[Senate Report 106-510]
[From the U.S. Government Publishing Office]





               INSPECTOR GENERAL ACT AMENDMENTS OF 1999

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                 S. 870

TO AMEND THE INSPECTOR GENERAL ACT OF 1978 (5 U.S.C. APP.) TO INCREASE 
   THE EFFICIENCY AND ACCOUNTABILITY OF OFFICES OF INSPECTOR GENERAL 
           WITHIN FEDERAL DEPARTMENTS, AND FOR OTHER PURPOSES




   October 27 (legislative day, September 22), 2000.--Ordered to be 
                                printed


                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
89-010                     WASHINGTON : 2000


                   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 M. Outhier, Investigative Counsel
       Michael D. Bopp, Legislative Director for Senator Collins
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                   Kenneth R. Boley, Minority Counsel
                     Darla D. Cassell, Chief Clerk


                                                       Calendar No. 919
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-510

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



 
                INSPECTOR GENERAL ACT AMENDMENTS OF 1999

                                _______
                                

October 27 (legislative day, September 22, 2000.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 870]

    The Committee on Governmental Affairs considered S. 870, a 
bill to amend the Inspector General Act of 1978 (5 U.S.C. App.) 
to increase the efficiency and accountability of Offices of 
Inspector General within Federal departments, and for other 
purposes, and reports favorably thereon with recommendations by 
a voice vote that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary..............................................1
 II. Background and need for legislation..............................2
III. Legislative history and committee consideration..................4
 IV. Section-by-section analysis......................................4
  V. Regulatory impact statement......................................5
 VI. CBO cost estimate................................................5
VII. Changes in existing law..........................................6

                         I. Purpose and Summary

    S. 870 provides the following changes to the Inspector 
General Act: (i) it prohibits Inspectors General (IGs) from 
receiving cash bonuses or awards; (ii) it provides for 
management reviews for Offices of Inspectors General (OIGs); 
(iii) it modifies the reporting requirements for OIGs; (iv) it 
increases the pay for IGs; and (v) it requires a study by the 
General Accounting Office of the need for consolidation of 
certain OIGs. The purpose of the bill is to increase the 
efficiency and accountability of federal IGs.

                II. Background and Need for Legislation

    The original Inspector General Act was signed into law 
twenty-two years ago. It has been subsequently amended, but has 
not received a systemic review since 1988. During the 106th 
Congress, the Senate Governmental Affairs Committee undertook a 
review of the current role and status of Inspectors General, 
and sought to determine the proper evolution of the OIGs at the 
start of the 21st century.
    During the past 22 years, the Inspector General community 
has grown from 12 offices in 1978 to 57 Inspectors General 
today. These 57 Inspectors General receive roughly $1.1 billion 
in annual funding from the Congress and employ over 10,000 
auditors, criminal investigators, and support personnel. OIGs 
are charged with tremendous responsibilities and are given 
great authority to uncover waste and abuse within the 
government.
    In many ways, the Inspectors General are the eyes and ears 
of the Congress as it works to detect and prevent waste, fraud, 
abuse, and mismanagement in federal programs. From their perch 
inside the federal agencies, the inspectors general have ably 
used their considerable auditing and oversight ability to 
inform subcommittees, committees, and the Congress about the 
day-to-day operations of the Executive branch. In many cases, 
OIGs have provided the critical documents and information that 
have assisted Congress in exposing fraud, waste, and abuse.
    The IG community has performed formidable tasks ably. They 
have made thousands of savings recommendations to Congress, 
ultimately saving taxpayers billions of dollars. Investigations 
by OIGs have also resulted in the recovery of billions of 
dollars from companies and individuals who defrauded the 
federal government. These investigations have led to thousands 
of criminal prosecutions, debarments, exclusions and 
suspensions. In sum, the IG's work ferreting out criminal and 
abusive action in government has gone a long way to create the 
clean and efficient government the taxpaying public expects and 
deserves.
    However, the Permanent Subcommittee on Investigations 
uncovered improprieties within one OIG itself, including poor 
accounting and management standards, violations of government 
contracting law, and perhaps most troubling, the abusive use of 
the authority of the OIG to further political interest. These 
failures raise a disturbing question--``Who is watching the 
Watchdog Congress has created?''
    While the Committee is not aware of any indication that 
these problems are widespread in the Inspector General 
community, the credibility and effectiveness of government 
itself is put in question whenever an office charged with 
combating waste and abuse engages in the kind of activity it is 
responsible for deterring.
    In response to these developments, the Governmental Affairs 
Committee has approved S. 870, the Inspector General Act 
Amendment of 2000, which has been designed to promote 
efficiency and accountability among the nation's OIGs.
    To enhance the independence of the Inspectors General 
community, the first proposal of this bill prohibits IGs from 
accepting any cash awards or bonuses. While this policy is 
followed informally by OIGs, S. 870 would ensure that it is 
applied as a matter of law to all OIGs.
    To increase accountability among the Inspectors General, 
this bill requires independent auditing of the books, and 
streamlines and focuses annual disclosure requirements. In 
recent years, Congressional changes have allowed a greater 
degree of sunshine to fall on our federal books, and the OIGs 
should be no exception to that rule. The taxpaying electorate 
is entitled to know how their money is spent, and, therefore, 
S. 870 compels transparency by mandating independent audits of 
each office every three years.
    On December 7, 1998, the National Commission on the 
Separation of Powers released its report which endorsed the 
concept of external reviews for OIGs. This bi-partisan 
commission was comprised of notable public figures including 
former Senate Majority Leader Howard H. Baker, Jr., former 
White House Counsel Lloyd N. Cutler, former U.S. Attorney 
General William Barr, former U.S. Secretary of State Lawrence 
Eagleburger, and former federal judge and director of the 
Federal Bureau of Investigation William Webster.
    Currently, OIGs are required by law to provide semi-annual 
reports to Congress. In response, OIGs have dutifully submitted 
voluminous documents twice yearly to Congress. However, at 
times these reports have been of questionable value. S. 870 
would instead increase the efficiency and value of the report 
process by reducing the requirement to a single report annually 
and specifying the material each report must address. Among 
other required information, under this bill each OIG would be 
required to identify all investigations and their status, 
provide detail of awarded noncompetitive contracts, and 
identify areas within their jurisdiction which are the ripest 
for fraud. The bill would permit biennial reporting by those 
OIGs that wish to continue current practices too.
    To both ensure continued independence and help correct an 
inequity involving the pay of Inspectors General versus their 
senior staff, this bill also would raise the annual pay for the 
Inspectors General from Executive Level 4 to Executive Level 3.
    Finally, the last provision of this bill calls upon the 
Comptroller General to develop criteria for determining whether 
the consolidation of OIGs would be cost-efficient and in the 
public interest. The General Accounting Office (``GAO'') would 
then conduct a study, based upon these criteria, to determine 
whether any OIGs should be consolidated. After the study is 
concluded, the GAO will submit a report to the Congress 
containing any recommendations for legislative action.
    Senator Collins noted in the July 19, 2000 hearing 
regarding S. 870 that it is ``designed to enhance the 
accountability and the independence of the IGs.'' Chairman 
Thompson agreed that enhancing the independence of the IGs is 
important, ``My own feeling is that the Executive Branch has 
gotten so preoccupied with the budget process and everything 
else, and has so little time to do oversight, that the balance 
is a little out of whack in favor of the executive power and 
that we need more * * * independence from the IGs than we have 
had * * *''

          III. Legislative History and Committee Consideration


                    amendments and committee action

    On July 19, 2000 the Committee on Governmental Affairs held 
a hearing to consider S. 870 as well as a legislative proposal 
to grant statutory law enforcement authority to presidentially-
appointed IGs. The witnesses were the Honorable Joshua Gotbaum, 
Executive Associate Director and Controller of the U.S. Office 
of Management and Budget, the Honorable Gaston L. Gianni, Jr., 
Inspector General for the Federal Deposit Insurance Corporation 
and Vice Chair of the President's Council on Integrity and 
Efficiency, the Honorable Patrick E. McFarland, Inspector 
General of the U.S. Office of Personnel Management, the 
Honorable Kenneth Mead, Inspector General for the U.S. 
Department of Transportation, and Nicholas M. Gess, Associate 
Deputy Attorney General, U.S. Department of Justice. On 
September 27, 2000, the Committee on Governmental Affairs 
considered S. 870. One amendment was offered by Senators 
Collins and Levin in the nature of a substitute, considered and 
adopted by voice vote. The Committee subsequently ordered S. 
870 reported by unanimous voice vote.

                    IV. Section-by-Section Analysis


Section 1. Short title

    ``The Inspector General Act Amendments of 2000''.

Section 2. Prohibition of cash bonus or awards

    This section prohibits IGs from accepting any cash award or 
cash bonus.

Section 3. External reviews

    This section requires that all Inspector General offices 
(OIGs) undergo an external review, not less than every 3 years, 
to evaluate the OIG's management and control of contracts, 
appropriated funds, and personnel actions.

Section 4. Annual reports (formerly semiannual reports)

    This section reduces the number of reports required to be 
submitted to Congress by requiring annual reports instead of 
semiannual reports. The provision also streamlines the 
information contained in those reports so that Congress and 
other policymakers can make better use of the work of the OIGs. 
The information required in the annual reports includes:
           Program areas within the establishment 
        identified as high risk because of vulnerabilities to 
        waste, fraud, abuse, and mismanagement;
           Description of the most significant audits 
        and investigations completed;
           Tables showing the number of audit reports 
        issued and associated financial benefits, corrective 
        actions taken as a result of OIG activity, and judicial 
        and administrative actions associated with 
        investigations;
           Organizational and management structure of 
        the OIG office; and
           Summary of each audit report issued in 
        previous reporting periods for which no management 
        decision has been made.

Section 5. Inspector Generals at Level III of executive schedule

    This section increases Inspector General's annual salary 
from $118,400 (Executive Level 4) to $125,900 (Executive Level 
3).

Section 6. Study and report on consolidation of Inspector General 
        Offices

    This section directs the Comptroller General to develop 
criteria for determining whether the consolidation of Federal 
Inspector General offices would be cost efficient and in the 
public interest. A study, based on the aforementioned criteria, 
would then be conducted to determine whether any offices should 
be consolidated . After the study is concluded, the Comptroller 
General shall then submit a report to Congress containing 
recommendations for any legislative action.

                     V. Regulatory Impact Statement

    Pursuant to paragraph 11(b) of rule XXVI of the Standing 
Rules of the Senate, the Committee has considered the 
regulatory impact that would be incurred in carrying out the 
bill. The Committee finds that enactment of the bill will not 
have significant regulatory impact.

                         VI. CBO Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 3, 2000.
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. 870, the Inspector 
General Act Amendments of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John R. 
Righter.
            Sincerely,
                                           Steven Lieberman
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 870--Inspector General Act Amendments of 2000

    S. 870 would amend the Inspector General Act of 1978 to 
raise the annual salary level of 28 inspectors general (IGs) 
from level IV to level III of the executive schedule, prohibit 
the payment of cash awards and bonuses to IGs, streamline 
certain reporting requirements, and require that IG offices be 
evaluated by an independent entity every three years. In 
addition, the bill would require the General Accounting Office 
(GAO) to study and report to the Congress on whether it would 
be cost effective and in the public interest to consolidate IG 
offices. GAO would have six months from enactment to complete 
its report.
    Subject to the availability of appropriated funds, CBO 
estimates that implementing the bill would cost up to $1.5 
million in fiscal year 2001 and, on average, around $1 million 
each year thereafter. That estimate includes annual costs of 
between $200,000 and $250,000 for increasing the pay of certain 
IGs and, based on information from GAO, about $1 million to 
review one-third of the roughly 60 IG offices each year, as 
well as savings of less than $500,000 a year to streamline 
reporting requirements. For fiscal year 2001, the estimate 
includes additional costs of less than $500,000 for GAO to 
study and report on the consolidation of IG offices. 
Prohibiting IGs from accepting cash awards and bonuses would 
codify existing administrative policy and thus have no 
budgetary effect.
    For most agencies with IG offices, any change in costs 
would be subject to the availability of appropriations. 
However, because the bill would affect direct spending by a few 
agencies that are not funded through annual appropriations, 
such as the Federal Deposit Insurance Corporation, the 
Tennessee Valley Authority, and the National Credit Union 
Administration, pay-as-you-go procedures would apply. CBO 
estimates that enacting the bill would have a negligible impact 
on direct spending.
    S. 870 contains no intergovernmental mandates or private-
sector mandates as defined in the Unfunded Mandates Reform Act 
and would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is John R. Righter. 
The estimate was approved by Peter H. Fontaine, Deputy 
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. 870, 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 
change is proposed is shown in roman):

