CRS Report for Congress
Received through the CRS Web
Statutory Offices of Inspector General:
A 20th Anniversary Review
Updated November 20, 1998
Frederick M. Kaiser
Specialist in American National Government
Diane T. Duffy
American Law Division
Congressional Research Service ˜ The Library of Congress
1998 marked the 20th anniversary of the Inspector General Act of 1978, the basic authority
governing statutory office of inspector general (OIGs), and the 10th anniversary of the
Inspector General Act Amendments of 1998, which added to their reporting requirements
and extended such offices to an additional set of government organizations. Consolidating
responsibility for auditing and investigations within an establishment or entity, statutory
OIGs now exist in nearly 60 departments, agencies, commissions, boards, and government
corporations. Despite their 20-year history, OIGs still face a number of concerns and
proposals for change, some of which were included in bills or enactments in the 105th
Congress. This report—and a companion one on the establishment and evolution of these
offices (CRS Report 98-397 GOV)—will be updated as events require.
Statutory Offices of Inspector General:
A 20th Anniversary Review
The year 1998 marked the 20th anniversary of the Inspector General Act of
1978, the basic authority governing statutory offices of inspector general (OIGs), and
the 10th anniversary of the Inspector General Act Amendments of 1988, which added
to their reporting requirements and extended such offices to an additional set of
government organizations. Statutory OIGs now exist in nearly 60 federal
establishments and entities, including all cabinet departments and the largest federal
agencies as well as many smaller boards, commissions, corporations, and
foundations. (These are covered in CRS Report 98-379 GOV, updated as events
The President's Council on Integrity and Efficiency (PCIE) and the Executive
Council on Integrity and Efficiency (ECIE) operate under the auspices of the Office
of Management and Budget. They provide coordinating mechanisms, respectively,
for the inspectors general (IGs) in the larger establishments, appointed by the
President and confirmed by the Senate, and for IGs in the smaller designated federal
entities, appointed by the agency head. A special integrity committee, under these
councils, may be established to investigate alleged wrongdoing by IGs or senior staff.
Offices of inspector general consolidate responsibility for auditing and
investigations within a federal department, agency, or other organization.
Established by law as permanent, independent, nonpartisan, and objective units,
OIGs are designed to combat waste, fraud, and abuse. To accomplish this broad
mandate, IGs have been granted a substantial amount of independence and authority.
Inspectors general are authorized to conduct audits and investigations of agency
programs; have direct access to agency records and materials; issue subpoenas for all
necessary information, data, reports, and other documentary evidence; hire their own
staff; and request assistance from other federal, state, and local government agencies
directly. Except under rare circumstances, spelled out in the law, an agency head
provides only "general supervision" over the IG and may not interfere with any of his
or her audits, investigations, or issuances of subpoenas. Inspectors general,
moreover, report semiannually to the agency head and Congress regarding their
findings, conclusions, and recommendations for corrective action and may issue
immediate reports on particularly serious or flagrant problems they discover. Indeed,
IGs are required to keep the agency head and Congress fully and currently informed
about problems and deficiencies relating to the administration of programs in their
agency through these reports and other ways, including testimony at congressional
Despite their 20-year evolution and substantial statutory revisions in 1988,
offices of inspector general still face a number of concerns and proposals for change.
Some of these were advanced in the 105th Congress through oversight hearings, the
statutory establishment of a new Treasury Inspector General for Tax Administration
and whistleblower provisions for employees in the intelligence community, and other
proposed amendments to the IG Act. These changes tie into the IGs’ institutional
arrangements, authority and powers, perceived effectiveness and orientation,
reporting requirements, personnel practices, and incentive awards.
Overview of Statutory OIGs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purposes, Powers, and Protections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Purposes of Offices of Inspector General . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Appointment, Removal, and General Supervision of IGs . . . . . . . . . . . . . . . 2
IGs in Federal Establishments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
IGs in Designated Federal Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Duties of IGs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
IG Reporting to and Informing the Agency Head and Congress . . . . . . . . . . 4
Semiannual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Seven-Day Letter Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Intelligence Community Whistleblower Reporting . . . . . . . . . . . . . . . . 5
Other Channels of Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Authority of IGs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Specific Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Prohibition on Program Operating Responsibilities . . . . . . . . . . . . . . . 7
Law Enforcement Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Coordination Among and Investigations of IGs . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Administrative Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Current Issues Affecting Inspectors General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Institutional and Procedural Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . 10
Authority of Inspectors General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Effectiveness and Orientation of IGs, PCIE, and ECIE . . . . . . . . . . . . . . . . 13
Reporting to the Agency Head and Congress . . . . . . . . . . . . . . . . . . . . . . . 14
Personnel Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Incentive Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Legislative Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Proposed Inspector General Act Amendments of 1998 . . . . . . . . . . . . . . . . 16
Proposed Inspector General for Medicare and Medicaid . . . . . . . . . . . . . . . 16
Proposed Reform of the Justice Department Inspector General . . . . . . . . . 17
Treasury Inspector General for Tax Administration . . . . . . . . . . . . . . . . . . 17
Intelligence Community Whistleblower Protection Act of 1998 . . . . . . . . . 17
Foreign Affairs Reform and Restructuring Act of 1998 . . . . . . . . . . . . . . . 18
Recognition of IG Accomplishments Since the 1978 Act . . . . . . . . . . . . . . 18
Statutory Offices of Inspector General:
A 20th Anniversary Review
Overview of Statutory OIGs
Statutory offices of inspector general (OIGs) consolidate responsibility for
auditing and investigations within a federal department, agency, or other
organization. Established by law as permanent, independent, nonpartisan, and
objective units, the OIGs are designed to combat waste, fraud, and abuse. The initial
establishments occurred in the wake of major financial and management scandals,
first in the Department of Health, Education, and Welfare (now Health and Human
Services) in 1976 and next in the General Services Administration (GSA) in 1978.
