the target of those information collection processes, usually compulsory ones, doesn’t have a lot of leeway to indicate, oh, this is unfair, you’re going too far, etc.

Terry Gerton Your report says that these investigations often lack transparency and predictability, which is some of what you’ve just described. What are the biggest weaknesses, you mentioned variability as well, in how agencies handle these kinds of cases?

Aram gavoor So, the way that our federal government is set up, and the way Congress regulates the federal government as well as the courts, is that it’s premised on affirmative procedures, usually enunciated in statute or self-imposed by the agency, a level of transparency that’s reasonably high so that members of the regulated public know what’s happening and how their government is regulating upon them, and then a level of that transparency then flowing through to judicial review, usually in the federal court system, usually in the context of review under a statute called the Administrative Procedure Act, where the court determines whether the ultimate agency action is arbitrary and capricious. However, here, the challenge is that the federal government needs to be able to collect information, usually compulsorily, to be able to decide whether to enforce or in furtherance of an enforcement. And there’s very, very few guardrails to stop that. So agency investigations are necessary for our government to do all of the things that our Congress has charged our government to do and that our president, you know, through our election is enforcing and taking care that the laws are faithfully executed. So, that can be everything from an audit, a subpoena, a civil investigative demand, it can really range, it can range from a door knock of government investigators themselves, people with badges.

Terry Gerton Your report describes that these investigations are sometimes idiosyncratic. So without transparency, without predictability, without a standard approach, what does that mean for the people or the organizations that might be under investigation?

Aram gavoor So, what that means is that the target of an investigation has relatively few tools besides complying with the investigation or capitulation to participate in that compulsory information gathering process. There is a Supreme Court case recently that provided an ability of a target of agency investigation or action to be able to challenge it constitutionally. Let’s be pretty clear, 99.9% of targets of agency investigations do not have a direct constitutional challenge of the agency’s authority to be able to investigate or engage in the enforcement. So, what happens in practice is that there’s a lot of pressure on the investigated target. They typically need to hire a lawyer, depending on the size of the company and subject matter as well as the agency that’s doing the investigating, they may need some level of highly specialized legal services. So, for example, if it’s the SEC doing an investigation, that’s a totally different animal from the wage and hour division simply responding to a complaint made by a single employee.

Terry Gerton I’m speaking with Professor Aram Gavoor. He’s the Associate Dean for Academic Affairs and Associate Professor of Law at George Washington University. So your paper and the Administrative Conference of the United States have made some recommendations that agencies could take on that would improve this process. Walk us through what you suggest.

Aram gavoor So first, the Administrative Conference of the United States is this lovely agency, of which I’m actually now a public voting member, that exists to engage in meaningful, nonpartisan, rigorous studies of how to make your government and the executive branch function better. And the study that I was commissioned to deliver, which I did and resulted in a favorable recommendation was how to improve agency investigative procedures for the benefit of the government, but for all Americans as well. And the big themes that my report and the ultimate recommendation concluded was that there needs to be improvements in disclosure and transparency, better improvements with initial investigations, initiating them, how to decide and what process there is for that, the methods of those investigations, you know, the scope, the general nature of the investigation, the potential violations of statutes and regulations being investigated, etc., determining the appropriate course of action following an investigation and then lastly, the negotiation and settlement procedures in the event that an investigation leads the agency to conclude that there was a violation of law or statute within its authority.

Terry Gerton Could agencies just adopt these on their own, or do they require statutory direction to move forward?

Aram gavoor So the great news is that agencies have the ability to adopt these. And also, if we’re just looking at presidential actions, the Trump administration, certainly in the first term, you know, we don’t have a very large data set for the second term, was actually quite serious about providing more transparency for investigations, as well as compulsory information collections government-wide. And I would say that in this administration, with President Trump signing an executive order creating a greater degree of White House control over so-called independent agencies, the ability of the White House to cause behavioral change or agencies themselves to cause their own behavioral change through self-policing is 100% there. It does not require a statute for an agency to be more transparent, to restrain itself somewhat more, to have more rigor with its procedures, higher levels of approval before it reaches out.

Terry Gerton Would you have any concern that an increase in transparency might conflict with confidentiality or privacy protections?

Aram gavoor Well, I would say this. Transparency, as it is understood for the executive branch, has built-in protections for privacy and for confidentiality. Even if you look at the Freedom of Information Act, which is a sub-statute of the Administrative Procedure Act, there are a variety of ways in which, in the broader domain of transparency, there are distinct and significant and important protections to be able to restrain the disclosure of just those things, Terry. And what I would say with regard to all of this is there are going to be a number of sensitive investigations, maybe a civil investigation that could then turn into a criminal referral where it is not in the interest of public policy, it’s not in interest of the executive branch or the American people for even the existence of those and those compulsory information collections at a relatively early level to be publicly revealed. So, for example, if you’re a drug company, there’s a variety of circumstances under which it is strongly in the interest of the drug company for a FDA investigation not to be fully public, because just a hint that there could be something wrong can turn markets. And it’s really about a balance. At what point does public interest in knowing what the government is doing, you know, prevail? I think that’s the baseline that should exist and then what is the rights obviously of the investigated party because they have very important rights right? And it’s very easy if we’re talking about something, generally, but if the government is investigating you, Terry, you know, if you’re getting an IRS audit for tax year 2023, you probably want that to be private. The nature of that information contains large amounts of taxpayer secrecy information under 26 U.S. Code Section 60103. It’s a very good example of something that shouldn’t be public. At the same extent, let’s say that EPA is knocking on your door because you’re violating the lead paint rule, and there’s some kids getting sick because they’re eating paint chips, that might make more sense for it to be publicly known. And of course, Terry, I’m sure you comply with all laws all the time.

Terry Gerton I try my best. So let’s just imagine that all of the agencies have your paper and they’ve read it and they want to move forward on it. What would the first steps look like and how would you know that transparency is improving?

Aram gavoor So it’s a multi-step process. The good part is the report and the recommendation is essentially a recipe for how to bake the cake. And the agency has to decide how that recipe applies to their statute, their mission, their goals, because obviously the federal government’s very broad. So that exists. I’m also infrequently making myself available just for this public service, right? I’m happy to have any conversation with any agency, and I do frequently, on these types of questions. But the good evidence that you might be able to see is, for example, if there is all of a sudden a published enforcement manual, first one is created, second it is published, and third it is available to you so you can actually understand how the agency is doing what it does if it comes knocking on your door. That’s something that’s very simple. Or for you to understand based on public disclosures, how the agency decides how to investigate, what to investigate when to stop an investigation. So you can have some level of understanding besides a black box on the other side of what you’re dealing with.

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Interview transcript

Terry Gerton The Office of Inspector General there at the U.S. Postal Service issued a recent report where you flagged excess and underutilized space across USPS facilities. First of all, tell us what initiated the study.

Joshua Bartzen Well, I will say that in terms of, there’s been an overall focus by the federal government on making sure that space is utilized all throughout agencies throughout the federal government. And with the Postal Service having the facility footprint that it has, over 34,000 facilities across the country, varying in size from pretty small post offices to larger processing plants, we figured it was a great time to start a project like this.

Terry Gerton And so as you went through it, what did you uncover about how much space is sitting idle or underutilized?

Joshua Bartzen Terry, it’s a great question. And for us, the first step that we took was try to understand what data is out there to kind of assess this network. So we went into the network and we were pleased at first when we saw that the Postal Services National Facility Database had information on fields that related to excess space or underutilized space or vacant space. So we’re like, okay, we viewed that as a good sign. However, once we started looking at some of the data that was associated and located in that system, I’ll say from an auditor’s perspective, our ears started to perk up a little, our eyes opened up a little and we’re like, okay, there seems to be some reliability, some things, outliers that we’re looking at. So then the crux of our audit, then we started really flushing out and kind of started peeling the layers of the onion back on that data. And we found some pretty concerning reliability issues.

Terry Gerton Well, let’s talk about reliability issues then, especially as it relates to the data. What did you find?

Joshua Bartzen So in terms of the data, some of the things we looked at were, they had incorrect inputs, where some of formulas like in Excel, they weren’t working as properly. They were incorrectly coded, where some space was office space, but it was coded as vacant land or some of the data was inconsistent between some of this system modules. Then we also noted that in certain instances, the data wasn’t even in there. So one of the key findings we had was that over 63% of the properties have not had a kind of data reliability assessment performed, on record. So that was concerning to us because at some point, going out collecting this data and then checking out it periodically, just that lack of data was very concerning for us.

Terry Gerton Whose job is it to keep the data up to date?

Joshua Bartzen Terry, it’s a great question. And honestly, that was kind of one of the things we’re talking with Postal about. Obviously, the Postal Service is a very big organization. There’s different functions. We were dealing primarily with the facilities group, but also the retail group, the processing group, the delivery group, they all have input into this because they’re aware of the day-to-day operations. We kind of attributed it to facilities because they were the kind of, as far as from our view, they were the overseers of this entire facility database and what was in their postal service facilities. Folks may have a little different perspective on that, but from our perspective, that’s where we landed.

