Inspectors General: Proposals to Strengthen Independence and
Accountability (20-JUN-07, GAO-07-1021T).
H.R. 928, Improving Government Accountability Act, contains
proposals intended to enhance the independence of the inspectors
general and to create a Council of the Inspectors General on
Integrity and Efficiency. This testimony provides information and
views about the specific proposals based on GAO's prior work. We
believe that effective, ongoing coordination of the federal
oversight efforts of GAO and the Inspectors General (IG) is more
critical than ever, due to the challenges and risks currently
facing our nation including our immediate and long-term fiscal
challenges, increasing demands being made for federal programs,
and changing risk. Close strategic planning and ongoing
coordination of audit efforts between GAO and the IGs would help
to enhance the effectiveness and impact of work performed by
federal auditors. In May of this year the Comptroller General
hosted a meeting with the IGs for the principal purpose of
improving the coordination of federal oversight between the IGs
and GAO. Working together, and in their respective areas, GAO and
the IGs can leverage each other's work and provide valuable input
on the broad range of high-risk programs and management
challenges across government.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-1021T
ACCNO: A71085
TITLE: Inspectors General: Proposals to Strengthen Independence
and Accountability
DATE: 06/20/2007
SUBJECT: Accountability
Audit authority
Audit oversight
Audit reports
Auditors
Federal agencies
Federal legislation
Government job appointments
Inspectors general
Interagency relations
Intergovernmental relations
Internal controls
Investigations by federal agencies
Investigations into federal agencies
Proposed legislation
Government agency oversight
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GAO-07-1021T
* [1]Auditor Independence
* [2]Provisions of H.R. 928
* [3]Terms of office and removal for cause
* [4]IG budget submission
* [5]IG Council
* [6]IG offices as separate agencies
* [7]IG investigative and law enforcement authorities
* [8]GAO and IG Coordination
* [9]Enclosure I: Inspectors General Appointed by the President
* [10]Enclosure II: Inspectors General Appointed by Agency Heads
* [11]Related GAO Products
* [12]Order by Mail or Phone
Testimony
Before the Subcommittee on Government Management, Organization and
Procurement, Committee on Oversight and Government Reform, House of
Representatives
United States Government Accountability Office
GAO
For Release on Delivery
Expected at 2:00 p.m. EST
Wednesday, June 20, 2007
INSPECTORS GENERAL
Proposals to Strengthen Independence and Accountability
Statement of Jeffrey C. Steinhoff
Managing Director Financial Management
and Assurance
GAO-07-1021T
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss current legislative proposals
intended to enhance the independence and operations of the inspectors
general (IG) offices. The IG offices play a key role in federal agency
oversight. They were created to prevent and detect fraud, waste, abuse,
and mismanagement in agencies' programs and operations; conduct and
supervise audits and investigations; and recommend policies to promote
economy, efficiency, and effectiveness. In the past almost 3 decades since
passage of the landmark IG Act of 1978, the IGs have played a very
important role in enhancing government accountability and protecting the
government against fraud, waste, abuse, and mismanagement.
The IG Act recognized IG independence as one of the most important
elements of the overall effectiveness of the IG function. In fact, much of
the IG Act, as amended (IG Act), provides specific protections to IG
independence that are unprecedented for an audit and investigative
function located within the organization being reviewed. These protections
were necessary due in large part to the unusual reporting requirements of
the IGs who are both subject to the general supervision and budget
processes of the agencies they audit while at the same time being expected
to provide independent reports of their work externally to the Congress.
Many of the provisions in the Improving Government Accountability Act,
H.R. 928,^1 seek to further strengthen the independence of the IGs to help
ensure their ability to effectively carry out their dual internal and
external reporting roles.
Today, I will discuss (1) the key principles of auditor independence, (2)
the proposals in H.R. 928 regarding IG independence and operations and the
establishment of a statutory council of IGs, and (3) additional matters
concerning IG independence and the coordination of federal oversight from
GAO's recent IG work.
My testimony today draws on provisions of the IG Act, professional
auditing standards, prior GAO reports, and information reported by the
IGs. In May 2006, the Comptroller General hosted a panel discussion on
many of the issues to be discussed today. I will draw upon information
gained from the panel to address several issues in H.R. 928.
^1Improving Government Accountability Act, H.R. 928, 110^TH Cong.
(February 8, 2007).
