[Senate Report 113-111]
[From the U.S. Government Printing Office]
113th Congress Report
SENATE
1st Session 113-111
_______________________________________________________________________
Calendar No. 199
SECURITY CLEARANCE OVERSIGHT AND REFORM ENHANCEMENT ACT
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
WITH ADDITIONAL VIEWS
[to accompany S. 1276]
TO INCREASE OVERSIGHT OF THE REVOLVING FUND OF THE OFFICE OF PERSONNEL
MANAGEMENT, STRENGTHEN THE AUTHORITY TO TERMINATE OR DEBAR EMPLOYEES
AND CONTRACTORS INVOLVED IN MISCONDUCT AFFECTING THE INTEGRITY OF
SECURITY CLEARANCE BACKGROUND INVESTIGATIONS, ENHANCE TRANSPARENCY
REGARDING THE CRITERIA UTILIZED BY FEDERAL DEPARTMENTS AND AGENCIES TO
DETERMINE WHEN A SECURITY CLEARANCE IS REQUIRED, AND FOR OTHER PURPOSES
September 25 (legislative day, September 24), 2013.--Ordered to be
printed
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri ROB PORTMAN, Ohio
JON TESTER, Montana RAND PAUL, Kentucky
MARK BEGICH, Alaska MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota JEFF CHIESA, New Jersey
Richard J. Kessler, Staff Director
John P. Kilvington, Deputy Staff Director
Beth M. Grossman, Chief Counsel
Lawrence B. Novey, Chief Counsel for Governmental Affairs
Anthony S. McClain, Staff Director, Subcommittee on the Efficiency and
Effectiveness of Federal Programs and the Federal Workforce
Keith B. Ashdown, Minority Staff Director
Christopher J. Barkley, Minority Deputy Staff Director
Andrew C. Dockham, Minority Chief Counsel
Catharine A. Bailey, Minority Director of Governmental Affairs
Laura W. Kilbride, Chief Clerk
Calendar No. 199
113th Congress Report
SENATE
1st Session 113-111
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SECURITY CLEARANCE OVERSIGHT AND REFORM ENHANCEMENT ACT
_______
September 25 (legislative day, September 24), 2013.--Ordered to be
printed
_______
Mr. Carper, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 1276]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1276) to increase
oversight of the Revolving Fund of the Office of Personnel
Management, strengthen the authority to terminate or debar
employees and contractors involved in misconduct affecting the
integrity of security clearance background investigations,
enhance transparency regarding the criteria utilized by Federal
departments and agencies to determine when a security clearance
is required, and for other purposes, having considered the
same, reports favorably thereon with an amendment in the nature
of a substitute and recommends that the bill, as amended, do
pass.
CONTENTS
Page
I. Purpose and Summary..............................................2
II. Background and Need for Legislation..............................2
III. Legislative History.............................................3
IV. Section-by-Section Analysis of the Bill, as Reported.............4
V. Congressional Budget Office Cost Estimate........................4
VI. Evaluation of Regulatory Impact..................................5
VII. Changes in Existing Law..........................................7
I. Purpose and Summary
The purpose of S. 1276 is to ensure that the Office of
Personnel Management's (OPM's) Inspector General (IG) has the
authority to obtain funding needed to audit and investigate
critical OPM activities that are currently off limits to
oversight by the IG due to an existing lack of authority. OPM
oversees human resources-related matters for federal employees,
such as hiring and benefits, as well as the pension and
insurance plans for federal retirees. It also provides a range
of commercial-like services to other federal agencies including
human resource management, leadership training, and background
investigations for security clearances. For these services, OPM
collects customer-agency's funds and deposits them into a
Revolving Fund, which in turn pays for the personnel and other
resources OPM uses to do its work for other agencies.
Because OPM's IG may currently not access Revolving Fund
money to cover the costs of oversight, the IG is left to
operate without the resources or personnel required to carry
out thorough oversight of this $2 billion Revolving Fund and
the services administered out of the Fund. S. 1276 will remedy
this problem by authorizing the use of the Revolving Fund to
pay for OPM's IG to audit and investigate OPM activities paid
for out of that Fund.
II. Background and Need for Legislation
OPM is tasked with managing the federal workforce in a
variety of ways, working with government agencies and employees
on issues from recruitment to the resolution of labor disputes.
Another major OPM function is the conducting of background
investigations through its Federal Investigative Services (FIS)
division. Currently, FIS conducts more than 90 percent of the
background investigations for government employees and
contractors, including most Defense Department
investigations.\1\
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\1\U.S. Office of Personnel Management, ``Background
Investigations.'' Accessed Sept. 20, 2013. http://www.opm.gov/
investigations/background-investigations.
