Office of Inspector General

Program Summary by Budget Activity

(Dollars in thousands)

Appropriation FY 2010 FY 2011 FY 2012 FY 2010 to FY 2012

Enacted Annualized

CR Level

Request $ Change % Change

 Audit $22,869 $22,869 $22,897 $28 0.1%

 Investigations $6,831 $6,831 $6,958 $127 1.9%

Subtotal, Office of Inspector General $29,700 $29,700 $29,855 $155 0.5%

Offsetting Collections - Reimbursables $8,000 $10,000 $13,200 $5,200 65.0%

Total Program Operating Level $37,700 $39,700 $43,055 $5,355 14.2%

Direct FTE 172 172 172 - -

*Does not include the FY 2010 Supplemental (P.L. 111-212) $1.8 million rescission

Summary

The Treasury Office of Inspector General 

(OIG) supports Treasury’s goal to ensure 

accountability and transparency, to protect the 

integrity of the Department, and to improve 

overall efficiency and effectiveness in 

Treasury programs and operations. The OIG 

conducts audits and investigations of all 

Treasury programs and operations except 

those under jurisdictional oversight of the 

Treasury Inspector General for Tax 

Administration and the Special Inspector 

General for the Troubled Asset Relief 

Program. In accordance with the Inspector 

General Act, the OIG through its activities (a) 

promotes economy, efficiency, and 

effectiveness in the administration of Treasury 

programs and operations; (b) prevents and 

detects fraud, waste, and abuse in Treasury 

programs and operations; and (c) keeps the 

Secretary and the Congress fully and currently 

informed about problems, abuses, and 

deficiencies in Treasury programs and 

operations.

The Fiscal Year (FY) 2012 President’s Budget 

request for the OIG will be used for critical 

audit and investigative resources. 

The OIG will continue to address its 

traditional audit mandates related to (1) the 

Department’s financial statements, (2) the 

Department’s implementation of the Federal 

Information Security Management Act 

(FISMA), and (3) failed Treasury-regulated 

financial institutions. In addition to these 

traditional mandates, the OIG is also 

responsible for mandates related to the DoddFrank Wall Street Reform and Consumer 

Protection Act and the Small Business Jobs 

Act of 2010. The Dodd-Frank Wall Street 

Reform and Consumer Protection Act requires 

the Inspector General to (1) function as the 

Chair of the Council of Inspectors General on 

Financial Oversight which includes periodic 

reporting on the Council’s audits and 

investigations along with views on regulatory 

matters, (2) monitor the transfer of functions 

of the Office of Thrift Supervision with 

periodic reporting to the Congress, and (3) 

perform reviews of systemically significant 

failed financial institutions that had been 

regulated by Treasury. The Small Business 

Jobs Act charges the OIG with providing 

oversight over two new Treasury programs, 

the $30 billion Small Business Lending Fund 

(SBLF) and the $1.5 billion State Small 

Business Credit Initiative (SSBCI). To comply 

with these mandates, the OIG will assess 

Treasury’s implementation of the two 

programs, continually monitor recipient 
compliance with program requirements and 

use of funds, and evaluate the impact of these 

programs on small business lending. 

Furthermore, the July 2010 U.S.-European 

Union agreement on the processing and 

transfer of financial messaging data for the 

purposes of the Treasury Department's 

Terrorist Finance Tracking Program 

specifically provides for the OIG’s oversight 

to ensure safeguards over sensitive 

information are followed. 

Once mandated requirements are met, the OIG 

will conduct audits of the Department’s 

highest risk programs and operations, to the 

extent that resources are available.

Investigative priorities 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 with 

an emphasis on Treasury Recovery Act funds; 

Investigating allegations of criminal conduct 

stemming from the OIG’s mandated failed 

bank reviews; and conducting proactive efforts 

to detect, deter and investigate, electronic 

crimes and other threats to the Department’s 

physical and cyber critical infrastructure.

Total resources required to support OIG 

operations for FY 2012 are $43,055,000, 

consisting of (1) $29,855,000 from direct 

appropriations and (2) $13,200,000 from 

reimbursable funding agreements to support 

the financial statement audit requirements of 

the Department and for OIG oversight of the 

SBLF and the SSBCI.

OIG FY 2012 Budget Highlights

(Dollars in thousands)

Appropriation Amount

FY 2010 Enacted $29,700

FY 2011 Annualized CR Level $29,700

Changes to Base:

Adjustment to Reach Policy Level: $351

Adjustment to Reach FY 2011 President's 

Policy

$351

Maintaining Current Levels (MCLs): $183

Maintaining Current Levels $183

Efficiencies, Savings & Base Reductions: ($392)

MLRs ($392)

Subtotal FY 2012 Changes to Base $142

Total FY 2012 Base $29,842

Program Changes:

Program Increases: $13

CIGIE Contribution $13

Subtotal FY 2012 Program Changes $13

Total FY 2012 Request $29,855

FY 2012 Budget Adjustments

FY 2011 Annualized CR Level

The FY 2011 Annualized CR Level for OIG is 

$29,700,000.

