Inspector General Act

The Inspector General Act of 1978 requires the Office of Management and Budget (OMB), in consultation with GAO, to identify federal entities, including government corporations and independent regulatory agencies, without offices of inspectors general and to publish a list of such entities annually in the Federal Register. The act also requires these entities to report annually to Congress and to OMB on the audit and investigative activities of their organizations. This fact sheet provides information on (1) whether federal entities identified by OMB in fiscal year 1994 reported their audit and investigative activity as required by law; (2) what audit and investigative activities these entities reported during the past three years; (3) what the status of audit recommendations for seven entities under the jurisdiction of the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education is; (4) how these seven entities process allegations of fraud and mismanagement; and (5) how they obtain their administrative services.

GAO found that: (1) in August 1994, OMB listed 59 federal agencies without statutory offices of inspectors general; (2) these agencies had about $3.2 billion in FY 1994 budget authority and 5,629 full-time equivalent staff; (3) each of the 59 agencies reported their audit and investigative activities, but usually after the reports' due date; (4) 18 of the agencies reported no audit or investigative activity during the 3-year period and 6 of the agencies reporting audit activity also reported investigative activity; (5) the agencies' audit activity consisted mainly of financial statement audits, grant audits, and operation or program audits; (6) of the 7 agencies chosen for closer review, 4 of them had implemented all audit recommendations, and the other 3 had implemented 50 of 78 audit recommendations; (7) although the 7 agencies' officials were not aware of any fraud or mismanagement allegations, they had the discretion to refer such allegations to the Department of Justice or various Offices of Inspector General; and (8) 6 of the 7 agencies obtained their administrative services through cross-servicing agreements with larger federal agencies, while the other agency provided its own administrative services.