State Department Inspector General: Actions to Address Independence and Effectiveness Concerns Are Under Way
Published: 2011-04-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 2007 GAO reported on concerns with the independence and effectiveness of the Department of State Inspector General (State OIG). GAO was asked to provide testimony on the issues we raised and the status of recommendations made to the State OIG in that report. This testimony focuses on the importance of auditor and IG independence, GAO's prior concerns with the State OIG's independence and effectiveness, and the status of OIG actions to address GAO's recommendations. The testimony is primarily based on GAO's 2007 report conducted in accordance with generally accepted government auditing standards, as well as the activities conducted to follow up on the status of our previous recommendations.
section_title: What GAO Found
paragraphs: The State Department Office of Inspector General (State OIG) has a critical responsibility in preventing and detecting fraud, waste, abuse, and mismanagement; and in providing independent audits and investigations of the department's programs and operations. In addition, the Foreign Service Act of 1980 requires the State OIG to perform inspections of the department's bureaus and posts, which is a unique requirement for an IG office. Independence is a critical element to the quality and credibility of an IG's work under the IG Act and is fundamental to professional auditing standards as well as an essential element of IG effectiveness. An IG must be independent and free from personal, external, and organizational impairments to independence in order to effectively fulfill the full range of requirements for the office. GAO's 2007 report identified areas of concern regarding the State OIG's independence and effectiveness. Specifically, the appointment of management and Foreign Service officials to head the State OIG in an acting capacity for extended periods of time is not consistent with professional standards for independence. In addition, GAO reported that the use of Foreign Service officers at the ambassador level to lead OIG inspections resulted in, at a minimum, the appearance of independence impairment. GAO also reported that inspections, by design, are conducted under less in-depth requirements and do not provide the same level of assurance as audits. However, the OIG relied on inspections rather than audits to provide oversight coverage, resulting in gaps to the audit oversight of the department. GAO also reported that inspections performed by the OIG's Office of Information Technology (IT) were not part of an internal quality review process, and that the State OIG and the department's Bureau of Diplomatic Security (DS) lacked an agreement to coordinate their investigative activities. The State OIG implemented two of GAO's five recommendations and has actions under way related to the remaining three. Specifically, the OIG now includes IT-related inspections in its internal quality-review process and has completed an agreement to coordinate investigations with DS. Also, the OIG is implementing a change to the succession planning for acting IG positions to exclude Foreign Service officers and is in the process of increasing the level of audit coverage through the distribution of staff and audit planning. In addition, the State OIG continues to assign Foreign Service officers at the ambassador level as team leaders for inspections, however, four of the six officers are rehired annuitants unlikely to rotate to State Department Foreign Service positions. GAO remains concerned, however, about the OIG's use of Foreign Service officers and the State Department's need to rely on acting IGs for extended periods of time. GAO continues to reaffirm its recommendations, and encourages the State OIG, with the assistance of the Secretary, to fully address these recommendations to enhance the effectiveness of the OIG's oversight of the State Department's programs and operations. In the 2007 report, GAO recommended that the IG work with the Secretary of State to address two recommendations regarding concerns about the State OIG's independence, and to reassess the mix of audits and inspections to help provide effective audit coverage of the department. In addition, GAO recommended that the IG include inspections performed by the OIG's Office of Information Technology in its internal quality review process and that it work with the department's Bureau of Diplomatic Security (DS) on an agreement to coordinate their investigative efforts.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Department of State Office of  Inspector General (State OIG), which is responsible for providing  oversight of the State Department including the Foreign Affairs  community in more than 270 embassies, consulates, and other posts  worldwide as well as the Broadcasting Board of Governors. The State  Inspector General (IG) has a critical responsibility to provide effective and  objective oversight of the department to support managers in their efforts  to improve performance and prevent or detect losses from fraud, waste, or  abuse and to the Congress in its responsibility for oversight of the  executive branch.
The statutory IGs, including the State IG, play a critical role in federal  agency oversight and in identifying mismanagement of scarce taxpayer  dollars. In light of this important role, the IG Act provides specific  protections to IG independence that are unprecedented for an audit and  investigative function located within an organization being reviewed.  These protections are necessary due in large part to the unusual reporting  requirements of the IGs who are both part of their federal agencies and  also expected to provide independent reports of their work externally to  the Congress.
My statement today is based primarily on our March 2007 report on the  activities of the State OIG, our October 2007 testimony that followed on  the same subject, and updated information we received from State OIG  officials to follow up on the status of our recommendations. In our 2007  report and testimony, we raised a number of concerns with the State OIG’s  independence, the lack of audit oversight in high-risk areas, and the lack  of assurance that the department is receiving independent investigations.   I will discuss in more detail (1) the importance of auditor and IG  independence, (2) prior reporting on our concerns with the State OIG’s  independence and effectiveness, and (3) information about the current  status of the State OIG’s actions to address our recommendations. This  testimony is based on our prior work and follow-up activities which were  performed in accordance with generally accepted government auditing  standards.
subsections: section_title: Background
paragraphs: The State OIG, as currently constituted, was established by the Omnibus  Diplomatic Security and Antiterrorism Act of 1986, which expanded on  the 1985 amendments to the Inspector General Act of 1978 (IG Act), as  an independent office to prevent and detect fraud, waste, abuse, and  mismanagement in the department’s programs and operations; conduct  and supervise audits and investigations; and recommend policies to  promote economy, efficiency, and effectiveness.
The State OIG is unique among federal inspectors general in its history and  responsibilities due to a statutory requirement for the OIG to provide  inspections of the department’s bureaus and posts worldwide. From 1906  until 1957, inspections were to be carried out at least once every 2 years  and were viewed as a management function, and not a function of an  independent inspector general. In 1957, the State Department  administratively established an Inspector General of Foreign Service,  which was the first inspector general office within the State Department to  conduct inspections. Congress enacted legislation in 1961 and in 1980  creating statutory inspectors general who were tasked with performing  inspections on certain State Department activities. In 1978, GAO reviewed  the IG’s inspection reports and questioned the independence of Foreign  Service officers who were temporarily detailed to the IG’s office and  recommended the elimination of this requirement.  The 1980 legislation,  section 209(a) of the Foreign Service Act, required the State IG to inspect  every foreign service post, bureau, or other operating unit in the State  Department at least once every 5 years.
In 1982, we reviewed the IG’s operations and noted that the 5-year  inspection cycle led to problems with the IG’s effectiveness by limiting the  ability to do other work. In addition, we continued to question the use of  Foreign Service officers and other persons from operational units within  the department to staff the IG office. In 1986, reacting to concerns similar  to those expressed in our 1982 report, Congress made the State IG a  presidentially appointed inspector general subject to the Inspector  General Act and prohibited a career member of the Foreign Service from  being appointed as the State IG. Starting in 1996 and continuing until  today, Congress, in the Department of State appropriations acts, annually  waives the 5-year statutory requirement for inspections. However, while  the inspection requirement is waived annually by Congress, the State IG  continues to conduct inspections as part of its plan for oversight of the  department.
The State OIG’s inspection responsibilities encompass a wide range of  objectives, which include reviewing whether department policy goals are  achieved and whether the interests of the United States are represented  and advanced effectively. In addition, the State OIG is assigned  responsibility for specialized security inspections in support of the  department’s mission to provide effective protection to its personnel,  facilities, and sensitive intelligence information. Inspections are defined by  the Council of the Inspectors General on Integrity and Efficiency (CIGIE)  as a process that evaluates reviews, studies, and analyzes the programs  and activities of an agency for the purposes of providing information to  managers for decision making; making recommendations for  improvements to programs, polices, or procedures; and identifying where  administrative action may be necessary.
There are fundamental differences between inspections and audits.  Inspections and audits are typically conducted under separate standards  with different basic requirements. That is, IGs are required by the IG Act to  conduct audits in accordance with Government Auditing Standards (also  known as generally accepted government auditing standards). In contrast,  the IGs follow CIGIE’s Quality Standards for Inspection and  Evaluation when conducting inspections as required by law. By d audits performed under Government Auditing Standards are subject to  more in-depth requirements for levels of evidence and documentation  supporting the findings than are inspections performed under CIGIE’s  inspection standards. Also, auditing standards require external quality  reviews of audit organizations (peer reviews) on a 3-year cycle, while  inspection standards do not require such external reviews. According to  CIGIE, inspections provide the benefits of a flexible mechanism for  optimizing resources, expanding agency coverage, and using alternative  review methods and techniques. However, as reported by a recent peer  review performed by the National Aeronautics and Space Administration  (NASA) IG, the State OIG’s Middle East Regional Office did not always  provide audits consistent with generally accepted government auditing  standards (GAGAS). Consequently, because these audits were not  performed in accordance with GAGAS, they were reclassified by the OIG  as inspections.
section_title: Importance of Auditor and IG Independence
paragraphs: Independence is a fundamental principle to the auditing profession and  the most critical element for IG effectiveness. Without independence, an  audit organization cannot conduct independent audits in compliance with generally accepted government auditing standards. Likewise, an IG who  lacks independence cannot effectively fulfill the full range of requirement of the office. Lacking this critical attribute, an audit organization’s wor might be classified as studies, research re ports, consulting reports, or  reviews, rather than independent audits.
