Pursuant to a congressional request, GAO provided summary information on: (1) whether federal agencies identified by the Office of Management and Budget (OMB) in fiscal year (FY) 1994 reported their audit and investigative activity as required by the Inspector General Act; (2) the extent of audit and investigative activity reported by these agencies over the past 3 fiscal years; (3) the status of audit recommendations for 7 federal agencies; and (4) how these 7 agencies process allegations of fraud and mismanagement and obtain their administrative services.

GAO found that: (1) in August 1994, OMB listed 59 federal agencies without statutory offices of inspectors general; (2) these agencies had about $3.2 billion in FY 1994 budget authority and 5,629 full-time equivalent staff; (3) each of the 59 agencies reported their audit and investigative activities, but usually after the reports' due date; (4) 18 of the agencies reported no audit or investigative activity during the 3-year period and 6 of the agencies reporting audit activity also reported investigative activity; (5) the agencies' audit activity consisted mainly of financial statement audits, grant audits, and operation or program audits; (6) of the 7 agencies chosen for closer review, 4 of them had implemented all audit recommendations, and the other 3 had implemented 50 of 78 audit recommendations; (7) although the 7 agencies' officials were not aware of any fraud or mismanagement allegations, they had the discretion to refer such allegations to the Department of Justice or various Offices of Inspector General; and (8) 6 of the 7 agencies obtained their administrative services through cross-servicing agreements with larger federal agencies, while the other agency provided its own administrative services.