       TITLE V--GOVERNMENT ORGANIZATION AND EMPLOYEES APPENDICES


                     INSPECTOR GENERAL ACT OF 1978


Sec. 3. Appointment of Inspector General; supervision; removal; 
                    political activities; appointment of Assistant 
                    Inspector General for Auditing and Assistant 
                    Inspector General for Auditing and Assistant 
                    Inspector General for Investigations

           *       *       *       *       *       *       *


    (e) An Inspector General (as defined under section 8G 
(a)(6) or 11(3)) may not receive any cash award or cash bonus, 
including any cash award under chapter 45 of title 5, United 
States Code.

Sec. 4. Duties and responsibilities; report of criminal violations to 
                    Attorney General; External Reviews

    (a) It shall be the duty and responsibility of each 
Inspector General, with respect to the establishment within 
which his Office is established--
          (1) to provide policy direction for and to conduct, 
        supervise, and coordinate audits and investigations 
        relating to the programs and operations of such 
        establishments;
          (2) to review existing and proposed legislation and 
        regulations relation to programs and operations of such 
        establishment and to make recommendations in the 
        [semiannual] annual reports required by section 5(a) 
        concerning the impact of such legislation or 
        regulations on the economy and efficiency in the 
        administration of programs and operations administered 
        or financed by such establishment or the prevention and 
        detection of fraud and abuse in such programs and 
        operations;

           *       *       *       *       *       *       *

    (e)(1)(A) Not less than every 3 years an external review 
shall be conducted of each Office defined under sections 11(4) 
and 8G(a)(5).
    (B) The Inspector General of each Office defined under 
sections 11(4) and 8G(5) shall arrange with the General 
Accounting Office or an appropriate private entity for the 
conduct of the review.
    (C) If an Inspector General contracts with a private entity 
for a review under this subsection, the private entity shall be 
contracted in accordance with section 303 of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 
253).
    (2) At a minimum, an external review under this subsection 
shall evaluate whether the Office of Inspector General properly 
manages and controls--
          (A) contracts awarded by the Office of Inspector 
        General, including a determination of whether--
                  (i) procedures used to procure contracts are 
                in accordance with applicable laws and 
                regulations; and
                  (ii) costs incurred are reasonable and 
                allowable under the terms of each contract;
          (B) appropriated funds, including a determination of 
        whether training and travel funds are expended in 
        accordance with applicable laws and regulations; and
          (C) personnel actions, including a determination of 
        whether hiring and promotion practices used and 
        performance awards issued are in accordance with 
        applicable laws and regulations.
    (3) Not later than 30 calendar days after the completion of 
an external review, a report of the results shall be submitted 
to the head of the establishment and simultaneously to the 
appropriate committees or subcommittees of Congress--

           *       *       *       *       *       *       *


Sec. 5. Semiannual reports; transmittal to Congress; availability to 
                    public, immediate report on serious or flagrant 
                    problems; disclosure of information; definitions.

