Highlights of the Comptroller General's Panel on Federal Oversight and the Inspectors General
Gao ID: GAO-06-931SP September 11, 2006The Inspector General Act of 1978, as amended, (IG Act) created independent offices headed by inspectors general (IG) responsible for conducting and supervising audits and investigations; promoting economy, efficiency, and effectiveness; and preventing and detecting fraud and abuse in their agencies' programs and operations. To carry out the purposes of the act, the IGs have been granted authorities and responsibilities to provide for their independence and effectiveness. These include the authority to have direct access to all records and information of the agency, to hire staff and manage their own resources, to receive and respond to complaints from agency employees, to request assistance from other government agencies, to issue subpoenas to obtain information and documents, and to administer oaths when taking testimony. The Senate Committee on Homeland Security and Governmental Affairs asked us to review whether additional IG authorities and responsibilities such as those provided in H.R. 2489, as well as other changes, could further enhance the independence and effectiveness of the IGs. Introduced in 2005, H.R. 2489 includes provisions for (1) a defined term of office for the IGs and conditions for removal, (2) IGs to submit their budgets directly to OMB and the Congress without agency review or approval, (3) the statutory establishment of a combined PCIE and ECIE Council, (4) changes in IG investigative and law enforcement authorities, and (5) reporting the results of IG inspections in their semiannual reports. The committee staff also asked us to review IG pay structure issues and qualifications. We also agreed to review recommendations made in our prior report to convert certain DFE IGs to presidential appointment and to consolidate IG offices to increase overall IG independence and effectiveness.
The majority of the panel participants did not favor statutorily establishing a fixed term of office for IGs, but did 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. The panel participants also generally agreed that a focus on the reasons for removal is important, but there are many legitimate reasons for removal that go beyond those listed in the pending House bill. The majority of panel participants believed that the current statutory qualifications for presidential IGs are sufficient and emphasized that the correct application of the selection and nomination processes is key for appointing qualified IGs. DFE IGs should have at least the same specific qualifications as specified for the presidential IGs in the IG Act. The panel participants had mixed views about whether the IGs should submit their budgets directly to OMB and to the Congress. The panel participants supported the roles and functions of the current PCIE and ECIE, but had mixed views about statutorily establishing a joint IG council. The panel participants did favor establishing a funding mechanism for an IG council, but recognized the current overall lack of federal funds for this project. Also, the panel participants overwhelmingly supported expanding the language of the IG councils' mission beyond that provided by H.R. 2489. In addition, there was broad-based support among panel members for a governmentwide accountability council to address broad accountability issues among GAO, OMB, PCIE, ECIE, and additional oversight organizations. The majority of panel participants stated that the pay structure for IGs needs to be addressed. The discussion included the importance of providing reasonable and competitive compensation, maintaining the IGs' independence in reporting the results of their work, and possibly providing IGs with performance evaluations that could be used to justify higher pay. The panel participants felt that base pay for IGs should be higher; however, they had mixed views about IGs receiving performance bonuses, primarily because of the uncertainty about the overall framework that would be used to evaluate performance and make the related decisions about bonuses. The panel participants overwhelmingly supported the ability of the DFE IGs 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. They also overwhelmingly supported providing the designated federal entities that have DFE IGs the authority under the Program Fraud Civil Remedies Act to investigate and report false claims and recoup losses resulting from fraud. In addition, the panel participants were unanimous in their support of defining IG subpoena power to include any medium of information and data. In the discussion of additional issues, the panel participants recognized the benefits of IG inspections and evaluations, and supported including the results of this work in the IGs' semiannual reports. Regarding the additional issue of converting DFE IGs to presidential appointment and consolidating IG offices, the panel participants had mixed responses. The panel participants did, however, overwhelmingly support close coordination among the IGs and between the IGs and GAO.
GAO-06-931SP, Highlights of the Comptroller General's Panel on Federal Oversight and the Inspectors General
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United States Government Accountability Office:
September 2006:
GAO:
By the Comptroller General of the:
United States:
Highlights Of The Comptroller General's Panel On Federal Oversight And
The Inspectors General:
GAO-06-931SP:
September 11, 2006:
Subject: Highlights of the Comptroller General's Panel on Federal
Oversight and the Inspectors General:
The Inspector General Act of 1978, as amended, (IG Act) created
independent offices headed by inspectors general (IG) responsible for
conducting and supervising audits and investigations; promoting
economy, efficiency, and effectiveness; and preventing and detecting
fraud and abuse in their agencies' programs and operations. To carry
out the purposes of the act, the IGs have been granted authorities and
responsibilities to provide for their independence and effectiveness.
These include the authority to have direct access to all records and
information of the agency, to hire staff and manage their own
resources, to receive and respond to complaints from agency employees,
to request assistance from other government agencies, to issue
subpoenas to obtain information and documents, and to administer oaths
when taking testimony.
The IGs established by the IG Act are either appointed by the President
with Senate confirmation (presidential IGs), or appointed by their
agency heads in designated federal entities (DFE IGs). There are
currently 58 IG offices established under the IG Act with 29
presidential IGs and 29 DFE IGs.[Footnote 1] The presidential IGs
established under the IG Act are part of the President's Council on
Integrity and Efficiency (PCIE) and the DFE IGs are part of the
Executive Council on Integrity and Efficiency (ECIE). Both councils are
chaired by the Deputy Director for Management in the Office of
Management and Budget (OMB), and were established by Executive Order to
coordinate IG activities across the government. (See app. II for a list
of the presidential and DFE IGs established by the IG Act.)