Auditor Independence
Key to a consideration of H.R. 928 are the principles of auditor
independence and how they apply in the IG community. Independence is the
cornerstone of professional auditing. Without independence, an
organization cannot do independent audits. Lacking this critical
attribute, an organization's work might be classified as studies, research
reports, consulting reports, or reviews, but not independent audits.
Government Auditing Standards^2 state, "In all matters relating to the
audit work, the audit organization and the individual auditor, whether
government or public, must be free from personal, external, and
organizational impairments to independence, and must avoid the appearance
of such impairments to independence. Auditors and audit organizations must
maintain independence so that their opinions, findings, conclusions,
judgments, and recommendations will be impartial and viewed as impartial
by objective third parties with knowledge of the relevant information."
[emphasis added].
o Personal independence applies to individual auditors at all
levels of the audit organization, including the head of the
organization. Personal independence refers to the auditor's
ability to remain objective and maintain an independent attitude
in all matters relating to the audit, as well as the auditor's
ability to be recognized by others as independent. The auditor
needs an independent and objective state of mind that does not
allow personal bias or the undue influence of others to override
the auditor's professional judgments. This attitude is also
referred to as intellectual honesty. The auditor must also be free
from direct financial or managerial involvement with the audited
entity or other potential conflicts of interest that might create
the perception that the auditor is not independent.
o External independence refers to both the auditor's and the audit
organization's freedom to make independent and objective judgments
free from external influences or pressures. Examples of
impairments to external independence include restrictions on
access to records, government officials, or other individuals
needed to conduct the audit; external interference over the
assignment, appointment, compensation, or promotion of audit
personnel; restrictions on funds or other resources provided to
the audit organization that adversely affect the audit
organization's ability to carry out its responsibilities; or
external authority to overrule or to inappropriately influence the
auditors' judgment as to appropriate reporting content.
o Organizational independence refers to the audit organization's
placement in relation to the activities being audited.
Professional auditing standards have different criteria for
organizational independence for external and internal audit
organizations. The IGs, in their statutory role of providing
oversight of their agencies' operations, represent a unique hybrid
of external and internal reporting responsibilities.
^2GAO, Government Auditing Standards, January 2007 Revision,
[32]GAO-07-162G , Sections 3.02 and 3.03 (Washington, D.C.: January 2007).
External audit organizations are organizationally independent
under professional auditing standards when they are
organizationally placed outside of the entity under audit. In
government, this is achieved when the audit organization is in a
different level of government (for example, federal auditors
auditing a state government program) or different branch of
government within the same level of government (for example,
legislative auditors, such as GAO, auditing an executive branch
program). External auditors also report externally, meaning that
their audit reports are disseminated to and used by third parties.
Internal audit organizations are defined as being organizationally
independent under professional auditing standards if the head of
the audit organization (1) is accountable to the head or deputy
head of the government entity or to those charged with governance,
(2) reports the audit results both to the head or deputy head of
the government entity and to those charged with governance, (3) is
located organizationally outside the staff or line-management
function of the unit under audit, (4) has access to those charged
with governance, and (5) is sufficiently removed from political
pressures to conduct audits and report findings, opinions, and
conclusions objectively without fear of political reprisal. Under
internal auditing standards,^3 internal auditors are generally
limited to reporting internally to the organization that they
audit, except when certain conditions are met.
The IG offices, having been created to perform a unique role in
overseeing federal agency operations, have characteristics of both
external audit organizations and internal audit organizations. For
example, the IGs have external reporting requirements consistent
with the reporting requirements for external auditors while at the
same time being part of their respective agencies. IGs also have a
dual reporting responsibility to the Congress and the agency head.
The IG Act also contains many unique provisions to provide for
independence under this model.
^3The Institute of Internal Auditors, Professional Practices Framework,
International Standards for the Professional Practice of Internal Auditing
(Altamonte Springs, Florida: March 2007).
Under the IG Act, the IGs (1) may perform any audit or
investigation without interference from the agency head and others
except under specific conditions, (2) report to and receive
general supervision only from the heads or deputy heads of their
agencies and no other agency officials, and (3) have direct and
immediate access to their agency heads. The IGs' external
reporting requirements in the IG Act include reporting the results
of their work in semiannual reports to the Congress. Under the IG
Act, the IGs are to report their findings without alteration by
their respective agencies, and these reports are to be made
available to the general public.
The IG Act also directs the IGs to keep the agency head and the
Congress fully and currently informed by these semiannual reports,
and otherwise, of any fraud and other serious problems, abuses,
and deficiencies relating to the administration of programs and
operations administered or financed by their agencies. Also, the
IGs are required to report particularly serious or flagrant
problems, abuses, or deficiencies immediately to their agency
heads, who are required to transmit the IG's report to the
Congress within 7 calendar days. Finally, depending on the IG's
appointment process, either the President or the agency head must
provide the Congress notification as to the reasons for the
removal of any IG.
