Statutory Offices of Inspector General: Establishment and Evolution

Statutory Offices of Inspector General: Establishment and Evolution

Order Code 98-379 GOV
Updated July 1, 2003
CRS Report for Congress
Received through the CRS Web
Statutory Offices of Inspector General:
Establishment and Evolution
Frederick M. Kaiser
Specialist in American National Government
Government and Finance Division
Summary
Statutory offices of inspector general consolidate responsibility for auditing and
investigations within a federal department, agency, or other organization. Established
by public law as permanent, nonpartisan, independent offices, they now exist in nearly
60 federal establishments and entities, including all departments and the largest agencies
as well as many boards, commissions, and governmental corporations. Under two major
enactments—the Inspector General Act of 1978 and its amendments of 1988—the
inspectors general (IGs) have been granted a substantial amount of independence and
authority to carry out their basic mandate to combat waste, fraud, and abuse.1 Recent
statutes, moreover, have added a separate Inspector General for Tax Administration in
Treasury and one in the new Department of Homeland Security; codified Justice IG
jurisdiction over the entire department; granted law enforcement powers to offices
headed by presidential appointees; and created a Criminal Investigator Academy and an
Inspector General Forensic Laboratory. This report will be updated as events require.
1 5 U.S.C. Appendix 3. Two other IGs operate under similar statutory guidelines: in the CIA,
under the Intelligence Authorization Act of 1990 (103 Stat. 1711), and in the GPO, under the
GPO Inspector General Act (44 U.S.C. 3901-3902). See: Frederick M. Kaiser, “The Watchers’
Watchdog: The CIA Inspector General,” International Journal of Intelligence and
Counterintelligence, vol. 3, 1989, pp. 55-75; Paul C. Light, Monitoring Government: Inspectors
General and the Search for Accountability (Washington: Brookings Institution, 1993); U.S.
Congress, House Subcommittee on Government Management, The Inspector General Act of
1978: Twenty Years After Passage, Are The Inspectors General Fulfilling Their Mission?,
hearings, 105th Cong., 2nd sess. (Washington: GPO, 1999); U.S. Congress, Senate Committee on
Governmental Affairs, The Inspector General Act: 20 Years Later, hearings, 105th Cong., 2nd sess.
(Washington: GPO, 1998); CRS Report 98-141, Statutory Offices of Inspector General: A 20th
Anniversary Review; CRS Report RS20944, Statutory Inspector for the FBI; CRS Report
RS21251, Analysis of President’s Proposal Concerning the OIG for the Proposed Department
of Homeland Security; and U.S. General Accounting Office, Inspectors General: Office
Consolidation and Related Issues, GAO Report GAO-02-575 (August 2002).
Congressional Research Service ˜ The Library of Congress

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Responsibilities
Inspectors General have three principal responsibilities under the Inspector General
Act of 1978, as amended:
! conducting and supervising audits and investigations relating to the
programs and operations of the establishment;
! providing leadership and coordination and recommending policies for
activities designed to promote the economy, efficiency, and effectiveness
of such programs and operations, and preventing and detecting fraud and
abuse in such programs and operations; and
! providing a means for keeping the establishment head and Congress fully
and currently informed about problems and deficiencies relating to the
administration of such programs and operations, and the necessity for and
progress of corrective action.
Authority and Duties
To carry out the purposes of the Inspector General Act, IGs have been granted broad
authority to conduct audits and investigations; access directly all records and information
of the agency; request assistance from other federal, state, and local government agencies;
subpoena information and documents; administer oaths when taking testimony; hire staff
and manage their own resources; and receive and respond to complaints from agency
employees, whose confidentiality is to be protected. In addition, the Homeland Security
Act of 2002 gave law enforcement powers to criminal investigators in offices headed by
presidential appointees. Following the terrorist attacks on the Pentagon and World Trade
Center on September 11, 2001, moreover, some IG staff were redeployed to assist in
airline security and in terrorist investigations by the FBI and other agencies.
Notwithstanding these powers and duties, IGs are not authorized to take corrective
action or make any reforms themselves. Indeed, the Inspector General Act, as amended,
prohibits the transfer of “program operating responsibilities” to an IG (5 U.S.C. Appendix
3, Section 9(a)(2)). The rationale for this prohibition is that it would be difficult, if not
impossible, for IGs to audit or investigate programs and operations impartially and
objectively if they were directly involved in carrying them out.
Reporting Requirements
IGs also have important obligations concerning their findings, conclusions, and
recommendations for corrective action. These include reporting (1) suspected violations
of federal criminal law directly and expeditiously to the Attorney General; (2)
semiannually to the agency head, who must submit the IG report (along with his or her
comments) to Congress within 30 days; and (3) “particularly serious or flagrant problems”
immediately to the agency head, who must submit the IG report (along with comments)
to Congress within 7 days. The IG for the Central Intelligence Agency (CIA), operating
under a different statute, must also report to the House and Senate Select Committees on
Intelligence if the Director (or Acting Director) of Central Intelligence is the focus of an
investigation, audit, or inspection.