The IGs receive general supervision from the heads of their agencies,
but for presidential IGs this may be provided by the officer next in
rank below the agency head if the authority is delegated. Also, in
accordance with the IG Act, the agency head may not prevent or prohibit
the IG from initiating, carrying out, or completing any audit or
investigation except under certain conditions specified by the act, or
from issuing any subpoena during the course of any audit or
investigation.
The Senate Committee on Homeland Security and Governmental Affairs
asked us to review whether additional IG authorities and
responsibilities such as those provided in H.R. 2489, as well as other
changes, could further enhance the independence and effectiveness of
the IGs. Introduced in 2005, H.R. 2489 includes provisions for (1) a
defined term of office for the IGs and conditions for removal, (2) IGs
to submit their budgets directly to OMB and the Congress without agency
review or approval, (3) the statutory establishment of a combined PCIE
and ECIE Council, (4) changes in IG investigative and law enforcement
authorities, and (5) reporting the results of IG inspections in their
semiannual reports. The committee staff also asked us to review IG pay
structure issues and qualifications. We also agreed to review
recommendations made in our prior report[Footnote 2] to convert certain
DFE IGs to presidential appointment and to consolidate IG offices to
increase overall IG independence and effectiveness.
To provide us with a foundation of views and information on these
issues, on May 11, 2006, we convened a panel of knowledgeable and
recognized experts to discuss IG issues regarding (1) terms of office
and removal, (2) qualifications, (3) budgets, (4) a joint statutory IG
council, (5) IG pay, (6) investigative and law enforcement authorities,
and (7) additional issues including IG inspections, IG conversion to
presidential appointment, and IG consolidation. Panel participants
included current and past administration officials, current PCIE and
ECIE leadership, former IGs, participants from research organizations
and academia, and congressional staff from both the House and the
Senate. See appendix III for a list of participants.
Due to time constraints during the panel discussion, the participants'
views about the IGs' budget process were obtained through subsequent
follow-up and are included in this summary of the panel's highlights.
The panel discussion and subsequent follow-up resulted in a range of
views on these specific issues, which do not necessarily represent
GAO's views. While no comments are attributed to specific panel
participants, the following summary and highlights of the discussion
are intended to convey both their general observations and selected,
specific points of view:
* The majority of the panel participants did not favor statutorily
establishing a fixed term of office for IGs, but did 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. The panel participants also generally agreed that a
focus on the reasons for removal is important, but there are many
legitimate reasons for removal that go beyond those listed in the
pending House bill.
* The majority of panel participants believed that the current
statutory qualifications for presidential IGs are sufficient and
emphasized that the correct application of the selection and nomination
processes is key for appointing qualified IGs. DFE IGs should have at
least the same specific qualifications as specified for the
presidential IGs in the IG Act.
* The panel participants had mixed views about whether the IGs should
submit their budgets directly to OMB and to the Congress. However,
their comments did support additional transparency of the IG budget
process through separate line items and other means.
* The panel participants supported the roles and functions of the
current PCIE and ECIE, but had mixed views about statutorily
establishing a joint IG council. The panel participants did favor
establishing a funding mechanism for an IG council, but recognized the
current overall lack of federal funds for this project. Also, the panel
participants overwhelmingly supported expanding the language of the IG
councils' mission beyond that provided by H.R. 2489. The panel
participants discussed the role and functioning of the integrity
committee, which is the committee of the PCIE and ECIE that reviews
alleged misconduct by the IGs and their senior staff, and identified a
need to explore additional communications to the Congress about the
committee's activities. In addition, there was broad-based support
among panel members for a governmentwide accountability council to
address broad accountability issues among GAO, OMB, PCIE, ECIE, and
additional oversight organizations.
* The majority of panel participants stated that the pay structure for
IGs needs to be addressed. The discussion included the importance of
providing reasonable and competitive compensation, maintaining the IGs'
independence in reporting the results of their work, and possibly
providing IGs with performance evaluations that could be used to
justify higher pay. The panel participants felt that base pay for IGs
should be higher; however, they had mixed views about IGs receiving
performance bonuses, primarily because of the uncertainty about the
overall framework that would be used to evaluate performance and make
the related decisions about bonuses.
* The panel participants overwhelmingly supported the ability of the
DFE IGs 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. They also overwhelmingly supported
providing the designated federal entities that have DFE IGs the
authority under the Program Fraud Civil Remedies Act to investigate and
report false claims and recoup losses resulting from fraud. In
addition, the panel participants were unanimous in their support of
defining IG subpoena power to include any medium of information and
data.
* In the discussion of additional issues, the panel participants
recognized the benefits of IG inspections and evaluations, and
supported including the results of this work in the IGs' semiannual
reports. Regarding the additional issue of converting DFE IGs to
presidential appointment and consolidating IG offices, the panel
participants had mixed responses. The panel participants did, however,
overwhelmingly support close coordination among the IGs and between the
IGs and GAO.
Appendix I includes further highlights of the matters discussed by the
panel's participants; appendix II lists the departments, agencies,
offices, and designated federal entities with IGs established by the IG
Act; appendix III lists the panel participants; and appendix IV lists
the questions we asked the panel participants.
