Ex-House admin officer comes under criticism at hearing

The House Inspector General offered a critical portrait of former Chief Administrative Officer Dan Beard Thursday in testimony to a congressional panel.

Inspector General Theresa Grafenstine told the Administration subcommittee on Oversight that she found significant “material weaknesses” within the CAO during Beard’s tenure in an audit of the House’s fiscal year 2009 financial statements. These included a lack of an internal controls program and a lack of control over information security.

Even more troubling, Grafenstine testified, was the culture at the top of CAO. She described the environment at the senior management level as “generally unsupportive of the financial statement process,” saying it exhibited disinterest, a lack of cooperation and “even obstruction” to requests for information from auditors.

{mosads}Beard resigned in July 2010 after the release of an unfavorable IG report on the House’s Office of Payroll & Benefits and Office of Financial Counseling, both of which fall under the CAO’s control.

Following his resignation, outgoing House Speaker Nancy Pelosi (D-Calif.) nominated Daniel Strodel to the position. Speaker John Boehner (R-Ohio) later upheld the nomination in a show of bipartisan support.

Grafenstine called the changes in CAO leadership “night and day,” citing greater cooperation, commitment and focus from Strodel.

In his own testimony on Thursday, Strodel was also critical of Beard’s leadership of the CAO. He said the lack of an internal controls program, reported by the IG, “told me that the primary driver to the situation that evolved was the tone at the top of the organization.”

Strodel was optimistic when asked by Rep. Aaron Schock (R-Ill.) if the CAO was now on track to meet a Sept. 30 deadline to implement internal control recommendations.

“I feel like we are on track,” he said.

While Grafenstine gave good marks to Strodel, she warned the CAO would get another adverse opinion from the IG for fiscal year 2010. Corrective actions within the CAO in response to the report were made too late, she said.

The CAO is expected to shrink as lawmakers look for ways to cut the budget. The CAO now has 680 employees, an increase of roughly 10 percent over the last five years.

Asked by subcommittee chairman Phil Gingrey (R-Ga.) if the CAO was presently “right-sized,” Strodel responded, “I think we’re soon to be right-sized by the budget cut that’s coming.

“I wouldn’t necessarily agree with it, but we’re going to have to live with it,” he said.

The subcommittee as a whole praised Strodel’s performance as the new CAO.

Of Beard’s departure, Gingrey commended “the former majority for having the insight and good judgment to make, obviously, a needed change, whether it was because of misfeasance or malfeasance.”