are 2 FTEs requested in support of the projects within this vision. There are a host of changes facing Congress that will require CAO employees to grow, learn and expand their capabilities. We must invest in our employees so they in turn will invest in the people we serve the House community. The funding requested, within this vision, supports project plans that would achieve enhanced leadership skills for all CAO supervisory personnel through a variety of professional leadership training and professional improvement programs. We also have specific project plans that promote personnel enhancement and retention through career management, enhanced training and employee recognition programs, and identification of core competencies for each of our positions.

I realize that this is simply a brief overview of operations and the pending Fiscal Year 2001 funding request. To better articulate the daily activities, responsibilities and proposals before the Offices of the Chief Administrative Officer, I have attached a brief outline of offices and operations. I appreciate the time given by the Subcommittee today and stand ready to answer any questions you may have.

Note: The FY 99 enacted amount was adjusted by a reprogram approved by the Subcommittee and was
further adjusted by the Emergency Supplemental for the Chief Administrative Officer of $6,373,000 for
Y2K readiness efforts.

1

For salaries and expenses for the Office of the Inspector General, $4,040,000. Included in this request is $1,997,000 (49%) for personnel and $2,043,000 (51%) for nonpersonnel related expenses.

Note: The Fiscal Year 1999 enacted amount was adjusted by a reprogram approved by the
Subcommittee.

Statement of Robert B. Frey III, Deputy Inspector General
Office of Inspector General

U.S. House of Representatives

Before the Subcommittee on Legislative Appropriations
House Committee on Appropriations

Chairman Taylor and Members of the Subcommittee, I am both pleased and honored to appear before you today in my capacity as the House Deputy Inspector General.

I would like to begin by briefly discussing the accomplishments of the Office of Inspector General (OIG) during the first session of the 106th Congress as well as the initiatives currently underway pursuant to our proposed Calendar Year (CY) 2000 Annual Audit Plan (AAP). I will then discuss the resources required to maintain our current level of audit/investigative effort in Fiscal Year (FY) 2001.

Accomplishments During the First Session of the 106th Congress

During the first session of the 106th Congress, we continued to identify areas needing administrative and financial improvement. In CY 1999, we issued 10 reports that made 117 recommendations for corrective action and identified numerous material internal control weaknesses. In addition, we currently have 11 audits in progress.

For CY 1999, we issued three audit reports dealing with network and operating security. The first of these--Additional Controls Needed Over The Windows NT Environment At The House--identified a number of issues that directly impact the security of the Windows NT operating system throughout the House complex. This report included 26 findings and 52 recommendations in the areas of planning for information technology (IT), the delivery and support of IT services, and the monitoring, or management oversight of IT. A second report, Internal Controls Over House World Wide Web Servers and Firewall, provided good news about the controls over these critical components of the House network, reporting that the controls over the HIR managed web servers and firewall were generally adequate at the time of our review. Although we made two recommendations in this report, the conditions leading to those recommendations were not significant security concerns for the network. The third report, Additional Security Controls Needed Over The House's High Speed Legislative Branch Network, assessed the Legislative Branch Network, better know as CAPNet, as it affects the security of the House network. We identified 10 weaknesses in HIR's management of CAPNet assets and recommended 16 actions in the areas of planning for IT and the delivery and support of IT.

A second focus in 1999 was the Year 2000 (Y2K). We began and ended the year with Y2K, issuing three reports on the House's preparation for this historical milestone. The first report, Prompt Action Needed To Meet The Year 2000 Deadline, highlighted the need for swift action on planned remediation projects, rigorous testing of all renovated systems, and planning for contingencies and business recovery, if needed. The Chief Administrative Officer (CAO),

and especially House Information Resources (HIR), took this report to heart, and made remarkable progress over the next few months. In our second Y2K report, Year 2000 Testing And Contingency Planning Efforts Should Minimize Risk Of Date Related Failures, we reported on the successful outcome of HIR's efforts. Finally, our third Y2K report, Summary Of The House Year 2000 Efforts, reported that Member and Committee offices, and all three House officers had taken reasonable actions to prepare for Y2K.

Furthermore, the House made significant progress in improving its financial management and operations in CY 1999. For the year ended December 31, 1998, the House compiled its own consolidating financial statements for the second consecutive year. Our financial audit validated that since last year's financial report the House implemented or initiated corrective actions to address a total of 45 prior audit recommendations. These positive efforts greatly reduced the House's eight weaknesses (three of which were material) to five--with no reportable material weaknesses--in this year's report. Thus, based on the extra effort of the staffs of both the CAO and OIG, we were able to express an "unqualified opinion" on the House's financial statements for the first time. The Audit Of The Financial Statements For The Year Ended December 31, 1998, Report No. 99-HOC-07, was issued on September 24, 1999. In addition, the Report of Independent Accountants on Compliance with Laws and Regulations, included in this audit report, identified no instances of noncompliance.

In addition to these audit efforts, we performed a detailed analysis of the Members payroll process and assisted with the acquisition, selection and implementation of the new Members Payroll System. Furthermore, we assisted with the development of the Request for Proposal for the new Staff Payroll System and are currently working with the Human Resource/Payroll Evaluation Committee to select the new system. Our auditors also worked closely with the Superintendent House Office Buildings to ensure the timely and effective implementation of our audit recommendations related to our fire audit--Fire Protection Systems Do Not Adequately Protect The House issued December 18, 1998. As part of this effort, we attended bi-weekly meetings where the implementation and status of the House's fire protection plan was discussed. During 1999, we also worked with the House Officers to revise the Personnel Policies and Procedures for the Officers and Inspector General of the U.S. House of Representatives and, as part of the House Drug-Free Workplace, developed an OIG Drug-free Workplace Plan.

For your information and future reference, I have attached a list of all final audit reports issued by the OIG to date.

Calendar Year 2000 Planned Audits

Our audit planning process is changing in CY 2000 in order to improve our ability to provide adequate oversight of the House's administrative and financial operations. We are currently developing an audit universe of auditable areas in the House where we will be able, through risk ranking of these areas, to more effectively use our resources to meet the needs of the House. Our proposed 2000 AAP and Perpetual Inventory of Proposed Audits (PIPA) presents a three year strategic plan accounting for 48 audits--requiring 9,850 audit staff days of effort.