A key provision in the IG Act regarding IG independence is for
certain IGs to be appointed by the President with the advice and
consent of the Senate. This appointment is required to be without
regard to political affiliation and is to be based solely on an
assessment of a candidate's integrity and demonstrated ability.
These presidentially appointed IGs can only be removed from office
by the President, who must communicate the reasons for removal to
both houses of the Congress. Government auditing standards
recognize this external appointment/removal of the IG as a key
independence consideration for IGs as external audit
organizations.
Organizational independence differs between the offices of
presidentially appointed IGs and agency-appointed IGs. In 1988,
the IG Act was amended to establish additional IG offices in
designated federal entities (DFE) named in the legislation.
Generally, these IGs have the same authorities and
responsibilities as those IGs established by the original 1978
Act, but they have a clear distinction in their appointment--they
are appointed and removed by their entity heads rather than by the
President and are not subject to Senate confirmation. In addition,
the DFE IGs do not have the requirement that their appointment is
to be without regard to political affiliation and based solely on
integrity and demonstrated ability. The DFE IGs, while they are
covered by many of the same provisions of the IG Act as the IGs
appointed by the President with Senate confirmation, are more
closely aligned to independence standards for internal auditors
rather than external auditors. At the same time, Government
Auditing Standards recognize that additional statutory safeguards
exist for DFE IG independence for reporting externally. These
safeguards include establishment by statute, communication of the
reasons for removal of the head of an audit organization to the
cognizant legislative oversight body, statutory protections that
prevent the audited entity from interfering with an audit,
statutory requirements for the audit organization to report to a
legislative body on a recurring basis, and statutory access to
records and documents related to agency programs.
We believe that the differences in the appointment and removal
processes between presidentially appointed IGs and those appointed
by the agency head do result in a clear difference in the
organizational independence structures of the IGs. Those offices
with IGs appointed by the President are more closely aligned with
the independence standards for external audit organizations, while
those offices with IGs appointed by the agency head are more
closely aligned with the independence standards for internal audit
organizations. However, as I mentioned earlier, the IGs represent
a unique hybrid of external auditing and internal auditing in
their oversight roles for the federal agencies.
Provisions of H.R. 928
In May 2006, at the request of the Senate Committee on Homeland
Security and Governmental Affairs, the Comptroller General
convened a panel of recognized leaders of the federal audit and
investigative community to discuss many of the same proposals that
are in H.R. 928, Improving Government Accountability Act. We drew
the panel from the current IG leadership, former IGs,
knowledgeable former and current federal managers, representatives
of academia and research institutions, a former member of the
Congress, and congressional staff, including the congressional
staff person closely involved in the development of the 1978 Act.
Among other issues, the panel members discussed terms of office
and removal for cause, submission of IG budgets, a proposed IG
Council, and investigative and law enforcement authorities for
agency-appointed IGs. The panel members did not discuss the
proposal in H.R. 928 calling for establishing IG offices as
separate agencies for purposes related to personnel matters. In
September 2006 we issued the results of the panel discussion.^4
I would now like to highlight the overall perspectives of the
panel in the context of H.R. 928.
Terms of office and removal for cause
Depending on the nature of their appointment, IGs serve at the
pleasure of either the President or their agency head. The IGs
appointed by the President with Senate confirmation may be removed
only by the President, while the IGs appointed by their agency
heads may be removed or transferred from their office only by the
agency head. However, in both types of removal, the reasons must
be communicated to the Congress after the action has taken place.
H.R. 928 includes a provision to specify a 7-year term of office
for each IG with more than one term possible. In addition, the
bill provides a removal-for-cause provision whereby an IG may be
removed from office prior to the expiration of his or her term
only on the basis of permanent incapacity, inefficiency, neglect
of duty, malfeasance, conviction of a felony, or conduct involving
moral turpitude.
The majority of the panel participants did not favor statutorily
establishing a fixed term of office for IGs. The reasons included
the panelists' belief that the proposal could disrupt current
agency/IG relationships and that agency flexibility is needed to
remove a poor-performing IG if necessary. On the other hand, a
statutory term of office and removal for specified causes was
viewed positively by some panelists as a means of enhancing
independence by relieving some of the immediate pressure
surrounding removal. The panel members did generally support a
statutory requirement to notify the Congress in writing in advance
of removing an IG, with an explanation of the reason for removal.
The participants cautioned that this procedure should consist only
of notification, without building in additional steps or actions
in the removal process.
IG budget submission
The IG Act Amendments of 1988 require the President's budget to
include a separate appropriation account for each of those IGs who
are appointed by the President or otherwise specified by the act.
In this context, IG budget requests are generally part of each
agency's budget process and are submitted as a separate budget
line item to the Office of Management and Budget (OMB) and the
Congress as a part of each agency's overall budget. In contrast,
most IGs appointed by their agency heads do not have a separate
appropriation account.
^4GAO, Highlights of the Comptroller General's Panel on Federal Oversight
and the Inspectors General, [33]GAO-06-931SP (Washington, D.C.: Sept. 11,
2006).
H.R. 928 would give the IGs an opportunity to justify their
funding requests directly to OMB and the Congress in addition to
being a part of their agencies' budget processes. In those cases
where the IGs make their budget requests directly to OMB and the
Congress, H.R. 928 would also require a comparison of the budget
requests submitted by the IGs to the funds requested by the agency
heads for their IGs included in the Budget of the United States
Government. The panel members had mixed views about whether IGs
should submit their budget requests directly to OMB and the
Congress. The panel believed that the current system of separate
budget line items for the presidential IGs works well and that all
IGs should have separate budget line items. This is an issue the
Congress would need to consider in the context of the broader
budget and appropriations process.
IG Council
In accordance with Executive Order No. 12805 issued in 1992, the
IGs meet and coordinate as two groups. The IGs appointed by the
President and confirmed by the Senate are members of the
President's Council on Integrity and Efficiency (PCIE), and the
IGs appointed by their agency heads are members of the Executive
Council on Integrity and Efficiency (ECIE). Both the PCIE and ECIE
are chaired by the OMB Deputy Director for Management.
H.R. 928 provides for a combined IG Council with duties and
functions similar to the current PCIE and ECIE, including (1)
identifying, reviewing, and discussing areas of weakness and
vulnerability in federal programs and operations with respect to
fraud, waste, and abuse; (2) developing plans for coordinated
governmentwide activities that address these problems and promote
economy and efficiency in federal programs and operations; and (3)
developing policies and professional training to maintain a corps
of well-trained and highly skilled IG personnel. The bill also
provides for a separate appropriation account for the IG Council.
In a prior report^5 we recommended establishing an IG Council in
statute with a designated funding source. We believe that by
providing a statutory basis for the council's roles and
responsibilities, the permanence of the council could be
established and the ability to take on more sensitive issues could
be strengthened. In contrast, the participants in our May 2006
panel discussion had mixed views about statutorily establishing a
joint IG Council but did favor establishing a funding mechanism.
^5GAO, Inspectors General: Enhancing Federal Accountability,
[34]GAO-04-117T (Washington, D.C.: Oct. 8, 2003).
H.R. 928 also provides for an Integrity Committee of the IG
Council to review and investigate allegations of IG misconduct.
The Integrity Committee's function would be similar to that of the
current Integrity Committee of the PCIE and ECIE, which is charged
with receiving, reviewing, and referring for investigation, where
appropriate, allegations of wrongdoing against IGs and members of
the IG's senior staff operating with the IG's knowledge.
Currently, the Integrity Committee receives its authority under
Executive Order 12993, signed in 1996, and is chaired by a
representative of the FBI. Other members of the committee are the
Special Counsel of the Office of Special Counsel, the Director of
the Office of Government Ethics, and three IGs representing the
PCIE and the ECIE. Cases investigated by members of the Integrity
Committee may be forwarded to the PCIE and ECIE Chairperson for
further action.
We believe that H.R. 928 would provide the IG councils--formed
currently through executive order--with needed statutory
permanence, and we continue to support formalizing a combined
council in statute, along with the Integrity Committee. We also
strongly support the concept behind the Integrity Committee. We
believe it is imperative that the independence of the Integrity
Committee be preserved and view this legislation as being directed
to ensure permanence of this important function and not to change
the basic underpinnings.
IG offices as separate agencies
In order to better attract and retain highly qualified IG
employees, H.R. 928 would provide the IGs with personnel authority
separate and apart from that of their agencies. To accomplish
this, the bill would consider each IG office to be a separate
agency for purposes of implementing certain provisions in Title 5
of the United State Code dealing with employment, retention,
separation, and retirement.
