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United States General Accounting Office: 
GAO: 

Report to the Chairman, Committee on Government Reform, House of
Representatives: 

August 2002: 

Inspectors General: 

Office Consolidation and Related Issues: 

GAO-02-575: 

Contents: 

Letter: 

Results in Brief: 

Background: 

Objectives, Scope, and Methodology: 

Independence: 

Consolidation and IG Quality of Work: 

Consolidation and the Potential Impact on IG Resources: 

Strengthening the PCIE and ECIE: 

Agency Budgets are Not the Sole Criteria for Establishing IGs: 

Survey Conclusions and GAO Views Regarding Conversion and 
Consolidation: 

Approaches to IG Conversion and Consolidation: 

Matters for Congressional Consideration: 

Agency Comments and Our Response: 

Appendixes: 

Appendix I: Summary of IG Survey Responses Regarding Conversion and
Consolidation: 

Appendix II: Potential IG Consolidations and Related Agency Missions: 

Appendix III: Designated Federal Entity Inspectors General: Fiscal Year
2000 Budgets and Full-time Equivalents (FTEs): 

Appendix IV: Inspectors General Appointed by the President: Fiscal Year
2000 Budgets and Full-time Equivalents (FTEs): 

Appendix V: Presidential IGs with Five Comparable DFE IGs: Fiscal Year
2000 Budgets: 

Appendix VI: Designated Federal Entities: Fiscal Year 2000 Budgets with
$134 Million Threshold: 

Appendix VII: Comments from the President’s Council on Integrity and
Efficiency: 

Appendix VIII: Comments from the Executive Council on Integrity and
Efficiency: 

Tables: 

Table 1: Twenty-eight Key Elements Related to IG Independence, Quality 
of Work, and Use of Resources: 

Figures: 

Figure 1: Distribution of Fiscal Year 2000 IG Budgets and Offices: 

Figure 2: Distribution of IGs with Comparable Fiscal Year 2000 Budgets 
and Offices: 

Figure 3: Potential Effect of Conversion on IG Independence: 

Figure 4: Potential Effect of Consolidation on Actual IG Independence: 

Figure 5: Potential Effect of Consolidation on the Appearance of IG 
Independence: 

Figure 6: Potential Effect of Consolidation on the Ability of IGs to 
Issue Hard-hitting Reports: 

Figure 7: Potential Effect of Consolidation on the IGs’ Ability to Use 
Audit Resources to Review Issues That Cross All DFE Agencies: 

Figure 8: Potential Effect of Consolidation on the Attention That DFE 
Agencies and the Congress Give to IG Recommendations: 

Figure 9: Potential Effect of Consolidation on the Ability of DFE IGs 
to Address Issues of Higher Risk and Priority: 

Figure 10: Potential Effect of Consolidation on the Ability to 
Uniformly Measure DFE Agency Performance: 

Figure 11: Potential Effect of Consolidation on Day-to-Day Contact with 
Senior DFE Officials: 

Figure 12: Potential Effect of Consolidation on Communication between 
the IGs and DFE Agency Heads: 

Figure 13: Potential Effect of Consolidation on the Ability of DFE 
Agency Head to Get the IG’s Attention: 

Figure 14: Potential Effect of Consolidation on IG Presence as a 
Preventative Measure for the DFE Agencies: 

Figure 15: Potential Effect of Consolidation on IG Knowledge of DFE 
Agency Missions, Operations, and Resource Limitations: 

Figure 16: Potential Effect of Consolidation on IG Knowledge of 
Priorities and Issues within Each of the DFE Agencies: 

Figure 17: Potential Effect of Consolidation on Oversight Planning: 

Figure 18: Potential Effect of Consolidation on the Timeliness of IG
Reports: 

Figure 19: Potential Effect of Consolidation on DFE Agency Audit 
Coverage: 

Figure 20: Potential Effect of Consolidation on IG Control over 
Spending for Travel, Training, and Personnel Related to Oversight of 
DFE Agencies: 

Figure 21: Potential Effect of Consolidation on IG Control over Their 
Own Budget Requests for Oversight Activity: 

Figure 22: Potential Effect of Consolidation on the IGs’ Ability to 
Absorb Resource Reductions: 

Figure 23: Potential Effect of Consolidation on the Availability of IG
Resources for Investigative Coverage: 

Figure 24: Potential Effect of Consolidation on the IGs’ Ability to
Minimize Duplication of Audit Efforts across the Federal Government: 

Figure 25: Potential Effect of Consolidation on the Quality of Training 
for IG Audit Work: 

Figure 26: Potential Effect of Consolidation on the IGs’ Ability to 
Share Methods and Programs for Audits and Investigations across the 
Federal Government: 

Figure 27: Potential Effect of Consolidation on the IGs’ Ability to 
Share Technology Specialists and Expertise: 

Figure 28: Potential Effect of Consolidation on the IGs’ Efficient Use 
of Human Capital Skills and Resources across the Federal Government: 

Figure 29: Potential Effect of Consolidation on the Availability of 
Adequate IG Resources: 

Figure 30: Potential Effect of Consolidation on the Availability of
Resources to Cover DFE Agency Issues: 

Figure 31: How Important Is It to Establish a Statutory PCIE/ECIE
Organization for Improving Their Operations? 

Figure 32: How Important Is It to Provide Designated Funding Sources to 
the PCIE/ECIE Organization for Improving Their Operations? 

Figure 33: How Important Is It to Establish Stated Roles and 
Responsibilities of an Alternative PCIE/ECIE Organization in Order to 
Improve Operations? 

Figure 34: Should Dollar Thresholds of Agency Budgets Be the Primary 
Factor in Determining Which Agencies Have an IG? 

Figure 35: Are Statutory IGs Needed for Agencies with Budgets Below 
$134 Million? 

[End of section] 

Comptroller General of the United States: 
United States General Accounting Office: 
Washington, D.C. 20548: 

August 15, 2002: 

The Honorable Dan Burton: 
Chairman: 
Committee on Government Reform: 
House of Representatives: 

Dear Mr. Chairman: 

This report responds to your request that we provide information about
how certain changes might affect the federal offices of inspectors 
general (IG). There are currently 57 IGs subject to the IG Act of 1978, 
as amended, or similar statutory provisions, with 29 IGs who are 
appointed by the President and confirmed by the Senate, and 28 IGs who 
are appointed by their agency heads in designated federal entities (DFE 
IGs). Among other duties, the IGs are responsible for (1) conducting 
and supervising audits and investigations; (2) promoting economy, 
efficiency, and effectiveness; and (3) preventing and detecting fraud 
and abuse in their agencies’ programs and operations. 