    (a) [Each Inspector General shall, not later than April 30 
and October 31 of each year, prepare semiannual reports 
summarizing the activities of the Office during the immediately 
preceding six month periods ending March 31 and September 30.] 
Each Inspector General shall, not later than October 31 of each 
year, prepare annual reports summarizing the activities and 
accomplishments of the Office during the immediately preceding 
12 month period ending September 30. Such reports shall 
include, but need not be limited to--
          [(1) a description of significant problems, abuses, 
        and deficiencies relating to the administration of 
        programs and operations of such establishment disclosed 
        by such activities during the reporting period;
          [(2) a description of the recommendations for 
        corrective action made by the Office during the 
        reporting period with respect to significant problems, 
        abuses, or deficiencies identified pursuant to 
        paragraph (1);
          [(3) an identification of each significant 
        recommendation described in previous semiannual reports 
        on which corrective action has not been completed;
          [(4) a summary of matters referred to prosecutive 
        authorities and the prosecutions and convictions which 
        have resulted;
          [(5) a summary of each report made to the head of the 
        establishment under section 6(b)(2) during the 
        reporting period;
          [(6) a listing, subdivided according to subject 
        matter, of each audit report issued by the Office 
        during the reporting period and for each audit report, 
        where applicable, the total dollar value of questioned 
        costs (including a separate category for the dollar 
        value of unsupported costs) and the dollar value of 
        recommendations that funds be put to better use;
          [(7) a summary of each particularly significant 
        report;
          [(8) statistical tables showing the total number of 
        audit reports and the total dollar value of questioned 
        costs (including a separate category for the dollar 
        value of unsupported costs), for audit reports--
                  [(A) for which no management decision had 
                been made by the commencement of the reporting 
                period;
                  [(B) which were issued during the reporting 
                period;
                  [(C) for which a management decision was made 
                during the reporting period, including--
                          [(i) the dollar value of disallowed 
                        costs; and
                          [(ii) the dollar value of costs not 
                        disallowed; and
                  [(D) for which no management decision has 
                been made by the end of the reporting period;
          [(9) statistical tables showing the total number of 
        audit reports and the dollar value of recommendations 
        that funds be put to better use by management, for 
        audit reports--
                  [(A) for which no management decision had 
                been made by the commencement of the reporting 
                period;
                  [(B) which were issued during the reporting 
                period;
                  [(C) for which a management decision was made 
                during the reporting period, including--
                          [(i) the dollar value of 
                        recommendations that were agreed to by 
                        management; and
                          [(ii) the dollar value of 
                        recommendations that were not agreed to 
                        by management; and
                  [(C) for which no management decision has 
                been made by the end of the reporting period;
          [(10) a summary of each audit report issued before 
        the commencement of the reporting period for which no 
        management decision has been made by the end of the 
        reporting period (including the date and title of each 
        such report), an explanation of the reasons such 
        management decision has not been made, and a statement 
        concerning the desired timetable for achieving a 
        management decision on each such report;
          [(11) a description and explanation of the reasons 
        for any significant revised management decision made 
        during the reporting period;
          [(12) information concerning any significant 
        management decision with which the Inspector General is 
        in disagreement; and]
          (1) a summary of the program areas within the 
        establishment identified by the Inspector General as 
        high risk because of vulnerabilities to waste, fraud, 
        abuse, and mismanagement;
          (2) a description of the most significant audits, 
        investigations (administrative, civil, and criminal), 
        and evaluations and inspections completed during the 
        reporting period;
          (3) a summary of each report made to the head of the 
        establishment under section 6(b)(2) during the 
        reporting period;
          (4) a table showing--
                  (A)(i) the total number of final audit 
                reports issued by the Office of Inspector 
                General; and
                  (ii) the financial benefits associated with 
                the reports segregated by category, such as 
                budget reductions, costs avoided, questioned 
                costs, and revenue enhancements, and
                  (B) corrective actions taken and program 
                improvements made during the reporting period 
                in response to either an Office of Inspector 
                General audit finding or recommendation 
                (excluding any recommendation included under 
                subparagraph (A) with respect to such 
                corrective actions);
          (5) a table showing--
                  (A) the judicial and administrative actions 
                associated with investigations conducted by the 
                Office of Inspector General;
                  (B) the number of--
                          (i) cases referred for criminal 
                        prosecution, civil remedies, or 
                        administrative actions;
                          (ii) cases presented but declined for 
                        prosecution, segregated by criminal and 