We have concerns about this proposal. First, we are concerned
about the inherent inefficiencies in enforcing a splitting of
administrative processes currently often being shared by agencies
and their IGs. Secondly, in providing such authorities to the IGs,
there could be a great disparity in how this would be implemented
by each IG office. The IG community has suggested that, as an
alternative, the IGs could seek legislative authorization to apply
to the Office of Personnel Management (OPM) for certain personnel
authorities. We believe that if implementation is properly
coordinated through the PCIE and ECIE, the IGs' proposal
represents a good alternative and would address the intent of H.R.
928.
H.R. 928 also covers all provisions in Title 5 relating to the
Senior Executive Service including receiving pay increases and
bonuses. Issues over IG pay and bonuses have arisen over the past
few years due to recent requirements^6 that rates of pay for the
federal Senior Executive Service (SES) be based on performance
evaluations as part of a certified performance management system.
IGs who are subject to these requirements must therefore receive
performance evaluations in order to qualify for an increase to
their pay. The IGs are provided general supervision by their
agency heads in accordance with the IG Act. However, independence
issues arise if the agency head is evaluating IG performance when
that evaluation is used as a basis for an increase in the IG's pay
or for providing a bonus. As a result, some IGs have effectively
had their pay capped without the ability to receive pay increases
or bonuses.
The majority of panel participants believed that the pay structure
for IGs needs to be addressed. The discussion emphasized the
importance of providing comparable compensation for IGs as
appropriate, while maintaining the IGs' independence in reporting
the results of their work, and providing them with performance
evaluations that could be used to justify higher pay. However,
responses to IGs' receiving performance bonuses were mixed, mainly
due to uncertainty about the overall framework that would be used
to evaluate performance and make decisions about bonuses. We
believe that an independent framework could be established through
the PCIE and ECIE, in cooperation with OPM, to conduct performance
evaluations of the IGs.
IG investigative and law enforcement authorities
The IG Act has been amended by subsequent legislation to provide
IGs appointed by the President with law enforcement powers to make
arrests, obtain and execute search warrants, and carry firearms.
The IGs appointed by their agency heads were not included under
this amendment but may obtain law enforcement authority by
applying to the Attorney General for deputation on a case-by-case
basis. In addition, the Program Fraud Civil Remedies Act of 1986^7
provides agencies with IGs appointed by the President with the
authority to investigate and report false claims and recoup losses
resulting from fraud below $150,000. The agencies with IGs
appointed by their agency heads do not have this authority. Also,
the IG Act provides all IGs with the authority to subpoena any
information, documents, reports, answers, records, accounts,
papers, and other data and documentary evidence necessary to
perform the functions of the IG Act. This subpoena authority does
not specifically address electronically stored information or
other forms of data.
^6National Defense Authorization Act, Pub. L. No. 108-136, 117 Stat. 1392,
1638 (Nov. 24, 2003).
H.R. 928 would allow IGs appointed by their agency heads to apply
to the Attorney General for full law enforcement authority instead
of having to renew their authority on a case-by-case basis or
through a blanket authority that must be renewed after an
established period of time. The bill would also provide the
designated federal entities with IGs appointed by their agency
heads the authority under the Program Fraud Civil Remedies Act to
address and prosecute false claims and recoup losses resulting
from fraud. In addition, the bill would provide the authority for
all IGs to require, by subpoena, information and data in any
medium, including electronically stored information as well as any
"tangible thing."
Panel participants overwhelmingly supported the provisions to (1)
allow IGs appointed by their agency heads to apply to the Attorney
General for full law enforcement authority instead of having to
renew their authority on a case-by-case basis or through a blanket
authority, (2) provide designated federal entities with IGs by
their agency heads the authority under the Program Fraud Civil
Remedies Act to investigate and report false claims and recoup
losses resulting from fraud, and (3) define IG subpoena power to
include any medium of information and data.
GAO and IG Coordination
In May of this year the Comptroller General hosted a meeting with
the IGs for the principal purpose of improving the coordination of
federal oversight between the IGs and GAO. We believe that
effective, ongoing coordination of the federal audit and oversight
efforts of GAO and the IGs is more critical than ever, due to the
challenges and risks currently facing our nation, including our
immediate and long-term fiscal challenges, increasing demands
being made for federal programs, and changing risks. Closer
strategic planning and ongoing coordination of audit efforts
between GAO and the IGs would help to enhance the effectiveness
and impact of work performed by federal auditors. Working together
and in our respective areas of expertise, GAO and the IGs can
leverage each other's work and provide valuable input on the broad
range of high-risk programs and management challenges across
government that need significant attention and reform.
