[Senate Report 106-218]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 408
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-218
_______________________________________________________________________



                     A BILL TO AMEND THE INSPECTOR


                              GENERAL ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 1707

 TO AMEND THE INSPECTOR GENERAL ACT OF 1978 (5 U.S.C. APP.) TO PROVIDE 
THAT CERTAIN DESIGNATED FEDERAL ENTITIES SHALL BE ESTABLISHMENTS UNDER 
                    SUCH ACT, AND FOR OTHER PURPOSES




                November 8, 1999.--Ordered to be printed

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
79-010                     WASHINGTON : 1999


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE VOINOVICH, Ohio               RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
           William ``Bill'' M. Outhier, Investigative Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                   Kenneth R. Boley, Minority Counsel
                 Darla D. Cassell, Administrative Clerk
                                                       Calendar No. 408
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-218

======================================================================



 
               A BILL TO AMEND THE INSPECTOR GENERAL ACT

                                _______
                                

                November 8, 1999.--Ordered to be printed

                                _______
                                

Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 1707]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 1707) to amend the Inspector General Act 
of 1978 (5 U.S.C. App.) to provide that the Tennessee Valley 
Authority Inspector General be appointed by the President, 
establish a criminal investigator academy and forensic 
laboratory for Inspectors General, and for other purposes, 
having considered the same, reports favorably thereon with 
amendments and recommendations by voice vote that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary..............................................1
 II. Background and need for legislation..............................2
III. Legislative history and committee consideration..................3
 IV. Section-by-section analysis......................................3
  V. Regulatory impact statement......................................4
 VI. CBO cost estimate................................................4
VII. Changes in existing law..........................................6

                         I. Purpose and Summary

    The purpose of S. 1707 is twofold: First, the bill is 
intended to enhance the independence of the Inspector General 
of the Tennessee Valley Authority (TVA) by making the position 
presidentially appointed. Second, the bill creates a Criminal 
Investigator Academy and Forensic Laboratory for the Inspector 
General community.

                II. Background and Need for Legislation


    A. THE TENNESSEE VALLEY AUTHORITY AS AN ESTABLISHMENT UNDER THE 
                     INSPECTOR GENERAL ACT OF 1978

    Currently there are two sets of inspectors general, 
``establishment agencies'' whose inspectors general are 
appointed by the president, and ``designated federal 
entities,'' including TVA, whose inspectors general are 
appointed (and removed) by the agency head.\1\ The duty of an 
inspector general is to ferret out fraud, waste and abuse 
within federal agencies. To properly carry out their mission, 
inspectors general must maintain independence from their 
agency. Although most inspectors general enjoy a cooperative 
relationship with their agency head, there have been several 
examples over the years of problems, including attempts by 
agency heads to harass or intimidate their inspectors general.
---------------------------------------------------------------------------
    \1\ 5. U.S.C. App. 3 Sec. 8G(a)(2); 5 U.S.C. App. 3 Sec. 11 (2).
---------------------------------------------------------------------------
    On May 26, 1999, the TVA Inspector General sent a ``seven 
day letter'' to the Chairman of the TVA Board alleging that the 
TVA Board had attempted to ``impede the independence'' of his 
office. On June 2, 1999, the Chairman of the TVA Board attached 
allegations against the TVA Inspector General and forwarded the 
letter to Congress. That same day, Senator Thompson, Chairman 
of the Governmental Affairs Committee, requested an independent 
investigation of all the allegations by the General Accounting 
Office (GAO). On September 15, 1999, GAO issued a report which 
stated in part that the Board's ``actions could be viewed as an 
attempt to undermine the IG's independence.'' \2\ GAO also 
found that the TVA Inspector General's actions had been proper 
under TVA policy.\3\ While not all parties agree with all of 
GAO's specific findings, the legal authority of the Board to 
remove the inspector general likely contributed to the problems 
at TVA.
---------------------------------------------------------------------------
    \2\ ``Tennessee Valley Authority: Facts Surrounding Allegations 
Raised Against the Chairman and the IG,'' General Accounting Office, 
GAO/OSI-99-20, September 15, 1999 at p. 16.
    \3\ Id. at p. 19.
---------------------------------------------------------------------------
    S. 1707 would convert TVA from a designated federal entity 
to an establishment agency under the Inspector General Act. As 
a result, the TVA Inspector General would be presidentially 
appointed and removable only by the President. This measure 
would enhance the independence necessary for the TVA Inspector 
General to properly investigate waste, fraud and abuse within 
the agency.