                        civil;
                          (iii) cases accepted for prosecution 
                        (both Federal and State); segregated by 
                        criminal and civil;
                          (iv) defendants indicted;
                          (v) defendants convicted;
                          (vi) defendants acquitted or charges 
                        dismissed after indictment;
                          (vii) defendants sentenced to terms 
                        of imprisonment;
                          (viii) defendants sentenced to terms 
                        of probation; and
                          (ix) suspensions, disbarments, 
                        exclusions, sanctions, or some other 
                        similar administrative action; and
                  (C) the total amount of fines, restitutions, 
                and recoveries;
          (6) a description of the organization and management 
        structure of the Office of Inspector General, 
        including--
                  (A) an organization chart showing the major 
                components of the Office:
                  (B) a statistical table showing the number of 
                authorized full-time equivalent positions 
                segregated by component and by headquarters and 
                field office; and
                  (C) the amount of funding received in prior 
                and current fiscal years;
          (7) a table showing--
                  (A) the number of contracts, and associated 
                dollar value, awarded on a noncompetitive basis 
                by the Office of Inspector General; and
                  (B) with respect to any individual contract 
                valued over $100,000, awarded on a non-
                competitive basis--
                          (i) the name of the contractor;
                          (ii) statement of work;
                          (iii) the time period of the 
                        contract; and
                          (iv) the dollar amount of the 
                        contract;
          (8)(A) a summary of each audit report issued in 
        previous reporting periods for which no management 
        decision has been made by the end of the reporting 
        period (including the date and title of each such 
        report);
          (B) an explanation of the reasons such management 
        decision has not been made; and
          (C) a statement concerning the desired timetable for 
        achieving a management decision on each such report;
          (9) [13] the information described under section 
        [05(b)] 804(b) of the Federal Management Improvement 
        Act of 1996; and
          (10) any other information that the Inspector General 
        determines appropriate to include in the annual report
    (b) [Semiannual] Annual reports of each Inspector General 
shall be furnished to the head of the establishment involved 
not later than [April 30 and] October 31 of each year and shall 
be transmitted by such head to the appropriate committees or 
subcommittees of the Congress within thirty days after receipt 
of the report, together with a report by the head of the 
establishment containing--
          (1) any comments such head determines appropriate;
          (2) statistical tables showing the total number of 
        audit reports and the dollar value of disallowed costs, 
        for audit reports--
                  (A) for which final action had not been taken 
                by the commencement of the reporting period;
                  (B) on which management decisions were made 
                during the reporting period;
                  (C) for which final action was taken during 
                the reporting period, including--
                          (i) the dollar value of disallowed 
                        costs that were recovered by management 
                        through collection, offset, property in 
                        lieu of cash, or otherwise; and
                          (ii) the dollar value of disallowed 
                        costs that were written off by 
                        management; and
                  (D) for which no final action has been taken 
                by the end of the reporting period;
          (3) statistical tables showing the total number of 
        audit reports and the dollar value of recommendations 
        that funds be put to better use by management agreed to 
        in a management decision, for audit reports--
                  (A) for which final action had not been taken 
                by the commencement of the reporting period;
                  (B) on which management decisions were made 
                during the reporting period;
                  (C) for which final action was taken during 
                the reporting period, including--
                          (i) the dollar value of 
                        recommendations that were actually 
                        completed; and
                          (ii) the dollar value of 
                        recommendations that management has 
                        subsequently concluded should not or 
                        could not be implemented or completed; 
                        and
                  (D) for which no final action has been taken 
                by the end of the reporting period; and (
          (4) a statement with respect to audit reports on 
        which management decisions have been made but final 
        action has not been taken, other than audit reports on 
        which a management decision was made within the 
        preceding year, containing--
                  (A) a list of such audit reports and the date 
                each such report was issued;
                  (B) the dollar value of disallowed costs for 
                each report;
                  (C) the dollar value of recommendations that 
                funds be put to better use agreed to by 
                management for each report; and
                  (D) an explanation of the reasons final 
                action has not been taken with respect to each 
                such audit report, except that such statement 
                may exclude such audit reports that are under 
                formal administrative or judicial appeal or 
                upon which management of an establishment has 
                agreed to pursue a legislative solution, but 
                shall identify the number of reports in each 