I wish to thank each of the panel participants for providing their
insights on the important matters this document discusses related to
the role played by the federal inspectors general in government
oversight. I appreciate the panel participants' willingness to spend
their time and to provide their views in connection with these
important matters.
Signed by:
David M. Walker:
Comptroller General of the United States:
Appendix I: The Comptroller General's Panel on Federal Oversight and
the Inspectors General:
Highlights of the Panel Discussion:
The overall objective of the panel was to have a full discussion on
whether additional inspector general (IG) authorities and
responsibilities, such as those included in H.R. 2489 (House bill), as
well as other changes, could further enhance the independence and
effectiveness of federal IGs.
Terms of Office and Removal from Office:
Presidential IGs may be removed from office by the President, who is
required to communicate the reasons for removal to the Congress. DFE
IGs may be removed or transferred from office by their agency heads,
who are also required to promptly communicate the reasons in writing to
the Congress.
Unlike other presidential appointees, IGs are to be appointed by the
President without regard to political affiliation. The removal
authority of the President is intended to permit the President to make
changes when the performance of an IG is unsatisfactory or when it
appears that appointment of another individual might result in more
effective performance. Removal of IGs without cause could give the
appearance of political maneuvering to control these important offices.
H.R. 2489 provides for a renewable 7-year term of office for IGs with
removal only for specific causes. The grounds for removal specified in
the bill are permanent incapacity, inefficiency, neglect of duty,
malfeasance, conviction of a felony, or conduct involving moral
turpitude. The following is a summary of the panel's major discussion
points.
* A statutory provision for a specific term of office for the IGs
without also considering changes to the conditions for removal would
not necessarily protect IGs from removal or enhance IG independence.
However, specific terms of office could provide an additional safeguard
to provide continuity between administrations.
* Even with a specified term, the IG could still be removed during the
term of office under the current process in the IG Act. Terms of office
need to be considered along with causes for removal.
* Removal of IGs with a term of office and with removal for cause as
specified by the House bill could be a problem if the administration
had to replace an IG for reasons other than those specified in the
bill, most notably poor quality work or incompetence.
* The question really is how to best achieve IG independence while
maintaining the ability of the administration to remove a poor-
performing IG. This may require broader conditions for removal than
those in the House bill.
* IGs need to be accountable for doing a good job. In the best
environment, the IG should focus on fraud, waste, and abuse and not be
in a situation that pits the IG against the head of the agency. The IGs
need to be independent, but removal for cause, as provided in H.R.
2489, limits the agency head and is not based on the quality of the
IG's work on audits and investigations.
* A term of office with removal for cause could help relieve immediate
pressures of removal, but such independence could also lead to an IG
who is isolated from the agency head and the rest of the agency. A
successful relationship between the IG and the head of the agency is
key for the IG concept to work, and it is the responsibility of the
administration to see that all new agency heads know about the
independence requirements of their IGs. Also, even with a term of
office and removal for cause, a President and an agency head could take
steps to neutralize the effectiveness of an IG, whether justified or
not.
* A term of office with removal for cause does provide needed
protection to an IG where the relationship with the agency head is
under stress, such as when the IG is investigating the agency head. In
this situation, removal for cause would provide the IG with protection
against being fired by the agency head. The question would become
whether the IG had justification for the issues identified during an
investigation of the head of the agency. Currently, the IGs look to the
Congress to support them during such times.
* The IG Act provides for notification to the Congress of an IG's
removal after the fact (along with the reasons for removal). This
provides an after-the-fact notification of the cause for removal rather
than removal for a cause that is established prior to removal. With no
real protection from removal currently in the IG Act, the congressional
notification of an IG's impending removal should be made in advance of
the actual removal. Notifying the Congress that an IG is about to be
removed would allow for a dialogue between the administration and the
Congress about an IG's removal before the action is taken.
While the majority of the panel participants did not favor statutorily
establishing fixed IG terms of office, most did 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 of
the impending removal and the related cause, without building in
additional steps or actions in the removal process. The panel
participants also generally agreed that a focus on the reasons for
removal is important, but there are many legitimate reasons for removal
that go beyond those listed in the House bill.
Qualifications:
To further ensure their independence, the IG Act requires that IGs
appointed by the President be selected without regard to political
affiliation and solely on the basis of integrity and demonstrated
ability in accounting, auditing, financial analysis, law, management
analysis, public administration, or investigations. There are no such
requirements specified in the IG Act for the DFE IGs, and H.R. 2489
does not have proposed changes in this area, but this was an issue the
Committee asked us to discuss. The following is a summary of the
panel's major discussion points.
* Key IG qualifications are integrity, a lack of political affiliation,
and demonstrated management ability. Many IGs continue in their
position from one administration to another because they are
professional and nonpartisan in carrying out their responsibilities.
* Prospective IGs should have demonstrated management skills as a
requirement for being considered for large IG offices. Nevertheless, a
natural leader can do well no matter what his or her background. With
management skills, the IG can hire good auditors and investigators and
manage them effectively; but it is better if the IG also has the
technical background as well.
* While auditors are the largest group in most IG offices, there is no
requirement that the IG be knowledgeable about audits or
investigations. When IGs were first created, more of them had
backgrounds in auditing. Now just a few IGs have technical backgrounds
in auditing. The current situation reflects a shift to investigation as
the preferred IG background. There needs to be some way to look for a
balance between auditors and investigators in the IG community.