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By means of these reports and “otherwise,” IGs are to keep the agency head and
Congress fully and currently informed. Other informing activities include testifying at
congressional hearings; meeting with legislators, officials, and staff; and responding to
congressional requests for information and reports.
Independence
In addition to having their own powers (e.g., to hire staff and issue subpoenas), the
IGs’ independent status is reinforced in a number of other ways: protection of their
budgets, qualifications on their appointment and removal, prohibitions on interference
with their activities and operations, and a proscription on being assigned any program
operating responsibilities.
Appropriations. Presidentially appointed IGs in the larger federal agencies have
a separate appropriations account (a separate budget account in the case of the CIA) for
their offices. This situation prevents agency administrators from limiting, transferring,
or otherwise reducing IG funding once it has been specified in law.
Appointment and Removal. Under the Inspector General Act, as amended, IGs
are to be selected without regard to political affiliation and solely on the basis of integrity
and demonstrated ability in accounting, auditing, financial and management analysis, law,
public administration, or investigations. The CIA IG, who operates under a different
statute, is to be selected under these criteria as well as prior experience in the field of
foreign intelligence and in compliance with the security standards of the agency.
Presidentially appointed IGs in the larger federal establishments who are confirmed
by the Senate can be removed only by the President. When so doing, the President must
communicate the reasons to Congress. However, IGs in the (usually) smaller, designated
federal entities can be removed by the agency head, who must notify Congress in writing
when exercising this power. In the U.S. Postal Service, by comparison, the governors
appoint the inspector general—the only statutory IG with a set term (7 years). The IG can
be removed with the written concurrence of at least seven of the nine governors, but only
for cause—again, the only statutory IG having such a qualification governing removal.
Supervision. IGs serve under the “general supervision” of the agency head,
reporting exclusively to the head or to the officer next in rank if such authority is
delegated. With only a few specified exceptions, neither the agency head nor the officer
next in line “shall prevent or prohibit the Inspector General from initiating, carrying out,
or completing any audit or investigation, or from issuing any subpoena during the course
of any audit or investigation.”
Under the IG Act, as amended, the heads of only five agencies—the Departments of
Defense, Homeland Security, Justice, and Treasury, plus the U.S. Postal Service—may
prevent the IG from initiating, carrying out, or completing an audit or investigation, or
issuing a subpoena, in order to preserve national security interests or to protect on-going
criminal investigations, among other specified reasons. When exercising this power, the
department head must transmit an explanatory statement for such action to the House
Government Reform Committee, the Senate Governmental Affairs Committee, and other
appropriate congressional committees and subcommittees within 30 days. Under the CIA
IG Act, the Director of Central Intelligence may similarly prohibit the CIA IG from