Quality Standards for Federal Offices of Inspector General adopted by  CIGIE includes requirements for IG independence. Specifically, IG their staff must be free both in fact and appearance from personal,  external, and organizational impairments to their independence. The IG s  and their staff have a responsibility to maintain independence so that  opinions, conclusions, judgments, and recommendations will be im and viewed as impartial by knowledgeable third parties. Likewise,  Government Auditing Standards states: “in all matters relating to  work, the audit organization and the individual auditor, whether  government or public, must be free from personal, external, and  organizational impairments to independence and must avoid the  appearance of such impairments to independence. Auditors and audit  organizations must maintain independence so that their opinions, find conclusions, judgments, and recommendations will be impartial and  viewed as impartial by objective th ird parties with knowledge of the  relevant information.”
Personal independence applies to individual auditors at all levels o audit organization, including the head of the organization. Personal  independence refers to the auditor’s ability to remain objective and  maintain an independent attitude in all matters relating to the audit, as  well as the auditor’s ability to be recognized by others as independent. The  es not  auditor is to have an independent and objective state of mind that do allow personal bias or the undue influence of others to override the  auditor’s professional judgments. This attitude is also referred to as  intellectual honesty. The auditor must also be free from direct financial or  managerial involvement with the audited entity or other potential c of interest tha independent.  t might create the perception that the auditor is not  The IG’s personal independence and appearance of independence to  knowledgeable third parties is critical to IG decision making related to th he  nature and scope of audit and investigative work to be performed by t IG office. The IG’s personal independence must be maintained when  conducting any audit and investigative work and when making decisions   to pursue and the nature and scope of the  to determine the type of work individual audits themselves.
External independence refers to both the auditor’s and the audit  organization’s freedom to make independent and objective judgmen o  from external influences or pressures. Examples of impairments t external independence include restrictions on access to records,  government officials, or other individuals needed to conduct the audit;  external interference over the assignment, appointment, compensation, promotion of audit personnel; restrictions on funds or other resou provided to the audit organization that adversely affect the audit  organization’s ability to carry out its responsibilities; or external authority  rces  to overrule or to inappropriately influence the auditors’ judgment as to  appropriate reporting content.
The IG Act provides the IGs with protections against impairments to  external independence by providing that IGs have access to all agency  documents and records, prompt access to the agency head, and the  authority to independently (1) select and appoint IG staff, (2) obtain  services of experts, and (3) enter into contracts. The IGs may choose  whether to exercise the act’s specific authority to obtain access to  information that is denied by agency officials.
In addition, the IG Act granted the IGs additional insulation from  impairment of external independence by requiring that IGs report the  results of their work in semiannual reports to Congress without alteration  by their respective agencies, and that these reports generally are to be  made available to the general public. The IG Act also directed the IGs to  keep their agency heads and Congress fully and currently informed of any  deficiencies, abuses, fraud, or other serious problems relating to the  administration of programs and operations of their agencies. Also, the IGs  are required to report particularly serious or flagrant problems, abuses, or  deficiencies immediately to their agency heads, who are required to  transmit the IG’s report to Congress within 7 calendar days.
Organizational independence refers to the audit organization’s  placement in relation to the activities being audited. Professional auditing  standards have different criteria for organizational independence for  external and internal audit organizations. The IGs, in their statutory role of  providing oversight of their agencies’ operations, represent a unique  hybrid including some characteristics of both external and internal  reporting responsibilities. For example, the IGs have external-reporting  requirements outside their agencies, such as to the Congress, which are  consistent with the reporting requirements for external auditors. At the  same time the IGs are part of their respective agencies and must also keep  their agency heads, as well as the Congress, concurrently informed.
The IG Act provides specific protections to the IGs’ organizational  independence including the requirement that IGs report only to their  agency heads and not to lower-level management. The head of the agency  may delegate supervision of the IG only to the officer next below in rank,  and is prohibited from preventing the IG from initiating, carrying out, or  completing any audit or investigation. In addition, IGs in large federal  departments and agencies, such as the State Department, are appointed by  the President and confirmed by the Senate. Only the President has the  authority to remove these IGs and can do so only after explaining the  reasons to the Congress 30 days before taking action.