Specifically, our objectives were to survey the IGs to obtain their 
views on how independence, quality of work, and use of resources might 
be affected by (1) converting DFE IGs from appointment by their agency 
heads to appointment by the President with Senate confirmation 
(conversion) and (2) consolidating IG offices by moving smaller DFE IG 
offices into larger Presidential IG offices (consolidation). We also 
obtained the IGs’ views on (1) creating a statutory alternative to the 
President’s Council on Integrity and Efficiency (PCIE) and the 
Executive Council on Integrity and Efficiency (ECIE) [Footnote 1] and 
(2) applying a budget-level threshold to determine which agencies 
should have IGs as opposed to receiving oversight on a collateral basis 
from a larger agency’s IG. We are also presenting our views on the 
impact that conversion, consolidation, and potential legislated changes 
to the PCIE and ECIE could have on IG effectiveness, and a discussion 
of options to illustrate possible examples of IG conversion and
consolidation for consideration by the Congress. 

As part of our review, we developed a survey instrument which included 
28 key elements related to IG independence, quality of work, and use of
resources. (See table 1.) 

Table 1: Twenty-eight Key Elements Related to IG Independence, Quality 
of Work, and Use of Resources: 

Independence: 
1. Independence resulting from conversion. 
2. Actual independence. 
3. Appearance of independence. 

Quality of work: 
4. Ability to issue hard hitting reports. 
5. Ability to review issues crossing DFEs. 
6. Attention to IG recommendations. 
7. Ability to audit issues of high risk. 
8. Ability to uniformly measure performance. 
9. Day-to-day contact between IGs and officials. 
10. Communication between IGs and DFE heads. 
11. Ability of DFE head to get the IG’s attention. 
12. Presence of the IG as a prevention measure. 
13. Knowledge of DFE agency missions. 
14. Knowledge of DFE agency priorities. 
15. Planning for IG oversight. 
16. Timeliness of reports. 
17. Oversight coverage of DFE agencies Use of IG resources. 
18. Control over spending. 
19. Control over budget requests. 
20. Ability to absorb resource reductions. 
21. Resources available for investigations. 
22. Ability to minimize audit duplication. 
23. Quality of audit training. 
24. Ability to share methods. 
25. Ability to share technology specialists. 
26. Efficient use of human capital skills. 
27. Availability of adequate resources. 
28. Resources available to cover DFE agency. 

[End of table] 

We obtained the views of the IGs on the potential impact of conversion 
and consolidation on each of these elements. The survey also asked the 
IGs about the potential impact of a permanent statutory alternative to 
the PCIE and the ECIE and the usefulness of a budget threshold to 
determine where IG offices should be established. 

Finally, as discussed with your staff, we are including our views on the
impact that conversion, consolidation, and legislated changes to the 
PCIE and ECIE could have on IG effectiveness and a discussion of 
options to illustrate possible examples of IG conversion and 
consolidation for consideration by the Congress. 

Results in Brief: 

Our survey results indicate a clear delineation between the responses of
the Presidential IGs and the DFE IGs regarding the potential impact of
conversion and consolidation. Overall, the Presidential IGs generally
indicated that DFE IG independence, quality, and use of resources could 
be strengthened by conversion and consolidation. At the same time, the 
DFE IGs’ responses to these same survey questions indicated that there 
would be either no impact or that these elements could be weakened. (See
appendix I). The difference in views between the Presidential and DFE 
IGs regarding the impact of conversion and consolidation is not 
surprising given the nature of the questions and issues involved, their 
various related interests, and the potential impact on the affected 
offices, especially the DFE IGs. 

Specifically, the Presidential IGs indicated that conversion could
strengthen DFE IG independence while the DFE IGs in general indicated
that there would be no effect on independence. Regarding the impact of
consolidation, the Presidential IGs indicated that both the DFE IGs’ 
actual independence and appearance of independence could be strengthened
while the DFE IGs generally indicated that there would be no impact. 

The Presidential IGs also indicated that several elements affecting the 
DFE IGs’ quality of work could be strengthened through consolidation,
including the ability to issue hard-hitting reports when necessary, to 
audit issues of high risk, to review issues across agencies, to get 
attention to recommendations made by the IGs, and to plan work. In 
addition, the Presidential IGs indicated that consolidation could 
strengthen the DFE IGs’ use of resources by increasing control over 
spending and budget requests, the availability of investigative 
resources, the ability to minimize duplication of audit efforts, the 
ability to share methods and technology specialists and to use human 
capital skills efficiently. At the same time, the DFE IGs generally 
indicated that there would be either no effect or that these elements 
would be weakened through consolidation. 

The Presidential IGs and DFE IGs generally agreed in their responses 
that consolidation could result in weaknesses affecting the day-to-day 
contact of IGs and DFE agency officials, knowledge of the DFE agency 
missions and priorities, and the availability of resources to cover DFE 
agency issues. For other elements in our survey, the Presidential IGs’ 
responses were inconclusive while the DFE IGs indicated potential 
weaknesses could occur. 

The IGs overwhelmingly responded that establishing the PCIE and ECIE
through legislation could make these organizations more effective,
especially if provided a permanent-funding source along with stated 
roles and responsibilities. These changes were viewed as increasing the 
ability of both the PCIE and ECIE to provide coordinating mechanisms for
effective governmentwide oversight. 

In our survey, most IGs responded that agency budgets should not be the
primary factor for determining whether an IG office should be 
established in a specific agency and that other factors, such as 
mission and risk, may indicate the need for an IG regardless of the 
size of an agency’s budget. Comments provided by the IGs to our survey 
suggested that in addition to agency budgets, other factors, such as 
the amount of federal funds at risk, should be considered when 
determining how to provide IG oversight. 

We believe that certain elements of DFE IG independence and 
effectiveness could be strengthened through conversion or consolidation.
Also, if IG offices were to be consolidated, the potential weaknesses
indicated by the DFE IGs’ responses, if implemented properly, could be
mitigated through targeted and proactive attention to the various areas 
of risk. For example, the lack of day-to-day contact between IGs and DFE
agency officials could be mitigated by having IG staff at the agency, 
where appropriate, to keep both the IG and the agency head informed and 
to coordinate necessary meetings between them. We also agree with the
combined DFE and Presidential IGs’ responses that legislative changes to
the PCIE and ECIE could strengthen IG effectiveness. In addition, we
believe that legislation could strengthen the planning and coordination 
of the IGs’ efforts with other oversight organizations, such as GAO. 

