Office of Inspector General

Program Summary by Budget Activity

Dollars in Thousands

 FY 2012 FY 2013 FY 2014 FY 2012 TO FY 2014

 Enacted Annualized Request $ Change % Change

Budget Activity CR Rate 

Audit $22,823 $22,963 $24,385 $1,562 6.84%

Investigations $6,818 $6,859 $6,966 $148 2.17%

Subtotal, Office of Inspector General $29,641 $29,822 $31,351 $1,710 5.77%

Offsetting Collections - Reimbursables $13,200 $15,400 $14,500 $1,300 9.85%

Total Program Operating Level $42,841 $45,222 $45,851 $3,010 7.03%

Direct FTE 173 172 194 21 12.14%

Reimbursable FTE 19 19 19 0 0.00%

Total FTE 192 191 213 21 10.94%

Summary

The Inspector General Act of 1978, as 

amended, gives the Treasury Office of 

Inspector General (OIG) the authority and 

responsibility to (1) audit and investigate the 

Department of the Treasury’s programs and 

operations; (2) promote economy and 

efficiency and to detect and prevent fraud and 

waste in those programs and operations; and 

(3) keep the Secretary and Congress aware of 

problems and solutions.

The OIG provides independent oversight of 

Treasury and all of its bureaus except the 

Internal Revenue Service (IRS) and the 

Troubled Asset Relief Program (TARP). The 

OIG has five components, including three 

mission offices – the Office of Audit, the 

Office of Investigations, and the Office of 

Small Business Lending Fund (SBLF) 

Program Oversight (separately funded through 

2017). In support of Treasury’s strategic goal 

to Foster a Prudent Use of Taxpayer Resources 

to Operate the Federal Government, OIG 

established the following strategic goals: 

promote the integrity and effectiveness of 

Treasury programs and operations through 

audits and investigations; proactively support 

and strengthen the Department’s ability to 

identify and manage challenges, both today 

and in the future; fully and currently inform 

stakeholders of Treasury OIG findings, 

recommendations, investigative results, and 

priorities related to Treasury programs and 

operations; and enhance, support, and sustain a 

workforce and strengthen internal operations 

to achieve the Treasury OIG mission, vision 

and strategic goals.

The FY 2014 budget request will be used to 

fund critical audit, investigative, and support 

activities to meet the requirements of the 

Inspector General Act of 1978, the DoddFrank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act), the Federal 

Information Security Management Act 

(FISMA), the Government Management 

Reform Act, the Federal Deposit Insurance 

Act , the Small Business Jobs Act of 2010, the 

Improper Payments Elimination and Recovery 

Act (IPERA), and the American Recovery and 

Reinvestment Act of 2009 (Recovery Act), 

among others. Specific mandates require that 

OIG audit the Department’s financial 

statements, the Department’s implementation 

of FISMA, the Department’s implementation 

of IPERA, and failures of Treasury-regulated 

banks. Recently, with passage of the 
Resources and Ecosystems Sustainability, 

Tourist Opportunities, and Revived Economies 

of the Gulf Coast States Act of 2012 

(RESTORE Act), the OIG is authorized to 

conduct, supervise, and coordinate audits and 

investigations of projects, programs, and 

activities of the Gulf Coast Restoration Trust 

Fund (Trust Fund). 

With the resources available after mandated 

requirements are met, the OIG will conduct 

audits and investigations of the Department’s 

highest risk programs and operations, as 

reported through a memorandum from the 

Inspector General to the Secretary of the 

Treasury on October 25, 2012. These include:

Programs that Support the Transformation of 

Financial Regulation - The Dodd-Frank Act 

established the Council of Inspectors General 

on Financial Oversight (CIGFO) and 

designated the Treasury Inspector General as 

Chair. The Council has statutory requirements 

to provide oversight of the Financial Stability 

Oversight Council (FSOC), which is chaired 

by the Treasury Secretary.

