United States Government Accountability Office

GAO By the Comptroller General of the

United States 

HIGHLIGHTS OF THE 

COMPTROLLER 

GENERAL’S PANEL 

ON FEDERAL 

OVERSIGHT AND 

THE INSPECTORS 

GENERAL 

September 2006 

GAO-06-931SP 
 

 GAO-06-931SP Federal Oversight and the IGs 

United Sta s Government Accountability Office

Washingto , DC 20548 

Comptroller General

of the United States

te

n

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.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. 

 

 

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. 
 GAO-06-931SP Federal Oversight and the IGs Page 2

 

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 report2

 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. 

2

 GAO, Inspectors General: Office Consolidation and Related Issues, GAO-02-575 (Washington, D.C.: 

Aug. 15, 2002). 
 GAO-06-931SP Federal Oversight and the IGs Page 3

 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. 
 GAO-06-931SP Federal Oversight and the IGs Page 4

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. 

David M. Walker 

Comptroller General 

of the United States 
 GAO-06-931SP Federal Oversight and the IGs Page 5

Appendix I 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. 

 
 GAO-06-931SP Federal Oversight and the IGs Page 6

 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. 
 GAO-06-931SP Federal Oversight and the IGs Page 7

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. 
 GAO-06-931SP Federal Oversight and the IGs Page 8

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 
 GAO-06-931SP Federal Oversight and the IGs Page 9

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 
 GAO-06-931SP Federal Oversight and the IGs Page 10

 

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 20043

 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. 

3

 Pub. L. No. 108-136, 117 Stat. 1392, 1638 (Nov. 24, 2003). 
 GAO-06-931SP Federal Oversight and the IGs Page 11

Figure 1: Maximum Basic Pay Rates for Selected Pay Plans for Fiscal Year 2006 

Executive-level positions 2006 maximum pay rates (in dollars) 

Executive Schedule—level I 

(e.g., cabinet secretaries) 

$183,500 

Executive Schedule—level II 

(e.g., deputy secretaries, Senators, and 

Members of the House of Representatives) 

 165,200 

Executive Schedule—level III 

(e.g., undersecretaries and deputies of 

most agencies) 

 152,000 

Executive Schedule—level IV 

(e.g., selected presidential inspectors general, 

chief financial and information officers) 

 143,000 

Executive Schedule—level V 

(e.g., commissioners, associate directors) 

 133,900 

Senior Executive Service 

(where performance evaluations are not provided 

through a certified performance management system) 

 152,000a

Senior Executive Service 

(where performance evaluations are provided through a 

certified performance management system) 

 165,200a

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). 

 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. 
 GAO-06-931SP Federal Oversight and the IGs Page 12

 

 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 Act4

 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. 

4

 31 U.S.C. §§ 3801-3812. 
 GAO-06-931SP Federal Oversight and the IGs Page 13

 

 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 report5

 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. 

5

GAO-02-575. 
 GAO-06-931SP Federal Oversight and the IGs Page 14

 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. 
 GAO-06-931SP Federal Oversight and the IGs Page 15

Appendix II 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 

 
 GAO-06-931SP Federal Oversight and the IGs Page 16

Appendix II Appendix II 

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 
 GAO-06-931SP Federal Oversight and the IGs Page 17

Appendix III 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 
 GAO-06-931SP Federal Oversight and the IGs Page 18

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 
 GAO-06-931SP Federal Oversight and the IGs Page 19

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 
 GAO-06-931SP Federal Oversight and the IGs Page 20

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 
 GAO-06-931SP Federal Oversight and the IGs Page 21

Appendix IV 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? 
 GAO-06-931SP Federal Oversight and the IGs Page 22

Appendix IV Appendix IV 

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) 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately.