Schools . Simply put, yes. We believe, from a policy standpoint, the growth in Charter Schools and the potential they offer for being able to offer innovative reforms or good. We think you often have a proliferation of different oversights and models of the state levels that make the subsequent overside more difficult. Our direct interaction is with the state entity and authorizing entity. Our work is with the states of verses with the schools and i think we share concerns that states to need need to do a better job in terms of exercising that oversight. How does the department create more transparency in how Charter Schools use taxpayer funds . Do you look at graduation rates, scores, reading levels and the math . If they are direct reps it recipients of money, they are subject to all the requirements of title 1. The dominant framework is the state framework for governing schools. We work in partnership but we have to defer in cases to where the states have a framework in regard to the Charter Schools. We send them title 1 money and we have some responsibility. We do provide oversight. I am a strong advocate of High Performing Charter School but i am troubled by the rest of the privatization of Public Schools under the guise of a charter operators. In your investigation involving education chartered management organizations, do you find that fraud and other problems are more prevalent with forprofit organizations or nonprofits . We have not found a difference between profit and forprofit. We have had problems with chartered management organizations. We are commencing audit work in this area also. We had a number of investigations involving these entities and Charter Schools in particular, we wanted to go in and get a good look at what that might mean. I agree with you that there is a problem. We may be able to find things in these funds when you go to some of these organizations . Yes, we have had a number of investigated cases already since the last few years. We have opened 56 Charter School investigations and dead had recovery of about 10 million. The deputy secretary was correct when he said that part of the problem is that there are a number of the risers in every state and a very and the level of over state oversight varies wildly among states. That is where some of the problems are. I thank the gentleman and now we go to mr. Mika of florida. In the recent legislation that Congress Passed known as map 21, the transportation reauthorization, we mandated the consolidation or elimination of some 50 department of transportation programs. How many positions have been eliminated and what taxpayer dollars can we expect from that consolidation or elimination of programs . We are in the process of consolidation now. There are specific requirements for doing so. Can you give us an estimate . Would be 100 positions . 500 positions . Will it save 1 million . Although the programs have been consolidated, the need for oversight and implementation of the funds has not gone away. We will redeployed personnel many positions do you expect to eliminate . We are currently on a hiring freeze. So, nobody . I did not say that. For direct hiring freezes, we expect people are just trying to justify their continued existence and congress sent a mandate to consolidate or eliminate some 50 programs. People in the department of transportation are still making excuses to continue the red tape and paperwork. I have not gotten into that which i see the same thing. Maybe you can supply the committee with some information on the savings and elimination of programs when we are trying to save money. We trod we talked about contract powers. Before i became chairman of aviation, there was a study about the operation of contract powers. Less and safety operations. After i became chairman, i asked the air Traffic Controllers this is a skewed steady and they did ask the right questions. We did another study and the study came back and it said for every contract power tower we ve they monitor the safety records. We have been cutting back contract towers is one of our biggest contracts and we are cutting back. What is your proposal to cut back . The objective we have we are saying 134 million . Want to minimize the inconvenience with the maximum number of towers. How big is the elimination . There are up to 248 hours. Each contract tower operates the price that i had the savings is about 1. 5 million for contract towers and it is safer. Youre cutting back substantially. You said this is your biggest contract . It is one of our biggest contracts. We had a list from way back in the Clinton Administration when they recommended another 69 towers to be converted and bush never converted them. Can we look at ways we can save money and make it safer . Are you familiar with that report . You are generally correct. Thats all i need to said. Say. We will provide this for the record. How much in the rail area are we cutting . Passenger rail on the Passenger Rail side of their is about 10 million cut. Were cutting back on talk about some things with conferences. We the increase in loss of food service and amtrak have gone from 81 85 million in the last fiscal cycle. We could eliminate food service. Would anyone start between here and new york . Between here and york. Almost every hamburger was underwritten at 7. Could we look at that instead of some of these other essential City Services . Would you consider that . The amtrak cuts are about 70 million. We would be happy you could eliminate Food Services and that would save another 85 million. Let me close with it. Mr. Clinger is a former chairman when i came to congress. His act required all the agencies come up with an Enterprise Architecture. We have 3 billion in annual expenditures for it and we have 400 Information Systems and some are duplicative and some are. Ihaicdo understand something is coming in may . Yes. We are waiting with bated breath. Theres an opportunity for savings there and that has been a focus of management. I will yield back the balance of my time. Now for the rest of your answer i could not show my face back at my office if i let this go by. That study was an oig study and it is less expensive than the faa operated towers and they are less safe. They are accepted with approval by the user community. I apologize, i meant oig. With that, we go to the gentleman from massachusetts. Tighe, your office did a study and they found there was 187 billion in student aid funds involved in student fraud. I commend you on that. In reality, it is less than one half of 1 of what we spend on federal aid and next to what i find of the subcommittee of oversight for the national security, it is minuscule. It is important nonetheless. If you look at forprofit institutions in a Higher Education field, 90 of their revenues come from taxpayers. Thats correct. Federal Financial Aid, pell grants, g. I. Bills, Tuition Assistance the have about 10 of all student enrollment but they take up about 25 of all Financial Aid dollars we spend. 20092010, they got 32 billion in taxpayer money. That is a lot of it we have had problems with overpricing tuition and recruiting practices. Have you looked at them with respect as to whether they are at greater risk in a fraud . Where we have seen the greater risk is the lowcost institutions. Which is primarily Community Colleges. There are forprofit schools like the university of phoenix that operates a Community College component called axia college which ihas seen a number of problems with fraud. It is the lower cost institutions primarily but not exclusively can you tell me why that is . You have so many more dollars and its programs going to one set of institutions and less going to the others. What is the distinction . It is not just a function of dollars. I agree with that said with the statistics. It is all about what comes back to the socalled student. When you sign up online, you have and visibility to your institution. They sign up for classes and apply for student aid and then the Community College or will take back from the title 4 dig if they receive a pell grant of 5,000 because i put zero , my application the Community College will take 600 for a semester of classes and remit the rest to you for room and board and books and other expenses related to education. The problem we see for distance education is, why are we finding room and board and those kind of circumstances . That grew up in brick and mortar schools when you lived on campus and in needed to pay room and board. You dont necessarily need to do that in distance education. There is a restriction on the old correspondence schools. You do not get room and board for correspondence schools. The post 9eleven gi bill done by the department of defense a eliminated Living Expenses of that gives you money that goes back to the bad guys. All they need to do is get a bunch of their friends or inmates in prison institutions to apply for student aid and then they kick back some of that money to the ring leaders. Mr. Miller, what are we doing about that . We are following up on the recommendations to take action. There are system changes we can make like statistical models, front aend. We could work on fasa. If there is a pattern that looks like suspicious behavior, you can require more personal identification to go on in the application process. Some of these require statutory changes. If youre going to change the eligibility requirements, that requires congress to act. Are you making those recommendations to congress . We will work with congress and pursue what we think is the right reproaapproach. Could you provide to this committee the recommendations you have made for statutory changes and the recommendations you are making for rule changes . Yes, there will be processed where were starting with hearings. Can you provide what is your doing . What is your doing to change the statute . Yes, part of the regulatory process we have to honor the process which says we cannot have a prescribed proscribes prescription before we start the rollmaking process. When the agenda gets upset, we will share that with your. You have some things that will already get changed a lot . We have an understanding of the issue and then how we engage . You have come to no conclusion yet as to changes in law . That would be premature. There are different ways to address the problem and coming up with specific solutions, were not at that point. Ms. Tighe, can you help us . The primary statutory change recommended was the change to the cost of attendance. There has been some Modest Movement in the senate through the appropriations bill for this year that will look at pell grant but i would urge congress to look at it as a total package of not just pell but also loans one can get. Looking at pell could possibly lead to a perverse situation where a Financial Aid administrator would do two calculations for cost of its attendance, one for pell and one for loans. One student might borrow more. I dont know the department has put in any kind of proposal to change the cost of attendance. If you will summarize you have a written report at this time . We did do a written report on the fraud rings i talked about. Thank you. I might remind all those that the Ranking Member and i in the last congress had the data act that would have changed recipient reporting and the databases on which these kind of investigations happen. Im not sure you can use the recovery act, the socalled rat board, to enact this and some of what you are trying to find, you may still be able to use that as set that the former ig said up to do modeling of what could be done on a broader basis. We would encourage that and if you need support from that, we would provide it. With that, we go to the gentleman from texas. Thank you, i was in high school, i was a dj and when i got sick of a song is when people knew what the song was an eye and they started to like it. I get the same feeling with the talk of sequestration. Many American People busy raising their families and working are catching on. I think they are seeing that this is looking a whole like like a manufactured crisis with people screaming that the sky is falling. If my personal budget were being sequestered and i was in your place testify before this committee, i might choose not to pay my mortgage because of sequestration my children will be hamas or i could choose not to eat out as often and said my family will go hungry. Heaven forbid we look for a box of noodles in the pantry, macaroni and cheese. My kids would probably prefer that. Is i reallyting at feel like this is a lot of posturing. Id like to ask the two secretaries if i came to you and say cut 2 from your budget, do whatever you need to do, minimize the effect on safety, minimize laying employees off you got card plus to figure fix your budget. Could you do it . Lets start with mr. Miller. We struggle with that. The money for poor kids and students for disabilities and kids on indian reservations is there. What child is more or less important . There is not 3 in a waste, fraud, or abuse. 99 is directly and program dollars. There is no fraud in these programs . You are saying you could not cut 3 from the budget . The sequester is forcing us to cut if you said could we find cuts that would not adversely affect students, the ones who are struggling to participate are global economies, i would say no. This will have an adverse impact we will regret that i cannot believe there is 3 there. What about transportation . 3 4 of our department is exempt from some question from sequestration could you find 3 . Of course we can do it but it depends of what the impact is. The easy stuff has been done. Since 2008 with in the faa, we have cut 510 million out of the cost by reducing travel 30 , it savings of 36 million, 100 million in innovative contracts. There was a nice laundry list of things we can continue to look at and i find it difficult to believe that it with the increased cost of gasoline, many families have had to squeeze 3 out of their budget. I dont think it is unreasonable we ask a desperate we in the house have come up with two different replacements for sequester that are not as painful. Maybe you could find something. I have an important question for the inspector general. I am the subcommittee chairman of on the post Office Government work force and the senses and recent news reports suggest that agency managers, to be able to choose favorites among their employees, to save them from furloughs in sequestration. Can you commit that the igs this will make sure that whatever furloughs, are handled in a fair and appropriate manner and they dont have political reprisals or choosing favorites . We will investigate every allegation. We are equipped to ensure that they are inquired into properly. Miller situation in education . Yes. Great, ive only got 25 seconds. I have questions on improper payments but i will just yield back the remainder of my time. It is all yours, mr. Chairman. You went to your work force and told them they had a hypothetical choice of taking that furlough, that 5 effective pay cut, or finding a way to come back to you and show they could do the same amount of work with 5 less employees next year, not this year, in the next fiscal year, would you predict that youre workers would come up with organizational changes that will allow you to keep the pay and benefits where they are and do as much with slightly less people . Just a prediction i think that i think thats what we were getting too. Isnt there enough organizational litharge gaea that builds and that almost any work force faced with attrition and other means or taking a pay cut, they will find a way to do better in the efficiency. Most of the savings in 2008 that i was out line had been suggested by our employees. We have a committed cadre of public servants. They will continue to find savings. I would submit they would do that with or without a sequester scenario. You agree that your work force is smart and innovative and can help us in this process . I would argue they have been. We have asked them even today to take on more and more responsibility and they have been forced to be more innovative with their programs and take more accountability and take more responsibility for providing real effective assistance not just about getting money out but that it is having an impact. We are asking more of our employees everyday. To ask them if we can do more, our employees would welcome that but they would not see it as a new request. Q, lets go to the gentleman from nevada. Thank you, mr. Chairman. Prior to coming to congress, i served in the state senate in nevada and over the last few years, we experienced tremendous budget shortfalls which required both sides of the aisle to come together to find a balanced approach to pass a balanced budget which is what we have done. I believe that the federal cuts, whether under sequestration, what occurred in the prior fiscal year, or what may come, needs to be put in context with the cuts that state and local entities have already incurred. In the department of education in nevada, 70 of our departments budget the federaly fund are federally funded positions. That is on top of the reductions that were made by our state agencies. I am a bit perplexed, mr. Chairman, that the line of questioning by some members on the other side somehow is pointing to the blame at our federal agency heads rather than taking the responsibility as members to do our job. , to come up with the policies we need to arrive at a balanced approach which is what a lot of state governments have been doing for many years. I respect the professionals that are here today and your viewpoints and i specifically want to ask mr. Porcari on the faa. I am concerned about air traffic control. We have 40 million visitors in and out of our major airports in las vegas. Can you elaborate on what the impact of the furloughs were that occurred in 2011 on your employees . We focused on what the new impact would be but what has already occurred . To the extent that we have had furloughs in the past, they have not been nearly as broad as what is bein