Terry Gerton What’s the impact to postal service management of not having good data about the usage of its various kinds of facilities?

Joshua Bartzen But Terry, great question. And we reported that the lack of visibility into this data really, it hinders your ability to drive financially beneficial alternatives, such as if you can repurpose the space, if you can rent it, if you dispose it. So all those types of things, we found that the data issues that we found really hindered anything going forward because at that point, it’s limiting your decision making. And we even highlighted a couple examples in the report in terms of the COVID test kits, when they came out, at some point, you’re trying to find facilities where there can be some space where you can store them and process them, and Postal Service eventually was able to do it. But the data wasn’t as readily available because they had to go ask and kind of re-engineer it going from step one. Similarly, lately, there’s been some increases in packages at certain locations, so much so that they’ve had to put exterior tents outside to kind of store the packages while they’re waiting to be processed. So we were saying, well, this is also another opportunity where if you knew where some available space was in nearby adjacent facilities that could help you out. The third part is there’s a revenue component to this too. And I think this aligns with a lot of the other things from the federal government that we discussed earlier is that, are there ways to either rent the space or dispose of it that can save you money? And in terms of that, we saw some instances where space was coded differently and that limited your ability to rent that, potentially rent that space. So again, financial operational impacts definitely arose from the lack of quality data.

Terry Gerton I’m speaking with Joshua Bartzen. He’s an audit director at the U.S. Postal Service Office of the Inspector General. So we talked a little bit about the finding around insufficient or inaccurate data. What was your second finding here?

Joshua Bartzen The second finding, the second part of that finding had to do with the overall broader strategy related to excess and underutilized space. And we were curious from the Postal Service perspective, did they have a strategy for reducing it or at least for managing it? Because the one reality we do know with the Postal Service is that the operational demands vary throughout the year. Like right now it’s holiday time, so we know that there’s a lot more packages going through the network, so you know you need more space. Do you need that space maybe in the middle of January? Maybe not. But that space can be used then for maybe something else. So the network and the volume variability is what they call it in terms of workflows, ebb and flow. Just being aware of it, having that data and that overall strategy can help you manage those kind of ebbs and flows throughout the year.

Terry Gerton You also noticed that the Postal Service hadn’t been meeting its congressional reporting requirements about facility space.

Joshua Bartzen That’s correct as well. So again, the GAO has placed federal real property management on its high risk list for over 20 years. And some of that continued work decades ago resulted in the passage of one of the federal real property laws that’s out there. We found the Postal Service hadn’t been complying with some of the reporting requirements of that. The Postal service said they weren’t aware of it. And again, they thought maybe it was a one-time reporting requirement, but again, with the move towards a federal government making more and more attention on this we thought it was, you know, us noting that compliance issue, and the Postal Service has agreed with that recommendation related to that compliance.

Terry Gerton You made a total of seven recommendations. How did the Postal Service respond across the board?

Joshua Bartzen I’ll say mixed, they agreed with two of them, and they disagreed with five. And in terms of the five that they disagreed with, most of those all pertain to the data or the strategy issues that we had discussed earlier. From our perspective, the Postal Service had some comments in there about who’s going to be responsible and who should be — and Terry, it’s funny that you mentioned who’s in charge of this — when the Post Service was talking about who is in charge this from an earlier point, Terry, there’s some difference of opinions. From our perspectives, though, At some point, we are auditors and we’re not consultants. So we’re going to tell you what to do, but we’re going to point out the issue. So we are less concerned with what entity within the Postal Service solves, corrects the issues that we brought up, but we noted for those five disagreed recommendations, we still think that they’re very important and they should be resolved.

Terry Gerton What do you think will happen now that you’ve raised awareness of this within the Postal Service? Are you seeing that they’re moving forward to take action, or what do you expect?

Joshua Bartzen We expect, at least from, I’ll go two-fold, just from the recommendation perspective, how those get handled is we have a resolution process with the Postal Service and we work to try to resolve those. So there’s some common agreement because I think collectively, between us and the Postal Service, we want these recommendations to be resolved. From a more global perspective, our report focusing on excess underutilized property is going to be one of many, I’m sure over these next couple of years, the federal focus is not going away, either by us, by GAO, by other federal stakeholders, so at some point, we’re envisioning that emphasis and that priority, the spotlight’s gonna stay. So I think it’s gonna have to be something that they’re gonna have to kind of make sure they’re managing. And to their credit, they’re creating a new data system to help manage some of these properties. Now with us, it’s becoming, hey, let’s make this a priority, make sure we’re doing this on an ongoing basis. Because again, that spotlight’s only gonna shine brighter.

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Interview transcript:

Terry Gerton I suspect that most people don’t know that Medicare funds graduate medical education. This is a topic you’ve looked into quite a bit at GAO. Give us an overview of this situation first.

Leslie Gordon Medicare is the biggest funder of graduate medical education. There are a number of federal programs that fund graduate medical education, but Medicare is the primary funder, funding about $22 billion in 2023. We’ve been looking at it over a course of years, because that’s a chunk of change to look at and understand if it’s being effective. Over the course of our work in 2017, 2018, we’ve noticed that there’s a misalignment; there’s an unevenness in how medical residency is distributed across the country and where those graduate medical education dollars go.

Terry Gerton How’s it supposed to work?

Leslie Gordon Well, the impetus behind funding for graduate medical education is to ensure we have a well-trained workforce. And indeed, it should be distributed across the country so that people have access to services. And Medicare cares about having trained providers to care for all the Medicare beneficiaries across the country.

Terry Gerton So the Consolidated Appropriations Act of 2021, if we can take our minds back that far, put in some provisions maybe to try to address this misallocation of graduate medical education, and you’ve just published a report on that. Tell us about what you found in terms of the first three years of this program.

Leslie Gordon Our report is an interim report. The Consolidated Appropriations Act of ’21 funded 1,000 new residency positions. That’s in a framework of over 163,000 medical residents. So it’s not a lot of positions, but it’s designed to alleviate situations where hospitals would like to expand, or smaller hospitals would like to open new medical residency programs, and to direct some attention to underserved communities.

Terry Gerton And as you looked at the distribution of those thousand positions, what did you find?

Leslie Gordon We found that awarded hospitals were very similar to those that applied who were not awarded. So we did a comparison to look at, were there any biases in how these positions were being distributed when CMS was distributing them? Or, did they follow the rules and the categories set out in the CAA? And generally, the awardees and those that were not awarded were similar in nature. There was an effort and an impetus to focus on underserved areas, particularly rural areas, as we noted earlier. And while there wasn’t a redistribution of a majority of positions going to rural areas, there was an emphasis and a success in funding the rural hospitals that applied. Ten rural hospitals applied, nine were awarded. That’s different from about 50% of urban hospitals that applied that were awarded.

Terry Gerton Sounds like this really didn’t get to the crux of putting more residents in urban hospitals.

Leslie Gordon It didn’t put more residents necessarily in urban hospitals. It put more residents everywhere, let me say that. It emphasized and allowed for more residency positions and programs in rural and underserved areas. But with a small portion of residencies that were being awarded, it’s a big pile to redistribute and only have a thousand pieces with which to do that.

Terry Gerton I’m speaking with Leslie Gordon. She’s director for Medicare at GAO. Are there particular issues that the smaller or rural hospitals faced in terms of applying for this program or really making the best use of the resources that could potentially be available?

Leslie Gordon In the course of our work, we talked to representatives from hospitals in all kinds of areas, including rural hospitals. We talked to some hospitals and we talked to hospital associations. We heard that CMS’s use of the health professional shortage area as the primary criterion for distributing and allocating prioritization of who would be awarded got in the way for some smaller communities and those that might be training in rural areas or serving rural residents that traveled out of their local area to seek care. The way in which it didn’t quite land for rural areas is that the HPSA score is based on a population-to-provider ratio. And if you add one new doctor to population of a thousand people, that can really change the score a lot, as opposed to adding one new doctor to a population of 200,000 people. In that way, it wasn’t quite aligned with the goal of focusing on rural areas.

Terry Gerton And so, are there changes that CMS could make to this distribution model in the last couple of years of this program to help address those shortcomings?

Leslie Gordon We provided this feedback and other feedback to CMS as a part of the course of our work. They have two more rounds to distribute. And one of the things we also learned about is that hospitals needed other funding to make good use of these additional spots, these additional residency spots. I think being more aware of upfront costs, the need to maintain accreditation, and some of the challenges that we highlight in our report will help CMS, perhaps, and those who apply.

Terry Gerton If CMS does adjust the criteria or support, are there metrics that they should track to make sure that the changes are working?

Leslie Gordon CMS is tracking the metrics that were set out in the Consolidated Appropriations Act, and we will be looking at and reporting again in 2027.

Terry Gerton So when you think about this over the next couple of years, are there things that Congress, or educators, or other folks should watch to gauge whether or not these new slots are meeting workforce goals? Are they helping advance the accreditation or the certification of young medical students?

Leslie Gordon I think the experience of awarding these positions helps highlight that it’s not just funding that will solve the problem in terms of distribution of medical residency. There’s a support infrastructure that needs to be there in terms staffing, in terms equipment, in terms considering the types of experiences that medical residents need to have to be fully trained. So we cover all these things in our report and I think that this experience with the allocation of the thousand positions helps highlight all the infrastructure that’s needed to support medical residency training.

