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Testimony:
Before the Subcommittee on Government Efficiency and Financial
Management, Committee on Government Reform, House of Representatives:
For Release on Delivery Expected at 2:00 p.m. EDT Wednesday, October 8,
2003:
INSPECTORS GENERAL:
Enhancing Federal Accountability:
Statement of David M. Walker Comptroller General of the United States:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-117T] GAO-04-
117T:
GAO Highlights:
Highlights of GAO-04-117T, a testimony before the Subcommittee on
Government Efficiency and Financial Management, Committee on
Government Reform, House of Representatives
Why GAO Did This Study:
On the 25th anniversary of passage of the Inspector General (IG) Act,
the Subcommittee sought GAO’s views on the role of the IGs in
providing independent oversight within federal agencies and to discuss
the new and continuing challenges faced by government performance and
accountability professionals.
What GAO Found:
The IGs have made a significant difference in federal performance and
accountability during the past 25 years as indicated by their reports
of billions of dollars in savings to the public and numerous civil and
criminal referrals. They have earned a solid reputation for preventing
and detecting fraud and abuse; promoting improvements in government
operations; and providing helpful analyses on a host of governmentwide
initiatives.
Notwithstanding the accomplishments of the past, our nation now faces
new challenges that demand even more from government performance and
accountability professionals. For example, we are fighting
international terrorism while facing a large and growing structural
deficit. In addition, recent corporate failures have shaken public
confidence in financial reporting and accountability in the private
sector. Federal auditors can learn important lessons from the
accountability breakdowns in the private sector and the resulting
legislation passed by Congress.
Closer strategic planning and ongoing coordination of audit efforts
between GAO and the IGs would help to enhance the effectiveness and
impact of work performed by federal auditors. Working together and in
our respective areas of expertise in long-term challenges and agency-
specific issues, GAO and the IGs can provide useful insights and
constructive recommendations on a broad range of high-risk programs
and significant management challenges across government.
A practical issue that has arisen is who pays the cost of agency
financial statement audits. Many IGs have told us that the cost of
agency financial audits has taken resources away from their
traditional work. In the private sector, the cost of financial audits
is a routine business expense borne by the entity being audited and
represents a small percentage of total expenditures for the audited
entity.
In a prior study, we considered the benefits of consolidating the
smallest IG offices with those of presidentially appointed IGs and
converting agency-appointed IGs to presidential appointment where
their budgets were comparable. We believe that, if properly
implemented, conversion or consolidation of IG offices could increase
the overall independence, economy, efficiency, and effectiveness of
IGs.
What GAO Recommends:
In order to enhance the effectiveness of federal accountability
professionals, Congress may wish to consider establishing, through
statute, a small group of designated federal accountability officials,
such as representatives from GAO and IG councils, to develop and
implement a periodic strategic planning and ongoing coordination
process for the manner in which GAO and IG work will be focused to
provide oversight to high-risk areas and significant management
challenges across government, while leveraging each other’s work and
minimizing duplication.
Congress may also want to consider enacting legislation making
agencies responsible for paying the cost of their financial statement
audits.
Congress may also wish to consider restructuring the IGs, which would
include elevating certain IGs to presidential appointment and
consolidating specific IG offices where benefits can be shown.
www.gao.gov/cgi-bin/getrpt?GAO-04-117T.
To view the full product, click on the link above. For more
information, contact Jeanette Franzel at (202) 512-9406 or
franzelj@gao.gov.
[End of section]
Mr. Chairman and Members of the Committee:
I appreciate the opportunity to share my thoughts with you on the
important role of the Inspectors General (IG), established in statute
25 years ago this month to provide independent oversight within federal
agencies. More significant for this discussion than the anniversary of
landmark legislation, however, are the new and continuing challenges we
face in assuring open, honest, effective, and accountable government
and the critical role of the IGs, in partnership with GAO and other
performance and accountability organizations, in addressing these
challenges.
A quarter of a century ago, Congress established statutory IGs in
response to serious and widespread internal control breakdowns in major
government departments and agencies, questions about integrity and
accountability in government as a whole, and failures of oversight in
the federal government. The IGs established by the Inspector General
Act of 1978 (IG Act) were charged with preventing and detecting fraud
and abuse in their agencies' programs and operations; conducting audits
and investigations; and recommending policies to promote economy,
efficiency, and effectiveness. The IG Act fortified the position of IG
with provisions protecting independence, provided powers of
investigation, and mandated reporting not just to the agency head but
to Congress as well. (See app. I for a more detailed history of the IG
Act.):
In the years since passage of the IG Act, Congress has also enacted a
series of laws to establish a foundation for efficient, effective, and
accountable government. This body of legislation has given IGs new
responsibilities and greater opportunities to play an increasing role
in government oversight. Clearly, the IGs have made a significant
difference in federal performance and accountability during the past 25
years as indicated by their reports of billions of dollars in savings
to the public and thousands of recommendations and civil and criminal
referrals. They have earned a solid reputation for preventing and
detecting fraud, waste, and abuse; promoting improvements in government
operations; and providing helpful analyses on a host of governmentwide
initiatives. It is safe to say that the federal government is a lot
better off today because of the IGs' efforts.
Notwithstanding the accomplishments of the past, we now face continuing
challenges that demand even more from government performance and
accountability professionals. For example, our nation is fighting
international terrorism while much of the critical government
infrastructure that we are trying to protect dates back to the 1950s.
At the same time, this nation is facing a large and growing structural
deficit due primarily to known demographic trends and rising health
care costs. Recent corporate failures have shaken public confidence in
financial reporting and accountability in the private sector. In
response, Congress passed the Sarbanes-Oxley Act of 2002, which has
significant new requirements for publicly traded companies and their
auditors. Federal auditors can learn important lessons from the
accountability breakdowns in the private sector and the resulting
legislation passed by Congress.
We have achieved many important successes in working across
organizational lines with the IGs and state and local government
auditors. An important recent effort in building closer ties in the
government accountability community has been the domestic working
group, which I established in 2001 to bring together key staff from
GAO, the IGs, and state and local audit organizations to explore issues
of mutual interest and concern. The annual roundtable discussions and
interim activities of the domestic working group help to focus
attention on key issues and shared challenges facing the government
audit community and allow participants to compare notes on methods,
tools, benchmarking results, and best practices. In the early 1970s,
GAO organized the intergovernmental audit forums in cooperation with
federal, state, and local audit organizations. These forums provided
the means through which new intergovernmental audit relationships were
developed and improved the usefulness of auditing at each level of
government. Some IGs have become active participants with GAO at the
forums to provide a means for exchanging views, solving common
problems, and promoting the acceptance and implementation of government
auditing standards. Other IGs, however, have not been very involved in
these forums and, in my view, this needs to change.