Management of Treasury’s Authorities to 

Support and Improve the Economy - The 

Recovery Act provided Treasury with 

approximately $22 billion in non-IRS funding 

for low-income housing projects and specified 

energy properties for which the OIG must 

provide oversight. Funds for the Recovery Act 

are available through FY 2013 and beyond for 

the specified energy properties program. The 

OIG will continue this work at Departmental 

Offices to determine whether the funds were 

spent as intended. While not an ideal situation, 

the Treasury OIG is providing the only 

monitoring presence in the field by Treasury 

for this program. The OIG will also continue 

its oversight of the low-income housing 

program as funded projects are being brought 

on line. In addition, the OIG anticipates an 

increase of related criminal investigations as 

Treasury continues to disburse these funds. 

Programs to Combat Money Laundering and 

Terrorist Financing/Bank Secrecy Act 

Enforcement - Ensuring criminals and 

terrorists do not use our financial networks to 

sustain their operations and/or launch attacks 

against the U.S. continues to be a challenge. 

Given the criticality of this challenge to the 

Department’s mission, the OIG continues to 

consider anti-money laundering and combating 

terrorist financing as inherently high-risk, and 

an area that demands a major focus of its selfdirected resources.

Gulf Coast Restoration Trust Fund 

Administration - In response to the Deepwater 

Horizon oil spill, Congress established within 

Treasury the Gulf Coast Restoration Trust 

Fund and requires Treasury to deposit in the 

Trust Fund 80 percent of administrative and 

civil penalties paid by responsible parties, 

which will be distributed for eligible activities 

affecting the Gulf Coast states (Alabama, 

Florida, Louisiana, Mississippi, and Texas).

OIG investigative priorities for FY 2013 

include: Investigating complaints of alleged 

criminal and serious misconduct by 

Department employees and contract 

employees; Investigating allegations of fraud 

and other crimes involving Treasury contracts, 

procurements, grants, guarantees (fictitious 

instruments), and federal funds; Investigating 

complaints related to financial programs and 

operations involving issuing licenses, 

providing benefits and exercising oversight of 

U.S. financial institutions; Conducting 

investigations into threats against treasury 

employees and facilities; and proactive efforts 

in detecting, investigating, and deterring 

electronic crimes and other threats to the 

Department’s physical and cyber critical 

infrastructure.
In addition to audit and investigative 

responsibilities cited above, the OIG will 

continue to provide audit and investigative 

oversight over two additional Treasury 

programs—the Small Business Lending Fund 

(SBLF) and State Small Business Credit 

Initiative (SSBCI). The SBLF is a $30 billion 

fund that is used by Treasury to inject capital 

into small and medium banks with incentives 

to encourage them to increase their lending.

The SSBCI provides Treasury with $1.5 

billion to support state programs designed to 

increase access to credit for small businesses.

To ensure proper oversight of the SBLF, in 

2010 OIG established the SBLF Program 

Oversight Office headed by a Special Deputy 

Inspector General with responsibility for all 

audit and investigative activities relating to the 

program and for recommending program 

improvements. Congress also directed the OIG 

to audit the use of SSBCI funds by 

participating states and required Treasury to 

recoup any misused funds identified by such 

audits. To comply with its mandates, the OIG 

will continue to assess Treasury’s 

implementation of these two programs, 

continually monitor recipient compliance with 

program requirements and use of funds, and 

evaluate the impact of these programs on small 

business lending. 

Total resources required to support OIG 

operations in FY 2014 are $45,851,000, 

consisting of (1) $31,351,000 from direct 

appropriations and (2) $14,500,000 from 

reimbursable funding agreements to support 

the financial statement audit requirements of 

the Department and for OIG oversight of the 

SBLF and SSBCI programs.

OIG FY 2014 Budget Highlights

Dollars in Thousands

Office of Inspector General FTE Amount

FY 2012 Enacted 173 $29,641

FY 2013 Annualized CR Rate 172 $29,822

Changes to Base:

Adjustment to Request - ($1,229)

Non-Recur CR Increase - ($181)

Non-Recur Workload Management & 

Decrease in Material Loss Review from 

FY 2013 - ($1,048)

Maintaining Current Levels (MCLs): - $283

Pay-Raise - $196

Non-Pay - $87

Efficiency Savings: - ($325)

Program Efficiencies - ($325)

Subtotal Changes to Base - ($1,271)

Total FY 2014 Base 172 $28,551

Program Changes:

Program Increases: 22 $2,800

Gulf Coast Restoration Trust Fund 

Oversight 22 $2,800

Total FY 2014 Request 194 $31,351

FY 2014 Budget Adjustments

Adjustments to Request

Non-Recur CR Increase -$181,000 / +0 FTE

The across-the-board 0.612 percent increase 

provided in the CR through March 27, 2013 is 

non-recurred.

Non-Recur Workload Management & 

Decrease in Material Loss Review from FY 

2013 -$1,048,000 / +0 FTE

Decreased workload related to MLRs due to 

economic improvement and decreasing bank 

failure rate.

Maintaining Current Level (MCLs)

Pay-Raise +$196,000 / +0 FTE

The President’s Budget proposes a 1 percent 

pay-raise for federal employees in 2014.

Non-Pay +$87,000 / +0 FTE

Funds are requested for inflation adjustments 

in non-labor expenses such as GSA rent 

adjustments postage, supplies, and equipment.

Efficiency Savings

Program Efficiencies -$325,000 / +0 FTE

General operational efficiencies due to careful 

and aggressive review of all expenditures and 
imposition of reductions where possible. OIG 

will continue to very tightly and 

conservatively manage attrition, since the OIG 

budget is 80 percent personnel costs, there is 

not significant discretionary spending to 

reduce without impacting people and 

performance. OIG will constrain spending to 

the minimum necessary to accomplish the 

savings.

Program Increases

Gulf Coast Restoration Trust Fund Oversight 

+$2,800,000 / +22 FTE

The RESTORE Act authorizes the Treasury 

Office of Inspector General (OIG) to conduct, 

supervise, and coordinate audits and 

investigations of projects, programs, and 

activities funded under the act. The OIG 

reviewed the RESTORE Act and based on 

experience determined that additional 

resources will be required to support an 

additional Audit Directorate of 19 FTE, one 

additional investigative FTE for the Office of 

Investigations along with two support FTE to 

provide required audit oversight and 

coordination for the Trust Fund projects, 

programs, and activities.

Explanation of Budget Activities

Audit ($24,385,000 from direct 

appropriations, $14,500,000 from 

reimbursable resources)

The Office of Audit conducts audits aimed to 

ensure the accountability of resources, protect 

information, and provide recommendations for 

improving the economy, efficiency, 

effectiveness, and integrity of Treasury 

programs and operations under its jurisdiction. 

The requested funding for FY 2014 is 

necessary to perform mandated work and 

maintain an appropriate level of oversight of 

Treasury programs and operations consistent 

with its responsibilities under the Inspector 

General Act. The OIG also responds to 

requests by Treasury officials and the 

Congress for specific work. As a newer 

responsibility, in FY 2014 the OIG must also 

provide oversight of Gulf Coast Restoration 

Trust Fund programs, projects and activities. 

Reimbursable funding supports agreements for 

contract audits of other Treasury bureaus, as 

well as oversight of the Small Business 

Lending Fund (SBLF) and the State Small 

Business Credit Initiative (SSBCI) programs. 

SBLF/SSBCI program oversight and expected 

performance is detailed in the SBLF/SSBCI 

Program Office budget submission.

Investigations ($6,966,000 from direct 

appropriations)

The Office of Investigations prevents, detects, 

and investigates complaints of fraud, waste,

and abuse. This includes the detection and 

prevention or deterrence of employee 

misconduct and fraud, or related financial 

crimes within or directed against Treasury. 

The Office refers its cases to the Department 

of Justice, state or local prosecutors for 

criminal prosecution or civil litigation, or to 

agency officials for corrective administrative 

action. 

With the increased risk of the Recovery Act 

grant programs for low-income housing and 

specific energy properties, the Office of 

Investigations faces greater challenges and 

anticipated increases in grant fraud. 

Investigative efforts are being directed towards 

those that subvert bank examination processes, 

subsequently defrauding the system and 

eroding the public’s trust.