The latter episode provided a catalyst for an OIG in GSA and in each of 11 other
departments and agencies. Reinforcing this, an even earlier scandal involving the
Agriculture Department demonstrated the weaknesses in independence, authority,
and resources of administratively created offices of inspector general. Statutory
offices now exist in nearly 60 federal establishments and entities, including all
cabinet departments and the largest federal agencies as well as many smaller boards,
commissions, corporations, and foundations.1
Separate from the offices directly under the Inspector General Act of 1978, as amended,
are two others, which, for the most part, have been modeled after the provisions of the basic
IG act, as amended: in the Central Intelligence Agency, whose IG is a presidential appointee
subject to Senate confirmation (103 Stat. 1711-1715); and in the Government Printing
Office, the only legislative branch entity with a statutory IG; in this case, the inspector
general is appointed by the head of the agency, the Public Printer (102 Stat. 2530).
For information on the history of OIGs and proposals for change, see: Michael
Hendricks, et al., Inspectors General: A New Force in Evaluation (San Francisco: JosseyBass, 1990); Paul C. Light, “Make the Inspectors General Partners in Reform,” Government
Executive, v. 25, Dec. 1993, and Monitoring Government: Inspectors General and the
Search for Accountability (Washington: Brookings Institution, 1993); Frederick M. Kaiser,
“The Watchers’ Watchdog: The CIA Inspector General,” International Journal of
Intelligence and Counterintelligence, v. 3, 1989; Kathryn E. Newcomer, “The Changing
Nature of Accountability: The Role of the Inspectors General in Federal Agencies,” Public
Administration Review, v. 58, March/April 1998; U.S. Congress, House Committee on
Government Operations, The Inspector General Act of 1978: A 10-Year Review, H.Rept.
100-1027, 100th Cong., 2nd sess. (Washington: GPO, 1988); U.S. Congress, House
Subcommittee on Government Management, Information, and Technology, The Inspector
General Act of 1978: Twenty Years After Passage, Are the Inspectors General Fulfilling
Their Mission?, Hearings, 105th Cong., 2nd sess., April 21, 1998 (not yet printed) and
Inspector General Act Oversight, Hearing, 104th Cong. 1st sess. (Washington: GPO, 1996);
and U.S. Library of Congress, Congressional Research Service, Statutory Offices of
Inspector General: Establishment and Evolution, by Frederick M. Kaiser, CRS Report 98379 GOV (Washington: 1998).
Under two major enactments—the Inspector General Act of 1978 (P.L. 95-452;
92 Stat. 1101-1109) and the Inspector General Act Amendments of 1988 (P.L. 100504; 102 Stat. 2515-2530), codified at 5 U.S.C. Appendix—inspectors general (IGs)
have been granted a substantial amount of independence and authority to carry out
their basic mandate. Each office is headed by an inspector general who is appointed
and removable in one of two ways: (1) presidential appointment, subject to the
advice and consent of the Senate, and presidential removal in specified federal
establishments, including all cabinet departments and larger federal agencies; and (2)
agency head appointment and removal in designated federal entities, the usually
smaller boards, foundations, commissions, and corporations.
The dual focus of OIG activities since their inception has been auditing and
investigation. Indeed, the 1978 act requires each IG in a federal establishment to
appoint two assistant inspectors general, one for auditing and one for investigations.
More recently, the offices have added inspection, a short-hand phrase for a usually
short-term evaluation of agency programs and operations and their impact.
Purposes, Powers, and Protections
The statutory offices of inspector general have been given a broad mandate,
along with an impressive array of powers and protections to carry it out
independently and impartially.
Purposes of Offices of Inspector General
Section 2 of the codified law specifies three broad purposes or missions of the
! to conduct and supervise audits and investigations relating to the programs
and operations of the establishment;
! to provide leadership and coordination and recommend policies for activities
designed to: (a) promote economy, efficiency, and effectiveness in the
administration of such programs and operations, and (b) prevent and detect
fraud and abuse in such programs and operations; and
! to provide a means for keeping the head of the establishment and Congress
fully and currently informed about problems and deficiencies relating to the
administration of such programs and operations as well as the necessity for
and progress of corrective action.
Appointment, Removal, and General Supervision of IGs
IGs in Federal Establishments. Section 3 of the codified law covers the
appointment, removal, and general supervision of inspectors general in federal
establishments. The President appoints the IGs in the federal establishments (i.e.,
cabinet departments and larger federal agencies) by and with the advice and consent
of the Senate. The statute also provides that the selection be done without regard to
political affiliation and solely on the basis of integrity and demonstrated ability in
accounting, auditing, financial analysis, law, management analysis, public
administration, or investigations.
The IG Act, as amended, provides that an inspector general may be removed
from office only by the President, who then must communicate the reasons for
removal to both Houses of Congress. There are no explicit restrictions on the
President’s authority; removal may be with or without cause.
Each inspector general “must report to and be under the general supervision of”
the establishment head or, to the extent this authority is delegated, to the officer next
in rank below the head, and shall not report to or be subject to supervision by any
other officer. The restriction on supervision is reinforced by another provision:
“Neither the head of the establishment nor any other officer shall prevent or prohibit
the Inspector General from initiating, carrying out, or completing any audit or
investigation, or from issuing any subpoena.”
Exceptions to this prohibition are few; they are spelled out for only certain
departments and for only specified reasons. Sections 8, 8D, and 8E of the IG Act, as
amended, authorize the heads of the Departments of Defense, Treasury, and Justice,
respectively, to prohibit an IG audit, investigation, or issuance of a subpoena which
requires access to information concerning ongoing criminal investigations, sensitive
operational plans, intelligence matters, counterintelligence matters, and other matters
the disclosure of which would constitute a serious threat to national security. (Under
separate statutory authority, the Director of Central Intelligence (DCI) has similar
power over the Inspector General in the Central Intelligence Agency (CIA).) Should
the agency head use this power to limit the IG’s exercise of authority, the reasons
must be communicated to the IG and then by the inspector general to specified
committees of Congress.
