Inspectors General

The 34 federal entities designated by a 1988 law have made progress in establishing offices of inspectors general (IG) during the past three years. The IGs have established policies and procedures for doing independent audits and investigations; have developed working relationships with their entity heads; and have reported potential recoveries, cost efficiencies, civil fines, and forfeitures from their audits and investigations. Several problems did arise during the implementation, however. GAO found that seven IGs were supervised by officials other than their entity heads, which is prohibited by law. In 14 of the 16 entities whose budget processes GAO reviewed, entity officials who competed with the IGs for resources--and whose programs and operations were subject to IG audits or investigations--made decisions affecting the IGs' budgets. Two entity heads did not adequately disclose the reasons for dismissing or transferring their IGs in their required written notification to Congress. GAO also discusses the ability of the IGs to ensure audit coverage of entity programs and operations, especially through the development and use of strategic plans.

GAO found that: (1) an independent and reliable OIG structure is needed to ensure that DFE receive adequate audit coverage of their programs and operations; (2) during the last 3 years, the 34 DFE have successfully implemented IG legislation, established IG audit and investigation policies and procedures, developed working relationships with DFE heads, and reported potential recoveries, cost efficiencies, civil fines, and forfeitures; (3) several problems have occurred as a result of the implementation of IG legislation, including prohibited supervision of IG officials, questionable budget apportionment for IG activities, and improper notification, dismissal, and transfer of IG personnel; (4) the Office of Management and Budget (OMB) has published guidance to strengthen the IG selection process and two DFE have used the guidance to select qualified and independent IGs; and (5) IG could not ensure effective audit coverage of their entities' programs and operations because they do not have effective strategic plans that link DFE risks and problems with audit strategies, the resources necessary to implement audit strategies, and performance measures to evaluate IG progress.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone: