Designated Federal Entities: Survey of Governance Practices and the Inspector General Role
Published: 2009-04-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: For entities that rely on others for funding, effective governance, accountability, and internal control are keys to maintaining trust and credibility. In recent years, corporate governance and accountability have received increased scrutiny and emphasis in the nonprofit, federal government, and public company sectors. Governance and accountability problems have also been identified at designated federal entities (DFE) such as the Smithsonian Institution, the Legal Services Corporation, and the Pension Benefit Guaranty Corporation. This report responds to a congressional request that GAO describe (1) the statutory structure of the governing bodies for each DFE organization and (2) the role of the inspectors general (IGs) in the governance structure. To accomplish this, GAO surveyed the DFE heads and IGs on governance issues and reviewed information from a variety of sources, including the IG Act and subsequent amendments; enabling legislation for the DFEs; and legislative and regulatory standards and requirements for financial reporting and internal control. GAO is not making specific recommendations in this report, but is providing this information for consideration in future efforts to update the governance of DFEs, oversee the entities and their IGs, and continue work to improve the effectiveness of government. GAO received technical comments, which were incorporated as appropriate.
section_title: What GAO Found
paragraphs: The DFEs vary in structure and requirements for governance. At the time of GAO's review, the designated size of the governing bodies of the 31 DFEs ranged from 1 to 24 members. Fifteen had at least one vacancy and 2 had more vacancies than sitting members. The frequency of DFE multimember governing-body meetings ranged from daily to rarely or not at all. In GAO's survey of DFEs, 13 indicated that they are required to comply with 12 key statutes that cover management and accountability. The remaining 18 reported varying requirements, with one not subject to any of the statutes. Only 7 DFE governing bodies have a structure that includes governance or oversight committees for ensuring oversight of management decisions, results of operations, and emerging risks. While 19 DFEs reported having orientation programs for new governing body members, only 9 reported ongoing training. IG effectiveness is influenced by an entity's governance structure and practices. Within DFEs, IGs vary in their role and relationship with management. IGs are charged with preventing and detecting fraud and abuse; conducting audits and investigations; and recommending policies to promote economy, efficiency, and effectiveness. To accomplish these objectives, IGs must be able to establish and maintain independence; have control of their resources to plan and perform work; recruit, retain, and manage sufficient professional staff; and be able to resolve audit and investigation recommendations. GAO's survey of IGs showed that most report to the highest levels in their entities, a legislative requirement that is a key element of independence. At the same time, the IGs had limited control over their resources, and their budgets and staffing were not always adequate to perform needed audits and investigations. Only 3 IGs had the transparency that a separate line item in their entity's budget provides, and 8 needed management approval for spending. Audit resolution varied, with some IGs reporting a lack of entity responsiveness to recommendations. Only 10 DFEs reported that their governing bodies have written policies for monitoring the implementation of IG recommendations. Nine of the 10 have policies that require the governing body to respond in writing and to develop a plan to address recommendations. During the course of GAO's work, Congress passed and the President signed into law on October 14, 2008, the Inspector General Reform Act of 2008, which was intended to enhance IG independence. Its implementation may mitigate some of the issues GAO found.

section_title: Letter
paragraphs: In recent years, corporate governance and accountability processes have  received increased scrutiny and emphasis in the nonprofit, federal  government, and public company sectors as a result of accountability  breakdowns, most notably in the public company financial scandals that  led to the enactment of the Sarbanes-Oxley Act of 2002. Governance is the  framework of rules and practices by which a governing body, such as a  board of directors, ensures accountability, fairness, and transparency in  the entity’s relationship with all of its stakeholders, including  management, employees, and government. Governance and accountability  problems have also been identified at federal entities, including the  Smithsonian Institution, Legal Services Corporation, and the Pension  Benefit Guaranty Corporation, all of which are considered designated  federal entities (DFE).
DFEs are the entities listed in the Inspector General Act of 1978 (IG Act),  as amended, which requires the head of each entity to establish an office  of inspector general (IG) and appoint an IG. Currently there are 31 DFEs,  which include boards, commissions, authorities, endowments, institutions,  agencies, and administrations created by statute to serve unique functions  and purposes. In fiscal year 2007, these entities were responsible for  annual budgets ranging from $10 million to $80 billion. The effectiveness  and independence of the DFE IG are closely related to the governance  structure of the DFE and the role that the IG plays within that structure.  IGs must be able to operate independently within the governance  framework at their respective agencies in order to be effective.
In response to your interest in governance issues in the DFEs, this report  provides information about DFE governing bodies and the role of the IGs  in DFE governance. The purpose of this report is not to make conclusions  on the effectiveness of governance and IG practices for each entity, but to  provide information for consideration in future oversight. In evaluating the  various governance practices for each entity, a variety of factors need to  be considered including the entity’s size, structure, mission, and risks. The  specific objectives of this report are to (1) describe and summarize the  statutory structure of the governing bodies for each DFE organization and  (2) describe the role of the IGs within the governance structure and  relationship with management of their respective agencies.
To obtain the information needed for our two reporting objectives, we  reviewed and summarized information from a variety of sources, including  the IG Act and subsequent amendments; enabling legislation for the DFEs;  and relevant legislative and regulatory standards and requirements for  financial reporting and internal control. Based on prior governance and IG  work, we developed and conducted a survey of DFE agency heads and,  separately, DFE IGs,  regarding governing body structure, communication  between governing body and IG, staffing and budget for the IG, and  number of IG recommendations. In addition, we conducted interviews  with certain DFE agency heads and IGs to clarify survey answers and  obtain additional information. We also sent the general counsels of each  DFE a data request asking the entity to identify which of 12 governance  and accountability statutes that we selected for review it is subject to,  voluntarily complies with, or does not follow. We refer to these  instruments in our report as the entity head survey, the IG survey, and the  data request. Appendix I contains a more complete description of our  scope and methodology. We conducted this engagement from September  2007 to January 2009 in accordance with all sections of GAO’s Quality  Assurance Framework that are relevant to our objective. The framework  requires that we plan and perform the engagement to obtain sufficient and  appropriate evidence to meet our stated objectives and to discuss any  limitations in our work. We believe that the information and data obtained,  and the analysis conducted, provide a reasonable basis for any findings  and conclusion.
subsections: section_title: Background
paragraphs: The 31 DFEs we surveyed were established in various statutes as  commissions, boards, authorities, corporations, endowments, institutions,  agencies, and administrations. Their heads may be individuals, such as a  chairperson or a director, or groups, such as commissions or boards.  Individuals and members of commissions and boards are generally  appointed by the President and confirmed by the Senate, but members for  some entities are set statutorily without additional appointment and  confirmation. For instance, the Pension Benefit Guaranty Corporation’s  statute sets the corporation’s board members as the Secretary of Labor,  Secretary of the Treasury, and Secretary of Commerce, all of whom are  appointed to their cabinet positions by the President and confirmed by the  Senate.
Each year, the Office of Management and Budget (OMB) determines and  publishes a list of DFEs and their heads. OMB uses the definition under  the IG Act, as amended, for the head of a DFE, which is any person or  persons designated by statute as the head of the DFE or if no such  designation exists, the chief policymaking officer or board of the DFE. It  is important to note that the term governing body for purposes of this  report is broad and therefore could include members in addition to the  entity head under the IG Act, as amended.
Table 1 shows the 31 DFEs categorized by organizational structure and  entity head for 2008.
Governance can be described as the process of providing leadership,  direction, and accountability in fulfilling an organization’s mission,  meeting its objectives, and providing stewardship of public resources,  while establishing clear lines of responsibility for results. Accountability  represents the processes, mechanisms, and other means—including  financial reporting and internal controls—by which an entity’s  management carries out its stewardship and responsibility for resources  and performance. Commonly accepted governance practices for federal  entities and nonprofit corporations have significantly evolved since the  financial scandals at large public companies in the early 2000s and passage  of the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act outlined a  framework for more effective corporate governance and introduced  reforms to public company financial reporting and auditing. Although the  act strengthened corporate governance only in the private sector, the  federal government and nonprofit sectors have also strengthened  governance and internal control requirements and practices. According to  OMB, passage of the Sarbanes-Oxley Act served as an impetus for the  federal government to reevaluate its current policies related to internal  control over financial reporting and management’s related responsibility.
The Inspector General Act of 1978 (1978 IG Act) created offices of  inspectors general at major departments and agencies to prevent and  detect fraud and abuse in their departments’ and agencies’ programs and  operations; conduct audits and investigations; and recommend policies to  promote economy, efficiency, and effectiveness. In 1988, the 1978 IG Act  was amended to establish additional IG offices in certain federal entities  designated by the legislation. Generally, the DFE IGs have the same  authorities and responsibilities as those established by the 1978 IG Act, but  there is a clear distinction—they are appointed and removed by their  agency heads rather than by the President and are not subject to Senate  confirmation. The 31 DFE IGs make up about half of all IG offices  established under the IG Act, as amended, and in fiscal year 2007 were  responsible for oversight with respect to gross agency budgets that ranged  from $10 million to $80.2 billion.
The IG Reform Act of 2008 (2008 Reform Act) was enacted on October  14, 2008, to, among other things, enhance the independence of the  inspectors general. (We have reported several times on independence  issues and challenges for the IG community.) Specifically, the 2008  Reform Act provides that both the President and DFE heads must give  written reasons to Congress for removing an IG at least 30 days prior to  removal. The 2008 Reform Act mandates that IGs shall submit their budget  to their entity’s head, who shall include, among other things, an aggregate  request for the IG in the entity’s budget proposal to the President. The  President must include in the budget of the U.S. government submitted to  Congress a separate statement of each IG’s budget request, and the  amount requested by the President for each IG. Before the act, only the  presidentially appointed IGs and three DFE IGs had such transparency  over their budgets. Regarding pay, the presidentially appointed IGs have  been paid at Executive Level IV, while the DFE IGs have been paid at the  GS-15 grade, Senior Executive Service level, or equivalent salary level  determined by their entity. The 2008 Reform Act requires that all  presidentially appointed IGs be paid at Executive Level III, plus 3 percent,  and all DFE IGs shall be paid at a level at or above the level of a majority  of senior executives of the respective DFEs. The 2008 Reform Act was  effective upon passage, but it provided up to 180 days to establish the  Council of Inspectors General on Integrity and Efficiency.
section_title: Wide Variation in Statutory Structures, Requirements, and Purpose Exists Among the DFEs
paragraphs: While Congress has historically weighed many political and policy factors  in deciding on DFE governance structures, and applied specific  accountability requirements to achieve its original objectives, current  private sector guidance says that governing bodies need to be large  enough to accommodate the necessary skills set, but still small enough to  promote cohesion, flexibility, and effective participation. DFEs vary in  their statutory size and structure as well as their statutory purpose and  requirements for governance. Survey responses showed that the size of  DFE governing bodies ranges from 1 to 24 members. Thirteen of the 31  DFEs had at least one vacancy in their governing body. At 2 of the DFEs— the Consumer Product Safety Commission and National Labor Relations  Board—active members were outnumbered by vacancies. Only 7 of 29  DFE governing bodies have committees that deal with governance or  oversight. Committees can enhance the overall effectiveness of the  governing body by ensuring focus and oversight in areas of concern. In  order to improve governance and accountability at federal agencies, a  variety of laws covering a range of management and administrative  practices and processes have been enacted. Of 12 key governance and  accountability statutes that we selected for review, 13 of 31 DFEs  responded that they are statutorily required to comply with all 12  statutes. Based on the responses of the remaining 18 DFEs, the  applicability of the 12 statutes varied, with 1 DFE—the Corporation for  Public Broadcasting—stating that it is not subject to any of the 12 key  governance and accountability statutes. Some entities that said they are  not statutorily required to comply with the statutes indicated that they  have adopted the provisions voluntarily or implemented an alternative  mechanism to attain the objectives of the statute. Finally, in relation to the  governing body’s effectiveness, 19 of the 29 DFEs surveyed reported  having orientation programs for the new governing body, while only 10  DFEs reported having ongoing training for governing body members.  Orientation and training programs for governing body members aimed at  providing information on governance practices and the regulatory  environment are important for the DFE governing body’s ability to carry  out its responsibilities effectively and efficiently. Corporate governance  guidelines in the private sector state that governing bodies should  establish committees that will enhance their overall effectiveness by  ensuring focus and oversight for areas of concern. Our work shows that  few DFEs reportedly have audit committees, none have an ethics  committee, and only a limited number have orientation and ongoing  training for governing body members, which is inconsistent with the  governance practices established in other sectors such as public  companies or nonprofits.
subsections: section_title: Statutory Size and Structure of DFE Governing Bodies Vary Significantly
paragraphs: Congress has over many decades weighed a variety of political and policy  considerations, such as political independence and accountability,  efficiency, and specific entity missions, in deciding on DFE governance  structures, and applied specific accountability requirements, such as  governing body appointment and removal authorities and governing body  public meeting requirements, to achieve its original objectives. Current  private sector guidance says that governing bodies need to be large  enough to accommodate the necessary skills set, but still small enough to  promote cohesion, flexibility, and effective participation. The DFE’s  governing bodies range in size from 1 to 24 members. For comparison,  according to the 2006 edition of the annual Directors’ Compensation and  Board Practices report by The Conference Board, the median board size  of publicly traded corporations, depending on the industry, ranges from 9  to 11 members. Of the 31 DFEs, only the Corporation for Public  Broadcasting, Legal Services Corporation, and United States Postal  Service statutorily have 9 to 11 governing body members. Three entities— the National Science Foundation, Smithsonian Institution, and  Appalachian Regional Commission—statutorily have more than 11  members, while the remaining 25 DFEs have 8 or fewer governing-body  members. (See table 2.)
At the time of our review, vacancies reportedly outnumbered active  members on the governing bodies of the Consumer Product Safety  Commission (CPSC) and the National Labor Relations Board. In recent  years, Amtrak and the Federal Election Commission have also had  significant vacancies. In January 2008, four of the six commissioner seats  for the Federal Election Commission were vacant. Over the past several  years the number of active board members at Amtrak has fluctuated, and  at least twice—between December 2007 and March 2008 and between  October 2003 and June 2004—the board had only two voting members  (excluding the Secretary of Transportation or his designee). Without the  minimum number of members required to conduct business, a board may  be legally unable to make certain decisions. For instance, the Federal  Election Commission’s enabling legislation requires that four of its six  commissioners be present for certain entity business to be carried out.  Also, the National Endowment for the Humanities and the National  Endowment for the Arts governing bodies, which are single-member  governing bodies, are currently vacant.
According to The Conference Board’s corporate governance guidelines,  corporate boards should be structured so that the composition and skill  set of a board is appropriate based on the corporation’s particular  challenges and strategic vision. The size of a governing body is important  not only for establishing the necessary range of skills, but in promoting  cohesion, flexibility, and effective participation of the members to achieve  their governance objectives.
Generally, the membership of DFE governing bodies is defined by the  DFE’s authorizing legislation, with many DFE governing body members  appointed by the President, with the advice and consent of the Senate. For  instance, the Pension Benefit Guaranty Corporation’s governing body is  statutorily composed of three members—the Secretary of Labor, Secretary  of Treasury, and Secretary of Commerce. The Secretary of Labor is the  chairperson and entity head under the IG Act. The Appalachian Regional  Commission is statutorily composed of governors of the 13 Appalachian  states and a federal cochair. The Smithsonian Board of Regents is  statutorily composed of the Vice President, the Chief Justice of the United  States, three members of the Senate, three members of the House of  Representatives, and nine other members not from Congress.
section_title: Not All DFEs Said They Are Required to Comply with Key Governance and Accountability Statutes
paragraphs: In order to improve governance and accountability at federal agencies, a  variety of laws covering a range of management and administrative  practices and processes have been enacted. We identified 12 statutes as  key to governance and accountability. The statutes, which are described in  Appendix III, cover funds control, performance and financial reporting,  accounting and internal control systems, human resources management,  and recordkeeping and access to information. They are the:    Anti-Deficiency Act (ADA),   “Purpose Statute” (31 U.S.C. § 1301(a)),   Improper Payments Information Act of 2002 (IPIA),    Accountability of Tax Dollars Act of 2002 (ATDA),    Government Performance and Results Act of 1993 (GPRA),    Federal Managers’ Financial Integrity Act of 1982 (FMFIA),    Federal Information Security Management Act of 2002 (FISMA),    Travel, Transportation, and Subsistence (5 U.S.C. Chapter 57),    Whistleblower Protection Act (WPA),    Ethics in Government Act of 1978 (Ethics),    Freedom of Information Act (FOIA), and    Government in the Sunshine Act (Sunshine).
Based on results from a data request we sent to the DFEs, table 3 shows 13  of 31 reported that they are subject to all 12 key governance statutes.
Reponded as subject to the te.
In responding to our data request, several DFEs indicated that although  they are not required to comply with a particular statute, they are in  essence following the statute, having adopted the provisions of the statute  voluntarily or implemented an alternative mechanism to attain the  statute’s objectives. (See Appendix IV.)
section_title: Few DFE Governing Bodies Include Oversight Committees
paragraphs: Corporate governance guidelines in the private sector state that governing  bodies should establish committees that will enhance their overall  effectiveness by ensuring focus and oversight for areas of concern. In the  private sector, statutes and standards require that public company boards  of directors maintain certain standing committees, such as audit,  nominating, ethics, and compensation. In addition, governing bodies have  established committees to focus on issues or particular concerns of the  board such as risk, technology, public policy, and corporate governance.  Committees handle specific issues or topics and usually make policy  recommendations for the full board to consider.
Most DFEs do not have governance or internal oversight committees.  However, DFEs, like all federal entities, do receive oversight by  congressional committees. Of the 29 DFEs responding to our survey, only  7—the Corporation for Public Broadcasting, Election Assistance  Commission, Federal Reserve Board, Legal Services Corporation, National  Science Foundation, Smithsonian Institution, and United States Postal  Service—indicated that they have committees or advisory panels for  enhancing governing body effectiveness that are commonly found in  public companies or nonprofit organizations. As shown in table 5, 5 of  those 7 have audit committees. None of the 29 governing bodies  responding to our survey reported having a standing ethics committee.  (See table 5.)
Some federal entities have applied private sector corporate governance  guidelines for oversight committees in response to recent governance  challenges or reports on governance and accountability practices. Some of  these challenges have even resulted in board reorganization and other  governance changes. For instance, in response to an IG report, the  Corporation for Public Broadcasting created a governance committee for  its board and revised the board’s by-laws to clarify the board’s and  president’s roles. In response to a GAO report, the Legal Services  Corporation created an audit committee and also added the  responsibilities of corporate governance to its Performance Review  committee, which was renamed Governance and Performance Review.  Based on recommendations of the Smithsonian Institution Board of  Regents’ Governance Committee, the board adopted a set of duties and  responsibilities for all regents, examined the board structure, and  appointed new leadership for each committee. In the last 3 years, the  United States Postal Service has added the role of governance to the  responsibilities of its Strategic Planning Committee, added the  Government Relations and Regulatory Committee, and developed a plan to  comply with the Postal Accountability and Enhancement Act. The Board  of Governors of the Federal Reserve combines functions of finance,  budget, performance review, and operations in its Board Affairs  Committee.
According to The Conference Board’s Corporate Governance Handbook  2007, a company board’s responsibility typically includes:    monitoring and evaluating senior management,   reviewing and approving management’s strategic and business plans,   reviewing and approving the entity’s risk management program,   reviewing and approving financial objectives and plans,    monitoring the entity’s performance against the strategic plan, and    helping to ensure ethical behavior and compliance with laws and  regulations.