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conducting investigations, audits, or inspections and, when doing so, must notify the
House and Senate Intelligence Committees of the reasons for such action within 7 days.
Coordination and Controls
Several presidential orders have been issued to improve coordination among the IGs
and provide a means for investigating charges of wrongdoing by the IGs themselves and
other top echelon officers. In early 1981, President Ronald Reagan established the
President’s Council on Integrity and Efficiency (PCIE) to coordinate and enhance efforts
at promoting integrity and efficiency in government programs and to detect and prevent
waste, fraud, and abuse (E.O. 12301). Chaired by the Deputy Director of the Office of
Management and Budget, the PCIE was composed of the existing statutory IGs plus
officials from the Office of Personnel Management, the Federal Bureau of Investigation
(FBI), and the Departments of Defense, Justice, and the Treasury, among others. PCIE
membership was subsequently expanded to include the Controller of the Office of Federal
Financial Management, the Director of the Office of Government Ethics, and the Special
Counsel. In 1992, following the establishment of new IG offices in designated federal
entities, a parallel Executive Council on Integrity and Efficiency (ECIE) was created for
these new IGs and other appropriate officials. Both the PCIE and the ECIE currently
operate under E.O. 12805, issued by President George H.W. Bush in 1992.2
Concerns about the investigation of alleged wrongdoing by IGs themselves or other
high-ranking Office of Inspector General officials prompted the establishment of a new
mechanism to pursue such charges. In 1996, President Bill Clinton chartered an Integrity
Committee, composed of PCIE and ECIE members and chaired by the FBI representative.
It is to receive such allegations and, if deemed warranted, to refer them for investigation
to an executive agency—including the FBI—with appropriate jurisdiction (E.O. 12993)
or a special investigative unit composed of council members.3
Establishment
Statutory offices of inspector general currently exist in 57 federal establishments and
designated entities, including all 15 cabinet departments; major executive branch
agencies; independent regulatory commissions; various government corporations and
foundations; and one legislative branch agency—the Government Printing Office (GPO).
All but two of these offices—in the CIA and in the GPO—are directly and explicitly
under the Inspector General Act of 1978, as amended.
Each office is headed by an inspector general, who is appointed in one of two ways:
(1) 29 are nominated by the President and confirmed by the Senate in the federal
establishments (i.e., all cabinet departments and the larger agencies). (See
Table 1); or
2 Federal Register, vol. 57, May 14, 1992, pp. 20627-20629.
3 Ibid., vol. 61, Mar. 26, 1996, pp. 13043-13045.

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(2) 28 are appointed directly by the head of the entity in the designated federal
entities (i.e., usually the smaller foundations, boards, commissions, and other
organizations). (See Table 2).
Table 1. Statutes Establishing Inspectors General Nominated by
the President and Confirmed by the Senate, 1976-Present
(current offices are in bold)a
Year
Statute
Establishment
1976
P.L. 94-505
Health, Education, and Welfare (now Health and Human Services)
1977
P.L. 95-91
Energy
1978
P.L. 95-452
Agriculture, Commerce, Community Services Administration,b
Housing and Urban Development, Interior, Labor,
Transportation, Environmental Protection Agency, General
Services Administration, National Aeronautics and Space
Administration, Small Business Administration, Veterans
Administration (now the Veterans Affairs Department)
1979
P.L. 96-88
Education
1980
P.L. 96-294
U.S. Synthetic Fuels Corporationb
1980
P.L. 96-465
Statec
1981
P.L. 97-113
Agency for International Developmentd
1982
P.L. 97-252
Defense
1983
P.L. 98-76
Railroad Retirement Board
1986
P.L. 99-399
U.S. Information Agencyb,c
1987
P.L. 100-213
Arms Control and Disarmament Agencyb,c
1988
P.L. 100-504
Justice, Treasury, Federal Emergency Management Administration,b,e
Nuclear Regulatory Commission, Office of Personnel Management
1989
P.L. 101-73
Resolution Trust Corporationb
1989
P.L. 101-193
Central Intelligence Agency
1993
P.L. 103-82
Corporation for National and Community Service
1993
P.L. 103-204
Federal Deposit Insurance Corporation
1994
P.L. 103-296
Social Security Administration
1994
P.L. 103-325
Community Development Financial Institutions Fundb
1998
P.L. 105-206
Treasury Inspector General for Tax Administrationf
2000
P.L. 106-422
Tennessee Valley Authorityg
2002
P.L. 107-296
Homeland Securitye
a. All, except the CIA IG, are directly under the 1978 Inspector General Act, as amended.
b. CSA, Synfuels Corporation, USIA, ACDA, RTC, CDFIF, and FEMA have been abolished or transferred.
c. The State Department IG had also served as the IG for ACDA. In 1998, P.L. 105-277 abolished ACDA
and USIA and transferred their functions to the State Department. The Act also brought the
Broadcasting Board of Governors and the International Broadcasting Bureau under the jurisdiction
of the State Department Inspector General.
d. The Inspector General in AID may also conduct reviews, investigations, and inspections of the Overseas
Private Investment Corporation (22 U.S.C. 2199(e)).
e. P.L. 107-296, which transferred FEMA’s functions to the Homeland Security Department, also granted
law enforcement powers to OIG criminal investigators in establishments.
f. The OIG for Tax Administration in Treasury is the only case where a separate office of inspector general
exists within an establishment or entity that is otherwise covered by its own office.
g. P.L. 106-422 also created, in the Treasury Department, a Criminal Investigator Academy to train IG staff
and an Inspector General Forensic Laboratory.

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Table 2. Designated Federal Entities and Agencies with Statutory IGs
Appointed by the Head of the Entity or Agency
(current offices are in bold)a
ACTIONb
Government Printing Officef
Amtrak
Interstate Commerce Commissiong
Appalachian Regional Commission
Legal Services Corporation
Board of Governors of the Federal Reserve System National Archives and Records Administration
Board for International Broadcastingc
National Credit Union Administration
Commodity Futures Trading Commission
National Endowment for the Arts
Consumer Product Safety Commission
National Endowment for the Humanities
Corporation for Public Broadcasting
National Labor Relations Board
Equal Employment Opportunity Commission
National Science Foundation
Farm Credit Administration
Panama Canal Commissionh
Federal Communications Commission
Peace Corps
Federal Deposit Insurance Corporationd
Pension Benefit Guaranty Corporation
Federal Election Commission
Securities and Exchange Commission
Federal Home Loan Bank Boarde
Smithsonian Institution
Federal Housing Finance Boarde
Tennessee Valley Authorityi
Federal Labor Relations Authority
United States International Trade Commission
Federal Maritime Commission
United States Postal Servicej
Federal Trade Commission
a. All, except the GPO, are considered “designated federal entities” and placed directly under the 1978 IG Act by the
1988 Amendments (P.L. 100-504) or subsequent enactments.
b. In 1993, P.L. 103-82 merged ACTION into the new Corporation for National and Community Service.
c. The Board for International Broadcasting was abolished by P.L. 103-236 and its functions and authorities transferred
to the new International Broadcasting Bureau within USIA, which, in turn, was abolished and its functions
transferred to the State Department.
d. In 1993, P.L. 103-204 made the IG in FDIC a presidential appointee, subject to Senate confirmation.
e .The FHLBB was abolished in 1989 by P.L. 101-73. The new FHFB was placed under the 1988 IG Act Amendments,
also by P.L. 101-73.
f. Unlike the designated federal entities, the GPO IG is not directly under the 1978 IG Act (P.L. 100-504).
g. The ICC was abolished in 1995 by P.L. 104-88.
h. The Panama Canal Commission, replaced by the Panama Canal Commission Transition Authority, was phased out,
when United States responsibility for the Canal was transferred to the Republic of Panama (22 U.S.C. 3611).
i. P.L. 106-422 redesignated TVA as a federal establishment.
j. In 1996, the U.S. Postal Service Inspector General was separated from the Chief Postal Inspector and now exists as
an independent position. The IG is appointed by, and can be removed by, the governors.
Table 3. Tabulation of Existing Federal Establishments,
Entities, or Agencies with Statutory IGs
IGs nominated by President
IGs appointed by head
Controlling statute
Total
and confirmed by Senate
of entity or agency
1978 IG Act,
as amended
28
27
55
Other statutes
1a
1b
2
Total
29
28
57
a. CIA IG, P.L. 101-193.
b. GPO IG, P.L. 100-504.