Office of Inspector General 

Program Summary by Budget Activity 

(Dollars in thousands) 

FY 2008 FY 2009 FY 2010 Appropriation Enacted Enacted Request $ Change % Change

Salaries and Expenses $18,450 $26,125 $26,700 $575 2.2%

 Audit $12,658 $20,116 $20,559 $443 2.2%

 Investigations $5,792 $6,009 $6,141 $132 2.2%

Subtotal, Office of Inspector General $18,450 $26,125 $26,700 $575 2.2%

Offsetting Collections - Reimbursables $6,361 $7,381 $8,000 $619 8.4%

Total Program Operating Level $24,811 $33,506 $34,700 $1,194 3.6%

Explanation of Request 

 

The Fiscal Year (FY) 2010 President’s Budget 

request for the Office of Inspector General 

(OIG) will be used to provide critical audit and 

investigative services, ensuring the 

effectiveness and integrity of Treasury’s 

programs and operations. The OIG will 

continue to address mandated requirements 

related to (1) audits of the Department’s 

financial statements, (2) information security, 

and (3) failed institutions regulated by the 

Office of the Comptroller of the Currency or 

the Office of Thrift Supervision resulting in 

material losses to the deposit insurance fund 

(material loss is currently defined as the 

greater of $25 million or 2 percent of the 

institution’s assets). To the extent that 

resources are available, the OIG will conduct 

audits of the Department’s highest risk 

programs and operations. Five of those 

programs and operations are discussed below. 

This list is not all inclusive, and risks change 

over time and circumstance. 

Programs to Ensure the Safety and 

Soundness of the Nation’s Financial 

Markets – The wave of bank failures that 

started in 2008 underscore the need for 

increased audit coverage of a more prospective 

nature. Material loss reviews are a backward 

look at the quality of supervision as it relates 

to the failed institution under review. The OIG 

believes that it is important for regulators to 

address emerging risks in financial markets 

and products. The subprime mortgage crises 

was a costly lesson that serves to remind us 

that regulators need to anticipate, recognize, 

and control business practices that create 

unreasonable risk. 

Another area that the OIG believes requires 

vigorous oversight is Treasury’s 

responsibilities under the Housing and 

Economic Recovery Act of 2008. Treasury has 

taken on an important role to complement the 

Federal Housing Finance Agency’s September 

2008 decision to place Fannie Mae and 

Freddie Mac in conservatorship. 

Programs to Promote Economic Recovery - 

With the enactment of the American Recovery 

and Reinvestment Act of 2009 (Recovery 

Act), Treasury was provided with, among 

other things, over $4 billion for low-income 

housing projects and specified energy 

properties of which the OIG has jurisdiction or 

joint jurisdiction with the Treasury Inspector 

General for Tax Administration. Additionally, 

the Community Development Financial 

Institutions Fund received $100 million to 

supplement its FY 2009 funding round for 

qualified program applicants. 

Programs to Combat Terrorist Financing 

and Money Laundering – Treasury faces 

unique challenges in carrying out its 

responsibilities under the Bank Secrecy Act 

Department of the Treasury - Budget in Brief FY 2010 Page 21
(BSA) and USA PATRIOT Act to prevent 

and detect money laundering and terrorist 

financing. Past audits and Congressional 

hearings have surfaced serious regulatory 

gaps in the detection of and/or timely 

enforcement action against financial 

institutions for BSA and related violations. 

Furthermore, with the current distress facing 

so many financial institutions throughout 

our country, we believe that there is an 

increased risk that compliance with BSA 

may have deteriorated further and may 

continue to worsen. 

Efforts to Ensure the Security of Treasury’s 

Information Systems -- The Department 

faces serious challenges in bringing its systems 

into compliance with information technology 

security policies, procedures, standards, and 

guidelines. In its FY 2008 Federal Information 

Security Management Act independent audit, 

the OIG continued to report deficiencies in the 

Department’s information security programs 

and practices. 