Terry Gerton Are there companion programs designed to address those infrastructure shortcomings?

Leslie Gordon The federal government actually has 72 programs. Yes, there’s a lot of programs and there are 72 health care workforce programs. And we have open recommendations from our prior work that HHS needs to examine the gaps in the workforce and take action to address those gaps and needs to communicate around them. We have other open recommendations that they don’t have the information necessary to identify and evaluate the cost effectiveness of those 72 programs. So we do have open work, not directly related to this report, but we have open recommendations that focus in on the need to have better information and truly evaluate the effectiveness of all of the Work First programs in a comprehensive way.

Terry Gerton And do you have a sense that CMS and HHS are taking on that task to sort of harmonize all of these programs so that they make sense and they are optimized for best outcomes?

Leslie Gordon They are making progress on our recommendations and we will continue to follow up to see how they progress.

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Interview transcript:

 

Terry Gerton Your office has recently published the results of your audit on the homeless screening clinical reminder process in the Veterans Health Administration. Let’s start by having you explain what that process is and how it’s supposed to work, and what difference it makes for veterans who are perhaps experiencing housing instability.

Steve Bracci First, I do want to acknowledge that VA has prioritized ending veteran homelessness. There are several programs to help veterans who are homeless or at risk of becoming homeless. The homeless screening clinical reminder process really is an outreach effort. During health care visits, the screening tool, which is a series of questions, is used as a proactive way for VA to identify and help veterans who are either homeless or concerned about their housing stability. And this is really important because veterans may be unaware of the programs and assistance VA has to offer, or they might be reluctant to ask for help. So the screening tool prompts clinical staff to ask veterans if they have any housing concerns that they want help with. This then allows the clinician to make a referral to a social worker who can then connect with the veteran to discuss options and provide them with the assistance they need. This is, again, really important because it can have a major impact on veterans’ housing stability and their overall health and wellbeing.

Terry Gerton And VHA has established a target timeframe for that follow-up, right? Will you walk us through that?

Steve Bracci When a veteran says they want help, they are supposed to acknowledge that and act on it within seven days, but the goal is to actually resolve and have a conversation with the veteran within 30 days. But of course they recognize that it’s important to do it as quickly as possible.

Terry Gerton And so I guess the big finding, as you did your audit, was that in cases where the medical centers used both VistA and the Oracle Health System, almost 61% of veterans didn’t receive appropriate follow-up. What exactly is going wrong there?

Steve Bracci First, I want to clarify the 61%. That only refers to the veterans we were able to review at the VistA sites. The issues we saw at the Oracle sites were more focused on the lack of reliable data, which prevented our team and actually prevents VA from being able to view veterans’ cases and make sure that they’re being followed up on. So the 61% does refer to the VistA site. I just wanted to make that clear. But to answer your question about what went wrong, there were two key breakdowns that we saw in the process. First, the staff that screened the veterans, the clinicians, did not always refer veterans to social workers. Facilities have different ways of doing this and the processes varied across the sites we reviewed. For example, some facilities do a formal referral through the electronic health record using the consult process, while others use more informal methods, like sending an instant message to social workers. That’s an example. But we did find instances where these referrals just weren’t made. And as a result, no one reached out to the veterans to provide them with the assistance they needed. So that was the first part. The second part is the staff who received the referrals didn’t always follow their local procedures for conducting outreach with respect to how they tried to reach the veterans or how many attempts they made to reach the veterans. The intent of a follow-up is for social workers to have an actual interaction with the veteran and to have a conversation, identify their needs, and then they can provide the appropriate intervention. But we found instances where there was no interaction at all and it was just a letter was sent, or an email. So there was no way to ensure that the veterans’ needs were actually being met.

Terry Gerton Homeless veterans can be amongst some of the toughest folks to actually contact. They may not have a reliable mailing address. They may have a predictable phone number. What are the contact mechanisms that the referral team is supposed to use to reach them?

Steve Bracci Whatever method possible. They try to reach them using a telephone number. They try email. They try text messages. I think that’s not something we really touched on too much in our report, but it does show the importance of trying multiple times to reach a veteran before closing out that referral.

Terry Gerton I’m speaking with Steve Bracci. He is a deputy assistant inspector general for the Office of Audits and Evaluations at the Department of Veterans Affairs. So you mentioned the 61% with VistA cases, but you also said with the Oracle Health System, they have unreliable data. I’m interested — it seems like two different IT systems, but I’m presuming they have sort of the same SOPs across the network, regardless of what IT system they’re using. What makes the difference in terms of reliable follow-up reports, or root causes?

Steve Bracci I think it’s just a matter of how reliable that follow-up report is. We found with the VistA sites that the report was accurate as far as identifying the actual veterans who screened positive and wanted help. It was the actual follow-up part of that that was missing, whether or not the veteran had actually been reached and whether or not the follow-up had been completed. So that was the piece that was missing with the VistA sites. With the Oracle sites, we just found that it wasn’t accurate at all. The actual report was somewhat unusable with identifying whether or not veterans had actually screened positive and then any sort of follow-up had been done. So, that was a distinction there.

Terry Gerton So you’ve got really two fundamentally different, systemic problems. Talk us through your recommendations. How do you want VA to tackle this issue?

Steve Bracci That’s a challenge for VA is when you have two systems — anytime you have IT systems and there need to be updates, that is a challenge. I think it’s just a matter of doing what they need to do to make sure that the systems are accurately capturing the data and reporting the veterans who need help so that that follow-up can be taken.

Terry Gerton How did VA respond to these recommendations, and who’s responsible for fixing the problem?

Steve Bracci I do want to acknowledge that VA concurred with our recommendations and they developed a responsive action plan for each one. So that’s important. Carrying out the action plans will require significant effort because not only are we dealing with two different systems, but we’re dealing with many VA medical facilities and each facility can do things a little bit differently. So identifying what works and taking steps to standardize that process across the system will take some effort. So that’s an important piece. Like I said, the recommendation about ensuring reliable reports could require additional coordination because we are dealing with VistA sites and Oracle sites, and it will require significant communication and collaboration across program offices and VA stakeholders to get the reports where they need to be. So ultimately responsible, you know, I mean the VA secretary is ultimately responsible for everything within VA. But you have many different program offices that are relevant in this case, and you have many different VA leaders also.

Terry Gerton Does VA have, say, a task force lead for this project?

Steve Bracci Not that I’m aware of.

Terry Gerton Let’s assume that they figure out how they’re going to orchestrate all of those different pieces that need to respond to this. What do you want veterans to know about how this might change their interaction or their service when they’re screened for homelessness or housing insecurity?

Steve Bracci I want veterans to know that they can expect to see improvements to the process. That’s why the OIG is so important: Our oversight focuses on topics and programs and services that are important to veterans. Our team does a really good job. When we conduct an audit, our team does really good job communicating with the different program offices and with VA leadership throughout the project. So when our report is issued, it doesn’t come as a surprise. So that communication, I think, is really important and it gives VA the opportunity to start making improvements and corrective actions immediately. And we’ve found that that is the case, that they take those meetings and they take our findings and our recommendations seriously. So I want veterans to know that. And, you know, I think VA as part of their response to our report, they have planned corrective actions that should be implemented by August of 2026. So if they follow through and they take action and they complete those plans, then veterans will see improvements to this process.

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The Department of Homeland Security’s inconsistent hiring practices present major challenges at a time when DHS is surging recruitment across its law enforcement components, according to the department’s watchdog.

The DHS inspector general, in an annual report on top management and performance challenges, flagged “fragmented law enforcement hiring” as one of the department’s top three issues.

The IG warns that those longstanding issues have been amplified by a recent influx of funding from the One Big Beautiful Bill Act passed last year. Immigration and Customs Enforcement, Customs and Border Protection, and the Secret Service have all embarked on major hiring initiatives over the past year, backed by billions of dollars in funding.

“There is overlapping, competitive, law enforcement hiring among ICE, CBP, and USSS,” the report warns. “These competing interests can undermine the hiring process when conducted without departmentwide planning. Law enforcement hiring will endure additional stresses in the coming years due to the OBBBA, which funds an increase in departmental law enforcement personnel.”

DHS recruiting is “further complicated by inconsistent vetting requirements and application processes” across law enforcement agencies, according to the report.

“These inconsistencies make it difficult to implement a more centralized, efficient hiring process, resulting in duplication of effort, higher costs, and slower onboarding across the department,” the IG states.

The report comes as the Trump administration touts ICE’s hiring of 12,000 new employees in less than a year. However, the vetting and training of ICE officers has come under increasing scrutiny amid the rapid hiring blitz.

Cyber and AI hiring

The IG report also highlights challenges with DHS’s hiring of cybersecurity, IT and artificial intelligence specialists. For instance, DHS’s Office of Intelligence and Analysis and the Coast Guard, respectively, face administrative challenges in recruiting personnel with AI-related skillsets, according to the IG.