The Corporate Governance Handbook 2007 further states that a company  board’s effectiveness depends on the quality and timeliness of information  received in order to make informed decisions and perform its oversight  function. Governing bodies establish committees to enhance the overall  effectiveness of the board by ensuring focus on and oversight of matters of  particular concern. Since the IG is responsible for preventing and  detecting fraud and abuse, conducting audits and investigations, and  recommending policies to promote economy, efficiency, and effectiveness,  the work of an IG at an entity can benefit the governing body, particularly  governing body and committee efforts to focus on issues and provide  oversight of the entity. Because single-member governing bodies and other  noncorporate entity governing bodies have many of the same  responsibilities as corporate boards of directors, we believe that public  company and nonprofit corporation governance practices may provide  benefits to those governing bodies.
Only five of the DFE governing bodies indicated they have an audit  committee, which is one of the key elements in effective corporate  governance. According to the National Council on Nonprofits Association,  an audit committee provides independent oversight of the organization’s  accounting and financial reporting and oversees the organization’s annual  audits. In the private sector, an audit committee is generally responsible  for the appointment, compensation, and oversight of the external auditor;  handling board communication with the external auditor regarding  financial reporting matters; and overseeing the entity’s financial reporting  and the adequacy of internal control over financial reporting. In the federal  government environment, the audit committee could also provide a key  venue for the IG’s role in governance and in communicating with those  charged with governance. Unless provided otherwise, the IG is responsible  for conducting or overseeing the annual agency audit. New auditing  standards reinforce the importance of communication between the  financial auditor and those overseeing the organization’s governance. The  auditing standards require that the auditor communicate with those  charged with governance, who have the duty to oversee the strategic  direction of the entity and obligations related to the accountability of the  entity. The standards recognize that multiple parties may be charged with  governance including oversight bodies, members of legislative  committees, boards of directors, audit committees, or parties contracting  the audit. Without an audit committee, organizations may find it more  difficult to ensure that weaknesses found during the financial audit as well  as IG recommendations are addressed properly.
None of the DFE governing bodies has a separate standing ethics  committee. An ethics committee is responsible for ensuring that the  organization has systems in place to provide assurance over employee  compliance with the organization’s code of conduct and ethics. According  to Standards for Internal Control in the Federal Government, a positive  control environment includes integrity and ethical values that are provided  by leadership through setting and maintaining the organization’s ethical  tone, providing guidance for proper behavior, removing temptations for  unethical behavior, and providing discipline when appropriate. The New  York Stock Exchange requires that an ethics committee function be  contained within the audit committee of listed companies.
Although audit and ethics committees are accepted governance practices,  in order to determine whether a governing body should create these  committees, consideration should be given to the entity’s structure, size,  mission, and risk.
section_title: A Majority of DFEs Have New Member Orientation Programs, While 9 DFEs Have Ongoing Training Programs
paragraphs: Nineteen of the 29 DFEs responding to our survey reported having  orientation programs for new governing body members, and at least 15 of  the 19 programs reportedly provide key information on oversight and  governance issues, such as governing body policies and communications  with management. Seventeen DFEs reported that the roles and duties of  their entities’ IGs are included in the orientation program. Of 9 DFEs that  reported having ongoing training for governing body members covering  topics such as the fiduciary duty of board members and role of the IG, only  5 addressed some of the statutory requirements and oversight topics— such as Government in the Sunshine Act and Freedom of Information Act,  travel policy, and ethics—considered necessary to keep board members  updated on current federal government and management practices.
DFEs are organizations unique in their missions, entity structure,  governing body and oversight framework, and budget. They are also  subject to varying governance and accountability statutes. Therefore,  orientation and training can be especially important for new governing  body members from the private sector who have not worked in the federal  government and may not be familiar with the federal government statutes  and environment, particularly the role of the IG and how the IG can assist  the board in achieving its oversight duties.
The initial training and orientation of new governing body members is a  critical area for the governing body due to the significance of the  stewardship, oversight, and potential fiduciary responsibilities of  individual governing body members and the governing body as a whole.  Current commonly accepted practice for public companies and nonprofit  corporations is to provide board members with a broad-based orientation  that encompasses the organization’s mission, vision, and strategic plan; its  history; the members’ obligations and performance objectives; board  policies on meetings and attendance; and board member job descriptions,  including performance expectations and fiduciary obligations.
Orientation and training programs help governing bodies to stay current  with information on governance practices and the regulatory environment.  In addition, a governing body needs to be kept up to date on key  management practices and requirements in such areas as risk assessment  and mitigation, internal controls, and financial reporting so that the  governing body can oversee management’s key processes. As the  governing body’s operating environment changes, new issues—whether  regulatory, current practice, or industry specific—emerge with the  changes. The orientation and training programs could help members of the  governing body identify and address the new issues.
section_title: Frequency of DFE Governing Body Meetings Varied, with Some Meeting Rarely or Not at All
paragraphs: According to The Conference Board’s corporate governance guidelines,  governing bodies should meet regularly and focus principally on broader  issues, such as corporate philosophy and mission, broad entitywide policy,  strategic management, oversight and monitoring of management, and  company performance against business plans. Of those we surveyed, the  number of meetings that the 25 DFE governing bodies with more than 1  member held each year varied greatly from 2005 through 2007 (see table  6). It is critical that the number and length of governing body meetings  allow the governing body members to appropriately fulfill their  stewardship, oversight, and potential fiduciary duties, which include  providing active oversight of the entity’s strategy implementation and risk  management.
section_title: IG Roles in Governance Vary
paragraphs: The IGs were created equally under the IG Act, as amended; however, the  entities’ structures, governance practices, and policies and procedures  vary, thereby affecting the role of the IG. These variances can be seen in  different ways including the IG reporting relationship, budget or spending  authority, and the entity’s governing body and management response to IG  recommendations. The IG Act, as amended, requires that DFE IGs report  to and be under the general supervision of their entity head. Most of the  DFE IGs we surveyed report to the highest levels in their entities, a  structure that helps to safeguard IG independence in accordance with the  IG Act and generally accepted government auditing standards.
GAO’s Internal Control Management and Evaluation Tool states that  the IG should have sufficient levels of competent and experienced staff  and that the responsibilities, scope of work, and audit plans of the IG  should be appropriate to the agency’s needs. The IG surveys also showed  that most DFE IGs had limited control over their resources and that their  budgets and staffing were not always adequate to perform audits or  investigations related to the missions or management challenges of their  entities. Government Auditing Standards state that restrictions on funds  or other resources provided to the audit organization can impair  independence and adversely affect the organization’s ability to carry out  its responsibilities.  Nine of the 31 DFE IGs who responded to our survey  stated that they need approval from entity management for spending on  specific activities such as travel and contracting and 12 DFE IGs  responded that they need entity approval to hire staff.
Management responsiveness to IG recommendations is another critical  factor that can influence the effectiveness of IG oversight and the effect of  IG work. IG responses to the survey showed that management  responsiveness to recommendations and audit resolution activities also  varied, with some DFE IGs reporting that agency responsiveness to  recommendations was lacking. One entity reported having 117 outstanding  recommendations, some dating to 1998. Only 10 DFEs reported that their  governing bodies have written policies for monitoring the implementation  of IG recommendations. Nine of those 10 have policies that require the  governing body to respond in writing acknowledging the  recommendations and to develop a plan to address them. Audit and  oversight committees, which can help oversee implementation of  recommendations, could assist IGs in providing effective oversight and  actively tracking and resolving recommendations.
subsections: section_title: Most IGs Report to Their Entity Head or the Governing Body
paragraphs: The IG Act, as amended, requires that DFE IGs report to and be under the  general supervision of their entity heads. The IG Act also requires IGs to  perform audits in compliance with Government Auditing Standards,  which state that for a government internal audit function to be  independent, the head of the audit organization must be accountable to  the head or deputy head of the government entity or to those charged with  governance and be located organizationally outside the staff or line  management function of the unit under audit. Without any other  safeguards, the independence of an IG who must report audit or  investigative findings in areas under the direct responsibility of his or her  supervisor may be impaired in both fact and appearance.
Twenty-nine of the 31 IGs we surveyed responded that they report either  to their entity head or the entity governing body. Table 7 shows that 16 IGs  responded that they meet with their entity heads at least weekly or  monthly and 12 meet with them quarterly. Government Auditing  Standards state that the internal audit organization, such as the IGs,  should report regularly to those charged with governance.
Six of the 31 IGs responded that their entity had an audit or other  oversight committee that they meet with and 4 indicated that they met  with the committee quarterly (See table 8). Government Auditing  Standards state that multiple parties may be charged with governance,  including oversight bodies, boards of directors, audit committees, or  parties contracting for the audit. Since those charged with governance  have the duty to oversee the strategic direction of the entity and  obligations related to the accountability of the entity, the IG’s regular  communication with the audit or other oversight committee is important  for the committee to carry out its governance duties.
section_title: Many DFE IGs Have Limited Control over Their Resources
paragraphs: Government Auditing Standards state that audit organizations must be  free from external impairments to independence. External impairments  occur when auditors are deterred from acting objectively and exercising  professional skepticism by actual or perceived pressures from  management and employees of the entity. For example, an IG’s lack of  control over the budgetary resources from its entity, such as the entity  head restricting funds or other resources to the IG, can impair an IG’s  independence and ability to carry out its responsibilities.
Separate appropriation accounts for IGs can help provide transparency  about the amount of the IG’s budget and reveal trends in resources  provided to them. However, until passage of the 2008 Reform Act, there  was no statute, including the IG Act, requiring separate appropriations  accounts for all DFE IGs. Three DFE IGs have a separate appropriation  account or line item in the Budget of the U.S. Government (Legal Services  Corporation, National Science Foundation, and Federal Reserve Board).  Twenty-six of 31 DFE IGs responding to the survey reported that they  developed or oversaw development of their budgets, with 8 of the 26  receiving guidance from entity management which the survey responder  indicated limited the size of the original request.