* The President can select for appointment whomever he likes; however,
the Senate should thoroughly investigate the nominee during
confirmation hearings. The Congress should thoroughly check the
demonstrated ability, integrity, and qualifications of IG nominees to
provide the required oversight.
The majority of panel participants believed that the current statutory
qualifications for presidential IGs are sufficient and emphasized that
the correct application of the selection and nomination processes is
key for appointing qualified IGs. Panel participants also indicated
that DFE IGs should have at least the same specific qualifications in
the IG Act as those specified for the presidential IGs.
IG Budgets:
IG budget requests are a part of each agency's budget process and are
submitted to OMB and the Congress as a part of each agency's overall
budget. Generally, the presidential IGs have their own separate
appropriation in their agencies' budgets while most DFE IGs do not have
a separate line item. H.R. 2489 proposes that IGs submit their budget
requests directly to OMB and the Congress without going through their
agencies' processes.
Due to time limitations during the panel discussion, the issue of IG
budgets was not covered. However, the following major points were
submitted by the panel in response to our electronic mail request for
views and comments shortly after the panel discussion.
* The current system of separate budget line items for presidential IGs
works well. Justifying an IG budget amount makes the IG more
accountable by being on the record for how taxpayers' money would be
used. The more light that is focused on this process, the better the
use of taxpayer money.
* All IGs should have their own line item in their agencies' budgets.
While the presidential IGs have this now, the DFE IGs generally do not.
Having their own budget line item would show whether or not an IG's
budget is being changed through disproportionate budget cuts. However,
whether IGs have a separate appropriation process is another matter and
perhaps a more difficult issue for agencies with small budgets.
* IGs should continue to submit their budgets through their agencies,
which then submit them to OMB. An independent budget request from the
IG to OMB or the Congress could impact the role of the agency in
balancing competing budget requests from the management team.
* By reporting the variance between the IG's proposed budget and the
agency-approved IG budget, as advanced by H.R. 2489, a congressional
committee could force an increase in IG funding, which would likely be
compensated through cuts in other agency programs and activities. In
this regard, the bill presents a trade-off of authority over IG budgets
between the Congress and the agency.
* Conversely, to promote more accountability and transparency, the IGs
should be able to submit their budgets directly to OMB and to the
Congress. This would give the IGs an opportunity to justify their
requests and give the administration the opportunity to support the IG
or explain why support is not provided.
The panel participants had mixed views about whether the IGs should
submit their budgets directly to OMB and the Congress. However, their
comments did support additional transparency of the IG budget process
through separate line items and other means.
Statutory IG Council:
In accordance with an executive order, the IGs meet and coordinate as
two groups. The IGs appointed by the President 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). The PCIE and ECIE integrity committee
is staffed by three IGs, representing both PCIE and ECIE, and personnel
from the Federal Bureau of Investigation (FBI), the Office of Ethics,
the Office of Special Counsel, and the Office of Public Integrity from
the Department of Justice to provide reviews of alleged misconduct by
the IGs and their senior staff. H.R. 2489 provides for a combined IG
council with the stated mission of increasing the professionalism and
effectiveness of IG personnel by developing policies, standards, and
approaches to aid in the establishment of a well-trained and skilled IG
workforce. H.R. 2489 also calls for an integrity committee within the
IG council with functions similar to the current integrity committee.
The following is a summary of the panel's major discussion points.
* There are some benefits that could result from having one IG council
rather than two councils, especially with regard to improved
communications.
* By contrast, the large size of one council for all IGs would be more
difficult to manage. Also, the difference between presidential IGs and
DFE IGs is recognized by having a separate PCIE and ECIE.
* Conversely, other panel members stated that establishing a statutory
IG council could greatly enhance accountability to the Congress. This
would also help with funding for the IG council staff and for the IG
training academies by making the resources available through a specific
line item appropriation. Establishing the IG council by statute could
further promote ownership and commitment to its mission.
* There is no need to change the mission of the PCIE and ECIE, and the
Congress has not indicated a need for a different mission. Things are
working well now under executive order with the IGs using their own
staff for PCIE and ECIE activities. In addition, establishing the IG
council in statute does not assure funding during difficult federal
budget times.
* Conversely, the language of the mission is too narrow and should be
enhanced with a better mission statement. Also, there is a need for a
way to fund these councils.
* The mission of the IG council should be to assess both the strengths
and weaknesses of government programs and operations. While it does
help management to learn about best practices when IGs report
strengths, currently, weaknesses are usually what get reported. For
example, the IGs report the major management challenges each year at
the request of the Congress.
* In addition to an IG council, there is a critical need for a
governmentwide accountability council to address broad accountability
issues among GAO, OMB, PCIE, ECIE, and additional oversight
organizations. This council could be structured so that it is similar
in concept to the Joint Financial Management Improvement Program
(JFMIP), whereby the JFMIP Principals (composed of the Comptroller
General of the United States, the Secretary of the Treasury, the
Director of OMB, and the Director of the Office of Personnel Management
(OPM)) meet at their discretion to discuss issues of mutual concern to
promote better governmentwide financial management. An accountability
council could share knowledge and coordinate oversight activities to
enhance the overall effectiveness of government oversight and to
preclude duplicate actions. There was broad-based support among panel
members for such a council.