Those types of challenges could delay key DHS AI projects, the report states.

“These challenges are magnified by inconsistent hiring practices across components, pay disparities with the private sector, and complex clearance requirements,” it continues.

Meanwhile, DHS’s Cyber Talent Management System has not met its original goal to help recruit thousands of cyber experts. Hiring using CTMS has reached just several hundred staff since the system was launched in 2021.

“Although there has been some success using CTMS, the department continuously improves it in partnership with hiring managers to make it a more effective tool,” the IG report states.

Furthermore, the Cybersecurity and Infrastructure Security Agency last year terminated many probationary staffers who were part of CTMS, further shaking confidence in the novel talent system.

Still, the IG report recommends DHS deepen centralized hiring efforts like CTMS to address its tech talent gaps.

“These centralized hiring efforts are a step in the right direction,” the report states. “However, it is unclear that these hiring efforts are sufficient to meet the hiring surges required by the OBBBA or keep pace with evolving Department needs as AI and machine learning are integrated into all operations. Since previous hiring surges did not achieve intended outcomes, DHS should pivot to more successful recruitment methods.”

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When Congress authorized over $5 trillion in pandemic-era relief programs, and directed agencies to prioritize speed above all else, fraudsters cashed in with bogus claims.

But data from these pandemic-era relief programs is now being used to train artificial intelligence-powered tools meant to detect fraud before payments go out.

The Pandemic Response Accountability Committee has developed an AI-enabled “fraud prevention engine,” trained on over 5 million applications for pandemic-era relief programs, that can review 20,000 applications for federal funds per second, and can flag anomalies in the data before payment.

The PRAC’s executive director, Ken Dieffenbach, told members of the House Oversight and Government Reform Committee on Tuesday that, had the fraud prevention engine been available at the onset of the pandemic, it would have flagged “at least tens of billions of dollars” in fraudulent claims.

Dieffenbach said that the PRAC’s data analytics capabilities can serve as an “early warning system” when organized, transnational criminals target federal benefits programs. He said the PRAC is working with agency inspectors general on ways to prevent fraud in programs funded by the One Big Beautiful Bill Act, as well as track fraudsters targeting multiple agencies.

“Fraudsters rarely target just one government program. They exploit vulnerabilities wherever they exist,” Dieffenbach said.

The PRAC’s analytics systems have recovered over $500 million in taxpayer funds. Created at the onset of the COVID-19 pandemic, the PRAC oversaw over $5 trillion in relief spending.  It was scheduled to disband last year, but the One Big Beautiful Bill Act reauthorized the PRAC through 2034.

Government Operations Subcommittee Chairman Pete Sessions (R-Texas) said the PRAC has developed data analytics capabilities that can comb through billions of records, and that these tools need a “permanent” home once the PRAC disbands.

“A permanent solution that maintains the analytic capacities and capabilities that have been built over the past six years is necessary and needed. Its database is billions of records deep, and it has begun to pay for itself,” Sessions said.

In one pandemic fraud case, the PRAC identified a scheme where 100 applicants filed 450 applications across 24 states, and obtained $2.6 million in pandemic loans. Dieffenbach said there are tens of thousands of cases like it.

“This is but one example where the proactive use of data and technology could have prevented or aided in the early detection of a scheme, mitigated the need for a resource-intensive investigation and prosecution, and helped ensure taxpayer dollars went to the intended recipients and not the fraudsters,” Dieffenbach said.

In 2024, the Government Accountability Office estimated that the federal government loses $233 to $521 billion in fraud every year.

Sterling Thomas, GAO’s chief scientist, said AI tools are showing promise in flagging fraud, but he warned that “rapid deployment without thoughtful design has already led to unintended outcomes.”

“In data science, we often say garbage in, garbage out. Nowhere is that more true than with AI and machine learning. If we start trying to identify fraud and improper payments with flawed data, we’re going to get poor results,” Thomas said.

The Treasury Department often serves as the last line of defense against fraud, but it is giving agencies access to more of its data to flag potential fraud before issuing payments.

Under a March executive order, President Donald Trump directed the Treasury Department to share its own fraud prevention database, Do Not Pay, with other agencies to the “greatest extent permitted by law.”

Renata Miskell, the deputy assistant secretary for accounting policy and financial transparency at the Treasury Department’s Bureau of the Fiscal Service, told lawmakers that only 4% of federal programs could access all of Do Not Pay’s data in fiscal 2014. But by the end of this fiscal year, she said all federal programs are on track to fully utilize Do Not Pay.

“We want every program — and there’s thousands of federal programs —  to use Do Not Pay before making award and eligibility determinations,” Miskell said.

To make Do Not Pay a more effective tool against fraud, Miskell said Treasury is looking for the ability to “ping” other authoritative federal databases, such as the taxpayer identification numbers (TINs) issued by the IRS or Social Security numbers, before issuing a payment. Without those datasets, she said, Treasury is following a “trust but verify” approach to payments, doing some basic checks before federal funds go out.

“These data sources would dramatically improve eligibility determination and fraud prevention,” Miskell said.

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Interview transcript:

Terry Gerton Your office recently took a closer look at how EPA oversees state and local air monitoring schedules. I’m wondering, was there a specific concern or a trend that raised the alarm with you?

Paul Bergstrand We came across a study from 2021 that had some analysis showing that there was a difference in pollution levels when air monitors were off compared to when they were on, and this interests us in several ways. So just to be clear, it is completely normal for monitors to be off. It happens because monitors have a schedule where they’re designed to be off or where there is some kind of technical difficulty that they’re correcting. But what interested us is the fact that there was a difference between when they were on and off in terms of pollution levels. They should be the same. And so we wanted to take a closer look for ourselves to see how the EPA is overseeing this issue and if they were doing anything to fix it.

Terry Gerton You looked at thousands of monitoring sites. What did you discover about the trends once you dug into the data?

Paul Bergstrand We use satellite and model data as alternatives to data from regulatory air monitors to compare air quality when monitoring sites are off and when they’re on. And we found that for a fine particulate matter, which was the focus of our evaluation, it amounted to an average increase of 4% for monitors that operate on daily schedule and 9% for sites that operate in one every three days. And then separately, we found that 35.7% of intermittent modelers had worse air quality on average when they were offline.

Terry Gerton What difference does that make for public health?

Paul Bergstrand Well, importantly, the EPA sets standards for air quality, and if the standards aren’t met, then the area is in non-attainment. And that means that there can be harmful cardiovascular effects, reduce visibility, contribute to water acidification. And so poor data quality means that some areas that should be in non-attainment might not be designated correctly.

Terry Gerton There’s an interesting catch-22 here around transparency. The EPA publishes the monitoring schedule online, which we would think would be good, and people can know about that, but it creates some perverse incentives for the regulated agencies. Talk us through how that works.

Paul Bergstrand Yes, it has been their regular practice to publish those schedules. But I want to note that our analysis did not indicate any malicious behavior. But it is a concern that someone could take advantage of that scheduling to choose to conduct maintenance and shut down a monitor when they know there will be increased ambient air pollution. So it was a concern of ours and the EPA saw the concern and they took action actually during our work and decided not to publish the 2025 schedule. And they’ve agreed to continue not to publish the schedule.

Terry Gerton Is that the best solution here? Are there other factors that you might consider or recommend?

Paul Bergstrand Well, in addition to that, we’ve asked them to do some more data analysis during their quality control checks of state and local data. And this would mean using some of the techniques we had in our report that they could replicate and improve upon to come up with their own analysis to look for data that might be poor or missing.

Terry Gerton You also flag that local agencies may have incentives to under-report pollution. So again, we have some mixed messages kind of happening here. What drives those incentives?

Paul Bergstrand Again, we did not identify any malicious behavior, but as you say, there are incentives. If the EPA does designate a state as a non-attainment, there are expensive controls they have to put in place. So there is that incentive to try and hide the pollution, so to speak, so they can eliminate the data point basically from the data the EPA is collecting. But it also could be completely normal that the data points are missing, and that’s why we’re suggesting that the EPA do its own analysis.

Terry Gerton I’m speaking with Paul Bergstrand. He is Assistant Inspector General, Office of Special Review and Evaluation for the Environmental Protection Agency’s Office of the Inspector General. Does EPA have the capacity and the tools to strengthen the oversight in that way that you were just recommending?

Paul Bergstrand We think they do. They can use similar or improved statistical methods using these alternative satellite data and modeling to help the quality control checks. That’s the way.

Terry Gerton Are they using those tools now?

Paul Bergstrand I can’t speak to what they’re doing now, whether they are or not, but we know they’ve done it in the past. They’ve done in 2022, where they looked at missing air pollution data from 2002 to 2018.

Terry Gerton So you mentioned that EPA was taking action to address some of your concerns even as the evaluation was going on. Are there further recommendations that you’ve made that you hope the EPA takes action on?

Paul Bergstrand Yes, I mean, they’ve agreed to both of our recommendations. And that second recommendation is that they incorporate some of these analyses into really spot-checking. And what’s important is that they can improve upon what we did to identify pollution that’s under-reported.