Eight DFE IGs reported that they needed approval from entity  management to spend funds for purchases, travel, training, and other IG  activities (see table 9).
Of the entities listed in table 9, the National Endowment for the Arts,  National Endowment for the Humanities, National Archives and Records  Administration, and the Consumer Product Safety Commission IGs  indicated they have never had a problem obtaining additional funds when  necessary. IGs at the Federal Labor Relations Authority (FLRA) and U.S.  International Trade Commission, however, informed us that they had not  been able to obtain funding for staff. A recent peer review of FLRA, for  instance, found that the IG did not perform the required FISMA  evaluations in 2006 and 2007 because management had not responded to  the IG’s requests for funds to hire contract auditors. The peer reviewer  recommended that the FLRA IG provide a copy of the peer review report  to FLRA management and that the FLRA IG use the peer review report to  seek assistance from other oversight bodies—including the appropriate  subcommittees of Congress and OMB—for help in addressing the existing  impairments to independence.
The 2008 Reform Act mandates that IGs shall submit their budget to their  entity’s head, who shall include, among other things, an aggregate request  for the IG in their agency budget proposal to the President. The President  must include in the budget submitted to Congress a separate statement of  each IG’s budget request, and the amount requested by the President for  each IG. This should provide more transparency to the IG budget process.
section_title: Many DFE IGs Have Limited Budgets and Staff to Perform Audits
paragraphs: GAO’s Internal Control Management and Evaluation Tool states that in  assessing office of inspector general internal controls, the IG should  consider whether it has sufficient levels of competent and experienced  staff and that the responsibilities, scope of work, and audit plans of the IG  should be appropriate to the agency’s needs.
In fiscal year 2008, the 31 DFE IGs had budgets ranging from $331,000 to  $233,300,000, with 5 having budgets $500,000 or under and 12 having  budgets under $1,000,000. In addition to the IGs’ overall mandate to  prevent and detect waste, fraud, and abuse and to promote economy and  efficiency, specific audit work may arise from legal mandates, requests  from entity management, requests from Congress, or from discretionary  work deemed necessary by the IG. The IGs also reported that the percent  of IG work spent on mandatory audits ranged from 0 to 100 percent. All  19 IGs who responded that their agencies are subject to the Accountability  of Tax Dollar Act of 2002 (ATDA) reported that funding for the entity’s  financial statements came from their IG budgets.
In fiscal year 2008, 15 of 31 DFE IGs reported having 5 or fewer staff.  Twelve of the 31 IGs responded that they need entity approval to hire staff.  Limited staffing may affect the ability of the IG to conduct the full range of  audits required by its mandate (See table 10).
Twenty of 31 IGs reported they had their own full or part-time General  Counsel. The IG offices that did not have their own General Counsel had  5 or fewer staff, except for Peace Corps, which had 17. Of those that did  not have their own General Counsel, all but FLRA used a member of their  entity’s General Counsel staff. FLRA used the General Counsel of another  entity’s Office of Inspector General. Absent adequate safeguards, cases  where the IG has no access to General Counsel other than that internal to  entity management could pose a potential impairment to IG independence.
section_title: Recommendation Follow- Up and Audit Resolution Activities Vary
paragraphs: GAO’s Internal Control and Management Evaluation Tool states that in  assessing an entity’s internal controls, the entity should consider whether  its IG regularly provides recommendations to management that are  evaluated and implemented when appropriate. The tool also considers  whether agency management has a mechanism to ensure prompt  resolution of findings and recommendations from audits and other  reviews.
According to their survey responses, IGs made recommendations ranging  in number from 0 to 593 in 2007. A number of the IGs we interviewed  stated that agency responsiveness to IG and financial audit  recommendations was lacking. One entity had 117 recommendations  outstanding, some dating to 1998. Audit or advisory committees, which  can play an oversight role in tracking and resolving recommendations,  exist at only seven of the DFEs.
Ten of the 29 DFEs that responded to our survey reported that their  governing bodies have written policies for monitoring the implementation  of IG recommendations. Nine of those 10 have policies that require the  governing body to respond in writing acknowledging the  recommendations and develop a plan to address them. Eight of the 10 also  require that the governing body provide a time frame for implementing the  IG recommendations and that the IG make a determination about whether  the recommendations have been implemented.
The Report Consolidation Act of 2000, as implemented by OMB Circular  No. A-136, Financial Reporting Requirements, requires that IGs of  executive agencies summarize the most serious management challenges  faced by their entities and assess their entities’ progress in addressing  these challenges. The challenges and any responses from the head of the  agency are to be included in the agency’s Performance and Accountability  Report (PAR). Twenty-four DFE IGs developed a list of management  challenges annually for their entities, while Amtrak, Election Assistance  Commission, Federal Reserve Board, National Credit Union  Administration, Postal Regulatory Commission, and Smithsonian  Institution reported they did not. Of those who prepared management  challenges, 10 reported them in both their semiannual reports and their  Performance and Accountability Reports. Another 10 documented  management challenges only in their entity’s PAR and 2 reported them  only in the IG semiannual report. Some entities documented their list of  challenges in multiple places. The Legal Services Corporation IG did not  report management challenges in either the semiannual report or the PAR,  neither of which it is required to issue, but included them in the IG’s  strategic plan.
section_title: Concluding Observations
paragraphs: Despite the modernization of governance structures and practices that  have occurred in the private sector in recent years, many DFEs, while  similar to private corporations and nonprofits, have not updated their  governance structures and practices. Therefore, the DFEs lag in  commonly accepted governance practices, such as the use of audit  committees, ethics committees, and orientation and training of governing  body members. For entities using funding from taxpayers and donors,  effective governance, accountability, and internal control are keys to  maintaining trust and credibility.
Although the DFE IGs receive equal treatment under the IG Act, as  amended, variations in governance structures and practices among the  entities create differing environments for them. Governance structures  and practices can aid or hamper the work of the IGs, which were created  by Congress to provide oversight and enhance the effectiveness of the  mission of these entities. Reviewing and updating their governance  structures, and the IG’s role, can provide DFE governing bodies with the  opportunity to determine how to best use the IGs to enhance  accountability and improve overall governance. As the 2008 Reform Act is  implemented, some of the issues identified in our survey, such as lack of  budget transparency and lack of control over budgets, may be mitigated.  We are not making specific recommendations in this report, but are  providing this information for consideration in future oversight of DFEs  and their IGs. The information on governance structures and practices  provided in this report can help inform continuing work to improve the  effectiveness of government, such as the new IG Council established  under the 2008 Reform Act, which can also use this information in its role  of promoting and supporting the effectiveness of the IG community and  fostering governmentwide efforts to improve management. The  information provides a basis for beginning discussions on the governance  structures and practices as well as the IG role, but additional individual  entity analysis that considers entity structure, size, mission, and risk  should be completed in order to determine whether the governance or IG  practice would provide value.
section_title: Agency Comments
paragraphs: We requested comments on a draft of this report from all 31 DFE entity  heads and IGs. Of the entity heads and IGs responding, a number provided  technical comments that we incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. We will then send copies of this report to other appropriate  congressional committees, the DFE entity heads, and the DFE IGs. The  report also is available at no charge on the GAO Web site at  http://www.gao.gov.
If you have any questions concerning this report, please contact me at  (202) 512-2600 or franzelj@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made key contributions to this report are  listed in Appendix V.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: Our reporting objectives were to describe (1) the statutory structure of the  governing body for each designated federal entity (DFE) organization and  (2) the inspector generals’ (IG) roles within the governance structure and  management of their respective entities.
We conducted this engagement from September 2007 to January 2009 in  accordance with all sections of GAO’s Quality Assurance Framework that  are relevant to our objective. The framework requires that we plan and  perform the engagement to obtain sufficient and appropriate evidence to  meet our stated objectives and to discuss any limitations in our work. We  believe that the information and data obtained, and the analysis  conducted, provide a reasonable basis for any findings and conclusion.
To obtain the information needed for our two reporting objectives, we  reviewed and summarized information from a variety of sources, including  the enabling legislation of each DFE; the IG Act, as amended; the 2007  Performance and Accountability Report (PAR) or 2007 Annual Report of  each DFE; the Office of Management and Budget’s (OMB) FY 2007 list of  designated federal entities and federal entities; and prior GAO reports on  inspectors general, accountability, and governance at the DFEs. Based on  prior work, we identified relevant current private sector guidance for  governance that included the following:    The Conference Board, Corporate Governance Handbook, 2007: Legal  Standards and Board Practices.
National Council of Nonprofit Associations, Financial Accountability    Lipman, F.D. and L.K. Lipman, Corporate Governance Best Practices:  Strategies for Public, Private, and Not-For-Profit Organizations.
American Bar Association, Guide to Nonprofit Corporate Governance  in the Wake of Sarbanes-Oxley.
Organization for Economic Cooperation and Development (OECD),  OECD Principles of Corporate Governance.
We also conducted a survey of the DFE entity heads and DFE IGs and  conducted follow-up interviews as needed.
We also submitted a data request of the DFE general counsels to ascertain  whether their entities were statutorily required to comply, voluntarily  complied, or do not follow 12 key governance and accountability statutes  that we selected for review. We express no opinion on the applicability of  the 12 statutes selected to any of the DFEs. We summarized survey, data  request, and interview results for entity head and management control and  supervision over the IG, budgets, use of resources, and other operational  issues. We identified key factors regarding the effectiveness of the IG and  summarized survey results and other information for impact on IG  effectiveness.
subsections: section_title: Survey Data
paragraphs: Much of the data presented in this report were obtained from the two  surveys directed to the DFE entity heads and the DFE IGs. The DFE entity  head survey included questions about governing body committees,  meetings, orientation, training, financial statement audits, IG oversight,  and internal controls. The DFE IG survey included questions about IG  experience, staffing, budget, supervision, salary, communications, and  resources. Since the population for both samples was known to be 31, we  surveyed all DFE entity heads and DFE IGs.  We identified inquiry areas  based on the congressional request, previously conducted literature  searches on governance responsibilities and structures, and our prior  internal experience and reporting on related topics. A listing of numerous  relevant publications is printed as appendix VI. We conducted a pretest of  our questionnaire for DFE entity heads and for DFE IGs. We directed our  DFE entity head survey to the entity head designated by OMB under the IG  Act, as amended. We directed our DFE IG survey to the IG for each entity.
We e-mailed the entity head questionnaires on March 25 and 26, 2008, and  the IG questionnaires on March 25, 2008. Those entity heads not  completing the questionnaire were e-mailed replacement questionnaires  on April 16, 2008. Those IGs not completing the questionnaire were e- mailed replacement questionnaires on April 11, 2008. On May 21, 2008, we  also made follow-up phone calls to nine entity heads and three IGs who  had yet to complete the survey. We received 29 of 31 entity head  questionnaires and all 31 of the IG questionnaires as of September 16,  2008.
section_title: Data Request
paragraphs: We also augmented our work by conducting a data request to obtain  information from DFE general counsels. The data request included 12  questions about key governance and accountability statutes we selected  and whether the entity was statutorily required to comply with, voluntarily  complied with, or was neither statutorily required to follow nor voluntarily  chose to comply with the statute. To determine the key governance and  accountability statutes for our data request, we reviewed relevant prior  GAO reports and compared published governance practices to the  statutes. We directed our data request to the general counsel of the  individual DFEs.
We e-mailed the data requests on June 17 and 18, 2008. Those general  counsels not completing the data request were e-mailed replacement data  requests on August 1, 2008. On August 19, 2008, we also made phone calls  to five general counsels. We received all 31 data requests.
section_title: Appendix II: History of Inspectors General
paragraphs: Statutory inspectors general were established by Congress after a series of  events in the 1970s that included:  a 1975 study by a subcommittee of the House of Representatives that  found inadequacies in internal audit and investigative procedures in  the Department of Health, Education, and Welfare, and  a 1977 study by the House Intergovernmental and Human Resources  Subcommittee that found serious deficiencies in a number of audit and  investigative efforts including a systemic lack of (1) central leadership  for audits and investigations, (2) auditor and investigator  independence, (3) procedures to ensure Congress would be informed  of serious problems, and (4) programs that looked for possible fraud  or abuse.
The Inspector General Act of 1978 (IG Act) was intended to address these  issues by providing for independent IGs appointed by the President. The  act charged the IGs with conducting and supervising audits and  investigations; recommending policies to promote economy, efficiency,  and effectiveness; and preventing and detecting fraud and abuse in their  agencies’ programs and operations. IGs are also required to report on the  results of their audits and investigations and prepare semiannual reports  to agency heads and the Congress.
Between 1978 and 1988, Congress passed legislation to establish statutory  IGs in 8 additional agencies. The House Subcommittee on Legislation and  National Security, Committee on Government Operations asked GAO to  study the internal audit capabilities of smaller federal agencies. In May of  1984 GAO issued Status of Internal Audit Capabilities of Federal  Agencies Without Statutory Inspectors General. Based on 99 responses  to surveys of 105 federal organizations, GAO uncovered many of the issues  that led to the establishment of 12 IGs in the IG Act. These included  auditors supervised by officials responsible for the programs under  review, leading to lack of auditor independence; inadequate audit coverage  of vulnerable agency operations; lack of evaluation of significant fraud  problems; and audit resolution and follow-up systems that did not meet  government requirements. In a June 1986 follow-up report, Nonstatutory  Audit and Investigative Groups Need to Be Strengthened, GAO reviewed  41 agencies without statutory IGs and found lack of independent and  sufficient audit capabilities within agencies continued to be a problem. In  its conclusion to the report, GAO supported legislation that had been  recently introduced in Congress that would extend IG Act protections and  requirements to most existing executive branch audit units.
The Inspector General Act Amendments of 1988 and the Government  Printing Office Inspector General Act of 1988 established statutory IGs in  5 additional departments and agencies, the Government Printing Office,  and 33 designated federal entities (DFE) listed in the act. Under the 1988  amendments, the IGs established in the 5 departments and agencies were  to be appointed by the President with Senate confirmation while the DFE  IGs were to be appointed by entity heads. Various other statutes since  1978 have amended the IG Act to add or remove entities required to have  IGs.
section_title: Appendix III: Description of Key Governance Statutes Observed during the DFE IG Governance Study
subsections: section_title: Current Governance Requirements
paragraphs: Since the designated federal entities (DFEs) were established with  different missions and during different years, the statutory requirements  for the identified key governance and accountability statutes vary.  Following are the key governance and accountability statutes identified  that cover funds control and budgeting, performance and financial  reporting, accounting and internal control systems, human resources  management, and recordkeeping and access to information.
section_title: Funds Control and Budgeting
paragraphs: Antideficiency Act (codified as amended in 31 U.S.C. 1341, 1342,  1351, and 1517)—Prohibits officers and employees of the government  from obligating or expending funds in advance of or in excess of  appropriations.
Purpose Statute (31 U.S.C. § 1301(a))—Requires federal agencies  and all U.S. government corporations, both mixed ownership and  wholly owned, to use appropriated funds only for the purposes  provided in the law.
Improper Payments Information Act of 2002 (Public Law 107- 300)—Requires agencies to identify susceptible programs and  activities, estimate their improper payments, and report on actions to  reduce improper payments.
section_title: Performance and Financial Reporting
paragraphs: Accountability of Tax Dollars Act of 2002 (Public Law 107-289)— The Chief Financial Officers Act of 1990 (CFO Act), as amended by the  Government Management Reform Act of 1994 (GMRA), requires the 24  agencies of the federal government covered by the CFO Act, including  some independent agencies, to submit annual audited financial  statements to the Office of Management and Budget (OMB) and  Congress. The financial statements must be prepared in accordance  with generally accepted accounting principles and audited in  accordance with generally accepted government auditing standards.
The Accountability of Tax Dollars Act of 2002 (ATDA) expanded this  requirement to include most other federal executive agencies.
Government Performance and Results Act of 1993 (Public Law  103-62)—Requires an annual performance report. The annual  performance report shall reflect, among other things, the agency’s or  corporation’s progress in achieving the performance goals set out in its  annual performance plan, which implements a mandatory longer-term  strategic plan.
section_title: Accounting and Internal Control Systems
paragraphs: Federal Managers’ Financial Integrity Act of 1982 (FMFIA) (31  U.S.C. 3512 (c), (d))—Provides the statutory basis for management’s  responsibility for and assessment of internal control. OMB Circular No.  A-123, Management’s Responsibility for Internal Control (rev. Dec.  21, 2004), sets out the guidance for implementing the statute’s  provisions, including agencies’ assessment of internal control under  the standards prescribed by the Comptroller General. Agencies are  required to annually provide a statement of assurance on the  effectiveness of internal control. U.S. government corporations are not  subject to FMFIA, but they are subject to similar requirements under  the Government Corporation Control Act, which incorporates by  reference the FMFIA standards in requiring U.S. government  corporations to include in their annual management reports a  statement on internal accounting and administrative control systems.
Federal Information Security Management Act of 2002  (FISMA) (Public Law 107-347)—Requires the development and  implementation of an entitywide information security program. As part  of that program, FISMA requires entity heads to periodically (1)  perform risk assessments of the harm that could result from  information security problems, such as the unauthorized disclosure or  destruction of information; (2) test and evaluate the effectiveness of  elements of the information security program; and (3) provide security  awareness training to personnel and contractors. FISMA also requires  the federal entity to annually have its IG or an external auditor perform  an independent evaluation of the entity’s information security  programs and practices to determine their effectiveness and to  annually submit a report on the adequacy and effectiveness of  information systems to OMB, GAO, and Congress.
Travel, Transportation, and Subsistence (5 U.S.C. Chapter 57) and  Federal Travel Regulation—Statutory requirements and executive  branch policies for travel by federal civilian employees and others  authorized to travel at government expense.
section_title: Human Resources Management
paragraphs: Whistleblower Protection Act (5 U.S.C. 2302)—Provides certain  protections to employees of federal agencies and, to a limited extent,  U.S. government corporations, when they engage in “whistleblowing,”  which involves reporting evidence of illegal or improper federal  employer activities to the relevant authorities.
Ethics in Government Act of 1978(Public Law 95-521)—Governs  ethical conduct, including public financial disclosure requirements,  and limits outside earned income and activities.
section_title: Recordkeeping and Access to Information
paragraphs: Freedom of Information Act (5 U.S.C. 552)—Requires that federal  entities make their records available for public inspection and copying  unless one of the listed FOIA exemptions applies, such as for records  pertaining to medical files, internal personnel practices, or trade  secrets.
Government in the Sunshine Act(5 U.S.C. 552b; Public Law 94- 409)—Requires that all board meetings, including meetings of any  executive committee of the board, must be open to public observation,  unless an exception applies.
section_title: Appendix IV: Profiles of Designated Federal Entities
paragraphs: This appendix contains profiles of the 31 designated federal entities  (DFEs) and their offices of inspectors general (IG).
subsections: section_title: 1. Amtrak
subsections: section_title: Purpose
paragraphs: The National Railroad Passenger Corporation was statutorily established  to meet the nation’s intercity passenger transportation needs.
section_title: Background
section_title: Governing body structure
paragraphs: Amtrak’s board statutorily consists of seven voting members and one ex- officio, nonvoting member (the President of Amtrak). The voting members  are appointed by the President and confirmed by the Senate for a 5-year  term. The President may choose to appoint the Secretary of  Transportation to be a voting member. The Secretary of Transportation  does not require the advice and consent of the Senate. As of October 2008,  Amtrak had five voting board members including the Secretary of  Transportation, and two vacancies.
section_title: Governing body committees
paragraphs: Audit and Finance; Government Relations, Legal, and Corporate Affairs;  Personnel and Compensation; Security, Safety, and Environmental Affairs;  and Service Development, Marketing, Product Management and Customer  Service.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 166 recommendations for which management action was still  needed.
section_title: 2. Appalachian Regional Commission (ARC)
subsections: section_title: Purpose
paragraphs: The Appalachian Regional Commission is a federal-state partnership that  works with the people of Appalachia to create opportunities for self- sustaining economic development and improved quality of life. The  commission’s purpose is to reduce the substantial socioeconomic gaps  between Appalachia and the rest of the nation. The commission, a federal  program, attempts to reduce these gaps by awarding grants to various  projects such as workforce training, highway construction, small business  start-up assistance, and education programs.
section_title: Background
section_title: Governing body structure
paragraphs: The ARC has a 14-member commission composed of a cochairman and the  governors of 13 Appalachian states. The federal cochairman is appointed  by the President and confirmed by the Senate. The governors select a state  cochairman from their number. The commission has an executive director  responsible for carrying out the administrative functions of the  commission and directing commission staff. Only the federal cochairman  and his or her staff are federal employees.
section_title: Governing body committees
paragraphs: None.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were six outstanding recommendations.
section_title: 3. The Board of Governors, Federal Reserve System
subsections: section_title: Purpose
paragraphs: The Federal Reserve System (Federal Reserve), the central bank of the  United States, is charged with conducting the nation’s monetary policy.  Through its supervisory and regulatory banking functions, the Federal  Reserve maintains the safety and soundness of the nation’s financial  system. The Federal Reserve also maintains the stability of the financial  system and provides services to depository institutions, the U.S.  government, and foreign official institutions.
section_title: Background
section_title: Governing body structure
paragraphs: The seven members of the Board of Governors of the Federal Reserve  System are appointed by the President and confirmed by the Senate. A full  term is 14 years. A member who serves a full term may not be reappointed.  The chairman and the vice chairman of the board are designated by the  President from among the members and are confirmed by the Senate. They  serve a term of 4 years. A member’s term on the board is not affected by  his or her status as chairman or vice chairman.
section_title: Governing body committees
paragraphs: The Committee on Board Affairs combines functions of finance, budget,  performance review, and operations. Regulations are assigned to the  committees on Supervisory and Regulatory Affairs and Consumer and  Community Affairs.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 16 outstanding recommendations.
section_title: 4. Broadcasting Board of Governors (BBG)
subsections: section_title: Purpose
paragraphs: The Broadcasting Board of Governors oversees all U.S. government and  government-sponsored, nonmilitary, international broadcasting. These  functions are carried out by the individual BBG international broadcasters:  the Voice of America, Alhurra, Radio Sawa, Radio Farda, Radio Free  Europe/Radio Liberty, Radio Free Asia, and Radio and TV Marti, with the  assistance of the International Broadcasting Bureau.
section_title: Background
section_title: Governing body structure
paragraphs: The board has nine members, eight appointed by the President and  confirmed by the Senate, and the Secretary of State. The President  appoints one member as chairman subject to the advice and consent of the  Senate. No more than four members, excluding the Secretary of State, may  be of the same political party. Members serve 3 years, excepting the  Secretary of State, and receive compensation for time spent on BBG  matters at the Level IV rate of the Executive Schedule. The Secretary of  State does not receive any compensation for service to the board. All  members are eligible for expense related to travel.
section_title: Governing body committees
paragraphs: Voice of America; International Broadcasting Bureau; Office of Cuba  Broadcasting; Radio Free Europe/Radio Liberty; Radio Free Asia; Middle  East (MBN); Personnel; and Language Service Review.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 5. Commodity Futures Trading Commission (CFTC)
subsections: section_title: Purpose
paragraphs: The Commodity Futures Trading Commission protects market users and  the public from fraud, manipulation, and abusive practices related to the  sale of commodity futures and options, and fosters open, competitive, and  financially sound futures and option markets.
section_title: Background
section_title: Governing body structure
paragraphs: The President appoints, and the Senate confirms, five commissioners with  demonstrated knowledge in futures trading or its regulation, or the  production, merchandising, processing, or distribution of one or more of  the commodities or other goods and articles, services, rights, and interests  covered by 7 U.S.C. Chapter 1. No more than three commissioners can be  of the same political party, and one commissioner is appointed as the  chairman by the President, by and with the advice and consent of the  Senate. Commissioners serve 5-year terms and generally serve until their  successor is appointed and qualified. The chairman serves at the pleasure  of the President.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There was one outstanding recommendation.
section_title: 6. Consumer Product Safety Commission (CPSC)
subsections: section_title: Purpose
paragraphs: The Consumer Product Safety Commission protects the public against  unreasonable risks of injury from consumer products; assists consumers  in evaluating the comparative safety of consumer products; develops  uniform safety standards for consumer products and minimizes conflicting  state and local regulations; and promotes research and investigation into  the causes and prevention of product-related deaths, illnesses, and  injuries.
section_title: Background
section_title: Governing body structure
paragraphs: There are five commissioners, who are appointed by the President, with  the advice and consent of the Senate. Commission members can be  removed by the President for neglect of duty or malfeasance in office, but  for no other reason. Commissioners are appointed to 7-year terms, with  any vacancies filled for the remainder of the term. No more than three  members may be of the same political party. The chairman is appointed by  the President from among the members of the commission and confirmed  by the Senate. The commission elects a vice chairman annually to act in  the absence or disability of the chairman or in the case of a vacancy in the  office of the chairman. The chairman, subject to commission approval,  appoints the various officers for the commission’s operations. At least 30  days before the beginning of each fiscal year, the commission must  establish an agenda for commission action.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 7. Corporation for Public Broadcasting (CPB)
subsections: section_title: Purpose
paragraphs: The Corporation for Public Broadcasting is a steward of the federal  government’s investment in public broadcasting. It helps support the  operations of more than 1,000 locally owned and operated public  television and radio stations nationwide and is a source of funding for  research, technology, and program development for public radio,  television, and related on-line services.
section_title: Background
section_title: Governing body structure
paragraphs: The CPB board has nine members, appointed by the President with advice  and consent of the Senate to terms of 6 years. No more than five may be  members of the same political party. Annually, the board elects a chairman  from its members as well as one or more vice chairmen. The board also  selects the president of the corporation and appoints other corporate  officers. A member whose term has expired may serve until his successor  has taken office or until the end of the calendar year, whichever comes  first. No member may serve in excess of two consecutive terms. The  members of the board are not considered officers or employees of the  United States. Members receive $150 per day for meetings and board  work, including travel time and are reimbursed for actual, reasonable, and  necessary expenses. No member may receive compensation of more than  $10,000 in any fiscal year.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were six outstanding recommendations.
section_title: 8. Denali Commission
subsections: section_title: Purpose
paragraphs: The Denali Commission is a federal-state partnership designed to provide  critical utilities, infrastructure, and economic support throughout Alaska.
section_title: Background
section_title: Governing body structure
paragraphs: There are seven board members including the federal cochair. Six of the  seven positions are statutorily defined as the Governor of the State of  Alaska, who serves as the state cochair; the President of the University of  Alaska; the President of the Alaska Municipal League; the President of the  Alaska Federation of Natives; the Executive President of the Alaska State  AFL/CIO; and the President of the Associated General Contractors of  Alaska. The Secretary of Commerce appoints the federal cochair from a  list of nominations from the President pro temporare of the Senate and the  Speaker of the House of Representatives. The federal cochair serves for 4  years and may be reappointed. Except for the federal cochair, members  receive a basic rate of pay at Level IV of the Executive Schedule plus travel  expenses for time spent on commission work. The commission must meet  at least twice a year.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General:
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 27 outstanding recommendations as of March 31, 2008.
section_title: 9. Election Assistance Commission (EAC)
subsections: section_title: Purpose
paragraphs: The EAC, established by the Help America Vote Act of 2002, serves as a  national clearinghouse and resource for information and review of  procedures with respect to the administration of federal elections.
section_title: Background
section_title: Governing body structure
paragraphs: The commission has four members appointed by the President with the  advice and consent of the Senate. The commission selects the chair and  vice chair, who may not be from the same political party, from among its  members. The chair and vice chair each serve 1-year terms and may only  serve in that position once during each term of office. Members serve for 4  years and may only serve two terms. Each member is compensated at the  annual rate of basic pay for Level IV of the Executive Schedule.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 41 recommendations outstanding.
section_title: 10. Equal Employment Opportunity Commission (EEOC)
subsections: section_title: Purpose
paragraphs: The Equal Employment Opportunity Commission enforces laws that  prohibit discrimination based on race, color, religion, sex, national origin,  disability, or age in hiring, promoting, firing, setting wages, testing,  training, and all other terms and conditions of employment.
section_title: Background
section_title: Governing body structure
paragraphs: The commission has five members, no more than three of whom may be  from the same political party. They are appointed by the President with  the advice and consent of the Senate. The President also designates two of  the members to be the chairman and vice chairman. The chairman runs  the commission’s operations. Members serve for 5 years.
section_title: Governing body committees
paragraphs: None.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 12 recommendations outstanding.
section_title: 11. Farm Credit Administration (FCA)
subsections: section_title: Purpose
paragraphs: The Farm Credit Administration is responsible for ensuring the safe and  sound operation of the banks, associations, affiliated service  organizations, and other entities that collectively comprise what is known  as the Farm Credit System, and for protecting the interests of the public  and those who borrow from Farm Credit institutions or invest in Farm  Credit securities.
section_title: Background
section_title: Governing body structure
paragraphs: The FCA board has three members appointed by the President with the  advice and consent of the Senate. One member is designated by the  President as the chairman and also serves as the CEO. Members serve for  6 years and may not be reappointed unless they were appointed to fill  unexpired terms of 3 years or less.
section_title: Governing body committees
paragraphs: (1)
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were three outstanding recommendations.
