Office of Inspector General

Program Summary by Budget Activity

Dollars in Thousands

 FY 2015 FY 2016 FY 2017 FY 2016 TO FY 2017

Budget Activity Enacted Enacted Request $ Change % Change

Audit $28,275 $28,304 $29,605 $1,301 4.60%

Investigations $7,076 $7,112 $7,439 $327 4.60%

Subtotal, Office of Inspector General $35,351 $35,416 $37,044 $1,628 4.60%

Offsetting Collections - Reimbursables $13,000 $13,000 $10,500 ($2,500) -19.23%

Total Program Operating Level $48,351 $48,416 $47,544 ($872) -1.80%

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 under its 

jurisdictional oversight; (2) provide leadership 

and coordination and recommend policies 

designed to promote economy, efficiency, and 

effectiveness, and prevent and detect fraud and 

waste in those programs and operations; and 

(3) provide a means for keeping the Secretary 

and Congress fully and currently informed 

about problems and deficiencies relating to the 

administration of such programs and 

operations and the necessity for and progress 

of corrective action.

The OIG provides independent oversight of 

Treasury and its bureaus except the Internal 

Revenue Service (IRS) and the Troubled Asset 

Relief Program (TARP). The OIG has four

components, including two mission offices –

the Office of Audit and the Office of 

Investigations. In support of Treasury’s 

strategic goals, the OIG established the 

following strategic goals: (1) promote the 

integrity, efficiency, and effectiveness of 

programs and operations across the OIG’s 

jurisdictional boundaries through audits and 

investigations; (2) proactively support and 

strengthen the ability of programs across the

OIG’s jurisdictional boundaries to identify 

challenges and manage risks; (3) fully and 

currently inform stakeholders of OIG findings, 

recommendations, investigative results, and 

priorities; and (4) enhance, support, and 

sustain a workforce and strengthen internal 

operations to achieve the OIG mission, vision,

and strategic goals.

The FY 2017 request for OIG will be used to 

fund critical audit, investigative, and mission 

support activities to meet the requirements of 

the Inspector General Act, and other statutes 

including, the Dodd-Frank Wall Street Reform 

and Consumer Protection Act (Dodd-Frank);

Federal Information Security Modernization

Act (FISMA); Government Management 

Reform Act; Improper Payments Elimination 

and Recovery Act, Digital Accountability and 

Transparency Act of 2014 (DATA Act);

Federal Deposit Insurance Act, 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 compliance with FISMA, failed 
depositary institutions regulated by Treasury, 

and data submitted to USAspending.gov. 

With the resources available after mandated 

requirements are met, 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) Cyber 

Threats; (2) Management of Treasury’s 

Authorities Intended to Support and Improve 

the Economy; (3) Efforts to Promote Spending 

Transparency and to Prevent and Detect 

Improper Payments; (4) Anti-Money 

Laundering and Terrorist Financing/Bank 

Secrecy Act Enforcement; and (5) Gulf Coast 

Restoration Trust Fund Administration. 

Cyber Threats

Cybersecurity represents one of the most 

serious challenges facing the Nation today. A

reliable infrastructure, including information 

systems and networks, is vital to our national 

security and economic stability. Cyber threats 

are a persistent concern as Treasury’s 

information systems are critical to the core 

functions of government and the Nation’s

financial infrastructure. As cyber threats 

become more sophisticated and subtle, they 

pose an ongoing challenge for Treasury to 

fortify and safeguard its internal systems and 

operations and the financial sector it oversees.

Effective public-private coordination 

continues to be required to address the cyber 

threats against the Nation’s critical 

infrastructure. In this regard, Treasury is

looked upon to provide effective leadership to 

financial institutions in particular, and the 

financial sector in general, to strengthen 

awareness and preparedness against cyber 

threats. 

Management of Treasury’s Authorities 

Intended to Support and Improve the 

Economy 

Congress provided Treasury with broad 

authorities to address the recent financial crisis 

under the Housing and Economic Recovery 

Act (HERA) and the Emergency Economic 

Stabilization Act (EESA) enacted in 2008, the 

American Recovery and Reinvestment Act of 

2009 (Recovery Act), and the Small Business 

Jobs Act of 2010. In response to the call for 

further financial reform, Congress passed 

Dodd-Frank in July 2010. While Treasury’s 

program administration under these Acts has, 

for the most part matured, challenges remain

in managing these programs and investments.

This challenge focuses on the broad authorities 

given to Treasury: 

• Dodd-Frank established the Financial 

Stability Oversight Council (FSOC), which 

is chaired by the Treasury Secretary.

FSOC’s mission to identify risks to 

financial stability that could arise from 

activities of large, interconnected financial 

companies; promote market discipline; and 

respond to emerging threats to the financial 

system.

• The Small Business Jobs Act of 2010 

created within Treasury the Small Business 

Lending Fund. Through that fund, 

Treasury invested $4 billion in financial 

institutions intended to increase the 

availability of credit to small businesses.

The Act also provided $1.5 billion to 

Treasury to allocate to eligible State 

programs through the State Small Business 

Credit Initiative.

• The Small Business Jobs Act also provided 

Treasury with authority to guarantee bonds 

issued for certain community and 

economic development activities. That 

function was established through

Treasury’s Community Development 

Financial Institutions (CDFI) Fund in June 

2013. 
• Under HERA, Treasury supports the 

financial solvency of the Federal National 

Mortgage Association (Fannie) and the 

Federal Home Loan Mortgage Corporation 

(Freddie). To maintain the positive net 

worth of these two government sponsored 

enterprises (GSEs), Treasury invested 

about $187 billion in senior preferred stock 

in the two GSEs. While the GSEs have not 

needed additional support since fiscal year 

2012, their futures remain uncertain and 

more assistance may be needed. If such 

support is needed, the funding capacity 

available is $117.6 billion and

$140.5 billion, to Fannie and Freddie, 

respectively.

• The American Recovery and Reinvestment 

Act of 2009 (Recovery Act) provided 

Treasury with approximately $30 billion in 

non-IRS funding for low-income housing 

and specified energy properties for which 

OIG provides oversight. 

Efforts to Promote Spending Transparency 

and to Prevent and Detect Improper 

Payments

The DATA Act requires the Federal 

Government to provide consistent, reliable, 

and useful online data about how it spends 

money. As a result, the DATA Act put certain 

requirements on the Secretary, the Director of 

the Office of Management and Budget (OMB), 

the Inspectors General of each Federal agency, 

and the Comptroller General of the United 

States. Implementing the DATA Act is a 

complex task requiring a substantial level of 

interagency coordination and cooperation to 

develop, establish, and apply new financial 

data standards and to develop new data 

handling methodologies within a short 

timeframe.

In light of the continuing problem with 

improper payments (estimated at $125 billion, 

or 4.5 percent of all program outlays, for fiscal 

year 2014), the Federal Government has 

intensified efforts to reduce improper 

payments in major Federal programs. The Do 

Not Pay Initiative, and the Treasury Bureau of 

the Fiscal Service’s (Fiscal Service) Do Not 

Pay Business Center, are chief components of 

efforts designed to prevent and detect 

improper payments to individuals and entities. 

With its potential to reduce improper 

payments, the Do Not Pay Program is a major 

and important undertaking by Fiscal Service 

and Treasury.

Anti-Money Laundering and Terrorist 

Financing/Bank Secrecy Act Enforcement 

Preventing criminals and terrorists from using 

financial networks to sustain their operations 

and/or launch attacks against the U.S. 

continues to be a challenge. Treasury’s Office 

of Terrorism and Financial Intelligence (TFI) 

is dedicated to disrupting the ability of terrorist 

organizations to fund their operations. TFI 

brings intelligence gathering and analysis, 

economic sanctions, international cooperation, 

and private-sector cooperation to identify 

donors, financiers, and facilitators supporting 

terrorist organizations, and disrupt their ability 

to fund such organizations. Treasury carries 

out its responsibilities to enhance financial 

transparency through the laws collectively 

known as the Bank Secrecy Act (BSA). The 

Financial Crimes Enforcement Network 

(FinCEN) is the Treasury bureau responsible 

for administering BSA, while Treasury’s 

Office of Foreign Assets Control administers 

U.S. foreign sanction programs. Given the 

criticality of this challenge to the Department’s 

mission, we continue to consider anti-money 

laundering and combating terrorist financing 

programs and operations as inherently highrisk.

Gulf Coast Restoration Trust Fund 

Administration

In response to the Deepwater Horizon oil spill, 

Congress enacted the RESTORE Act. This 

law established within Treasury the Gulf Coast 
Restoration Trust Fund (Trust Fund). It

requires Treasury to deposit 80 percent of 

administrative and civil penalties paid by 

responsible parties pursuant to the Federal 

Water Pollution Control Act (Clean Water 

Act) into the Trust Fund. Thne monies 

deposited are to be distributed to the affected

Gulf Coast States (Alabama, Florida, 

Louisiana, Mississippi, and Texas) for 

environmental and economic restoration. As 

of December 2015, the Trust Fund received 

about $816 million from the Federal 

Government’s settlement with the Transocean 

defendants. In July 2015, BP Exploration & 

Production Inc. (BPXP), agreed to settle with 

the Federal Government and the Gulf Coast 

States. This will result in about $4.4 billion 

plus interest expected to be deposited into the

Trust Fund over a 15-year period. With the 

amount and timing of the money resolved,

Treasury, the Gulf Coast States, and impacted 

local governments are challenged to meet the 

intent of the Act within the expected funding 

levels and timing of payments.

In the Investigations operational area, OIG has 

established five priorities for FY 2017:

Criminal and Serious Employee Misconduct

The OIG’s highest investigative priorities are 

complaints involving alleged criminal and 

other serious misconduct by Treasury 

employees. OIG investigates allegations of 

the general crimes enumerated in Title 18 of 

the U.S. Code, other federal crimes, alleged 

violations of the Ethics in Government Act, 

and allegations of serious misconduct 

prohibited by the Standards of Ethical Conduct 

for Employees of the Executive Branch. Some

Treasury bureaus and offices have additional 

rules and regulations relating to ethical 

standards for their employees. OIG also 

investigates those complaints and alleged 

violations.

Fraud Involving Contracts, Grants, 

Guarantees, and Funds

The OIG investigates allegations of fraud and 

other crimes involving Treasury contracts, 

grants, loan guarantees, and federal funds, 

including investigations made in accordance 

with Sections 1602 and 1603 of the Recovery 

Act. Such allegations often involve 

contractors, entities, and individuals who are 

providing or seeking to provide goods or 

services to the Department. OIG receives 

complaints alleging criminal or other 

misconduct from employees, contractors, the 

public, and Congress.

Financial Programs and Operations Crime

Investigations relating to Treasury financial 

programs and operations involve issuing 

licenses, providing benefits, and exercising 

oversight of U.S. financial institutions; fraud 

involving improper Federal payments such as 

those involving Treasury checks and the Check 

Forgery Insurance Fund (“CFIF”); crimes 

involving the improperly-redirected benefits of 

federal government payees; and false claims of 

any kind that generate inappropriate Federal 

payments, including federal income tax 

refunds, Social Security benefits, and 

Veterans’ Administration payments.

Threats Against Treasury Employees and 

Facilities

Investigative efforts into threats against 

Treasury employees and facilities are critical 

in ensuring safety. These matters require 

prompt attention and coordination with 

federal, State, and local authorities in order to 

protect those involved.

Treasury Employee and Bureau 

Impersonation Scams

Investigations relating to scammers who 

defraud the citizens of the U.S. and other 

countries by impersonating Treasury 

employees and/or by fraudulently using the 

Treasury and Bureau seals. These scams have

significantly increased in the last few years, 
and require prompt attention to protect the 

public and the integrity of the Department.

OIG FY 2017 Budget Highlights

Dollars in Thousands

Office of Inspector General FTE Amount

FY 2016 Enacted 194 $35,416

Changes to Base:

Maintaining Current Levels (MCLs): - $508

Pay-Raise - $269

Pay Annualization - $89

Non-Pay - $150

Subtotal Changes to Base - $508

Total FY 2017 Base 194 $35,924

Program Changes:

Program Increases: - $1,120

DATA Act and Other Audit Workload - $1,120

Total FY 2017 Request 194 $37,044

FY 2017 Budget Adjustments

Adjustments to Request

Maintaining Current Level (MCLs)

Pay-Raise +$269,000 / +0 FTE

Funds are requested for the proposed January 

2017 pay-raise.

Pay Annualization +$89,000 / +0 FTE

Funds are requested for annualization of the 

January 2016 pay-raise.

Non-Pay +$150,000 / +0 FTE

Funds are requested for inflation adjustments 

in non-labor expenses such as GSA rent 

adjustments postage, supplies, and equipment.

DATA Act and Other Audit Workload 

+$1,120,000 / +0 FTE

Funds are requested for anticipated increase in 

DATA Act and other audit workload.

Explanation of Budget Activities

Audit ($29,605,000 from direct 

appropriations, $10,500,000 from 

reimbursable resources)

The Office of Audit conducts audits 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, 

which include those of Treasury and the Gulf 

Coast Ecosystem Restoration Council. The 

requested funding for FY 2017 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. Reimbursable funding supports 

agreements for contracted audits as well as 

oversight of the SBLF/SSBCI programs.

SBLF/SSBCI program oversight and expected 

performance is detailed in the SBLF/SSBCI 

Program Office budget submission.

Investigations ($7,439,000 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. 

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.

OI also has substantially increased its focus on 

the investigation of Treasury related improper 

payment fraud and scams targeting U.S. 

citizens where Treasury employees are being 
impersonated and Treasury seals are being 

used to defraud victims.

Legislative Proposals

OIG has no legislative proposals.

OIG Performance by Budget Activity

Budget Activity Performance Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Target Target

Audit Number of Completed Audit 

Products

72 75 86 77 86

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

84.0 84.0 87.0 80.0 80.0

Key: DISC – Discontinued

Description of Performance

The Office plans to complete 86 audit products 

in FY 2017 and 77 in FY 2016. In FY 2015, 

the Office of Audit completed 86 audit 

products, exceeding the planned target of 75.

In FY 2015, the Office met its mandated audit 

requirements and identified $48.9 million in 

monetary benefits.

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, 

efficiency, and effectiveness of programs and 

operations across OIG’s jurisdiction while 

looking for opportunities to improve them.

In FY 2015 the OIG exceeded the 

Investigative Performance Measure target, 

opened 133 new investigations, and closed 70

investigations. The OIG also referred 27

investigations that substantiated administrative 

violations against a Treasury employee to the 

appropriate regulated bureau for action. In 

addition, the OIG referred 72 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.