The Inspector General Reform Act of 2008 provided additional  enhancements to overall IG independence that included establishing  CIGIE by statute to continually address areas of weakness and  vulnerability to fraud, waste, and abuse in federal programs and  operations; requiring that IGs have their own legal counsel or use other  specified counsel; and requiring that the budget amounts requested by the  IGs for their operations be included in the overall agency-budget requests  to the President and the Congress.
section_title: Independence and Effectiveness Concerns We Reported in 2007
subsections: section_title: Concerns Regarding the State OIG’s Independence
paragraphs: In March 2007, we reported on two areas of continuing concern regarding  the independence of the State OIG. These concerns involved the  appointment of management officials to head the State OIG in an acting  capacity for extended periods of time and the use of Foreign Service staff  to lead State OIG inspections. These concerns were similar to  independence issues we reported in 1978 and 1982 regarding Foreign  Service officers temporarily detailed from program offices to the IG’s  office and inspection staff reassigned to and from management offices  within the department. In response to concerns about personal  impairments to the State IG’s independence, the act that created the  current IG office prohibits a career Foreign Service official from becoming  an IG of the State Department.
Nevertheless, our 2007 review found that during a period of approximately  27 months, from January 2003 through April 2005, four management  officials from the State Department served as an acting State IG. All four of  these officials had served in the Foreign Service in prior management  positions, including political appointments as U.S. ambassadors to foreign  countries. In addition, we also found that three of the officials returned to  significant management positions in the State Department after serving as  acting IGs. We found that acting IG positions continue to be used and are  filled by officials with prior management positions at the department.  Independence concerns surrounding such acting appointments are  additionally troublesome when the acting IG position is held for such  prolonged periods. (See table 1.)
Another independence concern discussed in our March 2007 report is the  use of Foreign Service officers to lead inspections of the department’s  bureaus and posts. We found it was State OIG policy for inspections to be  led by ambassador-level Foreign Service officers. These Foreign Service  officers frequently move through the OIG on rotational assignments. As  Foreign Service officers, they are expected to help formulate, implement,  and defend government policy which now, as team leaders for the IG’s  inspections, they are expected to review. These officers may return to  Foreign Service positions in the department after their rotation through  the OIG which could be viewed as compromising the OIG’s independence.  Specifically, the appearance of objectivity is severely limited by this  potential impairment to independence resulting in a detrimental effect to  the quality of the inspection results.
section_title: Reliance on Inspections Limited Effectiveness due to Gaps in Oversight
paragraphs: In our 2007 audit, we found that the State OIG’s emphasis on inspections  limited its effectiveness because it resulted in gaps in the audit coverage of  the State Department’s high-risk areas and management challenges. These  critical areas were covered almost exclusively through OIG inspections  that were not subject to the same level of scrutiny that would have been  the case if covered by audits. Specifically, we found gaps of OIG audit  coverage in key State Department programs and operations such as (1)  information security, (2) human resources, (3) counterterrorism and  border security, and (4) public diplomacy. In these areas the State OIG  was relying on inspections rather than audits for oversight. In the 10  inspections that we examined, we found that the State OIG inspectors  relied heavily on invalidated agency responses to questionnaires  completed by the department staff at each inspected bureau or post. We  did not find any additional testing of evidence or sampling of agency  responses to determine the relevance, validity, and reliability of the  evidence as would be required under auditing standards. In addition, we  found that for 43 of the 183 recommendations contained in the 10  inspections we reviewed, the related inspection files did not contain any  documented support beyond written report summaries of the findings and  recommendations.
section_title: Inspections by the OIG’s Office of Information Technology Were Not Included in Quality Reviews
paragraphs: In our 2007 report we also found that inspections by the OIG’s Office of  Information Technology were not included in the internal quality reviews  that the OIG conducts of its own work. Information security is a high-risk  area and management challenge for the State Department, and the OIG  relied almost exclusively on inspections for oversight of this area.  Therefore, the quality of these inspections is key to the OIG’s oversight  effectiveness. In addition, CIGIE’s standards for inspections require that  IG inspections be part of a quality-control mechanism that provides an  assessment of the inspection work.
section_title: Lack of Coordination of Investigations between the State OIG and the Bureau of Diplomatic Security
paragraphs: We found in 2007 that there was inadequate assurance that the  investigative efforts of the State Department were coordinated to avoid  duplication or to ensure that independent OIG investigations of the  department would be performed. Specifically, while part of its worldwide  responsibilities for law enforcement and security operations, the  department’s Bureau of Diplomatic Security(DS) performed investigations  that included passport and visa fraud, both externally and within the  department; these investigations were not coordinated with the OIG  investigators. The IG Act, as amended, authorizes the State IG to conduct  and supervise independent investigations and prevent and detect fraud,  waste, abuse, and mismanagement throughout the State Department.