section_title: 12. Federal Communications Commission (FCC)
subsections: section_title: Purpose
paragraphs: The Federal Communications Commission regulates interstate and foreign  commerce in communications by radio, television, wire, satellite, and  cable. It is responsible for the provision of rapid, efficient nationwide and  worldwide communication services at reasonable rates. Its responsibilities  also include the use of communications for promoting safety of life and  property and for strengthening the national defense.
section_title: Background
section_title: Governing body structure
paragraphs: Five commissioners are appointed by the President, with the advice and  consent of the Senate for a term of 5 years. The President designates one  commissioner to be chairman. Commissioners receive an annual rate of  pay at Level IV of the Executive Schedule, with the chairman receiving  Level III. The commission has the authority to appoint the officers and  staff of the FCC and determine their compensation. Meetings of the  commission must be held no less than once a month.
section_title: Governing body committees
paragraphs: No data.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 13. Federal Election Commission (FEC)
subsections: section_title: Purpose:
paragraphs: The FEC ensures the campaign finance process is fully disclosed and that  laws regarding campaign finance are enforced. It also enforces the Federal  Election Campaign Act (FECA) and oversees the Presidential public  funding program.
section_title: Background
section_title: Governing body structure
paragraphs: The commission is made up of six members, who are appointed by the  President and confirmed by the Senate. Each member serves a single, 6- year term. By law, no more than three commissioners can be members of  the same political party, and at least four votes are required for any official  commission action. A new chairman is chosen each year from among the  members, with no member serving as chairman more than once during his  or her term.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 51 outstanding recommendations.
section_title: 14. Federal Housing Finance Board (FHFB)
subsections: section_title: Purpose
paragraphs: The Federal Housing Finance Board ensures the safety and soundness of  the Federal Home Loan Banks, their access to the capital markets, and the  fulfillment of their housing finance mission. Under the Housing and  Economic Recovery Act (HERA) of 2008 (Pub. L. No. 110-289, 122 Stat.  2654 (July 30, 2008)), the FHFB will cease to exist 1 year after the effective  date of HERA, or July 30, 2009, to be replaced by the Federal Housing  Finance Agency (FHFA). HERA also amended the IG Act to require that  the FHFA have an IG appointed by the President and confirmed by the  Senate.
section_title: Background
section_title: Governing body structure
paragraphs: The board is comprised of four members appointed by the President and  confirmed by the Senate, who serve a 7-year term, and the Secretary of  HUD. The President designates one of the board members as chairman. No  more than three may be of the same political party and terms are  staggered to end every other year. Members filling a vacancy serve only  the remainder of the predecessor’s term.
section_title: Governing body committees
paragraphs: None.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 15. Federal Labor Relations Authority (FLRA)
subsections: section_title: Purpose
paragraphs: The Federal Labor Relations Authority oversees the federal service labor- management relations program. It administers the law that protects the  right of employees of the federal government to organize, bargain  collectively, and participate through labor organizations of their own  choosing in decisions affecting them. The authority also ensures  compliance with the statutory rights and obligations of federal employees  and the labor organizations that represent them in their dealings with  federal agencies.
section_title: Background
section_title: Governing body structure
paragraphs: The authority is comprised of three board members who are appointed to  5-year terms by the President and confirmed by the Senate. No more than  two may be from the same political party. The President designates one  member to be chairman, who acts as chief executive and administrative  officer of the authority. The chairman is compensated at Level III of the  Executive Schedule and the other members are compensated at Level IV.
section_title: Governing body committees
paragraphs: None.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 179 outstanding recommendations.
section_title: 16. Federal Maritime Commission (FMC)
subsections: section_title: Purpose
paragraphs: The Federal Maritime Commission is responsible for regulating the  waterborne foreign commerce of the United States. It ensures that U.S.  ocean-borne trades are open to all on fair and equitable terms and protects  against concerted activities and unlawful practices.
section_title: Background
section_title: Governing body structure
paragraphs: The commission is comprised of five commissioners, who are appointed  by the President and confirmed by the Senate to 5-year terms. The  President designates one of the commissioners as chairman. No more than  three may be members of the same political party. The chairman is the  chief executive and administrative officer for the commission.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 17. Federal Trade Commission (FTC)
subsections: section_title: Purpose
paragraphs: The Federal Trade Commission enforces the laws that prohibit business  practices that are deceptive or unfair to consumers; promotes informed  consumer choice and public understanding of the competitive process;  and seeks to accomplish its mission without impeding legitimate business  activity.
section_title: Background
section_title: Governing body structure
paragraphs: The commission is comprised of five commissioners, nominated by the  President and confirmed by the Senate, each serving a 7-year term. The  President chooses one commissioner to act as chairman. No more than  three commissioners can be of the same political party.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were three outstanding recommendations.
section_title: 18. Legal Services Corporation (LSC)
subsections: section_title: Purpose
paragraphs: The Legal Services Corporation’s mission is to promote equal access to  justice and to provide high-quality civil legal assistance to low-income  persons.
section_title: Background
section_title: Governing body structure
paragraphs: The board has 11 members appointed by the President and confirmed by  the Senate for 3-year terms. The board elects a chairman annually from  among its members and appoints the president of the corporation. The  board must meet at least four times per year.
section_title: Governing body committees
paragraphs: Audit; Finance; Governance and Performance Review; Operations and  Regulations; Provision for the Delivery of Legal Services.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 19. National Archives and Records Administration (NARA)
subsections: section_title: Purpose
paragraphs: The National Archives and Records Administration safeguards and  preserves the records of our government, ensuring that the people can  discover, use, and learn from this documentary heritage; establishes  policies and procedures for managing U.S. government records; manages  the Presidential Libraries system; and publishes the laws, regulations, and  presidential and other public documents.
section_title: Background
section_title: Governing body structure
paragraphs: The Archivist is appointed by the President and confirmed by the Senate.  There is no set term of office. The Archivist chooses the Deputy Archivist.
section_title: Governing body committees
paragraphs: Not applicable.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 20. National Credit Union Administration (NCUA)
subsections: section_title: Purpose
paragraphs: The National Credit Union Administration is responsible for chartering,  insuring, and supervising federal credit unions and administering the  National Credit Union Share Insurance Fund. The administration also  administers the Community Development Revolving Loan Fund and  manages the Central Liquidity Facility, a mixed-ownership government  corporation that supplies emergency loans to member credit unions.
section_title: Background
section_title: Governing body structure
paragraphs: The management of NCUA is vested in a full-time, three-member board  appointed by the President and confirmed by the Senate. No more than  two board members can be from the same political party, and each  member serves a staggered 6-year term. The NCUA board normally meets  monthly, except August.
section_title: Governing body committees
paragraphs: (571)
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 21. National Endowment for the Arts (NEA)
subsections: section_title: Purpose
paragraphs: The National Endowment for the Arts, established by Congress in 1965 as  an independent federal agency, is the official arts organization of the  United States government. It is dedicated to supporting excellence in the  arts, both new and established; bringing the arts to all Americans; and  providing leadership in arts education.
section_title: Background
section_title: Governing body structure
paragraphs: The NEA is headed by a chairperson appointed by the President and  confirmed by the Senate. The chairperson serves for 4 years and may be  reappointed or serve until a successor is appointed.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 22. National Endowment for the Humanities (NEH)
subsections: section_title: Purpose
paragraphs: The National Endowment for the Humanities is an independent federal  agency established by Congress in 1965 to support research, education,  preservation, and public programs in the humanities.
section_title: Background
section_title: Governing body structure
paragraphs: NEH is directed by a chairperson, who is appointed by the President and  confirmed by the U.S. Senate, for a term of 4 years. The chairperson is  eligible for reappointment and may continue to serve until a successor has  been appointed and qualified.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 23. National Labor Relations Board (NLRB)
subsections: section_title: Purpose
paragraphs: The National Labor Relations Board is vested with the power to prevent  and remedy unfair labor practices committed by private sector employers  and unions and to safeguard employees’ rights to organize and determine  whether to have unions as their bargaining representative.
section_title: Background
section_title: Governing body structure
paragraphs: The chairman and four board members are selected by the President and  confirmed by the Senate. Board members serve staggered 5-year terms.  The President designates one member to serve as chairman of the board.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 20 outstanding recommendations.
section_title: 24. National Science Foundation (NSF)
subsections: section_title: Purpose
paragraphs: The National Science Foundation promotes the progress of science and  engineering through the support of research and education programs.
section_title: Background
section_title: Governing body structure
paragraphs: The National Science Board (NSB) is made up of 24 members appointed  by the President and confirmed by the Senate, and the NSF director is an  ex officio member. Members serve 6-year terms; one-third of the board is  appointed every 2 years. NSB members are drawn from industry and  universities, and represent a variety of science and engineering disciplines  and geographic areas. The NSB meets about six times a year. It reviews  and approves major NSF awards and new programs and initiates and  conducts studies and reports on a broad range of policy topics. The NSB  also publishes occasional policy papers or statements on issues of  importance to U.S. science and engineering.
section_title: Governing body committees
paragraphs: Audit and Oversight; Strategy and Budget; Programs and Plans; Education  and Human Resources; and Executive.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 76 outstanding recommendations.
section_title: 25. Peace Corps
subsections: section_title: Purpose
paragraphs: The mission of the Peace Corps is to help the people of interested  countries in meeting their need for trained men and women, and to help  promote better mutual understanding between Americans and citizens of  other countries.
section_title: Background
section_title: Governing body structure
paragraphs: The director and deputy director are appointed by the President and  confirmed by the Senate.
section_title: Governing Body Committees
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 113 outstanding recommendations.
section_title: 26. Pension Benefit Guaranty Corporation (PBGC)
subsections: section_title: Purpose
paragraphs: The Pension Benefit Guaranty Corporation provides for timely and  uninterrupted pension benefits payments to participants and beneficiaries  of voluntary private pension plans.