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Following leaks of classified data by National Security
Agency contractor Edward Snowden, the Senate Homeland Security
and Governmental Affairs Subcommittees on the Efficiency and
Effectiveness of Federal Programs and the Federal Workforce and
Financial and Contracting Oversight held a joint hearing on
June 20, 2013, titled ``Safeguarding our Nation's Secrets:
Examining the Security Clearance Process.'' Witnesses from OPM
and FIS testified that while FIS used OPM's Revolving Fund to
collect payments from federal agencies to finance background
investigations, the Fund has never been audited in its entirety
because the costs of audits, investigations, and other
oversight activities are prohibited from being charged against
the Fund. At the hearing, due to the many concerns raised about
the quality of the background investigations being carried out
by OPM, the OPM Inspector General, Patrick E. McFarland,
testified that the current insufficient level of oversight of
the Fund and activities carried out with its resources was a
``clear threat to national security.''\2\
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\2\Testimony of Patrick E. McFarland, Inspector General, U.S.
Office of Personnel Management, before the Senate Committee on Homeland
Security and Governmental Affairs, Subcommittee on the Efficiency and
Effectiveness of Federal Programs and the Federal Workforce:
``Safeguarding our Nation's Secrets: Examining The Security Clearance
Process,'' June 20, 2013. http://www. hsgac.senate. gov/subcommittees/
fpfw/hearings/ examining- the-workforce-of- the-us-intelligence-
community-and-the- role-of-private-contractors.
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Although FIS comprises the largest program within the
Revolving Fund, there are numerous other programs and
activities financed by the Fund. Currently, through the Fund,
OPM interacts with over 200 Federal entities, including all
major Federal departments and agencies, on activities such as
Human Resources Solutions, USAJOBS, Human Resources Line of
Business, HR Tools & Technology, Enterprise Human Resource
Integration, and the Presidential Management Fellows
Program.\3\
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\3\Testimony of Patrick E. McFarland, Inspector General, U.S.
Office of Personnel Management, before the House Committee on Oversight
and Government Reform, Subcommittee on Federal Workforce, U.S. Postal
Service and the Census: ``OPM's Revolving Fund: A Cycle of Government
Waste?'', June 5, 2013. http://oversight. house.gov/wp-content/
uploads/2013/06/ McFarland-Testimony- Final2.pdf.
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Indeed, OPM devotes more resources to administering the
programs funded through the $2 billion Revolving Fund than to
any of its other operational programs.\4\ Because of the
security and fiscal implications of properly administering and
financing this Fund, thorough oversight is a critical
necessity.
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\4\Id.
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S. 1276 would ensure that such oversight occurs. It does so
by authorizing Revolving Fund monies to be spent on the costs
of audits, investigations, and oversight activities by the IG.
This same legislative proposal was included in the President's
Fiscal Year 2014 budget request.\5\
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\5\Office of Management and Budget, Fiscal Year 2014 Budget of the
U.S. Government, Appendix, 2013, at page 1031, http:// www.whitehouse.
gov/sites/default/ files/omb/budget/ fy2014/assets/ appendix.pdf.
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III. Legislative History
On July 10, 2013, Senator Tester introduced S. 1276, with
Senators McCaskill, Portman, Coburn and Ron Johnson as
cosponsors, and the bill was referred to the Senate Committee
on Homeland Security and Governmental Affairs. In the House of
Representatives, similar legislation, H.R. 2860, has been
introduced by Reps. Blake Farenthold and Stephen Lynch.
As introduced, S. 1276 contained three provisions: (1) the
provision related to the Revolving Fund described above; (2) a
provision codifying the need for the Office of Personnel
Management to have a quality assurance process in place to
handle cases in which background investigations are
compromised; and (3) a provision requiring the federal
government to update its policies for determining which
employees require a security clearance.
The Committee considered the bill at a business meeting on
July 31, 2013. Senator Tester offered a substitute amendment
striking the provisions other than the one authorizing the use
of Revolving Fund resources for oversight activities. The
Committee adopted the substitute amendment, as modified, and
ordered the underlying bill reported favorably, both en bloc by
voice vote. Members present for the vote on the amendment and
on the bill were Senators Carper, Levin, McCaskill, Tester,
Begich, Baldwin, Coburn, Johnson, Ayotte, and Chiesa.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1--Short Title. This section states that the Act
may be cited as the ``Security Clearance Oversight and Reform
Enhancement Act.''
Section 2--Oversight of the Revolving Fund of the Office of
Personnel Management. This section amends 5 U.S.C.
Sec. 1304(e), to authorize the costs of OPM Inspector General
audits, investigations, and oversight activities relating to
the Revolving Fund and the functions financed by the Fund, to
be charged against the Fund.