                category so excluded.
    (c) Within sixty days of the transmission of the 
[semiannual] annual reports of each Inspector General to the 
Congress, the head of each establishment shall make copies of 
such report available to the public upon request and at a 
reasonable cost. Within 60 days after the transmission of the 
[semiannual] annual reports of each establishment head to the 
Congress, the head of each establishment shall make copies of 
such report available to the public upon request and at a 
reasonable cost.
    (d) Each Inspector General shall report immediately to the 
head of the establishment involved whenever the Inspector 
General becomes aware of particularly serious or flagrant 
problems, abuses, or deficiencies relating to the 
administration of programs and operations of such 
establishment. The head of the establishment shall transmit any 
such report to the appropriate days, together with a report by 
the head of the establishment containing any comments such head 
deems appropriate.
    (e)(1) Nothing in this section shall be construed to 
authorize the public disclosure of information which is--
          (A) specifically prohibited from disclosure by any 
        other provision of law;
          (B) specifically required by Executive order to be 
        protected from disclosure in the interest of national 
        defense or national security or in the conduct of 
        foreign affairs; or
          (C) a part of an ongoing criminal investigation.
    (2) Notwithstanding paragraph (1)(C), any report under this 
section may be disclosed to the public in a form which includes 
information with respect to a part of an ongoing criminal 
investigation if such information has been included in a public 
record.
    (3) Except to the extent and in the manner provided under 
section 6103(f) of the Internal Revenue Code of 1986 [26 USCS 
Sec. 6103(f)], nothing in this section or in any other 
provision of this Act shall be construed to authorize or permit 
the withholding of information from the Congress, or from any 
committee or subcommittee thereof.
    (f)(1) Subject to paragraph (4), in addition to any annual 
report required to be furnished and transmitted under 
subsection (b), an Inspector General shall prepare and submit a 
report described under paragraph (2) to--
          (A) the applicable congressional committee, if the 
        chairman or ranking member of a congressional committee 
        with appropriate jurisdiction submits a written request 
        to such Inspector General; or
          (B) to the Comptroller General of the United States 
        if the Comptroller General submits a written request to 
        such Inspector General.
    (2) A report referred to under paragraph (1) shall--
          (A) contain the information required for an annual 
        report under subsection (a); and
          (B) summarize the activities of the Office during the 
        6-month period ending on March 31 of the calendar year 
        following the date on which the request is made.
    (3) A report under this subsection shall be submitted on 
April 30 of the calendar year following the date on which the 
request is made.
    (4) An Inspector General shall not be required to submit a 
report under this subsection if the written request for such 
report is submitted to the Inspector General after November 30 
of the calendar year preceding the date on which the report is 
otherwise required to be submitted to a congressional committee 
or the Comptroller General.
    [(f)] (g) As used in this section--
          (1) the term ``questioned cost'' means a cost that is 
        questioned by the Office because of--
                  (A) an alleged violation of a provision of a 
                law, regulation, contract, grant, cooperative 
                agreement, or other agreement or document 
                governing the expenditure of funds;
                  (B) a finding that, at the time of the audit, 
                such cost is not supported by adequate 
                documentation; or
                  (C) a finding that the expenditure of funds 
                for the intended purpose is unnecessary or 
                unreasonable;
          (2) the term ``unsupported cost'' means a cost that 
        is questioned by the Office because the Office found 
        that, at the time of the audit, such cost is not 
        supported by adequate documentation;
          (3) the term ``disallowed cost'' means a questioned 
        cost that management, in a management decision, has 
        sustained or agreed should not be charged to the 
        Government;
          (4) the term ``recommendation that funds be put to 
        better use'' means a recommendation by the Office that 
        funds could be used more efficiently if management of 
        an establishment took actions to implement and complete 
        the recommendation, including--
                  (A) reductions in outlays;
                  (B) deobligation of funds from programs or 
                operations;
                  (C) withdrawal of interest subsidy costs on 
                loans or loan guarantees, insurance, or bonds;
                  (D) costs not incurred by implementing 
                recommended improvements related to the 
                operations of the establishment, a contractor 
                or grantee;
                  (E) avoidance of unnecessary expenditures 
                noted in preaward reviews of contract or grant 
                agreements; or
                  (F) any other savings which are specifically 
                identified;
          (5) the term ``management decision'' means the 
        evaluation by the management of an establishment of the 
        findings and recommendations included in an audit 
        report and the issuance of a final decision by 
        management concerning its response to such findings and 
        recommendations, including actions concluded to be 
        necessary; and
          (6) the term ``final action'' means--
                  (A) the completion of all actions that the 
                management of an establishment has concluded, 
                in its management decision, are necessary with 
                respect to the findings and recommendations 
                included in an audit report; and
                  (B) in the event that the management of an 
                establishment concludes no action is necessary, 
                final action occurs when a management decision 
                has been made.