Section 3 also provides for two assistant inspectors general within each IG
office in the specified federal establishments: i.e., an Assistant Inspector General for
Audits and an Assistant Inspector General for Investigations.
IGs in Designated Federal Entities. Section 8G covers the same matters for
offices of inspectors general in “Designated Federal Entities,” a category of
organization added by the 1988 Amendments. These entities include the Consumer
Product Safety Commission, Federal Communications Commission, Federal Labor
Relations Authority, and Securities and Exchange Commission, along with numerous
other usually small boards, commissions, government corporations, and foundations.
In addition to these entities, the inspector general in the Government Printing
Office (GPO)—the only legislative branch entity with a statutory office of inspector
general—operates under similar guidelines. Because GPO is a legislative branch
organization, however, its OIG was established under separate public law (44 U.S.C.
The appointment and removal provisions for IGs in designated federal entities
(and in GPO) differ from those which govern presidentially-appointed IGs. The
inspectors general in designated entities are appointed by the agency head.
Regarding removal, the agency head may remove or transfer the IG, but must
promptly communicate in writing the reasons for such action to both Houses of
As with the presidentially appointed inspectors general, however, the IGs in the
designated federal entities are required to report to and be under the “general
supervision” of the agency head. Furthermore, neither the head nor any other officer
can interfere with an IG audit or investigation or issuance of a subpoena.
Duties of IGs
The broad mandates, highlighted in section 2, are spelled out in greater detail
in section 4 of the codified law. Each inspector general is required to perform
specific duties to achieve the goals of promoting economy and efficiency and of
detecting and preventing waste, fraud, and abuse. These duties illustrate the IG’s
unique role within the agency and the broad grant of authority delegated by Congress.
The IGs are specifically directed to:
! provide policy direction for, conduct, supervise, and coordinate audits and
investigations relating to the establishment’s programs and operations;
! review existing and proposed legislation and regulations relating to programs
and operations and make recommendations in the semiannual reports
concerning the impact of the laws or regulations on the economy and
efficiency in the establishment’s programs and operations and on the
prevention and detection of fraud and abuse;
! recommend policies for, conduct, supervise, or coordinate other relevant
activities of the establishment;
! recommend policies for, conduct, supervise, or coordinate relationships with
other federal agencies, with state and local governmental agencies, and with
nongovernmental entities with respect to promoting economy and efficiency
and preventing and detecting fraud and abuse in establishment programs and
with respect to identifying and prosecuting participants in fraud or abuse; and
! report expeditiously to the Attorney General whenever the inspector general
has reasonable grounds to believe that there has been a violation of federal
IG Reporting to and Informing the Agency Head and Congress
Under section 5, inspectors general have two basic types of reporting
requirements to the agency head and to Congress. These are: (1) semiannual reports
and (2) seven-day letter reports dealing with particularly serious or flagrant problems,
a reporting obligation that was supplemented in 1998, by legislation regarding
allegations from whistleblowers in the intelligence community. These reporting
obligations complement the section 4 requirement to keep the agency head and
Congress “fully and currently informed.”
Semiannual Reports. IGs are directed to make semiannual reports that
summarize the OIG’s activities for the previous six months, itemizing waste, fraud,
and abuse problems, and identifying proposals for corrective action. The 1988
amendments refined and enhanced several of the semiannual reports’ ingredients.
For example, the reports must contain certain entries, some of which include:
! a description of significant problems, abuses, and deficiencies relating to
programs and operations;
! a description of recommendations for corrective action;
! an identification of each significant recommendation contained in the previous
reports on which corrective action has not been completed; and,
! statistical information relating to costs, management of funds, and related
These IG reports go directly to the agency head, who must transmit them
unaltered to appropriate congressional committees within 30 days. After another 60
days, such reports are to be made available to the public. The agency head is
authorized to append comments and specific data and information to the IG reports;
this additional information includes statistical tables showing audit reports and dollar
value of recommendations of disallowed costs and projected savings of
recommendations for funds which could be put to a better use.
Seven-Day Letter Reports. The Inspector General Act, as amended, also
requires the IG to report immediately to the agency head whenever the IG becomes
aware of “particularly serious or flagrant problems, abuses, or deficiencies relating
to the administration of programs and operations.” Such communications must be
transmitted—unaltered but allowing for comments the head deems appropriate—to
the appropriate congressional committees within seven days.
Intelligence Community Whistleblower Reporting. A parallel provision
affecting inspectors general in the intelligence community became law in 1998. The
Intelligence Community Whistleblower Protection Act (P.L. 105-272) specifically
authorizes intelligence community employees and contractors to submit an "urgent
concern"—that is, a serious or flagrant problem, abuse, violation of law or executive
order, or other specified wrongdoing—based on classified information to Congress.
This is to be accomplished by first notifying the inspector general in the relevant
agency—the Central Intelligence Agency, Department of Defense, Department of
Justice, or other organizations that conduct foreign intelligence or
counterintelligence—who must determine within 14 days whether the allegation
appears credible. If so, the IG notifies the agency head, who transmits the complaint,
along with any comments the head deems appropriate, to the House and Senate
Select Committees on Intelligence within seven days. If the IG does not transmit the
complaint or does not do so "in an accurate form," then the whistleblower may
contact the intelligence committees directly, following specified guidelines; these
include notification to the agency head, through the inspector general, of the intent
to contact the committees and a statement of the allegation.
Other Channels of Communication. The enactment provides for additional
channels for IGs to communicate with the agency head and Congress. Section 4
requires the IG:
to keep the head of such establishment and Congress fully and currently
informed, by means of the reports required by section 5 and otherwise,
concerning fraud and other serious problems, abuses, and deficiencies
relating to the administration of programs and operations administered or
financed by such establishment, to recommend corrective action
concerning such problems, abuses, and deficiencies, and to report on the
progress made in implementing such corrective action.