Additionally, the OI remains committed to 

investigating those that threaten, intimidate, or 

harass Treasury employees in the performance 

of their duties. These types of complaints are 

received frequently given the ongoing 

economic climate.

Legislative Proposals

OIG has no legislative proposals.
OIG Performance by Budget Activity

Budget Activity Performance Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Actual Target Target

Audit Number of Completed Audit 

Products 

68 126 91 70 75

Audit Percent of Statutory Audits 

Completed by the Required Date 

50.0 100.0 100.0 100.0 100.0

Investigations Percentage (%) of All Cases 

Closed During Fiscal Year that 

were Referred for Criminal/Civil 

Prosecution or Treasury 

Administrative Action

93.0 85.0 91.0 80.0 80.0

Key: DISC - Discontinued and B - Baseline

Description of Performance

In FY 2012, the Office of Audit completed a 

total of 91 audit products. The Office plans to 

complete 70 audit products in FYs 2013 and 

75 audit products in FY 2014. In FY 2012, the 

Office met its mandated audit requirements. 

Audit products include audit reports, 

evaluation reports, the Inspector General’s 

Semi-Annual Report to the Congress, and the 

Inspector General’s Annual Memorandum to 

the Secretary on the most significant 

management and performance challenges 

facing the department. Audit products can 

also include responses to specific information 

requests by the Congress on a variety of 

subjects, with the stand-up of the Consumer 

Financial Protection Bureau and Treasury’s 

contingency planning during the 2011 debt 

limit crisis being recent examples. By 

completing independent and timely 

assessments of Treasury’s programs and 

operations under jurisdiction, OIG supports its 

mission of promoting economy, efficiency, 

effectiveness, and integrity of Treasury 

programs and operations. The 

recommendations for improvement in 

Treasury programs and operations noted 

through OIG’s assessments, directly support 

the Treasury Department in achieving four of 

its five strategic goals (OIG also incidentally 

supports Treasury’s strategic goal of ―Pursue 

Comprehensive Tax and Fiscal Reform‖). It 

should be noted that a number of these 

assessments are mandated in law with specific 

reporting deadlines so that decision makers 

have timely information.

The Office of Inspector General has a mature 

audit operation that can well estimate, based 

on historical performance, a highly accurate 

prediction of future performance. That said, 

OIG has, over time, demonstrated agility at 

redirecting resources as necessary to address 

new challenges and mandates of its 

stakeholders.

OIG’s strategy is to continue to maintain a 

highly skilled and motivated workforce. One 

way this is done is through planning and 

executing a meaningful body of work designed 

to help ensure the integrity and effectiveness 

of Treasury programs and operations while

looking for opportunities to improve them.

In FY 2012, the OIG exceeded the 

Investigative Performance Measure target, 

opened 129 new investigations, and closed 85 

investigations. The OIG also referred 100 

percent of investigations that substantiated 

administrative violations against a Treasury 

employee to the appropriate regulated bureau 

for action. In addition, the OIG referred 109 

investigations for criminal prosecution. The 

OIG received investigative referrals regarding 

potential criminal misconduct that occurred 
prior to or during bank failures, and has 

worked criminal investigations with the 

Federal Deposit Insurance Corporation Office 

of Inspector General and the OIG Office of 

Audit regarding potential prosecution of acts 

which may have contributed to the bank 

failures. 

The Investigative performance measure is 

percentage of all cases closed by OI during the 

fiscal year referred for administrative action or 

for criminal or civil prosecution by Federal or 

local prosecutors. The goal for OIG is that at 

least 80 percent of closed cases meet the 

aforementioned criteria of closed cases in a

fiscal year. Meeting or exceeding this goal 

demonstrates that OI is responsive to 

allegations and complaints referred to OI and 

that when these referrals require investigation 

the cases are timely, thoroughly and accurately 

reported to assist the Department in 

maintaining the integrity of its programs and 

operations, subsequently ferreting out fraud, 

waste, and abuse. This goal was developed for 

use beginning in FY 2012 to achieve OIG’s 

goal of positively impacting Treasury’s 

strategic goals and providing a more 

meaningful measurement of investigative 

performance.