* The process of the integrity committee is not transparent to the
Congress, and there is no report to the Congress on the committee's
activities. The integrity committee should provide additional
information to the Congress, including procedures followed, the cases
investigated, and what the committee found in each case regarding
allegations of misconduct by IGs or their staff. However, the panel
participants generally agreed that the specific deliberations of the
integrity committee leading to the outcomes of each case should not be
reported.
* Currently only IGs and their senior staff are subject to review for
misconduct by the integrity committee. If the committee were to be
responsible for reviewing the misconduct of all IG staff, there could
be too many cases to cover and the integrity committee could be
overwhelmed with hundreds of cases. In addition, the IGs address
employee misconduct within their own offices.
The panel participants supported the roles and functions of the current
IG councils and there were mixed views about establishing a joint IG
council by statute. Participants did favor establishing a funding
mechanism for the IG councils but recognized the current overall lack
of federal funds for such a project. The panel participants
overwhelmingly supported expanding the language of the IG councils'
mission beyond that provided by H.R. 2489. The discussion of the role
and functioning of the integrity committee identified a need to explore
additional communications to the Congress about the committee's
activities. In addition, there was broad-based support among panel
members for a governmentwide accountability council to address wide-
ranging accountability issues among GAO, OMB, PCIE, ECIE, and
additional oversight organizations.
IG Pay:
The National Defense Authorization Act for Fiscal Year 2004[Footnote 3]
established a range of rates of pay for the federal Senior Executive
Service (SES) based on performance evaluations as part of a certified
performance management system. However, an evaluation of an IG's
performance by an agency official subject to oversight by the IG
creates the appearance of a conflict of interest and could possibly
bring the IG's objectivity into question. Also, for presidential IGs
who do not have SES status and are on the Executive Schedule, their pay
is established by statute at Executive Schedule, Level IV, without the
possibility of promotion. Meanwhile, SES employees who are not IGs can
receive pay increases up to the equivalent of Executive Schedule, Level
II. In addition, SES employees who are not IGs and who are in certified
performance management systems can receive cash awards or bonuses, in
addition to their pay, for a combined total up to the total
compensation payable to the Vice President ($212,000 in 2006).
Therefore, there are instances where SES employees who report directly
to the presidential IGs may be promoted to pay grades that exceed
Executive Schedule, Level IV, and receive higher pay than the IGs (see
fig. 1).
IGs do not compete for annual bonuses in order to eliminate any
appearance of a conflict of interest. Consequently, presidential IGs
can receive significantly less pay than those employees who report
directly to them. H.R. 2489 does not address presidential IG pay, but
does provide for DFE IG pay to be at a grade level or rank comparable
to that of a majority of the senior staff members of the designated
federal entity that report directly to the head of the entity. The
following is a summary of the panel's major discussion points.
Table 1: Maximum Basic Pay Rates for Selected Pay Plans for Fiscal Year
2006:
Executive-level positions: Executive Schedule--level I; (e.g., cabinet
secretaries);
2006 maximum pay rates (in dollars): $183,500.
Executive-level positions: Executive Schedule--level II; (e.g., deputy
secretaries, Senators, and; Members of the House of Representatives);
2006 maximum pay rates (in dollars): 165,200.
Executive-level positions: Executive Schedule--level III; (e.g.,
undersecretaries and deputies of; most agencies);
2006 maximum pay rates (in dollars): 152,000.
Executive-level positions: Executive Schedule--level IV; (e.g.,
selected presidential inspectors general,; chief financial and
information officers);
2006 maximum pay rates (in dollars): 143,000.
Executive-level positions: Executive Schedule--level V; (e.g.,
commissioners, associate directors);
2006 maximum pay rates (in dollars): 133,900.
Executive-level positions: Senior Executive Service; (where performance
evaluations are not provided through a certified performance management
system);
2006 maximum pay rates (in dollars): 152,000[A].
Executive-level positions: Senior Executive Service; (where performance
evaluations are provided through a certified performance management
system);
2006 maximum pay rates (in dollars): 165,200[A].
Source: GAO, Human Capital: Trends in Executive and Judicial Pay, GAO-
06-708:
(Washington, D.C.: June 21, 2006).
[A] We provided the maximum basic pay rates for 2006; however, SES
positions, other than IG positions, are eligible for additional cash
awards/bonuses. In addition, SES employees who are not IGs and who are
in certified performance management systems can receive cash awards or
bonuses, in addition to their pay, for a combined total up to the total
compensation payable to the Vice President ($212,000 in 2006).
[End of table]
* OPM is currently analyzing the presidential IG pay situation and is
working with the PCIE on proposed changes.
* Several questions must be answered to address IG pay. What pay grade
is needed to have the IGs on a level playing field with their agencies'
management? Do the DFE IGs need to have SES grades? At what grade level
can an IG be most effective? Should IGs be evaluated and how should
they be evaluated? Can the right personnel be attracted and retained
for IG positions from career service applicants and from outside the
federal government:
* Under the current pay system, many assistant IGs have little or no
interest in becoming presidential IGs because of the resulting pay cut
they would receive if they were selected as a presidential IG.
* Independence is key for the IGs' success. There should be no pressure
on IGs for their work to result in a particular outcome. Therefore,
bonuses and higher pay for IGs cannot be applied in the same structure
as SES compensation.
* The IGs should be evaluated on their performance within an
independent framework. There should be some measure of IG success that
is outcome based. The IGs should receive input on their performance
from a number of sources, including their agencies' management and
employees, congressional staff, results based on performance measures,
how they work with the PCIE, client feedback, surveys, and how well
they do their jobs based on their job performance. However, the
evaluation of an IG must be practical and doable.
* A different pay schedule for the IGs should be considered along with
bonus possibilities based on performance that acknowledge the need for
IG independence. Right now there are instances where the IGs' pay is
frozen.
The majority of the panel participants stated that the pay structure
for IGs needs to be addressed. The discussion included the importance
of providing reasonable and competitive compensation, maintaining the
IGs' independence in reporting the results of their work, and possibly
providing IGs with performance evaluations that could be used to
justify higher pay. The panel participants felt that base pay for IGs
should be higher; however, they had mixed views about IGs receiving
performance bonuses, primarily because of the uncertainty about the
overall framework that would be used to evaluate performance and make
the related decisions about bonuses.
IG Investigative and Law Enforcement Authorities:
The Homeland Security Act of 2002 (Public Law 107-296) amended the IG
Act to provide presidential IGs with law enforcement powers to make
arrests, obtain and execute search warrants, and carry firearms. DFE
IGs are not included under this act, 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[Footnote 4] provides agencies with presidential IGs the authority
to investigate and report false claims and recoup losses resulting from
fraud below $150,000. The agencies with DFE IGs do not have this
authority. Also, the IG Act provides IGs the authority to subpoena all
information, documents, reports, answers, records, accounts, papers,
and other data and documentary evidence necessary to perform the
functions assigned by the IG Act.
H.R. 2489 would allow DFE IGs 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. H.R. 2489 also provides
designated federal entities with DFE IGs the authority under the
Program Fraud Civil Remedies Act to investigate and report false claims
and recoup losses resulting from fraud. In addition, H.R. 2489
specifies the authority of IGs to require, by subpoena, information and
data in any medium including electronically stored information as well
as any tangible item. The following is a summary of the panel's major
discussion points.
* Since the terrorist strikes on September 11, 2001, IGs have taken on
an increasing number of fraud investigations that other law enforcement
agencies have abandoned due to their focus on terrorism. Law
enforcement authority for DFE IGs would be beneficial if the Attorney
General grants the authority as provided for in H.R. 2489.
* Full law enforcement authority has been useful for the presidential
IGs, and only those DFE IGs who require this authority would need to
apply to the Attorney General.
* Requirements for special training and peer review of the IGs' use of
law enforcement authority came with the authority provided by the
Homeland Security Act of 2002 for presidential IGs. Likewise, if the
DFE IGs obtained the same law enforcement authority, they should be
subject to these same requirements.
* Many fraud investigations do not reach the large-dollar threshold for
prosecution. However, the Program Fraud Civil Remedies Act can put some
teeth into civil remedies that are not currently sought.
* The Program Fraud Civil Remedies Act is not available to the DFE IGs
because the act was passed in 1986 and the designated federal entities
with DFE IGs were not established until 1988.
* The ability of IGs to issue subpoenas for mixed sources of data and
information, including electronic sources and data from any "tangible
thing," would be useful.
The panel participants overwhelmingly supported the ability of the DFE
IGs 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. They also overwhelmingly supported providing the
designated federal entities with DFE IGs the authority under the
Program Fraud Civil Remedies Act to investigate and report false claims
and recoup losses resulting from fraud. In addition, the panel
participants were unanimous in their support of defining IG subpoena
power to include any medium of information and data.
Additional Issues:
H.R. 2489 requires that the results of IG inspections and evaluations
be included in IG semiannual reports along with the results already
required by the IG Act for audits and investigations. Additionally, the
panel participants considered the benefits of converting DFE IGs to
presidential appointment for some of the largest DFE IG offices, and
consolidating the smallest IG offices with those of presidential IGs.
In a prior report[Footnote 5] we concluded that if properly
implemented, conversion or consolidation of IG offices could increase
the overall independence, economy, efficiency, and effectiveness of IG
oversight. The following is a summary of the panel's major discussion
points.
* IG inspections and evaluations are beneficial, and their results
should be included in the IGs' semiannual reports. The panel
participants also observed, however, that most IG inspection and
evaluation results are already included in the IGs' semiannual reports.
* When considering the benefits to independence of converting DFE IGs
from agency appointment to presidential appointment, there is a
distinction between the independence of IGs appointed by their agency
heads and those appointed by the President with Senate confirmation.
Typically, the further removed the appointment source is from the
entity to be audited, the greater the level of independence.
Consequently, the change from agency appointment to appointment by the
President has been recognized by the Congress since the advent of the
IG concept as a strengthening of this critical element of IG
effectiveness.
* The DFE IGs at the Corporation for Public Broadcasting, Legal
Services Corporation, National Science Foundation, and the U.S. Postal
Service are appointed by their independent boards of directors, while
other DFE IGs are appointed by their individual agency heads. To
convert those IGs who are now appointed by their boards of directors to
appointment by the President could actually politicize the process and
affect the scope of their boards' oversight.
* The additional confirmations that would result from converting agency-
appointed DFE IGs to presidential appointment would burden the Senate.
* Consolidation of some small IG offices should be considered based on
whether the size and risk of an agency is significant enough to justify
an IG office of its own. Based on this criterion there are probably too
many IG offices.
