(Bloomberg) -- Hedge funds and private-equity firms have created bogus service providers to boost fees they charge to portfolio companies and investors, SEC Chair Mary Jo White will tell lawmakers in Washington today.

Private funds also have mis-assigned some fees and expenses to companies in which they hold stakes, White said in remarks prepared for a House Financial Services Committee hearing on her agency’s 2015 budget. More than half of about 400 private-equity firms that SEC staff have examined have charged unjustified fees and expenses without notifying investors, according to a person familiar with the matter.

White’s comments are part of her argument to gain support for the agency’s $1.7 billion budget request, which faces opposition from House Republicans. The 2010 Dodd-Frank Act boosted the number of private-equity and hedge-fund advisers under SEC oversight by more than 50%.

“The funding we are seeking is fully justified by our existing and growing responsibilities to investors, companies and the markets,” White said in her prepared remarks.

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