Any specific conversions or consolidations of IG offices should be a
process of continuing dialogue among the PCIE, ECIE, affected agencies,
and the Congress. Nevertheless, should the Congress choose to pursue the
conversion or consolidation of the DFE IGs, there are some options that
are illustrative of how this could be accomplished. For example, the
relative size of the IG budgets shows that several DFE IGs are 
comparable to Presidential IGs and on that basis could be considered 
for conversion, while other IGs with relatively small budgets could be
considered for consolidation with Presidential IGs. Specifically, due 
to the relative size of their budgets, the U.S. Postal Service (USPS), 
National Science Foundation (NSF), and Federal Reserve Board (FRB) IGs 
could be considered as candidates for possible conversion and most of 
the remaining DFE IGs could be considered for consolidation with 
Presidential IGs based on some similarity of their agencies’ missions. 
This consolidation would include the Amtrak IG, which has a budget
comparable to Presidential IGs but an oversight mission closely related 
to the work of the Department of Transportation (DOT) IG. The Government
Printing Office (GPO) IG also has a budget comparable to Presidential 
IGs but GPO is a legislative branch agency and the IG would not be 
considered for conversion or consolidation with a Presidential IG in 
the executive branch. 

In our view, the conversion and consolidation of selected DFE IG offices
would serve to further enhance the overall independence, efficiency, and
effectiveness of the IG community. Therefore, we are including matters 
for consideration by the Congress related to amending the IG Act to 
include specific conversion and consolidation of DFE IGs, as well as 
establishing an IG council by statute. 

Similar to the survey results, the PCIE and ECIE IGs provided a clear
divergence of views in making comments on a draft of our report. The
PCIE response did not take exception to the information and conclusions
presented in our draft report. In contrast, the ECIE IGs raised broad
concerns with our report conclusions and methodology. A summary of the
PCIE and ECIE IGs’ comments with our response are presented on page 57
and their comments are reprinted in their entirety in appendixes VII and
VIII. 

Background: 

Over two decades ago, the Congress created IGs throughout the federal
government as a result of growing reports of serious and widespread
internal control breakdowns resulting in dollar losses and reduced
effectiveness or efficiency in federal activities. In the intervening 
years, IGs have reported success in carrying out this mission through 
billions of dollars in reported savings and cost recoveries and 
thousands of prosecutions of criminal cases resulting from their work. 
For example, for fiscal year 2000, IGs reported potential savings to 
the government of $9.5 billion; actions to recover $5.5 billion in 
fines and restitutions, suspensions or debarments of 7,000 individuals 
or businesses; and more than 2,600 civil or personnel actions resulting 
from their audit and investigative work in that year alone. In total, 
for fiscal year 2000, the IGs reported a potential return of taxpayer 
money of approximately $12 for every $1 spent. 

In fiscal year 2000, the 57 IG offices had total fiscal year budgets of 
about $1.3 billion and about 11,000 staff. While all IGs have the same 
basic mission and responsibilities, the IGs in the DFEs, with three 
exceptions, have smaller budgets and fewer staff than do the IGs who 
are appointed by the President. (See appendixes III and IV). Total 
fiscal year 2000 budgets for the DFE IGs was $111.1 million, or about 8 
percent of the total budgets for all IGs for that year. The 
Presidential IGs for fiscal year 2000 had $1.26 billion, or about 92 
percent of total IG budgets for that year. (See figure 1.) 

Figure 1: Distribution of Fiscal Year 2000 IG Budgets and Offices: 

[See PDF for image] 

This figure contains two pie-charts, depicting the following data: 

IG budgets: 
Presidential IGs: 92%; 
DFER IGs: 8%. 

IG offices: 
Presidential IGs: 51%; 
DFER IGs: 49%. 

[End of figure] 

The IGs at the U.S. Postal Service (USPS), Amtrak, and the National
Science Foundation (NSF), had budgets larger than some IGs appointed by
the President. In addition, the Federal Reserve Board (FRB) and the
Government Printing Office (GPO) IGs are each comparable in size with
budgets that were equal to about 80 percent of the smallest 
Presidential IG budget. (See appendix V.) For example, the USPS IG had 
a fiscal year 2000 budget of about $72 million, the fifth largest of 
all IG budgets. Likewise, the fiscal year 2000 budget for Amtrak was 
about $6.3 million, and for the NSF IG, it was about $5.4 million. Both 
the Amtrak and NSF IGs’ budgets are larger than the budgets of two IGs 
appointed by the President. The FRB and GPO IGs each had fiscal year 
2000 budgets over $3 million compared to the Presidential IG at the 
Corporation for National Service which had a $4 million budget. The 
total fiscal year 2000 budgets of these five largest DFE IGs make up 
about 81 percent of all DFE IG budgets, or about 7 percent of all IG 
budgets. The remaining 23 DFE IGs had budgets that total about $21 
million, roughly 1 percent of all IG budgets. (See figure 2.) Fourteen 
of these 23 DFE IGs had budgets under $1 million and 17 had less than 
10 staff. 

Figure 2: Distribution of IGs with Comparable Fiscal Year 2000 Budgets 
and Offices: 

[See PDF for image] 

This figure contains two pie-charts, depicting the following data: 

IG budgets: 
Presidential IGs: 92%; 
Amtrak, USPS, NSF, FRB, and GPO IGs: 7%; 
Remaining DFE IGs: 1%. 

IG offices: 
Presidential and comparable DFE IGs: 60%; 
Remaining DFE IGs: 40%. 

[End of figure] 

Consolidation of IG offices would likely result in IG oversight being
provided across several federal agencies and their respective missions.
This type of consolidated oversight is already being applied in various
departments and agencies across the government through both statutes
and other arrangements. For example, the oversight for the Broadcasting
Board of Governors and the International Broadcasting Bureau is
consolidated under the Department of State IG through the Foreign 
Affairs Reform and Restructuring Act of 1998 (Public Law 105-277). This 
statute authorizes the Department of State IG to exercise the same 
authorities with respect to these two agencies as the IG exercises 
under the IG Act of 1978 and section 209 of the Foreign Service Act of 
1980 with respect to the Department of State. In another example, the 
Agency for International Development (AID) IG may conduct reviews, 
investigations, and inspections of all phases of the Overseas Private 
Investment Corporation (OPIC) and is required to report these findings 
to OPIC’s Board under the authority of the Foreign Assistance Act of 
1961, as amended. As a result of the OPIC Amendments Act of 1981, 
Public Law 87-65, the AID IG performs audits, investigations, and 
inspections at the request of OPIC management and is authorized to be 
reimbursed for expenses incurred on behalf of OPIC. In addition, 1999 
amendments to the IG Act of 1978 direct the AID IG to supervise, 
direct, and control audit and investigative activities relating to 
programs and operations within the Inter-American Foundation and the
African Development Foundation. 

In another example of consolidated IG oversight, the Amtrak Reform and
Accountability Act of 1997 (Public Law 105-134) authorizes the 
Department of Transportation (DOT) IG to approve and oversee the 
contract for the assessment of financial requirements of Amtrak through 
fiscal year 2002. Also, the National Transportation Safety Board (NTSB) 
Amendments Act of 2000 (Public Law 106-424) provides the DOT IG the 
authority to review the financial management, property management, and 
business operations of the NTSB, including internal accounting and 
administrative control systems, to determine compliance with applicable 
laws, rules, and regulations. In another example, the Appalachian 
Regional Commission’s IG provides audit and investigative services to 
the Denali Commission through a memorandum of agreement between the IG 
and the commission. 

In 1998 the PCIE surveyed both the Presidential IGs and the DFE IGs to
obtain their views on S. 2167, the Inspector General Act Amendments of
1998, then under consideration. [Footnote 2] Among other 
considerations, the amendments contemplated consolidations of certain 
specific DFE IG offices with specific IGs appointed by the President. 
For example, these amendments proposed that the functions of the IGs 
for the Corporation for Public Broadcasting, the National Endowment for 
the Arts, the National Endowment for the Humanities, and the 
Smithsonian Institution be transferred to the IG at the Department of 
Education. The bill did not become public law, but the 1998 PCIE survey 
of the IGs did elicit valuable and relevant information concerning 
advantages and disadvantages associated with the consolidation of IG 
offices. 

In particular, the 1998 PCIE survey concluded that those IGs who agreed
with the proposed IG Act amendments felt that the independence of IG
oversight would be enhanced in the entities to be consolidated. However,
the IGs who opposed such a transfer felt that the benefits associated 
with the presence of an IG in the smaller agencies outweighed the
administrative inefficiencies that may have existed. Also, the IGs
responded that the size of an IG organization does not adequately 
measure the effectiveness and contributions of the IG in preventing and 
detecting fraud, waste, and abuse in the DFE agencies’ operations. 
Other IG comments reported by the 1998 PCIE survey results include 
recognition that by their proximity to the areas served, the DFE IGs 
are more attuned to the agency employees, functions, operations, and 
goals which they review. Finally, the PCIE reported that the IGs felt 
the issue of transferring IG functions from DFE IGs to Presidential IGs 
needs further study to determine whether such transfers would 
contribute to increased efficiencies and more effective oversight. 

Objectives, Scope, and Methodology: 

In order to provide information on the potential impact of the 
consolidation or conversion of DFE IGs, we developed and sent a 
structured survey to all existing IGs. As agreed with your staff, we 
identified and analyzed 28 elements of IG effectiveness in the areas of 
(1) IG independence, (2) the quality of IG work, and (3) the effective 
use of IG resources. The elements were obtained from IG Act 
requirements, the IGs’ vision statement, [Footnote 3] audit and 
investigative standards, past GAO reports, and statements from the IGs
and members of the Congress. We also obtained comments from a panel of
DFE IGs regarding the use of the criteria for IG effectiveness.
We developed a survey instrument that was sent to the IGs to obtain 
their views on the potential impact of conversion and consolidation on 
the elements of effectiveness for the DFE IG offices, the potential 
impact of a permanent statutory alternative to the PCIE and the ECIE, 
and the usefulness of using a budget threshold to determine at which 
agencies IG offices should be established. Survey responses were 
received from an equal number of Presidential and DFE IGs - 28 of the 
IGs appointed by the President and 28 of the IGs appointed by their 
agency heads. The Central Intelligence Agency IG declined to respond. 
We did not independently verify the information the IGs provided. 

Our survey addressed the potential impact that both conversion and
consolidation could have on the independence of the DFE IGs and the
resulting Presidential IG offices. However, because consolidation would 
to a large extent result in making DFE IG offices a part of 
Presidential IG offices, we did not duplicate the entire survey for 
both conversion and consolidation but rather relied on the IG responses 
to consolidation. 

Any number of scenarios exist for implementing a conversion or
consolidation strategy. Two options for conversion and consolidation of 
IG offices not specifically addressed by our survey include (1) 
combining the DFE IGs to create one large DFE IG office to cover all 
DFE agencies and (2) combining all the DFE IGs under a new IG appointed 
by the President and confirmed by the Senate. These options for 
conversion and consolidation were previously studied through a survey 
of the IGs and were met with limited support. The results of our prior 
study, which were provided in a 1999 report, [Footnote 4] showed that 
the first option was supported by 27 percent of the Presidential IGs 
and 7 percent of the DFE IGs. The second option was supported by 15 
percent of the Presidential IGs and 10 percent of the DFE IGs. 

Our current survey was completed prior to recent changes to Government
Auditing Standards [Footnote 5] regarding auditor independence and 
therefore addresses the requirements of the older independence 
standards. Nevertheless, as a basic premise under the revised 
standards, the IGs appointed by the President and confirmed by the 
Senate and IGs appointed by and reporting to a statutorily created 
governing body, as well as the DFE IGs appointed by their agency heads, 
are considered organizationally independent to report externally. 
[Footnote 6] Therefore, we do not believe that our survey results would 
have changed in any material way as a result of the changes in the 
auditor independence standards. 

We obtained comments on a draft of this report from the Presidential IGs
and the DFE IGs through the PCIE and the ECIE. These included technical
changes that have been incorporated in the report. A summary of their
written comments and our response are presented on page 57. The PCIE
and ECIE comments are reprinted in their entirety in appendixes VII and
VIII. We performed our review from March 2001 through March 2002 in
accordance with generally accepted government auditing standards. 

Independence: 

The independence of an audit entity is one of the most important 
elements of the overall effectiveness of the audit function. Auditors 
need to be as independent from external influences as possible both in 
fact and appearance, in order to ensure that their audit work is 
credible and respected. Therefore, the effect on IG independence is 
critical when considering the conversion of the DFE IGs to appointment 
by the President or consolidation of their offices with IGs appointed 
by the President. The IGs derive independence through numerous 
provisions in the IG Act. These include the authority of IGs to report 
violations of law directly to the Department of Justice, the 
requirement for IGs to prepare semiannual reports of their activities 
for the Congress without alteration by their agencies, the authority of 
IGs to perform any audit or investigation without interference from the 
agency head and others except under certain conditions specified by the 
act, and the requirement for the President or the agency head to 
communicate to the Congress the reasons for removing an IG. In 
addition, the IGs are required to follow Government Auditing Standards, 
[Footnote 7] which require IGs and individual auditors to be free from
personal, organizational, and external impairments to independence, and
to be independent in appearance. 

Conversion and Independence: 

The survey responses from the Presidential IGs and the DFE IGs differed 
as to whether DFE IG independence could be increased by having IGs
appointed by the President with Senate confirmation instead of the 
present practice of IG appointment by the heads of agencies in which 
they would lead the IG staff. Specifically, as shown in figure 3, 29 
IGs (24 Presidential and 5 DFE) responded that independence could be 
increased in this way and 22 IGs (19 DFE and 3 Presidential), responded 
that conversion would have no impact on DFE IG independence. One DFE IG 
responded that independence could be decreased. Two DFE IGs and one 
Presidential IG had no opinions and an additional IG did not respond. 

Figure 3: Potential Effect of Conversion on IG Independence: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Increase: 5; 
Decrease: 1; 
No effect: 19; 
No opinion: 2. 

Presidential IGs (number of IG responses): 
Increase: 24; 
Decrease: 0; 
No effect: 3; 
No opinion: 1. 

[End of figure] 

Five of the 19 DFE IGs who responded that conversion would have no
impact on their independence also stated that appointment by the
President could actually increase political influence on the IGs. This
contrasts rather sharply with 24 of the Presidential IGs’ survey 
responses that conversion could increase the independence of DFE IGs. 
Typically, the further removed the appointment source is from the 
entity to be audited, the greater the level of independence. To 
illustrate, conversion of IGs from appointment by their agency heads to 
appointment by the President with Senate confirmation has been 
recognized previously by the Congress as a way to obtain increased IG 
independence. Specifically, the perceived limitation of the Federal 
Deposit Insurance Corporation IG’s independence as a DFE IG under the 
IG Act was recognized as a reason to convert the IG to appointment by 
the President with Senate confirmation when Public Law 103-204 was 
passed on December 17, 1993. More recently, Public Law 106-422, 
November 1, 2000, converted the Tennessee Valley Authority (TVA) IG to 
appointment by the President with Senate confirmation because of 
concerns about interference by TVA management and recognized that the 
IG’s independence would be enhanced under appointment by the President. 
Consequently, the change from agency appointment to appointment by the 
President has been recognized by the Congress since the advent of the 
IG concept as a strengthening of this critical element of IG 
effectiveness. 

Consolidation and Independence: 

Similar to the survey results regarding conversion, the Presidential and
DFE IGs’ responses were different regarding the impact that 
consolidation could have on DFE IG independence. In responding to our 
survey, 26 IGs (24 Presidential and 2 DFE) indicated that independence 
could be increased and 2 DFE IGs believe it could be decreased. Of the 
remaining IGs, 25 (22 DFE and 3 Presidential) responded that 
consolidation would have no effect on independence and 2 (1 
Presidential and 1 DFE) had no opinion. An additional IG did not 
respond. (See figure 4). 

Three DFE IGs provided explanations of how independence would be 
decreased. Specifically, one DFE IG explained that the independence of
the agency (rather than IG independence) would decrease due to agency
concerns about undue political influence from the President. Another DFE
IG stated a preference for increasing independence through added
provisions in the IG Act rather than through consolidation, and the
remaining DFE IG stated that IGs appointed by the President are more
affected by politics and are more likely to be forced to resign. 

Figure 4: Potential Effect of Consolidation on Actual IG Independence: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Increase: 2; 
Decrease: 2; 
No effect: 22; 
No opinion: 1. 

Presidential IGs (number of IG responses): 
Increase: 24; 
Decrease: 0; 
No effect: 3; 
No opinion: 1. 

[End of figure] 

With respect to the appearance of independence there was some
consensus. As shown in figure 5, 39 IGs (27 Presidential and 12 DFE)
indicated that the appearance of independence could be strengthened by
consolidating DFE IGs with Presidential IGs. Fifteen IGs (14 DFE and 1
Presidential) responded that there would be no effect, and 2 DFE IGs
indicated that the appearance of independence would be weakened
through consolidation. Of the two DFE IGs who indicated that the
appearance of independence would be decreased, one provided additional
comments, reiterating that the decrease in appearance of independence
would be the result of an appearance of political influence by an IG
appointed by the President. 

Figure 5: Potential Effect of Consolidation on the Appearance of IG 
Independence: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 12; 
Weakened: 2; 
Neither: 14; 
Not applicable: 0. 

Presidential IGs (number of IG responses): 
Strengthened: 27; 
Weakened: 0; 
Neither: 1; 
Not applicable: 0. 

[End of figure] 

Consolidation and IG Quality of Work: 

The quality of audits and investigations is also a critical element of 
IG effectiveness. To determine the possible impact of consolidation on 
the quality of IG work, we obtained information for use in our survey 
from IG testimony before the Congress, IG reports, concerns of the 
Congress, and professional standards. These sources indicate that the 
quality of work is largely determined by the ability to issue hard-
hitting reports when necessary, to review issues across agencies, to 
get attention to recommendations made by the IGs, to audit issues of 
high risk, and to measure agency performance. Also, within each agency 
the quality of work is affected by the relationship the IG has with the 
agency and includes day-to-day contact with agency management, 
communication between the IG and the agency head including the ability 
of the agency head to get the attention of the IG, the presence of an 
IG as a prevention measure, the knowledge of agency missions and 
priorities, the IG’s ability to plan work, the timeliness of IG 
reports, and the audit coverage of the agency. 

As with the other survey questions, the views of Presidential IGs and 
DFE IGs are markedly different regarding the potential effect of 
consolidation on the quality of future IG work. The Presidential IGs’ 
responses indicate that consolidation could increase some of the 
elements of IG quality. For these same elements, the DFE IGs’ responses 
indicate that consolidation would either have no impact or that work 
quality could be weakened. In addition, responses from both the 
Presidential IGs and the DFE IGs indicate that there are elements of 
quality that could be weakened. These types of risks to quality would 
need to be addressed by the management of the merged IG operations to 
avoid or abate any undesired consequences by a consolidated IG. In our 
view, consolidation of DFE IG offices with Presidential IGs would not 
necessarily result in a reduction of audit quality, especially if 
proper steps are taken to mitigate areas that could be weakened. 

Ability to Issue Hard-hitting Reports When Necessary: 

The DFE IGs and the Presidential IGs again responded differently in
assessing the impact of consolidation on their ability to present hard-
hitting reports when necessary. Generally, the Presidential IGs 
responded that the DFE IGs’ ability to issue hard-hitting reports could 
be strengthened through consolidation. However, the DFE IGs generally 
responded that consolidation would either have no impact on this 
ability or that the quality of work could be weakened. Specifically, 26 
IGs (24 Presidential and 2 DFE) indicated that the ability of DFE IGs 
to issue hard-hitting reports would be strengthened. However, 21 IGs 
(19 DFE and 2 Presidential) responded that there would be no impact, 
and 7 IGs (5 DFE and 2 Presidential) indicated this ability could be 
weakened. (See figure 4.) The IGs provided no comments to explain their 
responses. 

Figure 6: Potential Effect of Consolidation on the Ability of IGs to 
Issue Hard-hitting Reports: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 2; 
Weakened: 5; 
Neither: 19; 
Not applicable: 2. 

Presidential IGs (number of IG responses): 
Strengthened: 24; 
Weakened: 2; 
Neither: 2; 
Not applicable: 0. 

[End of figure] 

Oversight of Cross-Cutting Issues: 

The ability of IGs to issue reports that address not only issues that 
are particular to their specific agencies but which address issues of 
broad interest across several agencies is another function of the PCIE 
and ECIE. This ability provides reports of cross-cutting issues for the 
Congress and for the benefit of the IGs’ collective agencies. As a 
result, the IGs have issued reports on such cross-cutting issues as 
computer security, debt collection, the use of government credit cards, 
and financial management. Twenty-two IGs (16 Presidential and 6 DFE) 
responded that consolidation could strengthen their ability to review 
issues that cut across other agencies while 16 IGs (12 DFE and 4 
Presidential) indicated that there would be no effect on the ability of 
the DFE IGs to issue cross-cutting reports. In addition, six IGs (five 
DFE and one Presidential) responded that this ability would be weakened 
by consolidation. (See figure 7). 

Figure 7: Potential Effect of Consolidation on the IGs’ Ability to Use 
Audit Resources to Review Issues That Cross All DFE Agencies: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 6; 
Weakened: 5; 
Neither: 12; 
Not applicable: 5. 

Presidential IGs (number of IG responses): 
Strengthened: 16; 
Weakened: 1; 
Neither: 4; 
Not applicable: 7. 

[End of figure] 

Attention to IG Recommendations: 

The ability of the IGs to achieve results through their recommendations 
is another key element of effectiveness. Some important objectives of 
the IGs’ audit work include improving accountability, saving tax 
dollars, improving programs and operations, and providing better 
service to the public. Auditors’ recommendations are vehicles for 
fulfilling these objectives but only the effective implementation of 
recommendations, not the recommendations themselves, will enable the 
government to work better at lower cost. Nineteen IGs (18 Presidential 
and 1 DFE) responded that greater attention would be given DFE IG 
recommendations as a result of consolidation. Eighteen IGs (14 DFE and 
4 Presidential) indicated that there would be no effect on the level of 
attention given to their recommendations as a result of consolidation. 
Also, 11 IGs (all were DFE) responded that there would be less 
attention to IG recommendations. (See figure 8.) In comments regarding 
the potential weaknesses of consolidation, one IG stated that 
consolidation would result in less credibility of the IG in the DFE, 
and another IG stated that DFE IG recommendations already receive 
attention. 

Figure 8: Potential Effect of Consolidation on the Attention That DFE 
Agencies and the Congress Give to IG Recommendations: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 1; 
Weakened: 11; 
Neither: 14; 
Not applicable: 2. 

Presidential IGs (number of IG responses): 
Strengthened: 18; 
Weakened: 0; 
Neither: 4; 
Not applicable: 6. 

[End of figure] 

Ability to Address High-Risk and Priority Issues: 

Assessing risk and establishing priorities for audits are important 
elements of the planning process for audit organizations. The ability 
to address those areas designated as high risk and of highest priority 
is fundamental to any audit organization’s work. The Presidential IGs 
and the DFE IGs again had widely different responses to this element of 
IG effectiveness. Twenty-one IGs (18 Presidential and 3 DFE) indicated 
that consolidation could strengthen the ability of the DFE IGs to 
address issues of higher risk and priority. However, 27 IGs (20 DFE and 
7 Presidential) indicated that consolidation would have no impact. In 
addition, two IGs (both were DFE) indicated that their ability in this 
area could be weakened. (See figure 9.) There were no additional 
comments provided by the IGs regarding their responses. 

Figure 9: Potential Effect of Consolidation on the Ability of DFE IGs 
to Address Issues of Higher Risk and Priority: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 3; 
Weakened: 2; 
Neither: 20; 
Not applicable: 3. 

Presidential IGs (number of IG responses): 
Strengthened: 18; 
Weakened: 0; 
Neither: 7; 
Not applicable: 3. 

[End of figure] 

Ability to Uniformly Measure Performance: 

The Government Performance and Results Act of 1993 (GPRA) includes
requirements for federal agencies to engage in strategic planning, 
establish performance measures, and report on their ability to meet 
these measures. The validity of the measures and the verification of 
agency reports of meeting the established measures is an important part 
of the success in implementing GPRA. At the request of members of the 
Congress, the IGs perform activities in the validation and verification 
of performance measures developed by their agencies in compliance with 
GPRA requirements. While there is no specific requirement in the act 
for the IGs to audit GPRA results, the extent of the IGs’ ability to 
assist their agencies continues to be of interest to the Congress. To 
the extent IGs can uniformly measure the performance of their agencies 
through use of the GPRA measures and their own audit efforts, the IGs 
will be increasingly effective in reporting on their agencies’ ability 
to successfully achieve their missions, goals, and specific performance 
measures. 

Twenty-five IGs (15 DFE and 10 Presidential) indicated that 
consolidation would have no impact on the ability to measure DFE agency 
performance. Fourteen IGs (12 Presidential and 2 DFE) indicated that 
this ability could be strengthened. Four IGs (all were DFE) responded 
that their ability would be weakened. Thirteen IGs responded that the 
question was not applicable. (See figure 10.) No comments were provided 
by the IGs on this issue. 

Figure 10: Potential Effect of Consolidation on the Ability to 
Uniformly Measure DFE Agency Performance: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 2; 
Weakened: 4; 
Neither: 15; 
Not applicable: 7. 

Presidential IGs (number of IG responses): 
Strengthened: 12; 
Weakened: 0; 
Neither: 10; 
Not applicable: 6. 

[End of figure] 

IG Contact with DFE Officials: 

The legislative history of the IG Act of 1978 includes guidance on IG
effectiveness by indicating that the IGs must have a close relationship 
with their agency heads and be responsive to their concerns. Moreover, 
the guidance illustrates that if the agency head is committed to 
managing the agency effectively the IG can be the agency head’s strong 
right arm while maintaining the IG independence needed to honor 
reporting responsibilities to the Congress. [Footnote 8] The survey 
responses indicate that both Presidential and DFE IGs believe this 
working relationship between the IGs and their DFE heads could be 
weakened through consolidation of the IG offices. 

Responses from 36 IGs (26 DFE and 10 Presidential) indicate that
consolidation could weaken the ability of the IGs to have day-to-day
contact with senior DFE agency officials. Nine IGs (eight Presidential 
and one DFE) indicated that there would be no impact on their day-to-day
contact with agency officials and five IGs (all were Presidential) 
responded that day-to-day contact could be strengthened. (See figure 
11.) 

Figure 11: Potential Effect of Consolidation on Day-to-Day Contact with 
Senior DFE Officials: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 26; 
Neither: 1; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 5; 
Weakened: 10; 
Neither: 8; 
Not applicable: 5. 

[End of figure] 

Communication between IGs and DFE Agency Heads: 

Attention to communication among IGs, agency heads, and program
management staff is included as part of the IGs’ vision statement. The 
IGs have stated their intent to work with agency heads and the Congress 
to improve program management. Therefore, IG communication with DFE
agency heads is another indicator of the quality of IG work. Thirty-
three IGs (26 DFE and 7 Presidential) responded that this communication 
could be weakened by consolidation. The Presidential IGs’ responses were
almost evenly divided among the strengthen, weaken, and no impact
choices with eight responses indicating that consolidation could 
actually strengthen communication and eight responses indicating that 
there would be no impact on communication. (See figure 12.) One DFE IG 
stated that close working relations with the agency head are currently 
enjoyed by the IG. No specific comments were made to indicate 
specifically how communication between the IG and DFE head would be 
weakened. 

Figure 12: Potential Effect of Consolidation on Communication between 
the IGs and DFE Agency Heads: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 26; 
Neither: 1; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 8; 
Weakened: 7; 
Neither: 8; 
Not applicable: 5. 

[End of figure] 

Ability of DFE Head to Get the Attention of the IG: 

While there are statutory protections to IG independence provided by the
IG Act, each IG is required by the act to be under the general 
supervision of their respective agency head. In addition, the IG vision 
statement recognizes the need for the agency head and the IG to work 
together. Thirty-one IGs (24 DFE and 7 Presidential) responded that 
this ability could be weakened by consolidation. The remaining 
responses of the Presidential IGs include seven who took an opposing 
view indicating that this ability could be strengthened by 
consolidation, and nine who indicated that there would be no impact. 
(See figure 13.) 

Figure 13: Potential Effect of Consolidation on the Ability of DFE 
Agency Head to Get the IG’s Attention: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 24; 
Neither: 3; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 7; 
Weakened: 7; 
Neither: 9; 
Not applicable: 5. 

[End of figure] 

IG Presence as a Preventative Measure: 

Comments from the DFE IGs raised concerns that through consolidation
with large IG offices the DFE agencies would possibly lose the effect of
having a “cop on the beat” which can act as a deterrent to fraud, waste,
abuse, and mismanagement. While the survey results indicate a concern
about weakening this IG presence, the concern is largely from the DFE 
IGs and not the Presidential IGs. Twenty-nine IGs (25 DFE and 4 
Presidential) indicated that the IGs’ presence as a preventative 
measure would be weakened in the DFE through consolidation. However, 13 
Presidential IGs responded that the IG presence in the DFE agencies 
would be strengthened by consolidation. The remaining IG responses 
indicated either no impact or that the question was not applicable. 
(See figure 14.) 

Figure 14: Potential Effect of Consolidation on IG Presence as a 
Preventative Measure for the DFE Agencies: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 25; 
Neither: 2; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 13; 
Weakened: 4; 
Neither: 6; 
Not applicable: 5. 

[End of figure] 

IG Knowledge of DFE Missions: 

Thirty-six IGs (26 DFE and 10 Presidential) indicated that the IG’s
knowledge of each DFE agency’s mission, operations, and activities would
be weakened through consolidation. This response appears to assume that
current DFE IG staff and their knowledge would no longer exist to 
provide DFE agency oversight. However, eight Presidential IGs indicated 
that consolidation could strengthen the IG’s knowledge of each DFE 
agency and eight indicated that there would be no impact. (See figure 
15.) One IG’s comments indicated there would be a large learning curve 
for the IGs not familiar with the DFEs; however another IG stated that 
the IG’s knowledge could be strengthened depending on staffing and the 
availability of resources. 

Figure 15: Potential Effect of Consolidation on IG Knowledge of DFE 
Agency Missions, Operations, and Resource Limitations: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 26; 
Neither: 1; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 8; 
Weakened: 10; 
Neither: 8; 
Not applicable: 2. 