           *       *       *       *       *       *       *


Sec. 8. Additional provision with respect to the Inspector General of 
                    the Department of Defense

           *       *       *       *       *       *       *


    (f)(1) Each [semiannual] annual report prepared by the 
Inspector General of the Department of Defense under section 
5(a) shall include information concerning the numbers and types 
of contract audits conducted by the Department during the 
reporting period. Each such report shall be transmitted by the 
Secretary of Defense to the Committees on Armed Services and 
Governmental Affairs of the Senate and the Committee on Armed 
Services and the Committee on Government Reform and Oversight 
of the House of Representatives and to other appropriate 
committees or subcommittees of the Congress.

           *       *       *       *       *       *       *


Sec. 8A. Special provisions relating to the Agency for International 
                    Development.

           *       *       *       *       *       *       *


    (c) In addition to the officers and employees provided for 
in section 6(c) of this Act, members of the Foreign Service 
may, at the request of the Inspector General of the Agency for 
International Development, be assigned as employees of the 
Inspector General.

           *       *       *       *       *       *       *


             TITLE V--GOVERNMENT ORGANIZATION AND EMPLOYEES


Sec. 5315. Positions at Level IV

[Inspector General, Department of Education.
[Inspector General, Department of Energy.
[Inspector General, Department of Health and Human Services.
[Inspector General, Department of Agriculture.
[Inspector General, Department of Housing and Urban 
Development.
[Inspector General, Department of Labor.
[Inspector General, Department of Transportation.
[Inspector General, Department of Veterans Affairs.
[Inspector General, Department of Defense.
[Inspector General, Department of State.
[Inspector General, Department of Commerce.
[Inspector General, Department of the Interior.
[Inspector General, Department of Justice.
[Inspector General, Department of the Treasury.
[Inspector General, Agency for International Development.
[Inspector General, Environmental Protection Agency.
[Inspector General, Federal Emergency Management Agency.
[Inspector General, General Services Administration.
[Inspector General, National Aeronautics and Space 
Administration.
[Inspector General, Nuclear Regulatory Commission.
[Inspector General, Office of Personnel Management.
[Inspector General, Railroad Retirement Board.
[Inspector General, Small Business Administration.
[Inspector General, Federal Deposit Insurance Corporation.
[Inspector General, Resolution Trust Corporation.
[Inspector General, Central Intelligence Agency.
[Inspector General, Social Security Administration.
[Inspector General, United States Postal Service.]

             TITLE V--GOVERNMENT ORGANIZATION AND EMPLOYEES


 Sec. 5314. Positions at level III

    Inspector General, Department of Education.
    Inspector General, Department of Energy.
    Inspector General, Department of Health and Human Services.
    Inspector General, Department of Agriculture.
    Inspector General, Department of Housing and Urban 
Development.
    Inspector General, Department of Labor.
    Inspector General, Department of Transportation.
    Inspector General, Department of Veterans Affairs.
    Inspector General, Department of Defense.
    Inspector General, Department of State.
    Inspector General, Department of Commerce.
    Inspector General, Department of the Interior.
    Inspector General, Department of Justice.
    Inspector General, Department of the Treasury.
    Inspector General, Agency for International Development.
    Inspector General, Corporation for Community and National 
Service.
    Inspector General, Environmental Protection Agency.
    Inspector General, Federal Emergency Management Agency.
    Inspector General, General Services Administration.
    Inspector General, National Aeronautics and Space 
Administration.
    Inspector General, Nuclear Regulatory Commission.
    Inspector General, Office of Personnel Management.
    Inspector General, Railroad Retirement Board.
    Inspector General, Small Business Administration.
    Inspector General, Federal Deposit Insurance Corporation.
    Inspector General, Central Intelligence Agency.
    Inspector General, Social Security Administration.
    Inspector General, United States Postal Service.

                                
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