The concept of keeping the head and Congress informed “otherwise” (separate
from the required reports) allows for a variety of mechanisms for the inspector
general or the office to communicate with Congress. These means extend to:
testifying at congressional hearings; meeting with lawmakers and staff; and providing
information and reports directly to Members of Congress, its committees and
subcommittees, and other offices.
Authority of IGs
To carry out the purposes of the act, Congress has granted the inspectors general
Specific Powers. Section 6 of the codified legislation authorizes the IGs,
among other things:
! to conduct audits and investigations and make reports relating to the
administration of programs and operations;
! to have access to all records, reports, audits, reviews, documents, papers,
recommendations, or other material which relate to programs and operations
with respect to which the IG has responsibilities under the act;
! to request assistance from other federal, state, and local government agencies;
! to issue subpoenas for the production of all information, documents, reports,
answers, records, accounts, papers, and other data and documentary evidence
necessary to perform the IG’s functions;2
! to administer to or take from any person an oath, affirmation, or affidavit;
! to have direct and prompt access to the agency head;
! to select, appoint, and employ officers and employees to carry out the
functions, powers, and duties of the office of the inspector general;
This section does not permit the IG to use the subpoena power to obtain documents and
information from other federal agencies. 5 U.S.C. App. 3, §6.
! to obtain the services of experts and consultants on a temporary or intermittent
basis, as authorized by 5 U.S.C. 3109; and
! to enter into contracts and other arrangements for audits, studies, and other
services with public agencies as well as private persons and to make such
payments as may be necessary to carry out the act.
The scope of an IG’s investigative authority is seen further in the range of
matters the inspector general may investigate stemming from an employee complaint
or disclosure of information. Under section 7 of the act, the inspector general is
authorized to receive and investigate complaints or information from an employee
concerning the possible existence of an activity constituting: a violation of law,
rules, or regulations; mismanagement, gross waste of funds, and abuse of authority;
or a substantial and specific danger to the public health and safety. In such instances,
the IG shall not disclose the identity of the employee without the employee’s consent,
unless the IG determines that such disclosure is unavoidable during the course of the
investigation. The act, supplementing other “whistleblower” statutes,3 also prohibits
reprisals against employees who properly make complaints or disclose information
to the IG.
Prohibition on Program Operating Responsibilities. Notwithstanding the
broad powers granted by the IG Act, as amended, inspectors general are prohibited
from taking corrective action or instituting changes themselves. Indeed, section 9 of
the act expressly forbids the transfer “of program operating responsibilities” to an IG.
This prohibition is designed to ensure the integrity of an IG’s audit or investigation;
if an IG were to carry out programs or institute changes, he or she would not be able
to audit or investigate them objectively or impartially in the future.
Law Enforcement Powers. Despite the broad range of investigative authority
under the IG Act, as amended, law enforcement powers have not been granted acrossthe-board in public law. Instead, the OIGs that have such authority—to carry
firearms, make arrests without warrants, and obtain and execute search
warrants—have acquired them in one of four basic ways: through transfers of preexisting offices which held relevant powers when the OIG was created, specific
statutory grants to a particular office (e.g., in the Agriculture and Defense
Departments), delegation of relevant authority and jurisdiction by the agency head,
and special deputation by the Department of Justice.
In the past, IGs have received ad hoc, temporary special deputation from the
Justice Department when law enforcement powers were needed independently (that
is, without relying upon other agencies to make arrests, carry firearms, or execute
search warrants). Criticism arose from the IG community, however, over the costs
associated with such deputation, delays in processing OIG applications for it, and its
limited duration and extent. As a result, an alternative policy has since been devised
See, most importantly, the Whistleblower Protection Act of 1989 (103 Stat. 16 et seq.) and
its companion legislation setting forth the Merit System Principles (5 U.S.C. 2301-2305),
along with the Intelligence Community Whistleblower Protection Act of 1998 (P.L. 105272).
to provide extended, blanket deputation to most offices of inspector general in federal
establishments (in 23 of the 28 OIGs headed by presidentially appointed IGs).
Memoranda of Understanding between the Justice Department and the qualified
OIGs implement this program, which is limited to one year and thus must be renewed
In nearly all cases, inspectors general have comprehensive jurisdiction over the
establishment or entity in which they are located. The few exceptions—in the
Departments of Justice and the Treasury—exclude from or circumscribe the
department IG's jurisdiction over certain law enforcement agencies.
One of those bureaus excluded from its parent agency IG has been the Treasury
Department's Internal Revenue Service (IRS), which has been criticized for abusive
and arbitrary conduct, maladministration, and an absence of accountability, oversight,
and controls. As a result, a Treasury Inspector General for Tax Administration, along
with other new organizations, including an IRS Oversight Board, has been
established to cover the Internal Revenue Service alone.4 The new IG for Tax
Administration, who is a presidential appointee subject to Senate confirmation,
operates independently of the Treasury Department OIG. This is the only case
among all statutory offices in which an IG has jurisdiction for a part of an
establishment or entity that has its own office of inspector general. As a corollary,
the Treasury Department Office of Inspector General is the only statutory office
whose jurisdiction has been subdivided to accommodate a separate statutory OIG
within the same establishment or entity.
Coordination Among and Investigations of IGs
Inspectors general, along with other relevant agencies, are members of one of
two coordinating mechanisms, which have been established by executive order and
operate under the auspices of the Office of Management and Budget (OMB). In
addition, allegations of wrongdoing against IGs themselves or other high ranking
officers can be investigated by a special integrity committee consisting of members
of these two councils.