Terry Gerton Are there things that communities should be doing themselves to maybe fill in gaps where the EPA isn’t monitoring or just get better data out to their citizens?

Paul Bergstrand I don’t, we didn’t look at that aspect in our report, but it’s a very interesting one. And I know there are maybe some grant programs or programs to get local air monitors, but in my experience, and I’m not speaking from the body of this report here, but in my experience, those are not used to do to collect regulatory data. So I’m quite sure on how to connect those dots from maybe your citizen-scientist using an air monitor to the data being used by the EPA.

Terry Gerton We’ve done a quick overview of your report and its findings and recommendations, but one of the things I want to point out to folks is that this information is really accessible. You’ve done an interesting job of making it available through what’s called a story map. Tell us about how EPA is using that kind of a tool to get this kind of information out.

Paul Bergstrand Yes, we wanted to be innovative in the way we’re portraying this complex status so it’s more accessible. And a story map is a web-friendly format where you can scroll at your leisure to look at dynamic information, graphics, maps. Just another way to present the information to the audience that we think has a lot of possibilities.

Terry Gerton So I don’t have to print off 100-page paper and put it under my pillow so I can absorb it while I sleep. This is very cool. Are you using it in other reports?

Paul Bergstrand We hope to be. This was our first one and it was sort of a pilot project. We are definitely going to be looking forward to more opportunities to use it.

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Interview transcript:

Joel Gurin The work that we’re doing now is part of an effort being led by the Robert Wood Johnson Foundation, which has become really concerned about the potential for some real disruptions to what you can think of as the public health data infrastructure. This is the data on all kinds of things, on disease rates, on social determinants of health, on demographic variables that’s really critical to understanding health in this country and working to improve it for all Americans. And we’ve seen a lot of changes over the last year that are very troubling. There are attempts to make some of this data unavailable to the public. Some major research studies have been discontinued. There’ve been deep cuts to the federal staff that are responsible for collecting some of this data. And just cuts to research funding, for example from the NIH overall. So it really adds up to a cross-cutting risk to the infrastructure of public health data that we’ve relied on for decades.

Terry Gerton Talk to us about why this data is so important, why it’s the government’s responsibility, maybe to keep it up to speed, and whether it’s a policy shift that’s driving this, or is it just individual actions?

Joel Gurin From what we can tell, it’s, I would say, a number of policy decisions that are all related to how the Trump administration sees the president’s priorities and how they want to implement those. So it’s not like we’ve seen a wholesale destruction of data, but we’ve see a lot of kinds of targeted changes. Anything related to DEI, to diversity issues, to looking at health inequity. That’s at risk. Any kinds of data related to environmental justice or climate justice — that’s at risk. Data related to the health of LGBTQ people, particularly trans individuals, that’s at risk. So we’re seeing these kinds of policy priorities of the administration playing out in how they relate to the collection of public health data. And this data is critical because government data, number one, some of these data collections are expensive to do and only the government can afford it. And also federal data has a kind of credibility, as a kind centralized source for information, that other studies don’t have. For example, the administration recently discontinued the USDA’s study of food insecurity, which is critical to tracking hunger in America. And it’s going to be especially important as SNAP benefits are cut back. There are other organizations and institutions that study hunger in America. The University of Michigan has a study, NORC has a study. But the federal study is the benchmark. And losing those benchmarks is what’s troubling.

Terry Gerton One of the recommendations, just to skip ahead, is that more states and localities and nonprofits collect this data if the federal government is not going to. But what does that mean for trust in the data? You mentioned that federal data is usually the gold standard. If we have to rely on a disperse group of interested organizations to collect it, what happens both to the reliability of the data and the trust in data?

Joel Gurin It’s a great question, and it’s one that we and a lot of other organizations are looking at now. One of the things that’s important to remember is that a lot of what we see as federal data actually begins with the states. It’s data that’s collected by the states and then fed up to federal agencies that then aggregate it, interpret it and so on. So one of questions people have now is, could we take some of that state data that already exists and collect it and aggregate it and study it in different ways, if the federal government is going to abdicate that role? There was some very interesting work during COVID, for example, when the Johns Hopkins Center, Bloomberg Center for Government Excellence, pulled together data from all over the country around COVID rates, at a time when the CDC was not really doing that effectively, and their website really became the go-to source. So we have seen places where it’s possible to pull state data together in ways that have a lot of credibility and a lot impact. Some of the issues are what do the states really need to make that data collection effective? So regardless of what the federal government does with their data, they need mandates from the federal government to collect it, or it won’t be collected. They need funding. About 80% of the CDC’s budget actually goes to state and local, and a lot of that is for data collection, so they need that funding stream to do the work. And they also need networks, which are starting to develop now, where they can sort of share expertise and share insights to make data work on a regional level.

Terry Gerton I’m speaking with Joel Gurin. He’s the president and founder of the Center for Open Data Enterprise. Well, Joel, then let’s back up a little bit and talk about the round table and the research that led into this paper. How did you do it and what were the key insights?

Joel Gurin So one of the things that our organization, Center for Open Data Enterprise, or CODE, does is we hold roundtables with experts who have different kinds of perspectives on data. And that’s what we did here with Robert Wood Johnson Foundation support. We pulled together a group of almost 80 experts in Washington last summer, and we led them through a very highly facilitated, orchestrated set of breakout discussions. We also did a survey in advance. We did some individual interviews with people. We do a lot of our own desk research. The result is a paper that we’ve just recently published on ensuring the future of essential health data for all Americans. You can find it on our website, odenterprise.org. That’s odenterpreise.org. If you go to our publications page and do the health section in the drop-down from publications, you’ll find it right there, along with a lot of other op-eds and things we publish related to it. Putting out this paper was really the result of pulling together a lot information from literally hundreds of pages of notes from those breakout discussions as well as our own research and as well is tracking everything that we could see in the news. But one of the things that I want to really emphasize, in addition to the analysis that we’ve done of what’s happening and what some of the solutions could be which is that’s a fairly lengthy paper and hopefully useful, we’ve also put together an online resource hub of what we think are the 70 or so most important public health data sets. And I want to really stress this because we think it’s actually a model for how to look at some of the issues affecting federal data in a lot of areas. We found that by working with these 80 or so experts and doing additional research and surveying them and talking to them, there’s a lot commonality and common agreement on what are the kinds of data that are really, really critical to public health and what are those sources. Once you know that, it becomes possible for advocates to argue for why we need to keep this data and how it needs to be applied. And it’s also possible to ask questions like, for this particular kind of data, could somebody other than the federal government collect it? And could we develop supplemental or even alternative sources? So we really feel that that kind of analysis, we hope, is a step forward in really figuring out how to address these issues in a practical way.

Terry Gerton That’s really helpful and also a great prototype for, as you say, data in other areas across the federal government that may or may not be getting the visibility that they used to get. What were the key recommendations that come out of the paper?

Joel Gurin Well, we had recommendations on a couple of different levels. We had recommendations to, as we talked about before, to really look at state and local governments as important sources of data. They are already, but could more be done with those? This includes, for example, not just government data collections the way it’s done now, but using community-based organizations to help collect data from the community in a way that ultimately serves communities. We’re also very interested in the potential for what are being called non-traditional data sources, like the analysis of social media data and other kinds of things that can give insights into health. But I think probably the single most important recommendations at the federal level are to continue funding for these critical data sources and to recognize how important they are and to really recognize the principle that there’s an obligation to understand health and improve health for all Americans, which means looking at data that you can disaggregate by demographic variables and so on. I want to say we have had some really positive signs, I think, from Congress, particularly on the overall issue of supporting health research. And when we talk about NIH research, remember some of that is really lab medical research, but a lot of it is research on public health, research on social factors, research on behavioral factors, all of this kind of critical work. And the president’s budget actually recommended a 40%  cut in NIH funding, which is draconian. The Senate Appropriations Committee over the summer said, we actually do not want to do that, and in fact, we want to increase the NIH budget by a small amount. So I think what we’re seeing is there’s a lot of support, bipartisan support in Congress, for protecting research funding that ultimately is the source of a lot of the data we need. Some of this is just because it’s a shared value, and some of it is because those research dollars go to research institutions in congressional districts that representatives and senators want to see continue to be funded. So I think that basic fear that a lot of us had a few months ago, that research was simply going to be defunded, I think, that may not happen. And I would hope that Congress continues both the funding and also support for not only some of this research funding, but agencies like the National Center for Health Statistics, or the Agency for Health Research and Quality, which have been under threat, to really recognize their importance and sustain them.

Terry Gerton One of the challenges we might face, even if Congress does appropriate back at the prior levels, is that much of the infrastructure has been reduced or eliminated, and that’s people and that’s ongoing projects. How long do you think it will take to kind of rebuild back up to the data collection level that we had before, if we do see appropriation levels back to what they were?

Joel Gurin I think that’s a really critical question. You know, early in the administration, 10,000 jobs at HHS were cut, about a quarter of those from the CDC. But there has been some pushback. There was an attempt during the shutdown to do massive layoffs in HHS and CDC. The courts ruled against that. So I’m hoping that we can prevent more of that kind of brain drain. It will take a while to restaff and really get everything up to speed, but we think it’s doable and we hope we can get on that path.

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Interview transcript

Terry Gerton You are the Acting Inspector General for the Special Inspector General for Afghan Reconstruction. That’s about to stand down, but tell us the origin story of the organization.

Gene Aloise Well, SIGAR was created around 2008, got started around 2009. We were created especially to look at Afghanistan. We’re the only IG created to look specifically at Afghanistan. Our legislation created us as an independent agency. We worked directly for the Congress and the administration. We’re not housed in any other federal agency, which made us very independent, which helped us do the work we did.

Terry Gerton Was there a specific gap or incident back in 2008 that prompted Congress to stand this up?

Gene Aloise Yes, Congress was getting concerned that there was so much money going into Afghanistan and they really didn’t have a special IG to look at it. They had other IGs going on, but they wanted a specific focus on Afghanistan.

Terry Gerton Over your nearly two decades, you’ve issued hundreds of audits and lessons learned reports. Are there any that stand out as significant and consequential, maybe the most consequential for U.S. Policy or operations?

Gene Aloise I think our final report summarizes all our work in the past 17 years. It lays out where the money was spent, how it was spent, what our audit work covered, what our investigations covered, and what our lessons learned report covers. It’s a very first-time-only comprehensive collaboration of all our work.

Terry Gerton As I read through it, one of the themes I took away was there were a lot of missing internal controls. Processes could have been organized and designed better from the beginning that would have prevented some waste. Could you give us some examples there?

Gene Aloise There are a lot of examples of missing controls. The problem with Afghanistan is we spent, and this is often said, too much money, too fast in a country that couldn’t absorb it. So there was, you know, a lack of agency control over the money going in there. We had too many people rotate too frequently to keep track of all the money. And so it was really easy — I use that term — for SIGAR to go in and find negative findings because of all the money that was going over and the lack of accountability for it.

Terry Gerton One of the things that really struck me was a description of sort of a misapprehension of the problem from the beginning, and it’s reflected in your name, Afghanistan Reconstruction, but we weren’t really reconstructing, we were constructing. What difference did that make in how the process played out?

Gene Aloise When you think about what we were trying to do, build a vibrant economy and democracy in a severely undeveloped country with high illiteracy rates, high poverty rates, it was really a Herculean task. And it wasn’t really reconstruction, as you mentioned, it was construction. We actually constructed the Ministry of Defense building, all the ministerial buildings over there we constructed. There was nothing there.

Terry Gerton We constructed institutions as well. How did that play out?

Gene Aloise Not well. I mean the government we created in Afghanistan, we being the United States and the donor countries, was basically a white collar criminal enterprise because of the corruption that was there. It was a good faith effort, but for many years we ignored, the United State and others, ignored the corruption. And by the time we created a government over there, it was endemic. Corruption was endemic.

Terry Gerton Did you notice in your final report that any of the previous reports and findings led to measurable change?

Gene Aloise Our reports led to about 30 legislative achievements, either specific legislation or amendments to legislation, to correct problems. We made over 1,500 recommendations to agencies. About 73% of them were implemented. We did change programs for the better. We did save money. About $4.6 billion we were able to save. So yeah, our reports had impact.

Terry Gerton Did you see that in real time or only in looking backwards?

Gene Aloise No, sometimes in real time. We stopped the purchase of UH-60 Blackhawk helicopters at a tune I think of $40 million, or there was infrastructure that was being built that we thought was not warranted. We stopped that. The report goes in just lists of a series of things we were able to stop.

Terry Gerton I’m speaking with Gene Alois. He’s the acting inspector general for the Special Inspector General for Afghanistan Reconstruction. Despite all of those accomplishments, the report also notes some systemic issues that were never fully resolved. What were the toughest problems to fix, and why did they persist?

Gene Aloise A lot of it dealt with agencies’ pushback to what we were trying to do. We were a very aggressive IG, probably the most aggressive IG in Washington, D.C., but a lot of people didn’t like that, that we were so aggressive. So sometimes we had a battle to get things done. We had a lot support on the Hill. We had, I think, 24 hearings over our time span, and we were able to get things done, but it wasn’t easy. For example, under the Biden administration, they delayed our work for over a year because they said in 2021 the troops left, your jurisdiction is over. But our jurisdiction was always follow the money. It was never tied to the troops. So that delayed our word for about a year.

Terry Gerton And how did you pick that back up then?

Gene Aloise Through a bipartisan congressional effort that got the administration to start cooperating with us.

Terry Gerton Well, speaking of following the money, your charter, I guess, sunsets in 2026, but there’s still money out there. Who will pick up the responsibility for tracking what’s left?

Gene Aloise For Afghanistan? We’re talking about the DOD IG and the State Department IG. We’ve transferred a lot of our material over to them. And they will pick up what’s left over there. But money has stopped. The Trump administration has stopped funding to Afghanistan.

Terry Gerton In this transition, how will you be able to protect the lessons learned? You’ve done a lot of reports about lessons learned. Where will those go?

Gene Aloise Hopefully, policymakers will look at our lessons learned reports and our other reports and use that to learn from, because if we go into Gaza and we go in Ukraine, they’re going to be facing the same challenges. I can guarantee you, as we sit here today, there are corrupt individuals, corrupt corporations, corrupt tribal leaders, ready to get whatever reconstruction money is going to go into those places. Look at SIGAR’s work. Look at our recommendations. Look at what we’ve discussed for 17 years. And it will give you what you need to do to prevent that.

Terry Gerton Do you think that there are specific legislative actions that would help prevent that in the future if we do create new contingency responses?

Gene Aloise Yeah, I think the best thing they could do is create another SIGAR-like organization because only an independent organization that is not feeling the pressure from an agency head or whatever to not report the facts is going to do what we were able to do in Afghanistan.

Terry Gerton What about on the front hand in terms of designing those contingency response missions? Are there particular lessons you wanted to put a pin in right now for people who are thinking about those?

Gene Aloise Here’s one, think about what you’re gonna do and if it really has any chance of success because what we saw in Afghanistan is really, did we ever have a chance for success in Afghanistan? I mean, the mission was so difficult to do. So be realistic about what you’re going to try to do in these countries that you’re going to pour lots of money in.

Terry Gerton Is that realistic assessment something that the government can do itself? Does it need outside red teamers to help it with? How do you really get a comprehensive realistic assessment?

Gene Aloise Plenty of smart people in the State Department, Defense Department, and other agencies that could sit down and lay out a strategy for wherever country they’re going into that yeah they can figure this out. You know, it’s not rocket science, it is a lot of common sense.

Terry Gerton Would you have a handover book for the next acting IG, for the next contingency IG?

Gene Aloise Yeah, once again, I’ll use our final report. Take a look at that. And it references all the other work we’ve done in the past. You couldn’t have a better plan than what we’ve laid out for the past 17 years or so.

Terry Gerton Well, now you’ve documented the lessons. Here’s hoping we learn them.

Gene Aloise Yes, I agree.

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Interview transcript:

 

Terry Gerton You have done some recent research that connects in very detailed ways the accuracy of census data to federal funding programs. Walk us through the high points and what’s at stake now as we look to 2030.

Sean Moulton Everyone knows that every 10 years we do a full census of the entire population here in the United States. And we’ve done it really since the founding of the country. But it’s not just an academic exercise just to figure out how many people are in each state or anything like that. We use that data in a very robust way. One of those ways is helping to guide our federal funding. What we’ve been looking into is, how much funding are we talking about that gets guided by the census? And what we found is 371 federal assistance programs that we can connect to census data in terms of guidance. And it gets guided in a number of ways. There’s some very simple ways where the census data can be, say, an on-off switch. The easiest example of this is funds maybe going to a rural area, or funds for an urban area. Urban-rural designation is entirely based on the number of people you have. You don’t have many people, population density is low, then you’re rural. That’s all there is to it. And so that census data getting that accurate can turn on or off money going to those types of areas. And there’s formulas where different pieces of census data go into an exact formula that figures out how much your area, your state, your county, your city or something like that might get. If you get the census data wrong, it could impact how much money’s coming to your area. A third area is a little bit more nebulous, but it’s definitely something we can track. Some programs accept applications and they can score and evaluate those applications on a variety of criteria, but they’re always transparent about it. And sometimes census data can come into play. Maybe the program is really geared and they want to help lower income areas or areas with historically disadvantaged communities. And so census data can be used to determine that, and your application might get extra points. And then the last way is for some of our loan programs, census data can even influence the interest rate that you might have to pay back. So it can affect how much money gets out and then how much you have to paid back. And these 371 programs, they accounted for $2.2 trillion in a single fiscal year, just one year.

Terry Gerton Was there anything about the 2020 Census or recent funding formulas that raised flags for you, that you want to make sure get addressed before we get to 2030?

Sean Moulton Every census, problems happen. It’s a huge endeavor, trying to count everyone in the country, at the same time, exactly where they are. We always have errors. But 2020 was one of the first years we did a lot more digital records. We were using what’s called administrative records to try and fill in some gaps from non-responses. And so we really need to address those. There are also a number of states that had statistically significant undercounts or overcounts, and those are particularly troubling. We need states and locations, especially in the areas that had previous undercounts, to make more of an effort in the run up to 2030 to make sure they get the count right.

