Office of Inspector General

Program Summary by Budget Activity

Dollars in Thousands

 FY 2014 FY 2015 FY 2016 FY 2015 TO FY 2016

Budget Activity Enacted Enacted Request $ Change % Change

Audit $27,050 $28,275 $28,304 $29 0.10%

Investigations $7,750 $7,076 $7,112 $36 0.51%

Subtotal, Office of Inspector General $34,800 $35,351 $35,416 $65 0.18%

Offsetting Collections - Reimbursables $12,000 $13,000 $13,000 $0 0.00%

Total Program Operating Level $46,800 $48,351 $48,416 $65 0.13%

Direct FTE 194 194 194 0 0.00%

Reimbursable FTE 19 19 19 0 0.00%

Total FTE 213 213 213 0 0.00%

Summary

The Inspector General Act of 1978 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 

goals, the OIG established the following 

strategic goals: (1) promote the integrity and 

effectiveness of Treasury programs and 

operations through audits and investigations; 

(2) proactively support and strengthen the 

Department’s ability to identify and manage 

challenges, both today and in the future; (3) 

fully and currently inform stakeholders of 

Treasury OIG findings, recommendations, 

investigative results, and priorities related to 

Treasury programs and operations; and (4) 

enhance, support, and sustain a workforce and 

strengthen internal operations to achieve the 

Treasury OIG mission, vision and strategic 

goals.

The FY 2016 request for the OIG will be used 

to fund critical audit, investigative, and 

mission support activities to meet the 

requirements of the Inspector General Act, and 

a number of other statutes including, but not 

limited to the Dodd-Frank Wall Street Reform 

and Consumer Protection Act (Dodd-Frank), 

Federal Information Security Management Act 

(FISMA), Government Management Reform 

Act (GMRA), Improper Payments Elimination 

and Recovery Act (IPERA), Digital 

Accountability and Transparency Act of 2014 

(DATA Act), Federal Deposit Insurance Act

(FDIA), Small Business Jobs Act of 2010, and 

Resources and Ecosystems Sustainability, 

Tourist Opportunities, and Revived Economies 

of the Gulf Coast States Act of 2012 

(RESTORE Act). Specific mandates include 

audits of the Department’s financial 

statements, the Department’s implementation 
of FISMA, and failed insured depositary 

institutions regulated by Treasury. 

With the resources available after mandated 

requirements are met, the OIG will conduct 

audits of the Department’s highest risk 

programs and operations, and respond to 

stakeholder requests for specific work as 

appropriate. Some of the Department’s 

highest risk programs and operations include: 

(1) continued implementation of Dodd-Frank; 

(2)management of Treasury’s authorities 

intended to support and improve the economy; 

(3) anti-money laundering and terrorist 

financing/Bank Secrecy Act Enforcement; and 

(4) Gulf Coast Restoration Trust Fund 

Administration.

Programs That Support the Continued 

Implementation of Dodd-Frank - The 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. CIGFO comprised 

of the Inspectors General of the eight federal 

financial regulators and the Special Inspector 

General for TARP, meets quarterly to share 

information on financial oversight, provides 

annual reports to FSOC and the Congress with 

the individual and collective perspectives of 

the inspectors general on ways to improve 

financial oversight, and evaluates FSOC 

activities through working groups. During

FY 2016, CIGFO will continue to evaluate 

FSOC’s activities. Apart from CIGFO, the 

OIG will provide oversight for four important 

Treasury offices established by Dodd-Frank –

the Office of Financial Research, the Federal 

Insurance Office, and the Office of Minority 

and Women Inclusion within Departmental 

Offices and Office of the Comptroller of the 

Currency. 

Management of Treasury’s Authorities to 

Support and Improve the Economy - The 

Recovery Act provided Treasury with 

approximately $29 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 for the specified energy 

properties program and will require continued 

oversight. The OIG will continue this work at 

Departmental Offices to determine whether the 

funds were spent as intended. The OIG will 

continue its oversight of projects funded under 

Treasury’s payments in lieu of tax credit 

programs – to persons for specified energy 

properties and to states for low-income 

housing projects over an extended period of 

time (5 years from the placed in-service date 

of the specified energy property and 15 years 

beginning on January 1 of the year following 

the placed in-service date for the low-income 

housing project). In addition, the OIG 

anticipates an increase of related criminal 

investigations as Treasury continues to 

disburse these funds. 

Another area that requires vigorous oversight 

by the OIG is Treasury’s responsibilities under 

the Housing and Economic Recovery Act of 

2008 (HERA). Under HERA, Treasury 

continued to support the financial solvency of 

the Federal National Mortgage Association 

(Fannie Mae) and the Federal Home Loan 

Mortgage Corporation (Freddie Mac) which is 

under the conservatorship of the Federal 

Housing Finance Agency. As of July 2014, 

Treasury invested $187 billion in the two 

entities to cover their losses and maintain a 

positive net worth. Although Fannie Mae and 

Freddie Mac did not require Treasury’s 

support in recent years, the futures of both 

remain in question and prolonged assistance 

may be required. During FY 2016, audit 

oversight of the Preferred Stock Purchase 

Agreement Program, the program through 

which Treasury provides its financial support 
to Fannie Mae and Freddie Mac, will continue. 

The OIG’s planned HERA oversight work in 

FY 2016 also includes the Housing Finance 

Agency (HFA) Initiative’s New Issue Bond 

Program ($15.3 billion). This program 

includes participation of over 90 state and 

local HFAs. 

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). Treasury OIG is 

charged with providing oversight of all 

programs, processes, and activities of the Trust 

Fund.

Treasury OIG’s investigative priorities for 

FY 2016 include: 

• Complaints of alleged criminal and 

serious misconduct by Department 

employees and contract employees; 

• Allegations of fraud and other crimes 

involving Treasury contracts, 

procurements, grants, guarantees 

(fictitious instruments), and federal 

funds; 

• Complaints related to financial 

programs and operations involving 

issuing licenses, providing benefits and 

exercising oversight of U.S. financial 

institutions;

• 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 the 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 the OIG’s

operations in FY 2016 are $48,416,000, 
consisting of (1) $35,416,000 from direct 

appropriations and (2) $13,000,000 from 

reimbursable funding agreements to support 

the financial statement audit requirements of 

the Department and for oversight of the SBLF 

and SSBCI programs.

OIG FY 2016 Budget Highlights

Dollars in Thousands

Office of Inspector General FTE Amount

FY 2015 Enacted 194 $35,351

Changes to Base:

Maintaining Current Levels (MCLs): - $549

Pay-Raise - $283

Pay Annualization - $72

FERS Contribution Increase - $107

Non-Pay - $87

 Efficiency Savings ($484)

 Administrative Reduction ($484)

Subtotal Changes to Base - $65

Total FY 2016 Base 194 $35,416

Total FY 2016 Request 194 $35,416

FY 2016 Budget Adjustments

Adjustments to Request

Maintaining Current Level (MCLs)

Pay-Raise +$283,000 / +0 FTE

Funds are requested for the proposed January 

2016 pay-raise.

Pay Annualization +$72,000 / +0 FTE

Funds are requested for annualization of the 

January 2015 pay-raise.

FERS Contribution Increase +$107,000 / 

+0 FTE

Funds are requested for increases in agency 

contributions to the Federal Employee 

Retirement System based on updated actuarial 

estimates.

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

Administrative Reduction -$484,000 / 

+0 FTE

OIG will reduce its administrative expenses 

and achieve savings due to delays in onboarding staffing. 

Explanation of Budget Activities

Audit ($28,304,000 from direct 

appropriations, $13,000,000 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 2016 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. In FY 2016 the 

OIG must continue to provide oversight of 

Gulf Coast Restoration Trust Fund programs, 

projects and activities, as well as Treasury’s 

roles and responsibilities under the DATA 

Act. 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 ($7,112,000 from direct 

appropriations)

The Office of Investigations (OI) 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. OI
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, OI faces greater 

challenges and anticipated increases in grant 

fraud. In addition, with the establishment of 

the Gulf Coast Restoration Trust Fund,

outreach efforts are being made in an effort to 

prepare for future investigative referrals and 

complaints aimed at suspected fraud 

involving these funds.

Additionally, OI remains committed to 

investigating benefit, payment and other 

monetary fraud associated with the programs 

and operations of the Treasury Department.

Legislative Proposals

OIG has no legislative proposals.

OIG Performance by Budget Activity

Budget Activity Performance Measure FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Target Target

Audit Number of Completed Audit 

Products

91 72 75 75 77

Audit Percent of Statutory Audits 

Completed by the Required Date

100.0 100.0 100.0 100.0 100.0

Investigations Percentage (%) of All Cases 

Closed During Fiscal Year that 

were Referred for Criminal/Civil 

Prosecution or Treasury 

Administrative Action

91.0 84.0 84.0 80.0 80.0

Key: DISC - Discontinued and B - Baseline

Description of Performance

The Office of Audits expects to complete 75 

audit products in FY 2015 and 77 in FY 2016. 

In FY 2014 the Office of Audit completed 75

audit products, exceeding the planned target of 

70. In FY 2014, the Office of Audit 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. By completing 

independent and timely assessments of 

Treasury’s programs and operations under our 

jurisdiction, the OIG supports its mission of 

promoting 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 its 

strategic goals. 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 OIG 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.
In keeping with the OIG’s strategy to maintain 

a highly skilled and motivated workforce, the 

OIG plans and executes 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 2014, the OIG exceeded the 

Investigative Performance Measure target, 

opened 81 new investigations, closed 92

investigations, and referred 48 investigations 

that substantiated administrative violations 

against a Treasury employee to the appropriate 

regulated bureau for action. In addition, the 

OIG referred 65 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 the 

percentage of all cases closed by OI during the 

fiscal year that were referred for administrative 

action or for criminal or civil prosecution by 

Federal or local prosecutors. Meeting or 

exceeding this goal demonstrates that OI is 

responsive to allegations and complaints and 

does an excellent and thorough job in 

analyzing and evaluating incoming 

complaints, investigating complaints that 

warrant full investigation and achieving a 

measurable result by way of either an 

Administrative or Criminal referral for action 

against the subject of the investigation. The 

low percentage of investigations closed had no 

actionable findings. OI’s excellent 

performance continues to assist the 

Department in maintaining the integrity of its 

programs and operations, subsequently 

ferreting out fraud, waste, and abuse. This 

goal was developed to achieve OIG’s goal of 

positively impacting Treasury’s strategic goals 

and providing a more meaningful 

measurement of investigative performance.