Two councils—the President’s Council on Integrity and Efficiency (PCIE), for
the presidentially appointed IGs, and the Executive Council on Integrity and
Efficiency (ECIE), for agency-head appointees—provide a coordinating mechanism
for the inspectors general, along with representatives from other appropriate
organizations. The other members include the Deputy Director for Management of
Sections 1102 and 1103 of P.L. 105-206, enacted on July 22, 1998. U.S. Congress,
Committee of Conference, Internal Revenue Service Restructuring and Reform Act of 1998,
conference report to accompany H.R. 2676, H.Rept. 105-599, 105th Cong., 2nd sess.,
(Washington: GPO, 1998), pp. 211-225.
the Office of Management and Budget, who chairs both councils; the Associate
Deputy Director for Investigations of the Federal Bureau of Investigation (FBI); the
Controller of the Office of Federal Financial Management; the Director of the Office
of Government Ethics; the Special Counsel of the Office of Special Counsel; and the
Deputy Director of the Office of Personnel Management. Besides these individuals,
the Vice Chairperson of the PCIE sits on the ECIE and the Vice Chairperson of the
ECIE, on the PCIE.
The President’s Council on Integrity and Efficiency, the older of the two
councils, was established in 1981 by President Reagan through Executive Order
12301. Both councils are now governed by Executive Order 12805, issued by
President Bush in 1992. Among their functions, the councils “shall continually
identify, review, and discuss areas of weakness and vulnerability in Federal programs
and operations to fraud, waste, and abuse, and shall develop plans for coordinated,
Governmentwide activities that address these problems and promote economy and
efficiency in Federal programs and operations.”
Allegations of wrongdoing by inspectors general or other high-ranking officers
in an IG office may be investigated by a special Integrity Committee, following a
process authorized by Executive Order 12993, issued by President Clinton in 1996.
Such a committee, established by the Chairperson of the PCIE and ECIE (i.e., the
Deputy Director for Management from OMB), is to consist of at least the following
PCIE and ECIE members: the FBI representative, who chairs the committee; the
Special Counsel of the Office of Special Counsel; the Director of the Office of
Government Ethics; and three or more IGs, representing both the PCIE and the ECIE.
In addition, the Chief of the Public Integrity Section of the Criminal Division of the
Department of Justice serves as an advisor to the Integrity Committee with respect
to its responsibilities and functions.
Once it receives allegations of wrongdoing, the Integrity Comittee reviews them
and, where appropriate, refers them to one of two investigative entities: either to an
agency with jurisdiction over the matter or to an investigative team composed of
selected investigators supervised and controlled by the Integrity Committee’s
Current Issues Affecting Inspectors General
The issues affecting the statutory IGs can be grouped under six broad categories:
—institutional arrangements and procedures;
—changes in authority of the IGs;
—effectiveness and orientation of the IGs, as well as the PCIE and ECIE;
—reporting to the agency head and Congress;
—personnel practices; and
Each of these issues is connected to the need for additional information and
study or to options for change. These have arisen because of perceived problems or
weaknesses in the existing offices’ resources, capabilities, operations, or authority;
a possible need for statutory OIGs in government organizations or entities which do
not have them currently; initiatives from the inspectors general directly to enhance
their powers; or recent studies of their operations and recommendations for change
coming from Members and committees of Congress or from outside sources.
Underlying some of the issues and options for change are differences among the
IGs, based in part upon the different needs and characteristics of the establishments
where they serve as well as the characteristics, experience, and orientation of the IG;
possible tension between the audit and investigation functions of the offices;
differences in the IGs’ focus between prevention and detection; concerns about IG
independence (from the establishment officers) versus IG impact (by working closely
with the same officials); and disputes between certain IGs and the Department of
Justice over their authority and jurisdiction.
The following provides suggestions for each of the five broad issues, based on
the public record since the IGs were established. The Congressional Research
Service takes no position in support of or in opposition to these suggestions.
Institutional and Procedural Arrangements
! Changing the removal provision for IGs by requiring that any such action by
the President or agency head be “for cause,” such as neglect of duty,
malfeasance, or serious disability.
! Setting a term of office (e.g., 6, 8, or 10 years) for the IGs, to encourage
longer service and greater stability in a single post than is now common.
! Establishing an inspector general in the Executive Office of the President
(with jurisdiction, for instance, over statutorily created entities therein).
! Establishing by statute offices of inspectors general in congressional branch
support agencies, particularly the General Accounting Office and the Library
of Congress, modeled perhaps after the OIG in the Government Printing
Office or in designated federal entities, where the IG is appointed by the
! Bringing the OIG in the Government Printing Office into closer conformity
with the IG Act provisions affecting OIGs in designated federal entities.
! Adding IG positions in other entities which might now meet the criteria used
in the 1988 amendments for the designated federal entities but did not then.
! Setting up a panel of PCIE members to make recommendations to the entity
heads or screen possible candidates for the IGs in the smaller designated
! Placing certain OIGs in designated federal entities under a statutory inspector
general in a related major establishment. This might be considered because
of the OIGs small size, limited resources, or problems with independence,
capabilities, and effectiveness. Several precedents for a dual assignment or
shared jurisdiction exist. There has been only one dual inspector general
assignment, however: i.e., the IG in the State Department also served as the
IG in the Arms Control and Disarmament Agency, which has since been
transferred to the State Department. Presently, the State Department IG also
has jurisdiction over the Broadcasting Board of Governors and the
International Broadcasting Bureau, while the IG in the Agency for
International Development covers the Overseas Private Investment
! Having one person be the inspector general for all or a number of smaller
designated federal entities. For instance, one individual could be the inspector
general in perhaps 10 or 11 small entities; thus, the so-called mini-IGs would
have a combined total of three IGs, contrasted with the more than 30
presently. Because of this combination, the newly created posts could become
presidential nominations subject to Senate confirmation, rather than remaining
as agency head appointments. This might also be a way of overcoming the
limitations of small size, few resources, and limited capabilities, by
comparison to other statutory IGs.
! Examining the offices with presidentially appointed IGs established by the
1988 IG Act Amendments and since then. This review would look at the
newest of the presidentially appointed IG positions with a view to assessing
their performance and reviewing any concerns about their independence and
their offices’ capabilities.