Terry Gerton I’m speaking with Sean Moulton. He’s a senior policy analyst at the Project on Government Oversight. Let’s dig into those undercounts a little bit. Are there communities that are most vulnerable to being undercounted? And when they are undercounted, what is the impact?

Sean Moulton There are, and Census Bureau knows this and has made efforts over the years to do better outreach to what they call hard-to-count communities, or historically hard-to-count, communities. And these are lower income communities, because of the digital divide; these are rural communities; these are renters. Children are hard to count for some reason; even though the parents are filling out the forms, they might not include their children for some reason. Maybe they don’t understand it applies to everybody. Non-English speakers, not primary English speakers, sometimes they don’t understand the forms or understand the necessity to respond. So there’s a lot of different groups that are harder than the average citizen, we’ll say, to get those responses back from. This is where states and cities and counties can do a better job of reaching out and making sure their community members know the importance of the census, not just as a legal activity, but as something that helps the community and then responds.

Terry Gerton The census is supposed to count every single person, right? Citizens and non-citizens. We had the addition of a citizenship question in 2020. Certainly we’ve had a lot of focus under the Trump administration on citizenship. What impact do you think that’s going to have leading into the 2030 count?

Sean Moulton So in 2020, we had an attempt to add a citizenship question, and it went all the way to the Supreme Court and they tossed it out on a procedural issue. They said, it’s a question you can ask. It’s been in the census before, but they did it in the wrong way, their process was wrong, flawed. So we may be seeing another fight over that. The real problem with the citizenship question is there’s not much evidence that it’s going to give us anything of importance. More importantly, a lot of what we use the census for, it doesn’t matter if you’re a citizen. The funding for hospitals or healthcare or roads — the roads don’t care if you are a citizen and driving on them, or if you a non-citizen and driving them, and we need to repair the roads based on the wear and tear and how many people are there. The same for mass transit and other things. We’re funding for everyone. And so, if we try and narrow our ask to citizens, we’re going to get our allocations of funds wrong, and citizens will then be also penalized. They’ll have roads that aren’t being repaired fast enough and they’ll have problems getting into emergency rooms and what have you. Citizens will also be affected because they will encounter the problems that the low funding leads to: poor maintenance on the roads, longer wait times for their health care. And so even though they may think this is about citizens/non-citizens, everyone’s affected when the funding gets impacted.

Terry Gerton Do you have a sense that members of Congress understand this connection? I mean, at the core, one of their jobs is to bring home money to their districts. If the census count is accurate, the better their funding will be. And yet, do you think they really understand the importance of the accuracy here?

Sean Moulton I don’t. You know, it is pretty buried. We had to do a lot of research to figure out the extent of this. And I can tell you that just a few years ago, the Census Bureau used to do a report somewhat along these lines, and their number was much, much lower. It’s only been in recent years that we’ve kind of expanded our understanding to realize just how important the Census Bureau numbers are in terms of guiding federal funds.

Terry Gerton Are there steps that Congress or the Census Bureau should take now to improve accuracy coming into the 2030 census? I mean, five years seems like a long way off, but Census is already getting ready.

Sean Moulton  A lot of people don’t realize there’s a lot that happens in between those 10 years, but right now probably one of the biggest things would be to get ready to participate in what’s called LUCA, Local Update of Census Addresses. And this is a process that the Census Bureau runs in the run-up to every decennial census where they reach out and they try and get participation of local officials — county, city, state — to update the addresses they have. And an interesting fact is, if the Census Bureau doesn’t have your address, then it doesn’t matter if you fill out the form or not. You can’t be counted. The address comes before the household’s response. And so if somehow you’re living in a recently refurbished apartment over a garage and the post office doesn’t have that address officially on file as a new residence, then you’re not going to get counted. And so we really need to update those addresses and keep them as up-to-date as possible because it’s the first step to getting the responses back.

Terry Gerton Just to wrap up sort of on a more systematic note, is having this much federal funding dependent on the census the best way to go forward? Are there other funding formulas that we should use? Maybe even, wrong, it is the best source of data that we have.

Sean Moulton It is. Obviously, there’s other funding formulas that get used; 371 is not the majority of federal programs out there. But when you’re talking about trying to assist individuals and households, then the census data really can help us find those households and say, inside a state or inside a city, how much should they get? And we’re going to use data to help drive and allocate those rather than simply dividing it up into one-fiftieth and every state gets that amount. It doesn’t make any sense. If one state needs more, it should get more, and the census data, while we’ve had our problems, is still a very accurate number based on getting a lot of the money allocated. We get some things wrong and we’re always trying to improve that, but it’s still an incredibly useful tool for the federal government and for private individuals. Corporations use a lot of census data to figure out where they’re going to put their next grocery store or what have you. That’s because it has proven to be such a reliable tool to help guide those kinds of decisions.

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Interview transcript:

Terry Gerton You participated in an annual report from the American Statistical Association, their latest assessment, which describes this system as being at risk. We’ll deal with some of the specifics here, but let’s start at the top. How risky and why does it matter?

Nancy Potok Well, we’re talking really about 13 primary statistical agencies that are decentralized and embedded in different cabinet departments or agencies. We also have about 100 statistical offices or units that are small statistical areas across different agencies that aren’t designated as the principal agencies. But we focused on the 13 agencies. To give a couple of examples of what I’m talking about, the Census Bureau is a statistical agency in the Department of Commerce. So is the Bureau of Economic Analysis, which puts out GDP numbers, for example. The Bureau of Labor Statistics is one of the agencies. They’re in the Department of Labor. We’ve got the Energy Information Administration in the Energy Department. National Center for Health Statistics, which is in CDC, which is in HHS. I hope everyone understands the acronyms. So there’s 13 of them, and they’re in all different agencies — Transportation, Social Security, Statistics of Income in IRS, etc. And there is a chief statistician whose job, actually in the Paperwork Reduction Act, is to coordinate the system and to help the system come up with standards and quality standard operating procedures, what you should be doing in terms of confidentiality of data and privacy protection. That position resides in OMB, the chief statistician. And then there’s an interagency council on statistical policy — that is, all of the statistical officials that come together periodically to try to coordinate.

Terry Gerton I really appreciate the clear perspective there. And you participated in an annual report from the American Statistical Association, their latest assessment, which describes this system as being at risk. We’ll deal with some of the specifics here, but let’s start at the top. How risky and why does it matter?

Nancy Potok It’s very risky, and we’ll delve into the details of why it is, but it matters because these statistical agencies are what I would call essential infrastructure. They produce information that policymakers depend on, and when that information is not trusted or when there are holes in the system, that can really affect decision-making at the local, state and federal levels. In fact, sometimes local and state officials are much stronger advocates for federal statistical data than we’re seeing right now in Congress, where we need some champions. There are so many critical decisions that are made based on federal statistical data. I mean, for example, the Census everybody knows about — an apportionment of Congress, and that’s in the Constitution. But also, recently the head of the Federal Reserve was talking about his concern about Bureau of Labor Statistics information because it feeds right into their decisions on interest rights. So all across the board, there’s really a lot of key decisions that affect peoples’ lives that are based on this information. We want it to be accurate, high-quality, objective, not politicized and readily available to people to use, and people trust it and know that it is protected.

Terry Gerton The report documents a number of pressures on the system. The first one is staffing. It says that most of these agencies have lost 20% to 30% of their staff in the last year. How are you seeing that play out in operations, in data collection and reliability? How does it show up?

Nancy Potok It shows up in very scary ways. I’ll start with the most extreme example. I do have to say in fairness, some of these staffing reductions are just what I would call collateral damage of what we have seen across all agencies in all areas for staffing reduction. But I’ll start with the Department of Education. So the Department of Education has a National Center for Education Statistics. It’s a relatively small agency, but they put together critical information about how we are doing with educational achievement, and they gather that from all the states. As part of the downsizing in the Department of Education, their staff — everybody was fired, and there were only three people left in that agency. And the head of the agency was fired. So not only did they not have a leader, but they had three people left to do this job. And a lot of what they’re doing is required by statute, and they’re just unable to fulfill that. That’s at one end. The other end, the largest statistical agency is the Census Bureau. The Census Bureau had several field operations that were scheduled. They’re actually special censuses that they do for localities that need to update their populations because they’re rapidly growing and they can’t wait 10 years. And they couldn’t do them, they had to cancel them because they lost staff. In between what we saw was a multiyear effort that the statistical agencies had gone out to really get data scientists and people who could work with AI and who just were up on all the latest techniques that statistical agencies are using. All those new hires got laid off when…people who were on probation, because they were new hires, all got laid off. Years of recruiting, because a lot of the statisticians and data scientists are going to work in the private sector for very high salaries, so getting them into government was a huge multiyear effort, and then boom, they were gone. So, the next generation, gone. And then lots of senior people who were really keeping things going and had the institutional knowledge, they took the retirement. They just left. So we have gaps at the early stages. We have gaps in the leadership across the board. And then in some agencies, we have no staff at all.