Adjustment to Reach Policy Level 

Adjustment to Reach FY 2011 President's

Policy +$351,000 / +0 FTE 

Adjustment from the FY 2011 Annualized 

Continuing Resolution (CR) Rate to reach the 

FY 2011 President's Policy Level. The 

President's Policy Level is equal to the FY 

2011 President's Budget as adjusted for the 

proposed pay freeze.

Maintaining Current Levels (MCLs) 

Maintaining Current Levels +$183,000 / +0 

FTE 

Funds are requested for inflation adjustments 

in non-labor expenses such as GSA rent 

adjustments, postage, supplies and equipment 

and health benefits and the increase in Federal 

Employee Retirement System participation. 

No inflation adjustment is requested for pay in 

FY 2012.
Efficiencies, Savings & Base Reductions 

MLRs -$392,000 / +0 FTE 

Savings from anticipated reductions in 

Material Loss Review work. The savings are 

anticipated due to regulatory reform and 

economic recovery.

Program Increases 

CIGIE Contribution +$13,000 / +0 FTE 

Contribution to the Council of Inspectors 

General on Integrity and Efficiency

Explanation of Budget Activities

Salaries and Expenses

Audit ($22,897,000 from direct appropriations

and $13,200,000 from reimbursable 

programs)

In FY 2010, the Office of Audit completed a 

total of 68 audit products. As the result of the 

unprecedented number of bank failures 

requiring a material loss review, the OIG 

completed some of the reviews after the 6-

month timeframe prescribed in statute, but the 

missed dates were not considered significant. 

The appropriate Congressional oversight 

committees were informed of this situation. 

The Office of Audit plans to complete 70 audit 

products in FY 2012.

In FY 2010 the Office of Investigations met 

or exceeded both Investigative Performance 

Measure targets. OIG received investigative 

referrals regarding potential criminal 

misconduct that occurred prior to or during 

bank failures, and has worked criminal 

investigations with the FDIC OIG and the 

OIG Office of Audit regarding potential 

prosecution of acts which may have 

contributed to the bank failures. As 

additional financial institutions fail over the 

next several years, OIG expects an associated 

increase in investigative work. Treasury’s 

Recovery Act grants in lieu of tax credit 

programs—for specified energy property and 

to states for low-income housing projects—

are estimated to cost almost $20 billion over 

their lives. OIG anticipates a significant 

increase of related criminal investigations as 

Treasury continues to disburse these funds. 

It is expected that the performance measures 

will be met or exceeded in FYs 2011 and 

2012 as well.

Investigations ($6,958,000 from direct 

appropriations)

The Office of Investigations prevents, detects 

and investigates complaints of fraud, waste 

and abuse at all Treasury non-IRS bureaus and 

offices. 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. 

The Office of Inspector General (OIG) is 

actively investigating numerous referrals of 

potential bank fraud received from the OIG’s 

Office of Audit related to their reviews of 

failed financial institutions that were regulated 

by OCC or the Office of Thrift Supervision.

Legislative Proposals

The OIG has no legislative proposals.
OIG Performance by Budget Activity

Budget Activity Performance Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Exceptional accountability and 

transparency

Number of Completed Audit 

Products (Ot)

64 68 68 62 70

Exceptional accountability and 

transparency

Percent of Statutory Audits 

Completed by the Required Date 

(E)

100.0 100.0 50.0 100.0 100.0

Exceptional accountability and 

transparency

Percentage (%) of Investigations 

that were referred for Criminal, 

Civil or Treasury administrative 

action

N/A N/A N/A B 80.0

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, M - Management/Cust. Satisfaction, DISC -

Discontinued, and B - Baseline

Description of Performance

In FY 2010, the Office of Audit completed a 

total of 68 audit products. As the result of the 

unprecedented number of bank failures

requiring a material loss review, the OIG 

completed some of the reviews after the 6-

month timeframe prescribed in statute, but the 

missed dates were not considered significant. 

The appropriate Congressional oversight 

committees were informed of this situation. 

The Office of Audit plans to complete 70 audit 

products in FY 2012.

In FY 2010 the Office of Investigations met or 

exceeded both Investigative Performance 

Measure targets. OIG received investigative 

referrals regarding potential criminal 

misconduct that occurred prior to or during 

bank failures, and has worked criminal 

investigations with the FDIC OIG and the OIG 

Office of Audit regarding potential 

prosecution of acts which may have 

contributed to the bank failures. As additional 

financial institutions fail over the next several 

years, OIG expects an associated increase in 

investigative work. Treasury’s Recovery Act 

grants in lieu of tax credit programs—for 

specified energy property and to states for lowincome housing projects—are estimated to cost 

almost $20 billion over their lives. OIG

anticipates a significant increase of related 

criminal investigations as Treasury continues 

to disburse these funds. It is expected that the 

performance measures will be met or exceeded 

in FYs 2011 and 2012 as well.