! Reviewing the statutory limitations on the Treasury Department IG’s
jurisdiction and authority over the law enforcement organizations in the
Department: i.e., Bureau of Alcohol, Tobacco and Firearms; Customs Service;
Internal Revenue Service (IRS); and Secret Service. This could examine
whether there is a need to modify the current relationship with the existing
Treasury Department IG or possibly to create a separate IG for one or all of
these organizations, if merited, because of concerns about their accountability,
performance, and conduct. In 1998, such an effort led to establishing a new
Treasury Inspector General for Tax Administration to cover the IRS (P.L. 105206).
! Establishing a separate office of inspector general for the Federal Bureau of
Investigation (FBI) and Drug Enforcement Administration (DEA) in the
Department of Justice or, alternatively, augmenting the authority and
jurisdiction of the Justice Department inspector general over them. These
options might be considered because of the size and importance of DEA and
FBI, sensitivity of their operations, criticisms of past performance, and their
relative independence from the Justice Department office of inspector general
by comparison to other bureaus and organizations within the Department.
! Examining and clarifying in statute the role and responsibilities of the Justice
Department IG with regard to the Office of Professional Responsibility (OPR),
an administratively created office, along with other internal investigative or
audit units in the department. Currently, for instance, there is a dispute within
the Justice Department about the scope of the IG’s jurisdiction vis-a-vis
OPR’s, regarding investigation of officers or employees in attorney positions.
! Clarifying or changing the relationship of the IGs in the individual Armed
Services with the Department of Defense (DOD) IG. This might include
placing the military IGs directly and explicitly under the control of the civilian
DOD inspector general.
! Expanding or clarifying the jurisdiction and authority of the IG in the Central
Intelligence Agency with respect to other intelligence agencies, for instance,
those in the Departments of Defense and Justice. One option would be to
extend the CIA IG’s jurisdiction to mirror the jurisdiction of the Director of
Central of Intelligence, resulting in an inspector general for the entire
! Examining the relationship of the IG with the Chief Financial Officer (CFO)
in each establishment where both posts exist.
! Creating the post of assistant inspector general for inspections, to supplement
the existing ones for auditing and investigations.
Authority of Inspectors General
! Reviewing and further clarifying, if necessary, the scope and tools of the IGs’
regulatory investigation authority. Certain limits on this authority and
jurisdiction were prescribed in a 1989 Justice Department Office of Legal
Counsel memorandum, commonly known as the “Kmiec memo” for its
author. The following year, the Acting Attorney General, based on
discussions between the Department of Justice and the PCIE, issued a
followup memorandum, establishing a set of principles that attempt to clarify
the earlier opinion.
! Examining and possibly expanding and standardizing law enforcement
authority for criminal investigators in the offices of inspector general. This
area of inquiry could look at: whether the current arrangements, especially the
long-term special deputation by the Marshals Service, have proven effective
and at what costs and impact on the offices of inspector general; whether there
should be across-the-board law enforcement powers in public law or whether
law enforcement powers, if expanded by statute, should be granted selectively
to specific agencies; and, most fundamentally, whether there is a need for
independent law enforcement authority for OIG criminal investigators, by
comparison to other mechanisms which rely upon the Marshals Service or
other law enforcement entities, and what impact such a change would produce
in the OIGs themselves, in their relationship with the Justice Department, and
in crime control efforts at the federal level.
! Enhancing IG testimonial subpoena authority for all statutory inspectors
general under the 1978 IG Act. This change could aid IGs especially in
gathering information about alleged abuses of authority and evidence about
suspected criminal wrong-doing.
! Examining and possibly clarifying the rights of employees who are
interviewed by IG staff, such as the right to counsel or to union representation
at such meetings.
! Clarifying or expanding IG access to certain private records of public officials.
These might include such items as income tax records and other financial
! Protecting the confidentiality of “whistleblowers” and other employees who
bring allegations of wrong-doing to the IGs’ attention. This might result in
examining instances where such confidentiality has not been adequately
protected, where the individual employee protested the disclosure, and where
(alleged) reprisals resulted.
! Granting IGs authority to halt specific projects or operations which are found
to have “particularly serious or flagrant problems” and which are reported to
the agency head and within seven days to Congress. (Only the now-defunct
Inspector General for Foreign Assistance has held authority to halt a project.)
These new powers could help to improve agency responsiveness to IG
findings of these serious problems and subsequent recommendations for
! Providing prosecutorial authority for IGs in specified areas, possibly on a trial
basis. This power could increase the impact of IG findings of criminal
conduct. Currently, prosecutions based on such discoveries are conducted by
U.S. Attorneys and the Department of Justice. These Justice Department
prosecutors may be overwhelmed with other cases that have a higher priority,
such as those involving illegal narcotics, thus, reducing the likelihood of
prosecutions based on IG findings of wrongdoing (for instance, for Medicare
or Medicaid fraud).
Effectiveness and Orientation of IGs, PCIE, and ECIE
! Measuring effectiveness and orientation of the offices and comparing them
over time. This could include attempts to determine changes within and
between the audit and investigation functions since the establishment of an
OIG, between an IG’s prevention and detection focuses, or between his or her
possible roles as an “outsider” (e.g., an independent critic) or “insider” (e.g.,
an ally of management). Other studies could focus on corrective action taken
by an agency on IG recommendations, based in part on the semiannual
statistical reporting provisions required by the 1988 Amendments to the IG
Act; these studies might examine whether the proposed corrective actions
have actually taken place, to what extent, and with what results. A related
inquiry might question the budgetary impact of corrective recommendations
that have been implemented, asking, for instance, whether the cost-savings
resulted in a reduction of an agency’s budget requests.
! Using different measurements or bases to assess performance effectiveness
and success. Different kinds of measurements than presently used might
reveal different levels or rates of success and effectiveness of IGs.