section_title: Background
section_title: Governing body structure
paragraphs: PBGC is administered by a director who reports to a board of directors,  which consists of the Secretaries of Labor, Commerce, and Treasury. The  Secretary of Labor is chairman of the board and calls meetings. Members  serve without compensation, but are reimbursed for expenses incurred  during board business. The corporation is aided by a seven-member  Advisory Committee appointed by the President.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 113 outstanding recommendations.
section_title: 27. Postal Regulatory Commission (PRC)
subsections: section_title: Purpose
paragraphs: The Postal Regulatory Commission oversees the Market Dominant and  Competitive Products of the U.S. Postal Service, adjusts as necessary lists  of these products, and reviews related complaints.
section_title: Background
section_title: Governing body structure
paragraphs: The commission is composed of five commissioners, each of whom is  appointed by the President, with the advice and by consent of the Senate,  for a term of 6 years. The Chairman is designated by the President. A  commissioner may continue to serve after the expiration of his or her term  for up to 1 year. No more than three members of the commission may be  members of the same political party.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were no outstanding recommendations.
section_title: 28. Securities and Exchange Commission (SEC)
subsections: section_title: Purpose
paragraphs: The Securities and Exchange Commission administers federal securities  laws that seek to provide protection for investors; to ensure that securities  markets are fair; and, when necessary, to provide the means to enforce  securities laws through sanctions.
section_title: Background
section_title: Governing body structure
paragraphs: The SEC consists of five commissioners appointed by the President and  confirmed by the Senate, with staggered 5-year terms. One of them is  designated by the President as chairman of the commission—the agency’s  chief executive. No more than three of the commissioners may belong to  the same political party.
section_title: Governing body committees
paragraphs: (531)
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 59 outstanding recommendations.
section_title: 29. Smithsonian Institution
subsections: section_title: Purpose
paragraphs: The Smithsonian Institution is an independent trust instrumentality of the  United States which comprises an extensive museum and research  complex. It is dedicated to the increase and diffusion of knowledge.
section_title: Background
section_title: Governing body structure
paragraphs: The Board of Regents has 17 members, including the Vice President, the  Chief Justice of the United States, 3 members of the U.S. Senate, and 3  members of the House of Representatives. Nine other persons other than  members of Congress, 2 of whom must be Washington D.C. residents and  7 from U.S. states, make up the remainder. House members serve for 2  years, the Senate members serve their term as Senators, and the other 9  members serve for 6 years. The board elects its own chancellor, who is the  presiding officer of the Board of Regents. The board also elects the  Secretary of the institution and three board members as an executive  committee. At least 8 members must be present for the meeting to have a  quorum. Members are paid travel expenses to attend meetings but their  service is otherwise gratuitous.
section_title: Governing body committees
paragraphs: Audit and Review; Executive; Compensation and Human Resources;  Facilities; Finance; Investment; Governance and Nominating;  Advancement; and Strategic Planning and Programs.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 61 outstanding recommendations.
section_title: 30. United States International Trade Commission (USITC)
subsections: section_title: Purpose
paragraphs: The United States International Trade Commission administers U.S. trade  remedy laws within its mandate; provides the President, the United States  Trade Representative, and Congress with analysis, information, and  support on matters of tariffs and international trade and competitiveness;  and maintains the Harmonized Tariff Schedule of the United States.
section_title: Background
section_title: Governing body structure
paragraphs: The USITC is headed by six commissioners who are nominated by the  President and confirmed by the U.S. Senate. No more than three  commissioners may be members of the same political party. The  commissioners serve overlapping terms of 9 years each, with a new term  beginning every 18 months. The chairman and vice chairman are  designated by the President from among the current commissioners for 2- year terms. The chairman and vice chairman must be from different  political parties, and the chairman cannot be from the same political party  as the preceding chairman.
section_title: Governing body committees
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There was one outstanding recommendation.
section_title: 31. United States Postal Service (USPS)
subsections: section_title: Purpose
paragraphs: The mission of the USPS is to provide the nation with reliable, affordable,  universal mail service.
section_title: Background
section_title: Governing Body Structure
paragraphs: The Board of Governors of USPS is composed of 11 members. It includes  nine governors who are appointed by the President and confirmed by the  Senate and the Postmaster General and the Deputy Postmaster General.  The nine governors select the Postmaster General, who becomes a  member of the board, and those 10 select the Deputy Postmaster General,  who also serves on the board. The Postmaster General serves at the  pleasure of the governors for an indefinite term. The Deputy Postmaster  General serves at the pleasure of the governors and the Postmaster  General. Members of the Board of Governors serve for 7 years. Each  governor receives $300 per day for not more than 42 days of meetings each  year and travel expenses, in addition to an annual salary of $30,000.
section_title: Governing body committee
paragraphs: Audit and Finance; Compensation and Management Resources;  Government Relations and Regulatory; Governance and Strategic  Planning; and Ad Hoc Committee on Operations.
section_title: Governance and accountability statutes
paragraphs: GAO sent a data request to the general counsel of each DFE asking about  the applicability of 12 governance and accountability statutes to their  entity. The table below reflects the response of the general counsel. We  did not independently analyze the applicability of these statutes to each  entity.
section_title: Office of Inspector General
section_title: Number of outstanding recommendations as of March 31, 2008
paragraphs: There were 212 outstanding recommendations.
section_title: Appendix V: Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Jeanette Franzel (202) 512-2600 or franzelj@gao.gov.
section_title: Acknowledgments
paragraphs: In addition to the person named above, major contributors to this report  were Kimberly McGatlin (Assistant Director), Lisa Crye, Francis Dymond,  Joel Grossman, Jacquelyn Hamilton, Maxine Hattery, Jennifer Henderson,  Jack Hufnagle, Chelsea Lounsbury, and Tory Wudtke.
section_title: Appendix VI: Relevant GAO Reports
paragraphs: Inspectors General: Independent Oversight of Financial Regulatory  Agencies. GAO-09-524T. Washington, D.C.: March 25, 2009.
Inspectors General: Actions Needed to Improve Audit Coverage of NASA.  GAO-09-88. Washington, D.C.: December 18, 2008.
Legal Services Corporation: Improvements Needed in Governance,  Accountability, and Grants Management and Oversight. GAO-08-833T.  Washington, D.C.: May 22, 2008.
Smithsonian Institution: Board of Regents Has Implemented Many  Governance Reforms, but Ensuring Accountability and Oversight Will  Require Ongoing Action. GAO-08-632 . Washington, D.C.: May 15, 2008.
Federal Oversight: The Need for Good Governance, Transparency, and  Accountability. GAO-07-788CG. Washington, D.C.: April 16, 2007.
Smithsonian Institution: Status of Efforts to Address a Range of  Funding and Governance Challenges. GAO-08-250T. Washington, D.C.:  December 12, 2007.
Inspectors General: Limitations of IG Oversight at the Department of  State. GAO-08-135T. . Washington, D.C.: October 31, 2007.
Legal Services Corporation: Governance and Accountability Practices  Need to Be Modernized and Strengthened. GAO-07-993. Washington, D.C.:  August 15, 2007.
Pension Benefit Guaranty Corporation: Governance Structure Needs  Improvements to Ensure Policy Direction and Oversight.  GAO-07-808. Washington, D.C.: July 6, 2007.
Inspectors General: Proposals to Strengthen Independence and  Accountability. GAO-07-1021T. Washington, D.C.: June 20, 2007.
Inspectors General: Activities of the Department of State Office of  Inspector General. GAO-07-138. Washington, D.C.: March 23, 2007.
Corporate Governance: NCUA’s Controls and Related Procedures for  Board Independence and Objectivity Are Similiar to Other Financial  Regulators, but Opportunities Exist to Enhance Its Governance  Structure. GAO-07-72R. Washington, D.C.: November 30, 2006.
Suggested Areas for Oversight for the 110th Congress. GAO-07-235R.  Washington, D.C.: November 17, 2006.
Intercity Passenger Rail: National Policy and Strategies Needed to  Maximize Public Benefits from Federal Expenditures. GAO-07-15.  Washington, D.C.: November 13, 2006.
Highlights of the Comptroller General’s Panel on Federal Oversight and  the Inspectors General. GAO-06-931SP. Washington, D.C.: September 11,  2006.
United Nations: Funding Arrangements Impede Independence of  Internal Auditors. GAO-06-575. Washington, D.C.: April 25, 2006.
Activities of the Treasury Inspector General for Tax Administration.  GAO-05-999R. Washington, D.C.: September 27, 2005.
Amtrak: Management and Accountability Issues Contribute to  Unprofitability of Food and Beverage Service. GAO-05-761T. Washington,  D.C.: June 9, 2005.
Kennedy Center: Stronger Oversight of Fire Safety Issues, Construction  Projects, and Financial Management Needed. GAO-05-334. Washington,  D.C.: April 22, 2005.
Tax-Exempt Sector: Governance, Transparency, and Oversight Are  Critical for Maintaining Public Trust. GAO-05-561T. Washington, D.C.:  April 20, 2005.
Activities of the Amtrak Inspector General. GAO-05-306R. Washington,  D.C.: March 4, 2005.
Inspectors General: Enhancing Federal Accountability. GAO-04-117T.  Washington, D.C.: October 8, 2003.
Department of Health and Human Services: Review of the Management  of Inspector General Operations. GAO-03-685. Washington, D.C.: June 10,  2003.
Inspectors General: Office Consolidation and Related Issues.   GAO-02-575. Washington, D.C.: August 15, 2002.
Inspectors General: Comparison of Ways Law Enforcement Authority Is  Granted. GAO-02-437. Washington, D.C.: May 22, 2002.
Inspectors General: Department of Defense IG Peer Reviews.   GAO-02-253R. Washington, D.C.: December 20, 2001.
U.S. Export-Import Bank: Views on Inspector General Oversight.   GAO-01-1038R. Washington, D.C.: September 6, 200l.
HUD Inspector General: Actions Needed to Strengthen Management and  Oversight of Operation Safe Home. GAO-01-794. Washington, D.C.: June  29, 2001.