Treasury’s Management of Capital 

Investments -- Treasury needs to ensure that 

large acquisitions of systems and other capital 

investments are properly managed. The 

Department’s record in this regard has been 

mixed and requires continued attention. 

The requested funding will also allow the OIG 

to: continue to prevent fraud, waste and abuse, 

at all Treasury non-IRS bureaus and offices, 

including investigating complaints of alleged 

employee misconduct, and allegations of fraud 

and other crimes involving Treasury programs; 

performing oversight of the Treasury's police 

operations at the Bureau of Engraving and 

Printing and the U.S. Mint; continuing review 

and investigation of instances where the U.S. 

Mint’s Coin Redemption and Bureau of 

Engraving and Printing’s Currency 

Redemption Programs are used to facilitate 

money laundering, structuring, and other 

unlawful activities; and conducting proactive 

efforts to detect, investigate, and deter 

electronic crimes and other threats to the 

Department’s physical and cyber critical 

infrastructure. 

 

Resources required to support OIG operations 

for FY 2010 are $26,700,000 from direct 

appropriations, and $8,000,000 from offsetting 

collections and reimbursable agreements for 

contract financial statement audits of other 

Treasury bureaus. 

Purpose of Program 

 

The Treasury OIG plays a major role in 

support of the Department of the 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. OIG 

conducts audits and investigations of all nonIRS offices in accordance with the Inspector 

General Act, as amended, to (a) promote 

economy, efficiency, and effectiveness in the 

administration of Treasury programs and 

operations; (b) prevent and detect fraud, waste, 

and abuse in Treasury programs and 

operations; and (c) keep the Secretary and the 

Congress fully and currently informed about 

problems, abuses, and deficiencies in Treasury 

programs and operations. 

There are also appropriated to the Department 

of the Treasury funds specifically identified 

for the annual audit of the Treasury-wide 

financial statements. 

Department of the Treasury - Budget in Brief FY 2010 Page 22
OIG FY 2010 Budget Highlights

(Dollars in thousands) 

Appropriation Amount

FY 2009 Enacted 26,125

Changes to Base: 

Maintaining Current Levels (MCLs): $575

Across the Board program reduction (9)

Non-Pay Inflation Adjustment 90

Pay Annualization 166

Pay Inflation Adjustment 328

Subtotal FY 2010 Changes to Base $575

Total FY 2010 Base 26,700

Total FY 2010 President's Budget Request 26,700

FY 2010 Budget Adjustments 

 

FY 2009 Enacted 

The FY 2009 enacted direct appropriation for 

OIG is $26,125,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain 

Current Levels +$575,000 / +0 FTE Funds 

are requested for: FY 2010 cost of the January 

2009 pay increase of $166,000; proposed 

January 2010 pay raise of $328,000; and nonlabor related items such as contracts, travel, 

supplies, equipment and GSA rent adjustments 

of $90,000. 

Explanation of Budget Activities 

 

Salaries and Expenses 

 

Audit ($20,559,000 from direct 

appropriations and $8,000,000 from 

reimbursable programs) The Treasury OIG 

plays a major role in support of the 

Department of the 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. OIG 

conducts audits and investigations of eight 

Treasury bureaus and all non-IRS Treasury 

offices in accordance with the Inspector 

General Act, as amended, to (a) promote 

economy, efficiency, and effectiveness in the 

administration of Treasury programs and 

operations, (b) prevent and detect fraud, waste, 

and abuse in Treasury programs and 

operations; and (c) keep the Secretary and the 

Congress fully and currently informed about 

problems, abuses, and deficiencies in Treasury 

programs and operations. 

There are also appropriated to the Department 

of the Treasury funds specifically identified 

for the annual audit of the Treasury-wide 

financial statements. This audit is performed 

by an independent public accounting firm 

under the supervision of OIG. These funds are 

not available for OIG programs and 

operations. 

Investigations ($6,141,000 from direct 

appropriations) The Office of Investigations 

prevents, detects and investigates complaints 

of fraud, waste and abuse at eight Treasury 

bureaus and all non-IRS Treasury 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 of Investigations 

refers its cases to the Department of Justice 

and state or local prosecutors for criminal 

prosecution or civil litigation, or to agency 

officials for corrective administrative action. 

 

Legislative Proposals 

 

The OIG has no legislative proposals for FY 

2010. 

OIG Performance by Budget Activity 

Department of the Treasury - Budget in Brief FY 2010 Page 23
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Budget Activity Performance Measure Actual Actual Actual Target 

Met? Target Target

Audit Number of completed audit products (Ot) 57 64 64 Yes 60 62 

Audit Percent of statutory audits completed by 

the required date (%) (E) 

100 100 100 Yes 100 100 

Investigations Percent of all cases that were accepted by 

prosecutors, referred for agency action, or 

closed during fiscal year and were 

completed within 18 months of case 

initiation (Oe) 

 Baseline 70 

Investigations Percentage of all cases closed during fiscal 

year that were referred for criminal/civil 

prosecution or Treasury Administrative 

action (%) (E) 

 Baseline 70 

Description of Performance 

 

In FYs 2007 and 2008, the Office of Audit 

completed 128 audit products, identified 

potential monetary benefits totaling nearly 

$7 million for bureaus and programs and 

completed all statutory audits by the 

required deadlines. 

In FY 2008, the Office of Audit performed 

or supervised contractors to meet its 

financial statement and information security 

mandated audit requirements. It also 

performed mandated material loss reviews 

of failed financial institutions supervised by 

Treasury. Furthermore, the Office of Audit 

directed its self-initiated work toward 

addressing Treasury’s major management 

and performance challenges. The Office of 

Audit completed 64 audit products, and met 

all statutory completion requirements. 

In FY 2008, the Office of Investigations 

continued investigating all reports of fraud, 

waste and abuse and other criminal activity. 

The Office of Investigations also continued 

to conduct a limited number of proactive 

integrity projects such as the fraudulent 

improper payments project initiated in FY 

2006. The Office of Investigations referred 

93 investigations for criminal prosecution, 

civil litigation, or corrective administrative 

action. The Office of Investigations 

undertook a thorough review of its 

performance measure methodology, and has 

developed better and more realistic measures 

with which to gauge its investigative 

performance. These new measures went into 

effect in FY 2009, and will be evaluated 

throughout the year. 

In FY 2009, the OIG expects to maintain 

performance at a level consistent with FY 

2008, and will continue to direct a 

significant portion of its limited resources to 

conducting the increasing number of 

material loss reviews of failed banks. 

Furthermore, the OIG will begin to provide 

oversight of more than $4 billion for lowincome housing projects and specified 

energy properties grants authorized by the 

Recovery Act. 

FY 2010 requested resources will enhance 

OIG’s ability to complete mandated material 

loss reviews by the statutory deadline. OIG 

will continue to direct much of its remaining 

resources to auditing Treasury programs: to 

ensure the safety and soundness of the 

Nation’s financial markets; to promote 

economic recovery; to combat terrorist 

financing and money laundering; to ensure 

the security of treasury’s information 

systems, and; to improve Treasury’s 

management of capital investments. The 

OIG expects to meet the revised 

investigative targets of 70 percent of all 

cases that were accepted by prosecutors, 

referred for agency action, closed, or 

exonerated during the fiscal year and were 

completed within 18 months of case 

Department of the Treasury - Budget in Brief FY 2010 Page 24
initiation; and 70 percent of all cases closed 

during the fiscal year that were referred for 

criminal/civil prosecution or Treasury 

Administrative action.; complete 62 audit 

products, and complete 100 percent of 

statutory audits on time in FY 2010.

Department of the Treasury - Budget in Brief FY 2010 Page 25