In addition, we have had the active participation of many IGs and state
and local government auditors on the Comptroller General's Advisory
Council on Government Auditing Standards. The Council provides advice
and guidance on revisions to the Comptroller General's Government
Auditing Standards, commonly known as the "Yellow Book," which is used
by government auditors at the federal, state, and local levels, as well
as contracted independent public accountants (IPA), in the audits of
government programs and activities. It is time, however, for IGs and
other members of the federal accountability community to build on past
successes by putting additional focus and efforts on reaching across
institutional lines and forming new alliances to address the complex
challenges facing our government and our nation.
My statement today will focus on five main points:
* opportunities for increasing the effectiveness of the federal
performance and accountability community through an enhanced strategic
partnership between the IGs and GAO,
* coordination of the IG and GAO roles in agency financial statement
audits and the audit of the U.S. government's consolidated financial
statements,
* the IG role in federal financial management advisory committees,
* structural streamlining within the IG community to increase resource
efficiencies, and:
* matters for congressional consideration to enhance federal
performance and accountability.
The Need for an Enhanced Strategic Partnership between the IGs and GAO:
One of the challenges facing the federal performance and accountability
community today is the need to meet increasing demands and challenges
with our current resources. Key to this challenge is determining how
GAO and the IGs can best complement each other and coordinate their
efforts. The IG Act requires that the IGs coordinate with GAO to avoid
duplicating efforts. In practice, GAO has largely devoted its efforts
to program evaluations and policy analyses that look at programs and
functions across government, and with a longer-term perspective; at the
same time, the IGs have been on the front line of combating fraud,
waste, and abuse within each agency, and their work has generally
concentrated on issues of immediate concern with more of their
resources going into uncovering inappropriate activities and
expenditures through an emphasis on investigations. GAO and the IGs
are, in many respects, natural partners. We both report our findings,
conclusions, and recommendations to Congress. As I mentioned earlier,
we share common professional audit standards through the Yellow Book,
and I am proud to say that several current IGs and many of their staff
are GAO alumni, including the Honorable Gaston Gianni, the IG of the
Federal Deposit Insurance Corporation and Vice-Chair of the President's
Council on Integrity and Efficiency, and Barry Snyder, the IG of the
Federal Reserve Board and Vice-Chair of the Executive Council on
Integrity and Efficiency, who are on the panel following me today.
While GAO and the IGs make up the federal performance and
accountability community, the division of responsibilities between them
has not generally included, nor does the IG Act include, strategic
planning and allocation of work across government programs based on
risk and the relative competitive advantages of each organization.
Traditionally, GAO and IG coordination has been applied on an ad-hoc,
job-by-job or issue-by-issue basis. We now have both the need and the
opportunity to enhance the effectiveness of federal oversight through
more strategic and ongoing coordination of efforts between GAO and the
IGs in the following areas:
* addressing major management challenges and program risks,
* monitoring the top challenges the government faces, such as
implementation of the President's Management Agenda, and:
* conducting the audit of the government's consolidated financial
statements.
Later in this testimony, I am suggesting that Congress consider
establishing, through statute, assignment of responsibility to a select
group of designated federal accountability and performance
professionals to engage in a formal, periodic strategic planning and
ongoing engagement coordination process to focus federal audit efforts
across the federal government. This process would be in addition to,
and would not replace, the current coordination of information sharing
and technical cooperation being implemented by the domestic working
group, the audit forums, and the President's Council on Integrity and
Efficiency (PCIE) and the Executive Council on Integrity and Efficiency
(ECIE).[Footnote 1]
Major Management Challenges and Program Risks:
GAO's latest high-risk report,[Footnote 2] released in January 2003,
highlights areas across government that are at risk either due to their
high vulnerability to waste, fraud, abuse, and mismanagement, or as
major challenges associated with the economy, efficiency, and
effectiveness of federal programs, policies, processes, functions, or
activities. Many of the high-risk areas we identified involve essential
government services, such as Medicare and mail delivery, that directly
affect the well-being of the American people. Although some agencies
have made strong efforts to address the deficiencies cited in the high-
risk reports--and some of the programs included on GAO's initial high-
risk list in 1990 have improved enough to warrant removal--we continue
to identify many other areas of high risk. Greater strategic
coordination between GAO and the IGs on a plan for monitoring and
evaluating high-risk issues and keeping the pressure high to reduce the
risk of these programs is not only desirable, it is essential if we are
to reduce the risk of key government programs.
At the request of Congress, the IGs annually report issues similar to
those in GAO's high-risk report identifying the "Top Management
Challenges" facing their agencies. In fiscal year 2002, the IGs ranked
information technology, financial management, and human capital
management among the most important challenges confronting their
agencies governmentwide; other priorities included performance
management, public health and safety, and grants management. Each of
these areas closely corresponds to an area on GAO's high-risk list.
Although both GAO and the IGs have efforts in place to identify major
risks and challenges within government, there is no mechanism in place
to carry out an integrated, strategic planning process as a means
through which these issues will be monitored and evaluated in the
future through combined and coordinated GAO and IG oversight.
President's Management Agenda:
The administration has signaled its commitment to government
transformation with the President's Management Agenda (PMA), which
targets 14 of the most glaring problem areas in government for
immediate action. Five areas--strategic human capital, budget and
performance integration, improved financial performance, expanded
electronic government, and competitive sourcing--are governmentwide in
scope, while 9 are agency specific. Each area has the potential for
dramatic improvement and concrete results. The areas also reflect many
of the concerns raised by both GAO's high-risk report and the IGs' top
management challenge lists. So far, however, progress on PMA has been
uneven. To achieve consistent progress, sustained attention from
Congress, the administration, and the agencies is needed. I believe
that GAO and the IGs can make important contributions, using our
combined experience, to help monitor the implementation of this
important initiative.
Key policymakers increasingly need to think beyond quick fixes and
carefully consider what the proper role of the federal government
should be in the 21st century. Members of Congress and agency heads can
start by undertaking a top-to-bottom review of federal programs and
policies to determine which should remain priorities, which should be
overhauled, and which have outlived their usefulness or are just no
longer affordable given more pressing demands. Everything that forms
the government's base must be on the table, including tax, spending,
and regulatory policies. Policymakers will need to distinguish "wants,"
which are optional, from "needs," which can be urgent. They need to
make hard choices that take into account what the American people will
support and what the federal government can afford and sustain over
time. To make informed decisions, Congress and agency heads will
require hard facts and professional analyses that are objective, fact
based, timely, accurate, nonpartisan, fair, and balanced. GAO and the
IGs are important sources of such objective information and analyses.
With our respective areas of expertise in long-term challenges and
agency-specific issues, GAO and the IGs can provide useful insights and
constructive recommendations on programs that may warrant additional
resources, consolidation, revision, or even elimination. Closer
periodic strategic planning and ongoing engagement coordination between
GAO and the IGs would help to ensure continued effective oversight of
these key issues facing government.
Audit of the U.S. Government's Consolidated Financial Statements:
GAO and the IGs are already partners in one of the most far-reaching
financial management initiatives in government--the yearly audits of
the federal government's consolidated financial statements. Under the
Chief Financial Officers (CFO) Act of 1990 as expanded by the
Government Management Reform Act of 1994, the IGs at the 24
agencies[Footnote 3] named in the CFO Act are responsible for the
audits of their agencies' financial statements. In meeting these
responsibilities, most IGs have contracted with IPAs to conduct the
audits either entirely or in part. GAO is responsible for the U.S.
government's consolidated financial statements audit, which by
necessity is based largely on the results of the IGs' agency-level
audits.
Since 1997, GAO has been unable to give an opinion on the consolidated
financial statements, in large part because of continuing financial
management problems at several agencies that also have resulted in
disclaimers of opinion by some IGs on their agency financial
statements--most notably the Department of Defense (DOD). In recent
years, we have seen progress in the results of the audits of the CFO
Act agency financial statements with more and more IGs and their
contracted IPAs moving from issuing a disclaimer of opinion to issuing
an unqualified ("clean") opinion on their respective agency financial
statements. In fact, 21 of the 24 CFO Act agencies received an
unqualified opinion on their fiscal year 2002 financial statements, up
from only 6 agencies for fiscal year 1996. We anticipate that if
sufficient progress continues to be made, there is a chance that we may
be able to render a qualified opinion on the consolidated balance sheet
in a few years as a first step toward rendering an opinion on the full
set of financial statements.
Our reviews of the work done by other IGs and IPAs on agency-level
financial statement audits during the last 2 years identified
opportunities for improvement in sampling, audit documentation, audit
testing, analytical procedures, and auditing liabilities. The varying
quality of the audit work has been of concern to us because of our need
to use the work of the agency auditors to support expressing an opinion
on the U.S. government's consolidated financial statements--an opinion
for which, in the final analysis, GAO is solely responsible and
accountable.
Earlier involvement and access by GAO in the agency-level financial
statement audits would help to strengthen the IG and IPA audit process
and bolster our ability to use their work in rendering an opinion. At a
minimum, GAO needs to (1) be involved up front in the planning phase of
each agency-level audit, (2) have unrestricted access to IG and IPA
audit documentation and personnel throughout the performance of the
audit, (3) receive assurances that each agency-level audit is planned,
performed, and reported in conformity with the Financial Audit Manual
(FAM) developed jointly and adopted by GAO and the PCIE, and (4) be
notified in advance of any planned deviation from the FAM's
requirements that could affect GAO's ability to use the agency
auditors' work.
At one agency (Department of Energy), for the selected areas we
reviewed, we found that the audit work was performed in conformity with
the FAM and that we would have been able to use the work without having
to perform additional audit procedures. The IG has an oversight team
composed of senior-level staff who perform moderate-level quality
control reviews of the contracted IPA's work throughout the audit
process. The oversight team evaluates its IPA in areas such as audit
planning and execution, audit documentation, and staff qualifications.
These types of practices could be shared and expanded upon across the
IG community. As an initial step to make the IG and IPA audit process
stronger and enhance GAO's ability to use their work in rendering an
opinion, we are considering holding a forum with the IGs and the IPAs
to share information--based on GAO's review of the IG and IPA work--
regarding best practices and areas to focus on that need additional
audit work, and to establish a framework for enhanced coordination of
the financial statement audit work.
Changes to enhance the agency financial statement audit process are
especially important given the planned acceleration of reporting
deadlines for agency audits. Although some agencies accelerated their
reports for fiscal year 2002, starting with fiscal year 2004, the
Office of Management and Budget (OMB) has required that agencies issue
their audited financial statements no later than 45 days after the end
of the fiscal year, with the consolidated financial statements to be
issued 30 days later. In past years, when the reporting deadlines were
4 and 5 months after the end of the fiscal year, agencies made
extraordinary efforts in which they spent considerable resources on
extensive ad hoc procedures and made adjustments of billions of dollars
to produce financial statements months after the fiscal year had ended.
Given the accelerated reporting dates, such extraordinary approaches
will no longer be an option. Over the next few years, as the government
addresses the impediments to receiving an opinion on its consolidated
financial statements, and we move closer to being able to render an
opinion on the consolidated financial statements, GAO will need to
invest more resources in assuring that the work of the IGs and IPAs on
the agency-level financial statement audits can be used by GAO to
support the audit of the consolidated financial statements. This
resource investment is necessary if GAO is to be able to render an
opinion on the consolidated financial statements.
Another matter of concern regarding the audit of the U.S. government's
consolidated financial statements involves the approaches used by the
IGs and IPAs for reporting on internal control at the agency level. Our
position is that an opinion on internal control is important in the
government environment and that the public should be able to expect
audit assurance on the adequacy of internal control over financial
reporting. We believe that auditor opinions on internal control are a
critical component of monitoring the effectiveness of an entity's risk
management and accountability systems. We also believe that auditor
opinions on internal control are appropriate and necessary for major
public entities such as the CFO Act agencies currently included in the
U.S. government's consolidated financial statements.
As does GAO in connection with our own audits, several agency auditors
are voluntarily providing opinions on the agencies' internal control;
but most do not. When an auditor renders an opinion on internal
control, the auditor is providing reasonable assurance that the entity
has maintained effective internal control over financial reporting
(including safeguarding of assets) and compliance such that material
misstatements, losses, or noncompliance that are material to the
financial statements would be detected in a timely fashion. For fiscal
year 2002, however, only 3 of the 24 CFO Act agencies received opinions
on internal control from their auditors.[Footnote 4] The remaining 21
reported on internal control, but provided no opinion on the
effectiveness of the agency's internal control. As we move closer to
being able to issue an opinion on the consolidated financial
statements, a disparity in reporting on internal control would hinder
our ability to provide an opinion on internal control for the
consolidated audit. Current agency-level reporting on internal control
would fall short of what the public should be able to expect from an
audit and, moreover, what is now legally required from the auditors of
publicly traded companies.
Congress has prescribed auditor opinions on internal controls for
publicly traded corporations under the Sarbanes-Oxley Act of
2002.[Footnote 5] A final rule issued by the Securities and Exchange
Commission in June 2003 and effective August 2003 provides guidance for
implementation of section 404 of the act, which contains requirements
for management and auditor reporting on internal controls. The final
rule requires companies to obtain a report in which a registered public
accounting firm expresses an opinion, or states that an opinion cannot
be expressed, concerning management's assessment of the effectiveness
of internal controls over financial reporting.
As you know, Mr. Chairman, we provided testimony before this
Subcommittee several weeks ago on the challenges of establishing sound
financial management within DHS.[Footnote 6] In that testimony, we
supported provisions of H.R. 2886 that would require DHS to obtain an
audit opinion on its internal controls. During the testimony, we also
supported provisions of H.R. 2886 that would require the Chief
Financial Officers Council and the PCIE to jointly study the potential
costs and benefits of requiring CFO Act agencies to obtain audit
opinions of their internal controls over financial reporting. In
addition, the current version of H.R. 2886 would require GAO to perform
an analysis of the information provided in the report and report the
findings to the House Committee on Government Reform and the Senate
Committee on Governmental Affairs. We believe that the study and
related analysis are important first steps in resolving the issues
associated with the current reporting on internal control.
Ultimately, we are hopeful that federal performance and accountability
professionals will not settle for anything less than opinion-level work
on internal control at the CFO Act agency level and on the
governmentwide audit. Increased planning and coordination will be
needed among GAO, IGs, and IPAs to determine the appropriate timing for
requiring an opinion on controls at the agency level. The specific
timing will depend on the current state of the agency's control efforts
so that an audit opinion on internal control would add value and
mitigate risk in a cost beneficial manner.
A practical issue that should also be dealt with is the adequacy of
resources to provide for the agency financial statement audits. Over
the years, a number of IGs have told us that the cost of agency
financial audits has taken resources away from their traditional work.
In the private sector, the cost of an annual financial audit is a
routine business expense borne by the entity being audited, and the
cost of the audit represents a very small percentage of total
expenditures for the audited entity. We support enacting legislation
that would make agencies responsible for paying the cost of their
financial statement audits. We also believe that an arrangement in
which the agencies pay for their own audits provides them with positive
incentives for taking actions--such as streamlining systems and
cleaning up their financial records prior to the audit--in order to
reduce the costs of the audit and avoid the "heroic" audit efforts that
we have seen in the past at some agencies.
Under the arrangement in which agencies pay the cost of their own
audits, we believe the IG should continue in the current role of
selecting and overseeing audits in those cases in which the IG does not
perform the audit but hires an IPA to conduct the audit. This would
leverage the IGs' expertise to help assure the quality of the audits.
We also advocate an approach whereby the IGs would be required to
consult with the Comptroller General during the IPA selection process
to obtain input from the results of GAO's reviews of the IPAs' previous
work and the potential impact on the consolidated audit.
The IG Role in Federal Financial Management Advisory Committees:
We envision an important role for the IGs in audit or financial
management advisory committees established at the federal agency level
for the purpose of overseeing an agency's financial management, audits,
and performance.
In the government arena, some state and local governments and federal
government corporations, as well as several federal agencies, have
adopted an audit committee, or "financial management advisory
committee," approach to governance. In the federal government, such
audit committees or advisory committees are intended to protect the
public interest by promoting and facilitating effective accountability
and financial management by providing independent, objective, and
experienced advice and counsel, including oversight of audit and
internal control issues. Responsibilities of the committees would
likely include communicating with the auditors about the audit and any
related issues. The work of the IGs logically provides much of the
basis for financial management advisory committees in overseeing
agencies' financial management, audits, and internal control. The work
of the IGs would also be critical for the financial management advisory
committees in their general governance roles. Specific roles and
responsibilities of the committees will most likely vary by agency. A
recently published guide, Financial Management Advisory Committees for
Federal Agencies,[Footnote 7] provides a helpful road map of suggested
practices for federal agency financial management advisory committees.
The concept of financial management advisory committees is very similar
to the audit committee structure being used in the private sector. To
help facilitate the audit process and promote disclosure and
transparency, the governing boards of publicly traded companies use
audit committees. Audit committees generally oversee the independent
audit of the organization's financial statements and address financial
management, reporting, and internal control issues. The Sarbanes-Oxley
Act has requirements for the audit committees of publicly traded
companies and their auditors regarding communications and resolution of
significant audit matters.
We strongly support the implementation of financial management advisory
committees for selected federal agencies, based on risk and value
added. Some agencies,[Footnote 8] including GAO, which has had such a
committee in place since 1995, have already implemented such an
approach, even though the committees have not been mandated or
established by statute. As these committees are implemented or required
in government, we would advocate amending the IG Act to emphasize the
IGs' unique role in reporting the results of their work to the advisory
committees while maintaining their independence and dual reporting
authority to Congress.
Structural Streamlining to Increase Resource Efficiencies:
One of the issues facing the IG community as well as others in the
performance and accountability community is how to use limited
resources to the best effect. In fiscal year 2002, the 57 IG offices
operated with total fiscal year budgets of about $1.6 billion and about
11,000 staff. (See app. II for more detail on IG budgets and staffs.)
Most IGs for cabinet departments and major agencies are appointed by
the President and confirmed by the Senate; however, IGs for some
agencies are appointed by the agency head, and these IGs generally have
smaller budgets and fewer staff than IGs appointed by the President.
While agency-appointed IGs make up about half of all IG offices, the
total of their fiscal year 2002 budgets was $162.2 million, a little
more than 10 percent of all IG budgets. Of these IGs, the offices at
the U.S. Postal Service (USPS), Amtrak, National Science Foundation
(NSF), and Federal Reserve Board (FRB) are exceptions and have budgets
that are comparable in size to those of presidentially appointed IGs.
The remaining 24 agency-appointed IGs have a total of 191 staff and
have budgets that make up about 2 percent of all IG budgets.
Importantly, 16 of the 28 agency-appointed IGs have fewer than 10
staff.
Potential IG Office Consolidations:
Last year we reported the views of the IGs, as well as our own, on the
possible benefits of consolidating the smallest IG offices with the
offices of IGs appointed by the President.[Footnote 9] We also
considered the conversion of agency-appointed IGs to presidential
appointment where their budgets were comparable to the presidentially
appointed IG offices. The August 2002 report contains several matters
for congressional consideration to address issues of IG conversion and
consolidation. We are reaffirming these views, which are included at
the end of my statement.
We believe that if properly structured and implemented, the conversion
or consolidation of IG offices could increase the overall independence,
efficiency, and effectiveness of the IG community. Consolidation could
provide for a more effective and efficient allocation of IG resources
across government to address high-risk and priority areas. It would not
only achieve potential economies of scale but also provide a critical
mass of skills, particularly given advancing technology and the ever-
increasing need for technical staff with specialized skills. This point
is especially appropriate to the 12 IG offices with five or fewer
staff. IG staff now in smaller offices would, in a large, consolidated
IG office, have immediate access to a broader range of resources to use
in dealing with issues requiring technical expertise or areas of
critical need.
Consolidation would also strengthen the ability of IGs to improve the
allocation of human capital and scarce financial resources within their
offices and to attract and retain a workforce with talents,
multidisciplinary knowledge, and up-to-date skills to ensure that each
IG office is equipped to achieve its mission. Consolidation would also
increase the ability of larger IG offices to provide methods and
systems of quality control in the smaller agencies.
We also recognize that there are potential risks resulting from
consolidation that would have to be mitigated through proactive and
targeted actions in order for the benefits of consolidation to be
realized without adversely affecting the audit coverage of small
agencies. For example, the potential lack of day-to-day contact between
the IG and officials at smaller agencies as a result of consolidation
could be mitigated by posting IG staff at the agency to keep both the
IG and the agency head informed and to coordinate necessary meetings.
In preparation for consolidation, staff in the smaller IG offices could
be consulted in planning oversight procedures and audit coverage for
their agencies. There may be fewer audits or even less coverage of
those issues currently audited by the IGs at smaller agencies, but
coverage by a consolidated IG could address areas of higher risk,
value, and priority, resulting in potentially more efficient and
effective use of IG resources across the government.
Results of the survey conducted for our August 2002 report indicate a
clear delineation between the responses of the presidentially appointed
IGs and the responses of the agency-appointed IGs. The presidentially
appointed IGs generally indicated that agency-appointed IG
independence, quality, and use of resources could be strengthened by
conversion and consolidation. The agency-appointed IGs indicated that
there would either be no impact or that these elements could be
weakened. The difference in views is not surprising given the
difference in the potential impact of consolidation on the interests of
the two groups of IGs. We believe that this difference in perspective,
more than any other factor, helps to explain the significant divergence
in the responses to the survey.
There are already some examples where consolidation of IG offices and
oversight is working. The Department of State IG provides, through
statute, oversight of the Broadcasting Board of Governors and the
International Broadcasting Bureau. The IG at the Agency for
International Development is authorized by specific statutes to provide
oversight of the Overseas Private Investment Corporation, the Inter-
American Foundation, and the African Development Foundation.
In terms of budget size, the agency-appointed IGs at USPS, Amtrak, NSF,
and FRB are comparable to the offices of IGs appointed by the
President. Moreover, in the case of the Postal IG, the office is the
fourth largest of all the IGs. (See app. II.) On that basis, these IGs
could be considered for conversion to appointment by the President with
Senate confirmation. While the Amtrak IG could be converted because of
comparable budget size, oversight of Amtrak is closely related to the
work of the Department of Transportation IG. Moreover, the
Transportation IG currently provides some oversight of Amtrak programs.
Therefore, the consolidation of the Amtrak IG with the Transportation
IG could be considered, rather than conversion.
Consideration has been given in the Fiscal Year 2004 Budget of the U.S.
Government to the consolidation of the two IG offices at the Department
of the Treasury, unique in the federal government. The original
statutory IG for the Department of the Treasury was established by the
IG Act amendments of 1988. The Treasury IG for Tax Administration was
established in 1998 as part of an Internal Revenue Service (IRS)
reorganization because the former IRS Inspection Service was not
perceived as being sufficiently independent from management.
Consequently, the IRS Office of the Chief Inspector, along with most of
the Inspection Service staff, was transferred to the new IG office to
ensure independent reviews.
The separate office of Treasury IG for Tax Administration was created
because IRS officials were concerned that if the resources of the IRS
Inspection Service were transferred to the original Treasury IG office,
they would be used to investigate or audit other Treasury bureaus to
the detriment of critical IRS oversight. With the passage of the
Homeland Security Act of 2002, and the transfer of Treasury's United
States Customs Service and United States Secret Service to the new
Department of Homeland Security, the original concerns about
competition for resources within the department should no longer be as
compelling.
IG Councils:
The PCIE is an interagency council comprising principally the
presidentially appointed and Senate-confirmed IGs. It was established
by Executive Order No.12301 in 1981 to coordinate and enhance the work
of the IGs. In 1992, Executive Order No.12805 created the ECIE, which
comprises primarily statutory IGs appointed by the heads of designated
federal entities as defined in the IG Act. The Deputy Director for
Management in OMB serves as the chair of both organizations. These IG
councils have been effective in coordinating the activities of the IGs
in their efforts to prevent and detect fraud, waste, and abuse
throughout the federal government and in reporting these results to
both the President and Congress.
The IG councils have provided a valuable forum for auditor
coordination. However, we believe that the current environment demands
a more formal, action-oriented, and strategic approach for coordination
among federal audit organizations and that the IG councils could be
strengthened in a number of ways. First, by providing a statutory basis
for their roles and responsibilities, the permanence of the councils
could be established and their ability to take on more sensitive issues
strengthened. In addition, the strategic focus of the councils could be
clearly established. As such, the councils would also be key in the
overall strategic planning process for federal audit oversight that I
described earlier in this statement.
Matters for Congressional Consideration:
As I stated at the beginning of my testimony, IGs have made a
significant difference in federal performance and accountability during
the last quarter century. The 25th anniversary of the landmark
legislation establishing the IGs is an opportune time to reflect on the
IGs' success while also considering ways to enhance coordination and
utilization of resources across the federal performance and
accountability community.
In order to enhance the effectiveness and impact of the federal
accountability community, Congress may want to consider establishing,
through statute, assignment of responsibility to a selected group of
designated federal accountability officials, such as representatives
from GAO, the PCIE, and the ECIE, to develop and implement a periodic,
formal strategic planning and ongoing engagement coordination process
for focusing GAO and IG work to provide oversight to high-risk areas
and significant management challenges across government, while
leveraging each other's work and minimizing duplication.
In order to resolve resource issues and provide positive incentives to
agencies to take prudent actions to reduce overall audit costs,
Congress may want to consider enacting legislation that makes agencies
responsible for paying the cost of their financial statement audits.
In order to achieve potential efficiencies and increased effectiveness
across the federal IG community, Congress may also want to consider
whether to proceed with a restructuring of the IG community, which
could include the following:
* amending the IG Act to elevate the IGs at USPS, NSF, and FRB to
presidential status,
* amending the IG Act to consolidate agency-appointed IGs with
presidentially appointed IGs based on related agency missions or where
potential benefits to IG effectiveness can be shown, and:
* establishing an IG council by statute that includes stated roles and
responsibilities and designated funding sources.
:
Mr. Chairman, that concludes my prepared statement. I would be happy to
respond to any questions you or Members of the Subcommittee might have.
:
[End of section]
Appendix I: The Inspector General Act:
The Inspector General Act of 1978 was enacted following a series of
events that emphasized the need for more-independent and coordinated
audits and investigations in federal departments and agencies. First,
in 1974, the Secretary of Agriculture abolished the department's
administratively established IG office, demonstrating the impermanent
nature of a nonstatutory IG. Later, in 1974 and 1975, a study by the
Intergovernmental Relations and Human Resources Subcommittee of the
House Government Operations Committee disclosed inadequacies in the
internal audit and investigative procedures in the Department of
Health, Education, and Welfare, now the Department of Health and Human
Services. The need to deal more effectively with the danger of loss
from fraud and abuse in the department's programs led to the
establishment of the first statutory IG in 1976. The Congress also
established an IG in the Department of Energy when that department was
created in 1977.
In 1977, the House Intergovernmental Relations and Human Resources
Subcommittee began a comprehensive inquiry to determine whether other
federal departments and agencies had a similar need for statutory IGs.
The Subcommittee's study revealed serious deficiencies in a number of
department and agency audit and investigative efforts, including the
following:
* No central leadership of auditors and investigators existed.
* Auditors and investigators exhibited a lack of independence by
reporting to officials who had responsibility for programs that were
being audited.
* No procedures had been established to ensure that the Congress was
informed of serious problems.
* No program existed to look for possible fraud or abuse.
As an initial effort to correct these deficiencies, the IG Act of 1978
established 12 additional statutory OIGs to be patterned after the one
at the Department of Health, Education, and Welfare. The act
consolidated the audit and investigative responsibilities of each
department and agency under the direction of one senior official--the
Inspector General--who reports to the head of the agency or, if
delegated, the official next in rank below the agency head. The
President appoints the IGs, by and with the consent of the Senate,
without regard to political affiliation and solely on the basis of
integrity and demonstrated ability in accounting, financial analysis,
law, management analysis, public administration, or investigations.
The IGs are responsible for (1) conducting and supervising audits and
investigations, (2) providing leadership and coordination and
recommending policies to promote economy, efficiency, and
effectiveness, and (3) detecting fraud and abuse in their agencies'
programs and operations. In addition, the IG Act requires IGs to
prepare semiannual reports which summarize the activities of the IG
during the preceding 6-month period. The reports are forwarded to the
department or agency head, who is responsible for transmitting them to
the appropriate congressional committees.
The act states that neither the agency head nor the official next in
rank shall prevent or prohibit the IG from initiating, carrying out, or
completing any audit or investigation, or from issuing any subpoena
during the course of any audit or investigation. This enhances the
independence of auditors and investigators by ensuring that they are
free to carry out their work unobstructed by agency officials. The act
further enhances independence by requiring IGs to comply with the
Comptroller General's Government Auditing Standards. One of these
standards requires auditors and audit organizations to be personally
and organizationally independent and to maintain the appearance of
independence so that opinions, conclusions, judgments, and
recommendations will be impartial and will be viewed as such by
knowledgeable third parties.
Between the enactment of the IG Act in 1978 and 1988, the Congress
passed legislation to establish statutory IGs, who are appointed by the
President with Senate confirmation, in 8 additional departments and
agencies. In 1988, the Congress enacted the Inspector General Act
Amendments of 1988 and the Government Printing Office (GPO) Inspector
General Act of 1988 (Titles I and II, Public Law 100-504) to establish
additional presidentially appointed IGs in 5 departments and agencies
and 34 IGs appointed by their agency heads (33 in designated federal
entities and 1 in GPO) in order to strengthen the capability of the
existing internal audit offices and improve audit oversight. Both GAO
and the President's Council on Integrity and Efficiency (PCIE) had
previously reported that the existing internal audit offices lacked
independence, adequate coverage of important programs, and permanent
investigative staff.
[End of section]
Appendix II: Inspector General Budgets and Staffing:
Table 1: Inspectors General Appointed by the President, Fiscal Year
2002 Budgets and Full-Time Equivalents (FTEs):
Federal departments/agencies: 1; Federal departments/agencies:
Department of Health and Human Services[A]; Budgets: $227,000,000;
FTEs: 1,569.
Federal departments/agencies: 2; Federal departments/agencies:
Department of Defense; Budgets: 151,000,000; FTEs: 1,215.
Federal departments/agencies: 3; Federal departments/agencies:
Treasury IG for Tax Administration; Budgets: 130,000,000; FTEs: 943.
Federal departments/agencies: 4; Federal departments/agencies:
Department of Housing and Urban Development; Budgets: 95,000,000; FTEs:
648.
Federal departments/agencies: 5; Federal departments/agencies: Social
Security Administration; Budgets: 75,000,000; FTEs: 564.
Federal departments/agencies: 6; Federal departments/agencies:
Department of Agriculture; Budgets: 75,000,000; FTEs: 642.
Federal departments/agencies: 7; Federal departments/agencies:
Department of Labor; Budgets: 67,000,000; FTEs: 426.
Federal departments/agencies: 8; Federal departments/agencies:
Department of Justice; Budgets: 65,000,000; FTEs: 329.
Federal departments/agencies: 9; Federal departments/agencies:
Department of Veterans Affairs; Budgets: 57,000,000; FTEs: 393.
Federal departments/agencies: 10; Federal departments/agencies:
Department of Transportation; Budgets: 50,000,000; FTEs: 454.
Federal departments/agencies: 11; Federal departments/agencies:
Department of Homeland Security; Budgets: 47,000,000; FTEs: 336.
Federal departments/agencies: 12; Federal departments/agencies:
Environmental Protection Agency; Budgets: 46,000,000; FTEs: 444.
Federal departments/agencies: 13; Federal departments/agencies:
Department of Education; Budgets: 39,000,000; FTEs: 276.
Federal departments/agencies: 14; Federal departments/agencies:
Department of the Interior; Budgets: 37,000,000; FTEs: 251.
Federal departments/agencies: 15; Federal departments/agencies:
General Services Administration; Budgets: 36,000,000; FTEs: 273.
Federal departments/agencies: 16; Federal departments/agencies:
Department of Energy; Budgets: 32,000,000; FTEs: 250.
Federal departments/agencies: 17; Federal departments/agencies: Agency
for International Development; Budgets: 32,000,000; FTEs: 166.
Federal departments/agencies: 18; Federal departments/agencies:
Federal Deposit Insurance Corporation; Budgets: 32,000,000; FTEs: 201.
Federal departments/agencies: 19; Federal departments/agencies:
Department of State; Budgets: 29,000,000; FTEs: 234.
Federal departments/agencies: 20; Federal departments/agencies:
National Aeronautics and Space Administration; Budgets: 24,000,000;
FTEs: 200.
Federal departments/agencies: 21; Federal departments/agencies:
Department of Commerce; Budgets: 21,000,000; FTEs: 136.
Federal departments/agencies: 22; Federal departments/agencies: Small
Business Administration; Budgets: 12,000,000; FTEs: 108.
Federal departments/agencies: 23; Federal departments/agencies:
Department of the Treasury; Budgets: 12,000,000; FTEs: 87.
Federal departments/agencies: 24; Federal departments/agencies: Office
of Personnel Management; Budgets: 11,000,000; FTEs: 89.
Federal departments/agencies: 25; Federal departments/agencies:
Tennessee Valley Authority; Budgets: 7,000,000; FTEs: 87.
Federal departments/agencies: 26; Federal departments/agencies:
Nuclear Regulatory Commission; Budgets: 6,000,000; FTEs: 41.
Federal departments/agencies: 27; Federal departments/agencies:
Railroad Retirement Board; Budgets: 6,000,000; FTEs: 51.
Federal departments/agencies: 28; Federal departments/agencies:
Corporation for National and Community Service; Budgets: 5,000,000;
FTEs: 16.
Federal departments/agencies: 29; Federal departments/agencies:
Central Intelligence Agency[B]; Budgets: na; FTEs: na.
Federal departments/agencies: Total; Budgets: $1,426,000,000; FTEs:
10,429.
Source: Budget authority and FTEs from Fiscal Year 2004 Budget of the
U.S. Government.
[A] Includes budget authority to combat health care fraud.
[B] Budget and FTE information not available.
[End of table]
Table 2: Inspectors General Appointed by Agency Heads, Fiscal Year 2002
Budgets and Full-Time Equivalents (FTEs):
Federal agencies: 1; Federal agencies: U.S. Postal Service; Budgets:
$117,324,000; FTEs: 713.
Federal agencies: 2; Federal agencies: Amtrak; Budgets: 8,706,539;
FTEs: 64.
Federal agencies: 3; Federal agencies: National Science Foundation;
Budgets: 6,760,000; FTEs: 50.
Federal agencies: 4; Federal agencies: Federal Reserve Board; Budgets:
3,878,000; FTEs: 29.
Federal agencies: 5; Federal agencies: Government Printing Office;
Budgets: 3,400,000; FTEs: 24.
Federal agencies: 6; Federal agencies: Legal Services Corporation;
Budgets: 2,500,000; FTEs: 15.
Federal agencies: 7; Federal agencies: Peace Corps; Budgets: 2,006,000;
FTEs: 16.
Federal agencies: 8; Federal agencies: Smithsonian Institution;
Budgets: 1,800,000; FTEs: 17.
Federal agencies: 9; Federal agencies: Federal Communications
Commission; Budgets: 1,569,000; FTEs: 10.
Federal agencies: 10; Federal agencies: National Archives and Records
Administration; Budgets: 1,375,000; FTEs: 13.
Federal agencies: 11; Federal agencies: Securities and Exchange
Commission; Budgets: 1,372,559; FTEs: 8.
Federal agencies: 12; Federal agencies: National Credit Union
Administration; Budgets: 1,338,135; FTEs: 7.
Federal agencies: 13; Federal agencies: Pension Benefit Guaranty
Corporation; Budgets: 1,300,000; FTEs: 11.
Federal agencies: 14; Federal agencies: Equal Employment Opportunity
Commission; Budgets: 1,106,119; FTEs: 10.
Federal agencies: 15; Federal agencies: Federal Housing Finance Board;
Budgets: 858,237; FTEs: 3.
Federal agencies: 16; Federal agencies: Farm Credit Administration;
Budgets: 829,621; FTEs: 5.
Federal agencies: 17; Federal agencies: Commodity Futures Trading
Commission; Budgets: 735,800; FTEs: 4.
Federal agencies: 18; Federal agencies: Corporation for Public
Broadcasting; Budgets: 735,000; FTEs: 9.
Federal agencies: 19; Federal agencies: National Labor Relations Board;
Budgets: 711,900; FTEs: 6.
Federal agencies: 20; Federal agencies: Federal Trade Commission;
Budgets: 710,000; FTEs: 5.
Federal agencies: 21; Federal agencies: National Endowment for the
Humanities; Budgets: 497,000; FTEs: 5.
Federal agencies: 22; Federal agencies: Appalachian Regional
Commission; Budgets: 466,000; FTEs: 3.
Federal agencies: 23; Federal agencies: Federal Maritime Commission;
Budgets: 441,034; FTEs: 3.
Federal agencies: 24; Federal agencies: Consumer Product Safety
Commission; Budgets: 407,000; FTEs: 3.
Federal agencies: 25; Federal agencies: Federal Election Commission;
Budgets: 392,600; FTEs: 4.
Federal agencies: 26; Federal agencies: National Endowment for the
Arts; Budgets: 392,577; FTEs: 4.
Federal agencies: 27; Federal agencies: International Trade Commission;
Budgets: 389,500; FTEs: 4.
Federal agencies: 28; Federal agencies: Federal Labor Relations
Authority; Budgets: 222,500; FTEs: 2.
Federal agencies: Total; Budgets: $162,224,121; FTEs: 1,047.
Source: As reported by the ECIE.
[End of table]
Table 3: Inspectors General Appointed by the President with Four
Comparable Agency-Appointed IGs Fiscal Year 2002 Budgets:
Department/agency IG: 1; Department/agency IG: Department of Health and
Human Services[A]; Fiscal year 2002 budgets: $227,000,000.
Department/agency IG: 2; Department/agency IG: Department of Defense;
Fiscal year 2002 budgets: 151,000,000.
Department/agency IG: 3; Department/agency IG: Treasury's IG for Tax
Administration; Fiscal year 2002 budgets: 130,000,000.
Department/agency IG: 4; Department/agency IG: U.S. Postal Service[B];
Fiscal year 2002 budgets: 117,324,000.
Department/agency IG: 5; Department/agency IG: Department of Housing
and Urban Development; Fiscal year 2002 budgets: 95,000,000.
Department/agency IG: 6; Department/agency IG: Department of
Agriculture; Fiscal year 2002 budgets: 75,000,000.
Department/agency IG: 7; Department/agency IG: Social Security
Administration; Fiscal year 2002 budgets: 75,000,000.
Department/agency IG: 8; Department/agency IG: Department of Labor;
Fiscal year 2002 budgets: 67,000,000.
Department/agency IG: 9; Department/agency IG: Department of Justice;
Fiscal year 2002 budgets: 65,000,000.
Department/agency IG: 10; Department/agency IG: Department of Veterans
Affairs; Fiscal year 2002 budgets: 57,000,000.
Department/agency IG: 11; Department/agency IG: Department of
Transportation; Fiscal year 2002 budgets: 50,000,000.
Department/agency IG: 12; Department/agency IG: Department of Homeland
Security; Fiscal year 2002 budgets: 47,000,000.
Department/agency IG: 13; Department/agency IG: Environmental
Protection Agency; Fiscal year 2002 budgets: 46,000,000.
Department/agency IG: 14; Department/agency IG: Department of
Education; Fiscal year 2002 budgets: 39,000,000.
Department/agency IG: 15; Department/agency IG: Department of the
Interior; Fiscal year 2002 budgets: 37,000,000.
Department/agency IG: 16; Department/agency IG: General Services
Administration; Fiscal year 2002 budgets: 36,000,000.
Department/agency IG: 17; Department/agency IG: Department of Energy;
Fiscal year 2002 budgets: 32,000,000.
Department/agency IG: 18; Department/agency IG: Agency for
International Development; Fiscal year 2002 budgets: 32,000,000.
Department/agency IG: 19; Department/agency IG: Federal Deposit
Insurance Corporation; Fiscal year 2002 budgets: 32,000,000.
Department/agency IG: 20; Department/agency IG: Department of State;
Fiscal year 2002 budgets: 29,000,000.
Department/agency IG: 21; Department/agency IG: National Aeronautics
and Space Administration; Fiscal year 2002 budgets: 24,000,000.
Department/agency IG: 22; Department/agency IG: Department of Commerce;
Fiscal year 2002 budgets: 21,000,000.
Department/agency IG: 23; Department/agency IG: Department of the
Treasury; Fiscal year 2002 budgets: 12,000,000.
Department/agency IG: 24; Department/agency IG: Small Business
Administration; Fiscal year 2002 budgets: 12,000,000.
Department/agency IG: 25; Department/agency IG: Office of Personnel
Management; Fiscal year 2002 budgets: 11,000,000.
Department/agency IG: 26; Department/agency IG: Amtrak[B]; Fiscal year
2002 budgets: 8,706,539.
Department/agency IG: 27; Department/agency IG: Tennessee Valley
Authority; Fiscal year 2002 budgets: 7,000,000.
Department/agency IG: 28; Department/agency IG: National Science
Foundation[B]; Fiscal year 2002 budgets: 6,760,000.
Department/agency IG: 29; Department/agency IG: Nuclear Regulatory
Commission; Fiscal year 2002 budgets: 6,000,000.
Department/agency IG: 30; Department/agency IG: Railroad Retirement
Board; Fiscal year 2002 budgets: 6,000,000.
Department/agency IG: 31; Department/agency IG: Corporation for
National and Community Service; Fiscal year 2002 budgets: 5,000,000.
Department/agency IG: 32; Department/agency IG: Federal Reserve Board
[B]; Fiscal year 2002 budgets: 3,878,000.
Department/agency IG: 33; Department/agency IG: Central Intelligence
Agency [C]; Fiscal year 2002 budgets: na.
Department/agency IG: Total; Fiscal year 2002 budgets: $1,562,668,539.
Source: Budget authority from Fiscal Year 2004 Budget of the U.S.
Government.
Note: The four comparable agency appointed IGs are in bold.
[A] Includes budget authority to combat health care fraud.
[B] Information supplied by the ECIE.
[C] Budget information not available.
[End of table]
(194355):
FOOTNOTES
[1] These councils were established by Executive Order and are
described later in this testimony.
[2] U.S. General Accounting Office, High Risk Series: An Update, GAO-
03-119 (Washington, D.C.: January 2003).
[3] The Federal Emergency Management Agency (FEMA), one of 24 agencies
named in the CFO Act, was transferred to the new Department of Homeland
Security (DHS), effective March 1, 2003. With the transfer, FEMA will
no longer be required to prepare audited stand-alone financial
statements under the CFO Act. Consideration is now being given to
making DHS a CFO Act agency, which would bring the number of CFO Act
agencies back up to 24.
[4] The three agencies receiving opinions on internal control for
fiscal year 2002 are the Social Security Administration, General
Services Administration, and Nuclear Regulatory Commission.
[5] Pub. L. No. 107-204, 116 Stat. 745 (2002).
[6] U.S. General Accounting Office, Department of Homeland Security:
Challenges and Steps in Establishing Sound Financial Management, GAO-
03-1134T (Washington, D.C.: Sept. 10, 2003).
[7] Financial Management Advisory Committees for Federal Agencies:
Suggested Practices, March 2003, prepared by KPMG, LLP.
[8] Agencies that currently have audit committees or financial
management advisory committees include the National Science Foundation,
Federal Deposit Insurance Corporation, and the Architect of the
Capitol.
[9] U.S. General Accounting Office, Inspectors General: Office
Consolidation and Related Issues, GAO-02-575 (Washington, D.C.: August
2002).