* Oversight may suffer if small IG offices are consolidated with larger
IG offices. The large agency IG could apply resources to the large
agency issues and ignore the small agency. Also, an IG should be at the
small agency site to be effective. Regarding the increase in additional
skills available through consolidation, the small IG offices can obtain
these skills now by sharing staff with other IGs.
* When considering IG office consolidations, an analytical approach
could be used to determine whether there is a need for IG oversight at
a DFE agency. Needed oversight could be attained by maintaining the
current DFE IG as the agency expert and using resources from the larger
IG office. Overhead would be less if IGs consolidated as a result of
economies of scale and sharing resources.
* Irrespective of what happens to the number of IGs, there should be
overall coordination among the IGs and close coordination between the
IGs and GAO to conserve and leverage resources.
The panel participants recognized the benefits of IG inspections and
evaluations, and supported having these results included in the IGs'
semiannual reports. The panel participants had mixed views on
conversion of DFE IGs to presidential appointment and consolidation of
IG offices. The panel participants did, however, overwhelmingly support
close coordination among the IGs and between the IGs and GAO.
Appendix II: Federal Departments, Agencies, and Offices with Inspectors
General Established by the IG Act and Appointed by the President
(Presidential IGs):
Agency for International Development:
Corporation for National and Community Service:
Department of Agriculture:
Department of Commerce:
Department of Defense:
Department of Education:
Department of Energy:
Department of Health and Human Services:
Department of Homeland Security:
Department of Housing and Urban Development:
Department of the Interior:
Department of Justice:
Department of Labor:
Department of State:
Department of Transportation:
Department of the Treasury:
Treasury Inspector General for Tax Administration:
Department of Veterans Affairs:
Environmental Protection Agency:
Export-Import Bank:
Federal Deposit Insurance Corporation:
General Services Administration:
National Aeronautics and Space Administration:
Nuclear Regulatory Commission:
Office of Personnel Management:
Railroad Retirement Board:
Small Business Administration:
Social Security Administration:
Tennessee Valley Authority:
Designated Federal Entities with Inspectors General Established by the
IG Act and Appointed by the Entity Head (DFE IGs):
Amtrak:
Appalachian Regional Commission:
Commodity Futures Trading Commission:
Consumer Product Safety Commission:
Corporation for Public Broadcasting:
Denali Commission:
Election Assistance Commission:
Equal Employment Opportunity Commission:
Farm Credit Administration:
Federal Communications Commission:
Federal Election Commission:
Federal Housing Finance Board:
Federal Labor Relations Authority:
Federal Maritime Commission:
Federal Reserve Board:
Federal Trade Commission:
Legal Services Corporation:
National Archives and Records Administration:
National Credit Union Administration:
National Endowment for the Arts:
National Endowment for the Humanities:
National Labor Relations Board:
National Science Foundation:
Peace Corps:
Pension Benefit Guaranty Corporation:
Securities and Exchange Commission:
Smithsonian Institution:
U.S. International Trade Commission:
U.S. Postal Service:
Appendix III: Comptroller General's Panel on Federal Oversight and the
Inspectors General:
Participants:
David Berick:
Majority Professional Staff Member:
Senate Committee on Homeland Security and Governmental Affairs:
The Honorable Dan G. Blair:
Deputy Director:
Office of Personnel Management:
Dr. Christine C. Boesz:
Inspector General:
National Science Foundation:
William L. Bransford:
General Counsel:
Senior Executive Association,
Partner:
Shaw, Bransford, Veilleux & Roth, P.C.
The Honorable William F. Clinger, Jr.
Senior Fellow:
Johns Hopkins University:
The Honorable Linda M. Combs:
Controller:
Office of Federal Financial Management:
The Honorable Earl E. Devaney:
Inspector General:
Department of the Interior:
Emilia DiSanto:
Special Counsel to the Chairman,
Chief Investigative Counsel:
Senate Committee on Finance:
Thomas Eldridge:
Majority Senior Counsel:
Senate Committee on Homeland Security and Governmental Affairs:
The Honorable Gregory H. Friedman:
Inspector General:
Department of Energy,
Vice Chair:
President's Council on Integrity and Efficiency:
The Honorable J. Russell George:
Treasury Inspector General for Tax Administration:
Department of the Treasury:
Dr. Robert Greenstein:
Founder and Executive Director:
Center on Budget and Policy Priorities, former Administrator:
Food and Nutrition Service:
U.S. Department of Agriculture:
Linda Gustitus:
Lecturer:
Government Affairs Institute:
Georgetown University:
Jennifer Hemingway:
Professional Staff Member:
Senate Committee on Homeland Security and Governmental Affairs:
The Honorable John P. Higgins, Jr.