Specifically, 5 U.S.C. Sec. 1304(e)(1) currently states
that the Revolving Fund is available to OPM for financing
investigations and other services that other agencies request
OPM to perform on a reimbursable basis. Section 2(a) of the
bill amends Sec. 1304(e)(1) to also make the Fund available to
OPM for the cost of audits, investigations, and oversight that
are conducted by OPM's IG and that relate to the Fund and the
functions financed by the Fund.
In addition, 5 U.S.C. Sec. 1304(e)(5) currently requires
that OPM must prepare a budget each year for the operations
financed by the Revolving Fund, and that the budget must be
submitted to Congress for consideration. Section 2(b) of the
bill amends Sec. 1304(e)(5) to require OPM's IG to estimate the
amount that will be needed for adequate oversight of the Fund
and of the functions financed by the Fund, and to require that
OPM must include that estimate in its annual budget for the
Fund. The legislation also specifies that the estimate from
OPM's IG may not exceed 0.33 percent of the total amount of
expected expenditures from the Revolving Fund that OPM includes
in the budget for Congress.
V. Congressional Budget Office Cost Estimate
August 23, 2013.
Hon. Tom Carper,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1276, the Security
Clearance Oversight and Reform Enhancement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
S. 1276--Security Clearance Oversight and Reform Enhancement Act
S. 1276 would permit activities of the Office of Personnel
Management's (OPM) Office of the Inspector General (IG) to
receive funding through the OPM Revolving Fund. The bill also
would set a limit on the funds available. Under current law,
the OPM Revolving Fund provides about $2 billion a year for a
variety of functions, including background investigations to
determine an individual's suitability for a security clearance,
but the IG is not permitted to use those funds to audit and
provide oversight of the fund's finances.
Based on information from the OPM IG, CBO estimates that
implementing this legislation would enable the IG to begin
auditing the OPM Revolving Fund at a cost of $13 million over
the 2014-2018 period, assuming appropriation of the necessary
funds. Enacting the bill would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
S. 1276 would impose no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
VI. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill. The enactment of
this legislation will not have a significant regulatory impact.
There are no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act and no costs on
State, local, or tribal governments. The legislation contains
no other regulatory impact.
ADDITIONAL VIEWS
At the June 20, 2013 hearing witnesses also testified about
the lack of government-wide standards in background
investigations and awarding security clearances, and the need
for improved guidance. A third provision requiring the federal
government to update its policies for determining which
employees require a security clearance was included in the
original draft of the bill. This third provision was removed in
the amendment offered by Sen. Tester pending OPM-ODNI guidance
of ``sensitive'' national security designations. The Committee
continues to be concerned about the lack of government wide
standards in national security designations and will monitor
the OPM-ODNI guidance.
Ron Johnson.
VII. Changes in Existing Statute Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic and existing law, in which no
change is proposed, is shown in roman):
UNITED STATES CODE
* * * * * * *
TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
* * * * * * *
PART II--CIVIL SERVICE FUNCTIONS AND RESPONSIBILITIES
* * * * * * *
CHAPTER 13--SPECIAL AUTHORITY
* * * * * * *
Sec. 1304. Loyalty investigations; reports; revolving fund.
(a) * * *
* * * * * * *
(e)(1) A revolving fund is available, to the Office without
fiscal year limitation, for financing investigations, training,
and such other functions as the Office is authorized or
required to perform on a reimbursable basis, including
personnel management services performed at the request of
individual agencies (which would otherwise be the
responsibility of such agencies), or at the request of
nonappropriated fund instrumentalities, and for the cost of
audits, investigations, and oversight activities relating to
the fund and the functions financed by the fund, conducted by
the Inspector General of the Office. However, the functions
which may be financed in any fiscal year by the fund are
restricted to those functions which are covered by the budget
estimates submitted to the Congress for that fiscal year. To
the maximum extent feasible, each individual activity shall be
conducted generally on an actual cost basis over a reasonable
period of time.
* * * * * * *
(5) The Office shall prepare a business-type budget
providing full disclosure of the results of operations for each
of the functions performed by the Office and financed by the
fund, and such budget shall be transmitted to the Congress and
considered, in the manner prescribed by law for wholly owned
Government corporations. Each budget submitted under this
paragraph shall include an estimate from the Inspector General
of the Office of the amount required to pay the reasonable
expenses to adequately audit, investigate, and perform other
oversight activities relating to the fund and the functions
financed by the fund for the applicable fiscal year, which
shall not exceed 0.33 percent of the total budgetary authority
requested in the budget estimates submitted to Congress by the
Office for that fiscal year.
* * * * * * *