^731 U.S.C. SS 3801-3812.
We will continue in our coordination with the IGs to help achieve
our mutual goals of providing the oversight needed to help ensure
that the federal government is transparent, economical, efficient,
effective, ethical, and equitable. Significant coordination has
been and is occurring between GAO and the IGs on agency-specific
issues and cross-cutting issues. The Comptroller General in
testifying^8 on the 25th anniversary of the IG Act, suggested, in
light of this increased need for a well-coordinated federal audit
community, the creation of a more formal mechanism going forward
for a governmentwide council. In addition, panel participants
recognized a critical need for a governmentwide council to address
broad accountability issues among GAO, the IGs, and OMB. The
structure of this council could be similar in concept to the Joint
Financial Management Improvement Program (JFMIP), whose
principals^9 meet at their discretion to discuss issues of mutual
concern to promote governmentwide financial management. An
accountability council could share knowledge and coordinate
activities to enhance the overall effectiveness of government
oversight and to preclude duplicate actions.
A good example of a strong formalized partnership between the GAO
and the IGs is in the area of financial auditing. Under the Chief
Financial Officers Act of 1990, as amended, the IGs at the 24
agencies covered by the act are responsible for the audits of
their agencies' financial statements. In meeting these
responsibilities, most IGs have contracted with independent public
accountants to conduct the audits either entirely or in part. In
some cases, GAO conducts the audits. GAO is responsible for the
U.S. government's consolidated financial statement audit, which is
based largely on the results of the agency-level audits. GAO and
the IGs have agreed on a common audit methodology, the GAO-PCIE
Financial Audit Manual, which is used by all auditors of federal
financial statements, whether the IG, an independent public
accounting firm, or GAO. In addition, we have established formal
ongoing coordination and information-sharing throughout the audit
process so that both the IGs and GAO can successfully fulfill
their respective responsibilities in an effective and efficient
manner.
^8GAO, Inspectors General: Enhancing Federal Accountability,
[35]GAO-04-117T (Washington, D.C.: Oct. 8, 2003).
^9The Comptroller General, the Director of OMB, the Secretary of the
Treasury, and the Director of the Office of Personnel Management
In closing, under the landmark IG Act, the IGs have continued to
be an essential component of the government accountability
framework and the contributions of the IGs have been most
noteworthy. IG independence is critical to the effectiveness of
the IG offices in carrying out their unique roles of overseeing
federal agencies. Independence not only depends on organizational
characteristics, but also on the personal independence of the
individual appointed to the office and this individual's freedom
from external factors that can impair independence. The IG must
maintain this independence while reporting to two
organizations--its agency and the Congress. This task requires an
IG to maintain a prudent balance between loyalty to the agency and
responsibility for conducting objective and independent audits and
investigations as required by the IG Act. We believe that a number
of the provisions in H.R. 928 would help to enhance IG
independence and effectiveness, and we would be pleased to assist
the Subcommittee as it considers this legislation.
This completes my formal statement. Mr. Chairman, I would be
pleased to answer any questions that you or the Subcommittee
members may have at this time.
Enclosure I: Inspectors General Appointed by the President
Fiscal Year 2006 Appropriated Budgets and Actual FTEs
Federal departments and agencies Budgets FTEs
1 Department of Health and Human Services $ 222,000,000 1,445
2 Department of Defense 206,772,130 1,370
3 Treasury IG for Tax Administration 131,953,140 838
4 Department of Housing and Urban Development 104,940,000 646
5 Social Security Administration 91,476,000 608
6 Department of Homeland Security 82,187,000 520
7 Department of Agriculture 80,336,000 598
8 Department of Labor 71,445,000 450
9 Department of Veterans Affairs 70,174,000 464
10 Department of Justice 68,000,000 411
11 Department of Transportation 61,874,000 419
12 Environmental Protection Agency 50,241,000 337
13 Department of Education 48,510,000 288
14 General Services Administration 42,900,000 293
15 Department of Energy 41,580,000 262
16 Department of the Interior 38,541,000 261
17 Agency for International Development 36,640,000 172
18 National Aeronautics and Space Administration 32,400,000 203
19 Department of State 30,945,000 186
20 Federal Deposit Insurance Corporation 30,690,000 125
21 Department of Commerce 22,467,000 122
22 Small Business Administration 20,361,080 95
23 Office of Personnel Management 18,216,000 131
24 Department of the Treasury 16,830,000 116
25 Tennessee Valley Authority 14,700,000 90
26 Nuclear Regulatory Commission 8,308,000 49
27 Railroad Retirement Board 7,124,000 53
28 Corporation for National and Community Service 5,940,000 23
29 Export-Import Bank 1,000,000 0
30 Central Intelligence Agency na na
Totals $1,658,550,350 10,575
Source: PCIE and ECIE.
na - Information not available.
Fiscal Year 2006 Appropriated Budgets and Actual FTEs
Enclosure II: Inspectors General Appointed by Agency Heads
Federal departments and agencies Budgets FTEs
1 United States Postal Service $158,000,000 916
2 Special IG for Iraq Reconstruction 34,000,000 115
3 Amtrak 16,984,000 87
4 National Science Foundation 11,500,000 62
5 Federal Reserve Board 5,118,740 33
6 Government Printing Office 4,950,200 23
7 Pension Benefit Guaranty Corporation 4,038,990 21
8 Peace Corps 3,064,000 19
9 Federal Communications Commission 2,597,903 20
10 Securities and Exchange Commission 2,507,300 10
11 Legal Services Corporation 2,507,000 18
12 Library of Congress 2,457,000 17
13 National Archives and Records Administration 2,200,000 16
14 Smithsonian Institution 1,938,932 14
15 Equal Employment Opportunity Commission 1,810,307 11
16 National Credit Union Administration 1,764,926 8
17 Election Assistance Commission 1,600,000 1
18 National Labor Relation Board 1,080,327 7
19 Farm Credit Administration 998,248 5
20 Federal Housing Finance Board 959,271 4
21 Federal Trade Commission 917,500 5
22 Corporation for Public Broadcasting 834,264 9
23 Commodity Futures Trading Commission 795,000 4
24 Federal Election Commission 691,584 5
25 National Endowment for the Humanities 589,600 5
26 U.S. International Trade Commission 521,205 1
27 Appalachian Regional Commission 476,000 3
28 Federal Maritime Commission 469,885 2
29 National Endowment for the Arts 402,000 3
30 Federal Labor Relations Authority 284,487 1
31 Consumer Product Safety Commission 241,270 2
32 Denali Commission na^a 1
33 U.S. Capitol Police na^b na^b
34 Office of Director of National Intelligence na^b na^b
Totals $266,299,939 1,448
Source: PCIE and ECIE.
na - Information not available.
aIG budget is not determined separately from the agency's budget.
bIG offices established in 2006.
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Highlights of the Comptroller General's Panel on Federal Oversight
and the Inspectors General. [14]GAO-06-931SP . Washington, D.C.:
September 11, 2006.
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Internal Auditors. [15]GAO-06-575 . Washington, D.C.: April 25,
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Kennedy Center: Stronger Oversight of Fire Safety Issues,
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[18]GAO-05-334 . Washington, D.C.: April 22, 2005.
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[19]GAO-04-117T . Washington, D.C.: October 8, 2003.
Department of Health and Human Services: Review of the Management
of Inspector General Operations. [20]GAO-03-685 . Washington,
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Inspectors General: Office Consolidation and Related Issues.
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Inspectors General: Comparison of Ways Law Enforcement Authority
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Inspectors General: Department of Defense IG Peer Reviews.
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HUD Inspector General: Actions Needed to Strengthen Management and
Oversight of Operation Safe Home. [24]GAO-01-794 . Washington,
D.C.: June 29, 2001.
U.S. Export-Import Bank: Views on Inspector General Oversight.
[25]GAO-01-1038R . Washington, D.C.: September 6, 200l.
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Highlights of [38]GAO-07-1021T , testimony before the Subcommittee on
Government Management, Organization and Procurement, Committee on
Oversight and Government Reform, House of Representatives
June 20, 2007
INSPECTORS GENERAL
Proposals to Strengthen Independence and Accountability
H.R. 928, Improving Government Accountability Act, contains proposals
intended to enhance the independence of the inspectors general and to
create a Council of the Inspectors General on Integrity and Efficiency.
This testimony provides information and views about the specific proposals
based on GAO's prior work.
We believe that effective, ongoing coordination of the federal oversight
efforts of GAO and the IGs is more critical than ever, due to the
challenges and risks currently facing our nation including our immediate
and long-term fiscal challenges, increasing demands being made for federal
programs, and changing risk. Close strategic planning and ongoing
coordination of audit efforts between GAO and the IGs would help to
enhance the effectiveness and impact of work performed by federal
auditors.