Inspector General:
Department of Education:
The Honorable Frank Hodsoll:
Senior Consultant:
Logistics Management Institute, former Deputy Director for Management:
Office of Management and Budget:
Bill Hogan:
Senior Fellow:
Center for Public Integrity:
The Honorable Clay Johnson III:
Deputy Director for Management:
Office of Management and Budget,
Chair:
President's Council on Integrity and Efficiency, Executive Council on
Integrity and Efficiency:
Frederick M. Kaiser:
Specialist:
Government and Finance Division Congressional Research Service:
C. Morgan Kinghorn:
President:
National Academy of Public Administration:
The Honorable John A. Koskinen:
President:
U.S. Soccer Foundation, former Deputy Director for Management:
Office of Management and Budget:
The Honorable Richard P. Kusserow:
President:
National Hotline Services, former Inspector General:
Department of Health and Human Services:
James R. Naughton:
Attorney/CPA, former Counsel:
Intergovernmental Relations and Human Resources Subcommittee:
House Committee on Government Operations:
[conducted hearings throughout 1977 and 1978 to establish offices of
inspectors general in a number of federal departments]
Nancy Nelson:
Section Chief:
Integrity in Government:
Civil Rights Section:
Criminal Division:
Federal Bureau of Investigation:
Brian Newkirk:
Legislative Assistant:
Office of Representative Jim Cooper:
The Honorable Patrick P. O'Carroll:
Inspector General:
Social Security Administration:
David Rapallo:
Minority Chief Investigative Council:
House Committee on Government Reform:
The Honorable Charles O. Rossotti:
Senior Advisor:
The Carlyle Group, former Commissioner:
Internal Revenue Service:
Barry R. Snyder:
Inspector General:
Federal Reserve Board, Vice Chair:
Executive Council on Integrity and Efficiency:
The Honorable Linda M. Springer:
Director:
Office of Personnel Management:
Mark Stephenson:
Minority Professional Staff Member:
House Committee on Government Reform:
The Honorable James B. Thomas, Jr.
Consultant, former Inspector General:
Department of Education:
Virginia L. Thomas:
Director:
Executive Branch Relations:
The Heritage Foundation:
Fred Thompson:
Vice President for Management and Technology:
Council for Excellence in Government:
Dr. Cornelius E. Tierney:
Professor Emeritus of Accountancy:
School of Business:
George Washington University:
The Honorable Nikki L. Tinsley:
Senior Manager/Consultant:
EAM, Inc./Mosley & Associates, former Inspector General:
Environmental Protection Agency:
Howard Weizmann:
President:
Private Sector Council:
Partnership for Public Service:
GAO Participants:
The Honorable David M. Walker:
Comptroller General of the United States:
Gene L. Dodaro:
Chief Operating Officer:
Jeffrey C. Steinhoff:
Managing Director:
Financial Management and Assurance:
Jeanette M. Franzel:
Director:
Financial Management and Assurance:
Jackson W. Hufnagle:
Assistant Director:
Financial Management and Assurance:
Margaret A. Mills:
Analyst-in-Charge:
Financial Management and Assurance:
Appendix IV:
The Comptroller General's Panel on Federal Oversight and the Inspectors
General:
Questions for Discussion:
Terms of Office, Removal, Qualifications, Budgets:
* What are your views on terms of office for IGs?
* Should there be limitations on removal of an IG?
* Are changes needed to the current budget submission process to better
safeguard IG independence and to ensure that IGs obtain adequate
budgets and resources?
* Are the IG appointment process and the required IG qualifications in
the IG Act sufficient?
* Should IGs submit their budget requests directly to OMB and the
Congress instead of through the budget requests of their agency heads?
* Are there any other independence issues that need to be addressed?
Statutory IG Council:
* Should there be an IG council established by statute?
* Should there be a federal accountability council in addition to the
IG council that would provide for coordination between GAO and the IG
community?
* What should the mission and duties of the IG council be and how
should it be funded?
* Are the current provisions in H.R. 2489 for mission, functions, and
responsibilities sufficient?
* Are there other functions that should be added to the IG council?
* What type of transparency, accountability, and reporting requirements
should be placed on the council?
* Should the integrity committee have any additional functions or
transparency requirements?
* Are there any other IG council issues that need to be addressed?
IG Pay:
* At what grade level does the IG need to be for protocol purposes and
to function effectively in the oversight role?
* Should the pay structures be changed for the presidential IGs and the
DFE IGs? If so, how?
* Is it appropriate for IGs to receive performance ratings and, if so,
who should be responsible for preparing the ratings?
* Is the determination of awards and bonuses for IGs an appropriate
role for the IG council?
* Are there any other pay and personnel issues that need to be
addressed?
IG Investigative and Law Enforcement Authorities:
* Should the IG Act be amended to include IG subpoenas for any
information medium?
* Should the DFE IGs have statutory law enforcement authority?
* How well has statutory law enforcement worked for the presidential
IGs?
* Is there a need for the Program Fraud Civil Remedies Act to apply to
the DFE IGs?
* Are there any other law enforcement and investigative issues that
need to be addressed?
Additional Issues:
* Should the results of inspection and evaluation reports be included
in the IGs' semiannual reports? Are inspection reports useful, and if
not, how could the reports be made more useful?
* Should any other changes be made to the requirements for IGs'
semiannual reports?
* Are there DFE IG offices where it would be more appropriate to have a
presidential IG?
* Are there instances where consolidation of IG offices would provide
more effective oversight?
* Are there any other issues that should be discussed?
(194609):
FOOTNOTES
[1] For the purposes of this report, the presidentially appointed IGs
are referred to as presidential IGs and the IGs in the designated
federal entities are referred to as DFE IGs. While the scope of this
report covers the presidential IG and DFE IG offices established under
the IG Act, there are other IG offices that have also been established
under separate legislation and administratively.
[2] GAO, Inspectors General: Office Consolidation and Related Issues,
GAO-02-575 (Washington, D.C.: Aug. 15, 2002).
[3] Pub. L. No. 108-136, 117 Stat. 1392, 1638 (Nov. 24, 2003).
[4] 31 U.S.C. §§ 3801-3812.
[5] GAO-02-575.
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