        B. THE INSPECTORS GENERAL CRIMINAL INVESTIGATOR ACADEMY

    In the past, the inspector general community has attempted 
to maintain a criminal investigator academy for both initial 
and continuing education after basic training at the Federal 
Law Enforcement Training Center (FLETC) in Glencoe, GA. 
However, because the academy has had to rely on funds available 
on an ad hoc basis in the various inspector general budgets, 
the community has been unable to maintain sufficient or 
reliable funding for its academy. According to the Treasury 
Inspector General for Tax Administration, who has been selected 
to speak for the IG community on training matters, many IG 
offices have experienced investigative success because of 
training in their specialized area. However, many have also 
been unable to obtain such specialized training. Some 
inspectors general have even experienced investigative setbacks 
because of a lack of specialized training.
    The inspectors general provide a wide variety of 
specialized law enforcement functions for the government, often 
in conjunction with other law enforcement agencies. According 
to the 1999 Progress Report to the President by the President's 
Council on Integrity and Efficiency and the Executive Council 
on Integrity and Efficiency, inspector general investigations 
resulted in 14,885 successful criminal prosecutions in 1998 
alone.\4\ It is imperative, therefore, that inspectors general 
receive adequate and continuing criminal investigative 
training. S. 1707 would establish and authorize such funds as 
necessary for an Inspectors General Criminal Investigator 
Training Academy.
---------------------------------------------------------------------------
    \4\ PCIE/ECIE: A progress Report to the President, Fiscal Year 
1998, p. 47.
---------------------------------------------------------------------------

             C. THE INSPECTORS GENERAL FORENSIC LABORATORY

    The inspectors general have a significant need for forensic 
laboratory capabilities. Currently, they use a variety of 
different approaches, including sharing other federal 
facilities and working out arrangements with state or private 
service providers. Three-quarters of inspectors general 
surveyed stated that their offices currently utilize such 
services in support of investigations (for such services as 
handwriting analysis, fingerprinting, authenticating documents, 
document chemistry, and digital imaging). If such services were 
made available to inspectors general, they estimate that the 
number of cases referred for laboratory work would increase by 
a third. In other words, a quarter of the cases where such 
services are appropriate currently do not get them. S. 1707 
would establish and authorize such funds as necessary for an 
Inspectors General Forensic Laboratory.

          III. Legislative History and Committee Consideration


                    AMENDMENTS AND COMMITTEE ACTION

    On November 3, 1999, the Committee on Governmental Affairs 
considered S. 1707. One amendment was offered, debated and 
adopted by voice vote. Senators Thompson and Lieberman offered 
an amendment in the nature of a substitute which (i) converted 
the TVA from a designated federal entity to an establishment 
agency under the Inspector General Act and (ii) established the 
Inspectors General Criminal Investigator Academy and the 
Inspectors General Forensic Laboratory. Senator Cleland 
requested to be added as a co-sponsor to the amendment. The 
Committee subsequently ordered S. 1707 reported by unanimous 
voice vote.

                    IV. Section-by-Section Analysis


Sec. 1. The Tennessee Valley Authority as an establishment under the 
        Inspector General Act of 1978

    Congress finds that (1) inspectors general serve an 
important function in preventing and eliminating fraud, waste, 
and abuse in the Federal Government; and (2) independence is 
vital for an inspector general to function effectively. This 
section converts TVA from a designated federal entity to an 
establishment agency under the Inspector General Act of 1978 
and adds the TVA Inspector General to the list of positions at 
level IV of the Executive Schedule. This section also 
establishes that the bill takes effect thirty days after the 
date of its enactment. In addition, this section requires that 
the TVA Inspector General continue to serve as an inspector 
general for a designated federal entity until the President 
makes an appointment under the Inspector General Act of 1978.

Sec. 2. Establishment of Inspectors General Criminal Investigator 
        Academy and Inspectors General Forensic Laboratory

    This section establishes the Inspectors General Criminal 
Investigator Academy within the Department of the Treasury. It 
is to be administered by an Executive Director who shall report 
to an establishment inspector general to be designated by the 
President's Council on Integrity and Efficiency or, if that 
council is eliminated, by a majority vote of the inspectors 
general created under the Inspector General Act of 1978. This 
section also establishes the Inspectors General Forensic 
Laboratory within the Department of the Treasury. It is to be 
administered by an Executive Director who shall report to an 
establishment inspector general to be designated by the 
President's Council on Integrity and Efficiency or, if that 
council is eliminated, by a majority vote of the inspectors 
general created under the Inspector General Act of 1978. In 
addition, this section authorizes such sums as may be necessary 
for fiscal year 2001 and each fiscal year thereafter.

                     V. Regulatory Impact Statement

    S. 1707 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.

                         VI. CBO Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 5, 1999.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1707, a bill to 
amend the Inspector General Act of 1978 (5 U.S.C. App.) to 
provide that certain designated federal entities shall be 
establishments under such act, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John R. 
Righter.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 1707--A bill to amend the Inspector General Act of 1978 (5 U.S.C. 
        App.) to provide that certain designated federal entities shall 
        be establishments under such act, and for other purposes

    Summary: S. 1707 would require the President to appoint the 
inspector general (IG) for the Tennessee Valley Authority 
(TVA). Currently, that authority rests with the board of the 
directors of TVA. In addition, the bill would establish both 
the Criminal Investigator Academy and the Inspectors General 
Forensic Laboratory within the Department of the Treasury. The 
new entities would provide centralized training and forensic 
lab services for the 59 offices of inspector general. Beginning 
in fiscal year 2001, the bill would authorize the appropriation 
of such sums as may be necessary to fund the two facilities.
    Assuming appropriation of the necessary amounts, CBO 
estimates that implementing S. 1707 would cost the federal 
government about $22 million over the 2001-2004 period. Because 
the bill would not affect direct spending or receipts, pay-as-
you-go procedures would not apply. S. 1707 contains 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.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1707 is shown in the following table. 
For the purposes of this estimate, CBO assumes that the 
estimated authorization level will be appropriated by the start 
of each fiscal year. The costs of this legislation fall within 
budget function 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2000      2001      2002      2003      2004
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.................................         0         6         5         5         6
Estimated Outlays.............................................         0         5         6         5         6
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: S. 1707 would establish two entities--
the Criminal Investigator Academy and the Inspectors General 
Forensic Laboratory--to provide centralized support to federal 
IG offices. To some extent, the IG offices currently fund such 
services separately. Based on information from the Department 
of the Treasury, CBO estimates that operating the two centers 
would cost about $6 million in fiscal year 2001 and about $29 
million over the 2001-2004 period, assuming appropriation of 
the necessary amounts. That estimate includes about $1 million 
for certain one-time expenses in 2001 and assumes that, in 
total, the academy and laboratory would require between 45 and 
50 employees. The estimated costs for fiscal years 2002 through 
2004 have been adjusted to reflect the impact of inflation on 
the costs of operation.
    Because the IG offices would no longer fund such services 
separately, we estimate that implementing S. 1707 would reduce 
their costs by about one-quarter of the additional costs 
estimated for the academy and laboratory. Thus, in total, CBO 
estimates that implementing the bill would cost the federal 
government about $5 million in fiscal year 2001 and about $22 
million over the 2001-2004 period.
    Pay-as-you-go considerations: None.
    Intergovernmental and private sector impact: S. 1707 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: John R. Righter.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                      VII. Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 1707, 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 
changes are proposed is shown in roman):

     [From United States Code, Title 2--The Congress, Chapter 17--
                      Congressional Budget Office]

                     INSPECTOR GENERAL ACT OF 1978

           *       *       *       *       *       *       *



       TITLE V--GOVERNMENT ORGANIZATION AND EMPLOYEES APPENDIXES

           *       *       *       *       *       *       *



SEC. 8G. REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL 
                    ENTITIES