DS performs its investigations as a function of management, reporting to  the State Department Undersecretary for Management. In contrast, the  State OIG is required by the IG Act to be independent of the offices and  functions it investigates. We reported in 2007 that without a formal  agreement to outline the responsibilities of both DS and the State OIG  regarding these investigations, there was inadequate assurance that this  work would be coordinated to avoid duplication or that independent OIG  investigations of the department would be performed.
section_title: The State Department’s OIG Has Actions Under Way or Completed to Address Most of Our Recommendations
subsections: section_title: Recommendations from Our 2007 Report
paragraphs: To address the concerns we raised in our March 2007 report we made five  recommendations.
To help ensure the independence of the IG Office, which also impacts the  effectiveness of the office, we recommended that the IG work with the  Secretary of State to  (1) develop a succession-planning policy for the appointment of  individuals to head the State IG office in an acting capacity that  provides for independent coverage between IG appointments and also  to prohibit career Foreign Service officers and other department  managers from heading the State OIG in an acting capacity, and  (2) develop options to ensure that State OIG inspections are not led by  career Foreign Service officials or other staff who rotate to  assignments within State Department management.
We also made the following three recommendations to the State IG to  address the effectiveness of the OIG:  (1) help ensure that the State IG provides the appropriate breath and  depth of oversight of the State Department’s high-risk areas and  management challenges, reassess the proper mix of audit and  inspection coverage for these areas;  (2) provide for more complete internal quality reviews of inspections,  include inspections performed by the State IG’s Office of Information  Technology in the OIG’s internal quality review process; and  (3) develop a formal written agreement with the Bureau of Diplomatic  Security to coordinate departmental investigations in order to provide  for more independent investigations of State Department management  and to prevent duplicative investigations.
section_title: Progress Has Been Made in Addressing Our Prior Recommendations
paragraphs: In response to a draft of our 2007 report, the State OIG has implemented  two recommendations and has taken actions related to the remaining  three recommendations. Although the State OIG has not fully addressed a  recommendation that has been the subject of GAO recommendations  regarding the independence of the State OIG’s inspections since our 1978  report, there has also been some progress in this area.
The OIG implemented our recommendation to include inspections  performed by the Office of Information Technology in its internal quality  review process in June 2008, by abolishing the State OIG’s Office of  Information Technology and transferring staff into either the Office of  Audits or into the Office of Inspections. As a result, the OIG’s information  technology inspections are now included in the Office of Inspections’  internal quality-review process.
The OIG has implemented our recommendation that the office work with  the Secretary of State and the Bureau of Diplomatic Security (DS) to  develop a formal written agreement that delineates the areas of  responsibility for State Department investigations. In December 2010, the  State IG’s investigative office completed an agreement with the bureau’s  Assistant Director of Domestic Operations to address the coordination of  investigative activities. This agreement, when fully implemented, should  help to ensure proper coordination of these offices in their investigations.
Regarding a succession plan for filling acting IGs positions, the State  Deputy IG stated that he issued a memo to abolish the deputy IG for  Foreign Service position to help ensure that any future deputy IG moving  into an acting IG position would not be a Foreign Service officer. The  Deputy IG stated that he is currently working with the department to  update the Foreign Affairs Manual to reflect this change. Furthermore,  the elimination of this position helps to strengthen the independence of  the OIG. We believe the State IG’s changes are responsive to the  recommendation made in our 2007 report. Nevertheless, the State  Department has relied on acting IGs to provide oversight for over 5 of the  last 8 years since January 2003. (See table 1.) This use of temporarily  assigned State Department management staff to head the State OIG can  affect the perceived independence of the entire office in its oversight of  the department’s operations, and the practice is questionable when  compared to the independence requirements of Government Auditing  Standards and other professional standards followed by the IGs. Further,  career members of the Foreign Service are prohibited by statute from  being appointed as State IG. This exclusion helps to protect against the  personal impairments to independence that could result when a Foreign  Service officer reviews the bureaus and posts of fellow Foreign Service  officers and diplomats.
Regarding our recommendation to reassess the mix of audits and  inspections for the appropriate breadth and depth of oversight coverage,  especially in high-risk areas and management challenges, we noted gaps in  audit coverage. Specifically, in both fiscal years 2009 and 2010, the OIG  had gaps in the audit coverage of management challenges in the areas of  (1) coordinating foreign assistance, (2) public diplomacy, and (3) human  resources. However, the State OIG has made progress in planning for and  providing additional audit coverage. Since 2007 the State OIG’s resources  have increased, providing the opportunity to augment its audit oversight of  the department. Specifically, the OIG’s total on board staff increased to  227, from 191 in at the end of fiscal year 2005. Also, the OIG’s audit staff  increased to 64 compared to 54 at the end of fiscal year 2005. In addition,  the Office of Audits and the Middle East Regional Office are planning to  merge resulting in the OIG’s largest component.
In January 2010, the State OIG reorganized the focus of the Office of  Audits and began to align its oversight efforts with the department’s  growing global mission and strategic priorities. The newly reorganized  Office of Audit consists of six functional divisions and an audit operations  division to address (1) contracts and grants, (2) information technology,  (3) financial management, (4) international programs, (5) human capital  and infrastructure, (6) security and intelligence, and (7) audit operations,  which includes quality assurance. These audit areas are intended to  develop expertise and address the department’s management challenges.  According to the Office of Audits Fiscal Year 2011 Performance Plan, the  office will target high-cost programs, key management challenges, and  vital operations to provide managers with information that will assist them  in making operational decisions. The 2011 plan includes new areas such as  global health, food security, climate change, democracy and governance,  and human resource issues within the State Department. In addition, with  the assistance of an independent public accountant, the State OIG has  completed an audit of a major issue in coordinating foreign assistance, the  Global HIV/AIDS Initiative related to the President’s emergency plan for  AIDS relief.
Regarding our recommendation concerning the use of career Foreign  Service officials to lead inspection teams, the State OIG’s inspections  handbook requires that the team leaders for inspections be a Foreign  Service officer at the rank of ambassador. We also stated in our 2007  report that experience and expertise are important on inspection teams,  but the expert need not be the team leader. However, the Deputy IG stated  that having Foreign Service officers with the rank of ambassador as team  leaders is critical to the effectiveness of the inspection teams. OIG officials  stated that there are currently six Foreign Service officers at the  ambassador level serving as the team leaders for inspections, four of  whom are rehired annuitants working for the State OIG. To address  independence impairments the State OIG relies on a recusal policy where  Foreign Service officers must self-report whether they have worked in a  post or embassy that is subject to an inspection and therefore presents a  possible impairment. Further, State OIG officials noted that the team  leaders report to a civil service Assistant IG and the inspection teams  include other members of the civil service. We continue to believe that the  State OIG’s use of management staff who have the possibility of returning  to management positions, even if they are rehired annuitants or currently  report to civil service employees in the OIG, presents at least an  appearance of impaired independence and is not fully consistent with  professional standards.
section_title: Closing Observations
paragraphs: The mission of the State OIG is critical to providing independent and  objective oversight of the State Department and identifying  mismanagement of taxpayer dollars. While the IG Act provides each IG  with the ability to exercise judgment in the use of protections to  independence specified in the act, the ultimate success or failure of an IG  office is largely determined by the individual IG placed in that office and  that person’s ability to maintain personal, external, and organizational  independence both in fact and appearance, while reporting the results of  the office’s work to both the agency head and to the Congress. An IG who  lacks independence cannot effectively fulfill the full range of requirements  for this office.
The State OIG has either implemented or is in the process of implementing  the recommendations from our 2007 report, with the exception of our  recommendation to discontinue the use of Foreign Service officers as  team leaders for inspections. We remain concerned about the  independence issues that can arise from such an arrangement. In addition,  we remain concerned that a permanent IG has not been appointed at the  State Department for almost 3 years.
We commend the OIG for the steps it is taking to build and strengthen its  audit practice, and we are re-emphasizing our 2007 recommendation for  the OIG to reassess its mix of audit and inspections to achieve effective  oversight of the department’s areas of high risk and management  challenges.
Madam Chairman Ros-Lehtinen, Ranking Member Berman, and Members  of the Committee, this concludes my prepared statement. I would be  happy to respond to any questions you or other Members of the  Committee might have at this time.
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