! Assessing the role of OIGs in implementation of the Government Performance
and Results Act, both for themselves and for the agencies in which they are
! Examining the role of OIGs in helping to determine, commenting upon, and
recommending corrective action for the high risk or high vulnerability areas
in federal programs that have been identified by GAO.
! Requiring that the summary reports on IG activities produced by the
President’s Council on Integrity and Efficiency and the Executive Council on
Integrity and Efficiency be issued semiannually. The PCIE reports had been
issued twice a year until the FY 1988 report. These accounts, along with the
ECIE reports, now appear only once a year; and their release is often delayed
by more than six months after the end of the fiscal year. This results not only
in fewer summary accounts of IG activities but also in less timely information
and data than would be available if they were issued semiannually.
! Examining the role and responsibilities of the President’s Council on Integrity
and Efficiency (PCIE), covering presidentially-appointed IGs, and the
Executive Council on Integrity and Efficiency (ECIE), covering entity-head
appointments. This effort could examine how the PCIE and ECIE have
contributed to the effectiveness of the IGs, presumably through improved
coordination; any OMB followup to such efforts; what other techniques or
operations might be adopted along the same lines; and whether individual IG
activities, operations, or independence might have been jeopardized or
reduced because of PCIE or ECIE demands.
! Looking into the controls (via the PCIE/ECIE Integrity Committee) over
alleged abuses of authority or other improprieties by IGs or their top
! Examining what has happened to IG findings of suspected criminal
wrongdoing reported to the Attorney General. This might include comparing
among the IGs the number and type of such reported suspicions, as well as the
Justice Department’s own followup investigations and prosecutions. This
examination could lead to determining the reasons why the Justice
Department followed up (or did not do so) with its own investigations and
prosecutions and, thus, help to improve IG preliminary investigations and
gathering of evidence, if that appears necessary.
Reporting to the Agency Head and Congress
! Enhancing and standardizing the data and information on investigations in the
semiannual reports. This might follow the lines for audit statistics and data
required by the 1988 IG Act Amendments.
! Improving communication surrounding the major findings, conclusions, and
recommendations in the semiannual reports. This could occur through, for
instance, regular hearings with relevant congressional subcommittees when
the report is issued and in-person briefings by IG personnel for congressional
staff on relevant panels.
! Consolidating or coordinating the semiannual reports from IGs with the
periodic reports submitted under other relevant statutes, such as the Chief
Financial Officers Act and the Federal Managers’ Financial Integrity Act.
! Requiring that the IGs issue their summary activity reports only annually,
rather than semiannually, as is the case now.
! Increasing the use of the seven-day letter reports about “particularly serious
or flagrant problems.” This might be accomplished by clarifying the meaning
of the phrase in law, in a congressional report, or in a PCIE advisory opinion
to the IGs. The effort might also lead to setting specific criteria and standards
for submitting such reports. It might, for instance, require that any finding
which is repeated in three successive semiannual reports be considered
“particularly serious or flagrant” and automatically submitted to the agency
head and then sent to Congress within seven days. This possible product
could be based on an examination of the infrequent use of the seven-day letter
reports—about once a year for all IGs—and a comparison of this use with
episodes that appear to meet a common understanding of “particularly serious
or flagrant problems” but were not reported under this provision.
! Examining systematically the agency heads’ and Congress’s response to
seven-day letter reports about particularly serious or flagrant problems
discovered by the IGs.
! Requiring the IG to issue a confidential report directly to the appropriate
congressional committees whenever the head of the establishment is the
subject of an IG investigation. Presently, only the CIA Inspector General has
this authority (for the Director of Central Intelligence).
! Comparing personnel practices of IGs. This might include examining whether
the IG hires his or her own staff or relies upon personnel rotating into and out
of the office from other parts of the establishment. It could also involve a
comparison of the recruitment practices and selection criteria for new hirings,
promotional opportunities and practices, and complaints or grievances from
IG personnel in this field.
! Comparing changes over time between the audit and investigative side of each
OIG. This effort could help to determine whether any growth in one side has
been accomplished at the expense of the other, and if so, why.
! Contracting out for activities and operations. This could involve a review of
such contracting among IGs currently or for each IG over time, what types of
activities are contracted for, actual costs and cost-benefits, and the possible
loss of in-house capabilities through a reliance on such outsourcing of
activities and operations, which might result in “hollow government” (that is,
the inability of a government office to perform its basic functions or activities
! Using “whistleblower” cash incentive awards. This effort could look at the
extent of their use by the inspectors general to reward federal personnel for
cost-saving disclosures, differences among the IGs, and changes in usage over
! Allowing IGs to be eligible for incentive awards or not. An examination of
this matter might first of all review the differences in accepting incentive
awards among IGs and then examine the differences of opinion over whether
IGs should be eligible for such awards, particularly those granted by the
establishment head or based on his or her recommendation. If these types of
awards are found acceptable, attention might then be given to alternative
arrangements for nominating IGs—possibly through a panel of PCIE or ECIE
members or through a panel of experts set up under the Federal Advisory
Committee Act—to avoid the appearance of a conflict of interest.
Several legislative initiatives in the 105th Congress have called for changes in
the statutory offices of inspector general.
Proposed Inspector General Act Amendments of 1998
In the most far-reaching of these, Senator Susan Collins introduced legislation
(S. 2167), for herself and Senator Grassley, that would have amended the Inspector
General Act of 1978 in a number of ways. First of all, the proposal would
consolidate seven of smaller IG offices in designated federal entities into larger OIGs
in federal establishments with similar subject matter jurisdictions (e.g., Peace Corps
OIG into the State Department OIG). The initiative would also reduce the
semiannual reporting by IGs (to the agency head and to Congress) to a single annual
In addition, inspectors general in larger federal establishments, who are
appointed by the President and confirmed by the Senate, would be given a renewable
nine-year term of office, in the expectation that this would encourage longer tenure.