In May of this year the Comptroller General hosted a meeting with the IGs
for the principal purpose of improving the coordination of federal
oversight between the IGs and GAO. Working together, and in their
respective areas, GAO and the IGs can leverage each other's work and
provide valuable input on the broad range of high-risk programs and
management challenges across government.
IG independence is one of the most important elements of the overall
effectiveness of the IG function. The IG Act, as amended, (IG Act)
provides specific protections to IG independence that are necessary due in
large part to the unusual reporting requirements of the IGs who are both
subject to the general supervision and budget processes of the agencies
they audit while at the same time being expected to provide independent
reports of their work externally to the Congress.
The IGs, in their statutory role of providing oversight of their agencies'
operations, represent a unique hybrid of external and internal reporting
responsibilities. IG offices have characteristics of both external audit
organizations and internal audit organizations by reporting the results
of their work both externally to the Congress and internally to the agency
head. A key provision of the IG Act regarding IG independence is for
certain IGs to be appointed by the President with the advice and consent
of the Senate. Other IGs established by amendments to the IG Act, are
appointed by their agency heads.
In May 2006, at the request of the Senate Committee on Homeland Security
and Governmental Affairs, the Comptroller General convened a panel of
recognized leaders in the federal government and in academia to discuss
many of the same proposals that are in H.R. 928. Many of the provisions
in H.R. 928, Improving Government Accountability Act, address IG
independence. Today we are providing our views and the views of the panel
on the following provisions: (1) providing IGs with specified terms of
office and limiting IG removal for specified cause, (2) changes to how IGs
submit their budget requests, (3) a statutorily established IG Council,
(4) defining
IG offices as separate agencies for purposes of personnel authority, and
(5) providing additional investigative and law enforcement authorities.
The majority of the panelists did not favor a term of office, but they did
favor advanced notification to the Congress of the reasons for removal.
Regarding IG budgets, the panelists had mixed views about the IGs sending
their budget requests directly to OMB and the Congress, but supported
separate budget line items for all IGs. In a prior report, GAO recommended
establishing an IG Council in statute with a designated funding source and
strongly supports the proposal in H.R. 928. In contrast, the panelists had
mixed views about statutorily establishing a joint IG Council but did
favor establishing a funding mechanism. While the panel did not address
the proposal to formalize the Integrity Committee in statute, GAO strongly
supports this provision and believes it is important that the independence
and work of the Integrity Committee be preserved. We do not support the
proposal to define IG offices as separate agencies, but do support the
intent of the bill in addressing IG pay and personnel issues. Finally, the
panel overwhelmingly supported the provisions in H.R. 928 related to IG
investigative and law enforcement authorities.
References
Visible links
13. http://www.gao.gov/cgi-bin/getrpt?GAO-07-138
14. http://www.gao.gov/cgi-bin/getrpt?GAO-06-931SP
15. http://www.gao.gov/cgi-bin/getrpt?GAO-06-575
16. http://www.gao.gov/cgi-bin/getrpt?GAO-05-999R
17. http://www.gao.gov/cgi-bin/getrpt?GAO-05-306R
18. http://www.gao.gov/cgi-bin/getrpt?GAO-05-334
19. http://www.gao.gov/cgi-bin/getrpt?GAO-04-117T
20. http://www.gao.gov/cgi-bin/getrpt?GAO-03-685
21. http://www.gao.gov/cgi-bin/getrpt?GAO-02-575
22. http://www.gao.gov/cgi-bin/getrpt?GAO-02-437
23. http://www.gao.gov/cgi-bin/getrpt?GAO-02-253R
24. http://www.gao.gov/cgi-bin/getrpt?GAO-01-794
25. http://www.gao.gov/cgi-bin/getrpt?GAO-01-1038R
26. http://www.gao.gov/
27. http://www.gao.gov/
28. http://www.gao.gov/fraudnet/fraudnet.htm
29. mailto:[email protected]
30. mailto:[email protected]
31. mailto:[email protected]
32. http://www.gao.gov/cgi-bin/getrpt?GAO-07-162G
33. http://www.gao.gov/cgi-bin/getrpt?GAO-06-931SP
34. http://www.gao.gov/cgi-bin/getrpt?GAO-04-117T
35. http://www.gao.gov/cgi-bin/getrpt?GAO-04-117T
37. http://www.gao.gov/cgi-bin/getrpt?GAO-07-1021T
38. http://www.gao.gov/cgi-bin/getrpt?GAO-07-1021T
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