    (a)(1) * * *
    (2) the term ``designated Federal entity'' means Amtrak, 
the Appalachian Regional Commission, the Board of Governors of 
the Federal Reserve System, the Board for International 
Broadcasting, the Commodity Futures Trading Commission, the 
Consumer Product Safety Commission, the Corporation for Public 
Broadcasting, the Equal Employment Opportunity Commission, the 
Farm Credit Administration, the Federal Communications 
Commission, the Federal Election Commission, the Federal 
Housing Finance Board, the Federal Labor Relations Authority, 
the Federal Maritime Commission, the Federal Trade Commission, 
the Legal Services Corporation, the National Archives and 
Records Administration, the National Credit Union 
Administration, the National Endowment for the Arts, the 
National Endowment for the Humanities, the National Labor 
Relations Board, the National Science Foundation, the Panama 
Canal Commission, the Peace Corps, the Pension Benefit Guaranty 
Corporation, the Securities and Exchange Commission, the 
Smithsonian Institution, [the Tennessee Valley Authority,] the 
United States International Trade Commission, and the United 
States Postal Service;
    (3) * * *

SEC. 11. DEFINITIONS

    As used in this Act--
          (1) the term ``head of the establishment'' means the 
        Secretary of Agriculture, Commerce, Defense, Education, 
        Energy, Health and Human Services, Housing and Urban 
        Development, the Interior, Labor, State, 
        Transportation, or the Treasury; the Attorney General; 
        the Administrator of the Agency for International 
        Development, Environmental Protection, General 
        Services, National Aeronautics and Space, Small 
        Business, or Veterans' Affairs; the Director of the 
        Federal Emergency Management Agency, or the Office of 
        Personnel Management; the Chairman of the Nuclear 
        Regulatory Commission or the Railroad Retirement Board; 
        the Chairperson of the Thrift Depositor Protection 
        Oversight Board; the Chief Executive Officer of the 
        Corporation for National and Community Service; the 
        Administrator of the Community Development Financial 
        Institutions Fund; and the chief executive officer of 
        the Resolution Trust Corporation; and the Chairperson 
        of the Federal Deposit Insurance Corporation; [or the 
        Commissioner of Social Security, Social Security 
        Administration;] the Commissioner of Social Security, 
        Social Security Administration; or the Board of 
        Directors of the Tennessee Valley Authority; as the 
        case may be;
          (2) the term ``establishment'' means the Department 
        of Agriculture, Commerce, Defense, Education, Energy, 
        Health and Human Services, Housing and Urban 
        Development, the Interior, Justice, Labor, State, 
        Transportation, or the Treasury; the Agency for 
        International Development, the Community Development 
        Financial Institutions Fund, the Environmental 
        Protection Agency, the Federal Emergency Management 
        Agency, the General Services Administration, the 
        National Aeronautics and Space Administration, the 
        Nuclear Regulatory Commission, the Office of Personnel 
        Management, the Railroad Retirement Board, the 
        Resolution Trust Corporation, the Federal Deposit 
        Insurance Corporation, the Small Business 
        Administration, the Corporation for National and 
        Community Service, or the Veterans' Administration, [or 
        the Social Security Administration;] the Social 
        Security Administration, or the Tennessee Valley 
        Authority; as the case may be;
          (3) * * *
          (4) * * *
          (5) * * *

           *       *       *       *       *       *       *


             TITLE V--GOVERNMENT ORGANIZATION AND EMPLOYEES


SEC. 5315. POSITIONS AT LEVELIV

           *       *       *       *       *       *       *


Inspector General, Tennessee Valley Authority.

           *       *       *       *       *       *       *


                TITLE XXXI--MONEY AND FINANCE ANNOTATED


SEC. 1105(A). BUDGET CONTENTS AND SUBMISSION TO CONGRESS

           *       *       *       *       *       *       *


          (32) * * *
          (33) a separate appropriation account for 
        appropriations for the Inspectors General Criminal 
        Investigator Academy and the Inspectors General 
        Forensic Laboratory of the Department of the Treasury.

                                  
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