The bill would also require that all IGs undergo an external review or evaluation of
their activities and operations at least every three years. Finally, S. 2167 would
increase the salary level of IGs in the federal establishments from Executive Level
4 ($118,400) to Executive Level 3 ($125,900). Because IGs have generally refrained
from receiving bonuses in order to avoid the appearance of a conflict of interest, this
loss of bonuses (from the agency head) has resulted in some IGs receiving lower
annual compensation than their subordinates, particularly assistant and deputy
inspectors general, who have accepted such bonuses.
Proposed Inspector General for Medicare and Medicaid
H.R. 251, introduced by Representative Jack Quinn on January 7, 1997, would
have created a statutory inspector general for medicare and medicaid. The new
inspector general would have the same responsibilities, duties, powers, and
authorities as the other statutory IGs under the 1978 Inspector General Act, as
Proposed Reform of the Justice Department Inspector General
The proposed Department of Justice Inspector General Reform Act, H.R. 2182,
would have amended the IG Act of 1978, as it pertains to the Department of Justice
(DOJ). Introduced by Representative Robert Wexler on July 7, 1997, the bill
provided that the Inspector General in the Justice Department would have oversight
responsibility for the internal investigations performed by any DOJ entity. The IG
would also have authority to initiate, conduct, and supervise inspections (along with
audits and investigations as it is now authorized), regarding any Department entity
or organization. The head of each DOJ entity, moreover, would be required to report
promptly to the IG such matters, and under the terms, that the IG determines are
necessary to carry out the IG's responsibilities. The proposal would also ensure that
an IG audit, investigation, or inspection would preempt that of any other DOJ entity
on the same matter.
Treasury Inspector General for Tax Administration
The Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105206) established a new Treasury Inspector General for Tax Administration to cover
the Internal Revenue Service. The law is to take effect within 180 days after its
enactment, which occurred on July 22, 1998.5 (The enactment contained additional
oversight mechanisms and procedures to help improve accountability and control
over the IRS.)
The jurisdiction for the new IG is confined to the IRS and tax administration,
while the Treasury Department IG is excluded from such matters. As a presidential
appointee, subject to Senate confirmation, the Inspector General for Tax
Administration is on a par with statutory IGs in other establishments, that is, all the
cabinet departments and larger federal agencies. The new IG reports to and is under
only the "general supervision" of the head of the establishment—the Secretary of the
Treasury, here—as are the other inspectors general. The IG for Tax Administration
also has the same duties, authorities, and requirements of the IGs in other
establishments. In addition, the powers and responsibilities of the IRS Office of
Chief Inspector, including access to tax records, are transferred to the new Inspector
General for Tax Administration.
Sections 1102 and 1103 of P.L. 105-206.
Intelligence Community Whistleblower Protection Act of 1998
The Intelligence Authorization Act for Fiscal Year 1999 (P.L. 105-272)
contained the Intelligence Community Whistleblower Protection Act of 1998, which
involves the inspectors general in relevant establishments, notably the Central
Intelligence Agency, Department of Defense, and Department of Justice, along with
other organizations that conduct foreign intelligence or counterintelligence. Based
on H.R. 3829, introduced by Representative Porter Goss, Chairman of the House
Permanent Select Committee on Intelligence, and modified by the conferees on the
intelligence authorization bill, the new whistleblower statute is designed to promote
and protect reporting to Congress by employees or contractors who have an "urgent
concern" about a number of matters, based on classified information. Such concerns
include: suspected serious or flagrant problems, abuses, violations of law or
executive orders; false statements to Congress; a willful withholding of certain
information from Congress; and reprisals or the threat of reprisals against a
whistleblower. (A parallel proposal in the Senate—S. 1668, 105th Congress—by
comparison, did not specifically involve the IGs, unlike the House proposal and the
The new whistleblower statute establishes a procedure whereby employees
notify the inspector general in their establishment of such problems and concerns.
The IG is to determine within 14 days, if the charge appears credible. If so, the
inspector general then notifies the agency head, who must transmit the information,
along with any comments the head deems appropriate, to the House and Senate
Select Committees on Intelligence within seven days.
If the IG does not transmit the complaint to the agency head or does not do so
in an "accurate form," the inspector general must report this to the whistleblower.
If he or she does not agree with the IG's decision, then the whistleblower is allowed
to submit the information to the intelligence committees directly, under prescribed
conditions; these include notice to the agency head, through the IG, of the intent to
contact the panels and a statement of the allegation.
Foreign Affairs Reform and Restructuring Act of 1998
The Foreign Affairs Reform and Restructuring Act of 1998, a part of the
Omnibus Consolidated and Emergency Supplemental Appropriations Act for Fiscal
Year 1999 (P.L. 105-277), calls for the transfer of certain programs and agencies to
the Department of State. Two of these—the Arms Control and Disarmament Agency
(ACDA) and the United States Information (USIA)—are scheduled to be merged into
the Department in 1999; consequently, the State Department IG will inherit
jurisdiction for their programs and operations. (Previously, the State Department IG
had a dual assignment as Inspector General in ACDA; this was the only case in
which the same individual held two official inspector general positions, serving as
the IG in two separate establishments.) In addition, the State Department inspector
general, via P.L. 105-277, has been granted jurisdiction over the independent
Broadcasting Board and the International Broadcasting Bureau, which had been
under the USIA inspector general.
Recognition of IG Accomplishments Since the 1978 Act
In 1998, Congress recognized the accomplishments of the statutory inspectors
general upon their 20th anniversary through P.L. 105-349. Introduced by Senator
Glenn, for himself and six cosponsors, the joint resolution (S.J.Res. 58) commended
the offices for their professionalism and dedication; recognized their
accomplishments in combating waste, fraud, and abuse (resulting, for instance, in an
estimated $3 billion in returns and investigative recoveries and another $25 billion
in funds that could be put to better use, in FY1997); and reaffirmed the role of the
IGs in promoting economy, efficiency, and effectiveness in the administration of
federal programs and operations.