Terry Gerton Nancy Potok is the CEO of NAPx Consulting and former Chief Statistician of the United States. Nancy, you mentioned public trust at the beginning, and your report shows that trust in federal data dropped from 57% to 52% in just four months, from June to September. What’s driving that decline and what does it mean for evidence-based policy?

Nancy Potok We didn’t delve deeply in the surveys that we were doing, which were conducted by NORC at the University of Chicago as part of their AmeriSpeak ongoing surveys. We’d like to delve into more of why, so I would just be speculating. But I assume it’s everything that people are reading about the federal government and the way information is being used. So if you’re reading that information is being used for law enforcement, for example, that agencies are sharing data for law enforcement — in the public’s mind, it may be difficult to sort that out. They are not necessarily that familiar with all the protections around statistical data and that it cannot be used for anything other than a statistical purpose. So if they’re worried about information being shared and their privacy and confidentiality, that could also reflect on their willingness to participate in the surveys. And we’re seeing response rates drop, which affects the quality. So it’s a bad cycle. In addition, when the head of the Bureau of Labor Statistics was fired, we had words that came from the president saying how bad the statistics were and really impugning the quality. So if people are listening to the president, which they are, that would also affect their trust.

Terry Gerton The report mentions nine new recommendations, and there were other outstanding recommendations. If Congress could move forward on these, which would you want to see them take on first?

Nancy Potok I know a lot of people talk about the staff and the resources, and there’s sort of a baseline at which these agencies operate that needs to be met. I think in my mind, and in the minds of my colleagues on this study, the thing that we want to see most is a strategy with some muscle to it to modernize the system. A lot of people have talked about, should we centralize these 13 agencies into one Office of National Statistics, which most countries in the world have? We have this very decentralized system. That’s a topic that’s been around a long time. What we’re saying is, look, there’s many things that can be done to improve this system. It’s not just money. We need a really strong chief statistician. We need some statutes that will drive modernization and innovation, kind of like a technology innovation fund almost, where we bring together strong leadership and give them the resources they need to work with partners outside the federal government. We put in a very strong pitch for bringing in the private sector and academia to do some of this heavy duty research on how we modernize statistics, and then bring them back to the agencies who are kind of busy maintaining, and then give them the resources to implement it. So let’s see some money go outside the government for this research. Let that research be directed towards how we have better federal data and statistics, and then let’s implement. But we need a strategy for that, and really strong leadership. I think for some people, when they were looking at the report, they viewed it as, “oh, they’re just asking for more money, like all agencies,” and that is absolutely not the case. I want to be clear about that. We are advocating for coordination inside and outside the government, removing the barriers to that and putting enough money in to fund what a strategic approach would prioritize. Because they’re doing a lot of stuff they don’t need to do, but they don’t have the leverage to stop doing those things. They still have to do those. So we just want to see almost like a remake of the system, a rethinking.

Terry Gerton Where in Congress does that responsibility lie?

Nancy Potok Well, that’s the problem because we’ve got 13-plus agencies and they’re all in different subcommittees. That’s part of what we identified as an issue, is that first, there’s no enough oversight. Two, the agencies, many of them are buried deep in the bureaucracy and they never get to talk to Congress directly. And third, kind of in the days when it was what I would call really the heyday of federal statistics, when they were very strong and supportive, there were champions in Congress. A couple of members in the Senate and House really understood the value of data and worked across all of these many different appropriations subcommittees and oversight committees to really think about this as a whole. We do have what I would call data champions in Congress right now, but a lot of times they’re focused on open data and just AI in general and those types of things. They haven’t really understood the role of the statistical agencies in that greater data ecosystem. And so that’s the challenge — getting the focus on that, to understand this is basic infrastructure of our country. It’s super important. Somebody’s got to pay attention.

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Interview transcript:

Terry Gerton You are doing important work, and I want to talk about this program specifically, the All of Us Research Program at NIH. Tell us what that’s all about.

Charles Summers NIH has the goal of enrolling a million-plus Americans into a research program that is based around genetics and precision medicine. So it’s really the future of medicine, really where things are headed. Instead of treating you based on age or race or any of those things, they would treat you based on genetics. So, if this medicine is specifically for you, it would help you better than just a guess that we get on some things. That’s the overall goal of what NIH wants to do with this research data and research outputs.

Terry Gerton A million people, that’s a lot of folks. And genetic information is pretty personal. What is going on in terms of being able to protect participant data?

Charles Summers For us at the OIG, definitely that’s one of our highest and most important things, protecting the data and securing the data and just lending a hand as far as oversight in pointing where there are places to make improvements or recommendations to improve and secure data to requirements that are out there, as well as if we see something that just doesn’t seem right. So that’s our main goal is to protect that data, because it’s not just their data. It’s our data and it’s our parents’ data and its American data.

Terry Gerton What prompted you then to look at the data protection processes in this research program? Was there a red flag or something that happened?

Charles Summers We’ve done work at NIH since I’ve been working here. We go through risks and things like that, so the All of Us program with genomic data, the Office and National Council has said that this is a national security concern. At NIH we’ve done some work here in the past with the All of Us program, so we checked up on some of those findings. There’s also persistent cybersecurity and national security threats that have increased in challenges across the board, as far as technology goes and those vectors that NIH must lock down to protect this data. So all of those combined, it’s critical operations and programs that we feel are everybody’s concern, as well as partnering with HHS as far as how we’re going to protect the program as a whole.

Terry Gerton It seems like if you’re going to get a million people to volunteer, one of the core guarantees is that their data be protected. What did you find as you got into the audit?

Charles Summers Absolutely, and I do want to emphasize what you said. It is core to the program because if you lose that trust, less people are going to join. Currently, NIH says they have over 600,000 participants already in the program enrolled. The goal is a million, but that’s where they are currently, over 600,000 already enrolled. Some of the key cybersecurity gaps that we found there were inadequate access controls allowed access of the systems from abroad, which was employees. It’s not just somebody trying to get access, but the employees could access that data from abroad. We also found that the system permitted the research participants to download data, even though policies and procedures restricted that and did not allow for that. In both of those access controls, we like to say it’s kind of like there was warning banners that pop up to say, “hey, you can’t do this.” It’s kind of like a door with a scary sign on it that says, “hey, don’t go in here.” But the door is unlocked and you can go through it. So you could close those and go ahead and access this data and download some of this data. And that’s not what we normally would see. We would want to block it, and if there was a need for it, then you would go through the proper procedures to get it, to open those for you. And then the last two things that we found was NIH had failed to inform the Data Research Center, which was the awardee of this that the data for them, they didn’t inform them of the national security concerns around genomic data. So when that Data Research Center awardee is setting up the system and going through checks and balances on security controls, they set it to a certain level based on risk in which they do the risk assessments. But NIH didn’t give them that key piece of information which could have changed the level that maybe that security should be; actually maybe it should be up another notch. So that wasn’t factored in when they were doing risk assessments. Lastly, we found that the Data Research Center was not remediating findings that they find themselves as well as something that may come up from an audit, or something like that, in the time requirements that align with the federal requirements and that were in the contract. So they had some different timeframes … in the system security plan, so those were in opposition of what they had already agreed to as far as the contract.

Terry Gerton You mentioned as you walked through those findings that the genomic database is managed by a contractor, DRC. Is that a normal thing for these kinds of research projects and what does that say to you about the need for better oversight between HHS, NIH and the contractor?

Charles Summers NIH does have the responsibility for oversight for all their contractors, and that is very typical for this type of program in all of these large op-divs. Throughout HHS we leverage contractors and grantees and things like that. The need for so much expertise in these areas, a lot of times that is where you have to go to get that much expertise because you’re needing large numbers of people. So it is very much NIH’s responsibility to have that in the contracts as well as the oversight to ensure that the proper security levels are being maintained. And I think that’s noted in some of the findings. For instance, the finding of not providing them the information that genomic data is of national security concerns — so that would factor into the risk assessment, which is part of the agreement for the DRC to complete. Without that complete information, things may be not at the correct level. Definitely the burden is on NIH for that oversight and ensuring that is taking place.

Terry Gerton So, you made five recommendations in this report. Are any of them, do you think, particularly urgent, and what are you hoping to see NIH do quickly to respond?

Charles Summers We don’t normally rank these findings, but our access controls tend to drift to the top because that is the gate to getting access in the system and restricting access to people you don’t want in the systems. For instance, the first recommendation was to enforce the restrictions for remote users. Very important to us as we have certain countries of concern … so we want to ensure if people are there, we’re using proper security and you have proper approvals. That was one of one of our findings as well. Also blocking unauthorized downloads of data. So both of those around access control, very high, as well as remitting findings timely, because those are weaknesses that you know are there. Timeframes to remediate those, you want them to be as short as possible to close those windows of known vulnerabilities that adversaries may use to try to gain access to the system. NIH did reply to us and respond, very acceptable and concurred with those findings as we describe it. And they have already taken some actions on all these findings, and part of our tracking system is where they’re at, and we have timeframes and they report, here’s where we’re at, here’s what we’re going to do next. That goes back and forth until the completion so we ensure that those are completed.

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