[End of figure] 

IG Knowledge of DFE Priorities: 

In responses identical to the previous survey question, 36 IGs (26 DFE 
and 10 Presidential) indicated that IG knowledge of the DFE agencies’ 
priorities and issues could be weakened through consolidation. 
Likewise, eight Presidential IGs indicated that this knowledge could be 
strengthened and eight indicated that consolidation would have no 
impact. (See figure 16.) One IG provided comments and stated that after 
consolidation, the IGs would lose their perspective about the DFE 
agencies’ goals and direction. This response appears to assume that 
current DFE IG staff would no longer be available to provide such a 
perspective. 

Figure 16: Potential Effect of Consolidation on IG Knowledge of 
Priorities and Issues within Each of the DFE Agencies: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 26; 
Neither: 1; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 8; 
Weakened: 10; 
Neither: 8; 
Not applicable: 2. 

[End of figure] 

IG Ability to Plan Work: 

In the area of planning work, 21 IGs (17 DFE and 4 Presidential) 
responded that the ability to plan their work at the DFEs could be 
weakened. This contrasts with the responses of 13 IGs (12 Presidential 
and 1 DFE) who indicated that planning could be strengthened. Fourteen 
IGs (eight Presidential and six DFE) indicated that consolidation would 
have no impact. (See figure 17.) No IGs commented on how this ability 
would be strengthened; however, one DFE IG stated that planning for 
coverage of the DFE agencies would be diluted by the other work 
requirements of the consolidated IG office. 

Figure 17: Potential Effect of Consolidation on Oversight Planning: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 1; 
Weakened: 17; 
Neither: 6; 
Not applicable: 4. 

Presidential IGs (number of IG responses): 
Strengthened: 12; 
Weakened: 4; 
Neither: 8; 
Not applicable: 4. 

[End of figure] 

Timeliness of IG Reporting: 

Twenty-five IGs (23 DFE and 2 Presidential) indicated that the 
timeliness of reports would be weakened by consolidation. Fifteen IGs 
(11 Presidential and 4 DFE) indicated that consolidation would have no 
impact. Also, six Presidential IGs indicated that timeliness could be 
strengthened. Ten IGs (nine Presidential and one DFE) responded that 
the question was not applicable. (See figure 18.) In comments provided, 
one IG observed that the reports in large audit organizations generally 
have longer report review cycles. Likewise, comments from two DFE IGs 
stated they believe reports by the DFE IGs are probably more timely 
than they would be under consolidation. No comments were provided by 
the six IGs who indicated that timeliness could be strengthened. 

Figure 18: Potential Effect of Consolidation on the Timeliness of IG 
Reports: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 23; 
Neither: 4; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 6; 
Weakened: 2; 
Neither: 11; 
Not applicable: 9. 

[End of figure] 

Oversight Coverage of DFE Agencies: 

The IGs are required by the IG Act to coordinate, conduct, and provide
policy direction for audits and investigations in their agencies. 
Therefore, IG oversight coverage of agency programs, offices, and 
activities is another element of IG quality. Thirty-three IGs (25 DFE 
and 8 Presidential) indicated that IG coverage at the DFE agencies 
would be decreased. Nine Presidential IGs took the opposite view, 
responding that coverage could be increased. The 14 remaining IG 
responses (11 Presidential and 3 DFE) indicated either no impact or 
that they did not have an opinion on this matter. (See figure 19.) Most 
of the IGs’ comments explained that the decrease would be the result of 
low priorities for coverage in the DFEs by IGs who are appointed by the 
President. Specifically, one DFE IG stated that larger agencies have 
requirements that differ from those of smaller agencies, making it much 
more likely that the priorities of large agencies would supercede those 
of smaller agencies. In contrast, one Presidential IG commented that 
audit coverage of the DFE would increase after consolidation because 
the IG resulting from consolidation would first test the control 
environment of the DFE agencies to determine the necessary level of 
coverage, which would result, at least initially, in more coverage. 

Also, another DFE IG who indicated that consolidation would have no
effect on coverage stated that coverage depends on the IG resources
available as well as the priorities established. 

Figure 19: Potential Effect of Consolidation on DFE Agency Audit 
Coverage: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 25; 
Neither: 2; 
No opinion: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 9; 
Weakened: 8; 
Neither: 4; 
No opinion: 7. 

[End of figure] 

Consolidation and the Potential Impact on IG Resources: 

The efficient and effective use of IG resources and human capital can
significantly affect the overall effectiveness of IG offices in helping 
their agencies address problems. For example, many IGs have determined 
that protecting agency information technology resources is a priority 
and often assist their agencies through independent advice and guidance 
on appropriate levels of IT security. However, these efforts require 
the use of knowledgeable IT specialists and a wise use of overall 
budgetary resources by the IGs. Also, the better IGs can control their 
own spending, budget requests, and absorb any budget decreases the more 
effective they can be in addressing the oversight of their agencies. In 
addition, information from IG testimony before the Congress, IG 
reports, concerns of the Congress, and professional standards indicate 
that IGs are affected by the ability to obtain resources for 
investigations, the ability to minimize duplication of efforts, the 
quality of training, the ability to share methods and technology
specialists, the efficient use of human capital skills, and the 
availability of adequate resources to provide oversight of the agency. 

The IG Act Amendments of 1988 require separate appropriations accounts
for the IGs appointed by the President, which provides greater control 
for these IGs over their budgets. The IG Act does not require such 
accounts for the DFE IGs. We reported in a prior review of 16 DFE IGs’ 
budgets that 14 of the DFE IGs had entity officials making decisions 
affecting the IGs’ fiscal year budgets who also competed with the IGs 
for resources and whose programs and operations were subject to IG 
audits and investigations. [Footnote 9] The results of our survey 
indicate that eight DFE IGs continue to obtain approval from agency 
officials to make spending decisions in one or all of the areas of 
travel, training, and personnel. 

IG Control over Spending: 

The survey results were again clearly delineated between the responses
from the Presidential IGs and the DFE IGs. In response to our survey
question on IG control over spending on travel, training, and personnel 
for oversight of the DFE agencies, 27 IGs (18 DFE and 9 Presidential) 
indicated that consolidation would have no impact. However, 18 IGs (16 
Presidential and 2 DFE) believe this control could be strengthened by 
consolidation. In addition, seven IGs (6 DFE and 1 Presidential) 
indicated that IG control over this spending could be weakened. (See 
figure 20.) 

Figure 20: Potential Effect of Consolidation on IG Control over 
Spending for Travel, Training, and Personnel Related to Oversight of 
DFE Agencies: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 2; 
Weakened: 6; 
Neither: 18; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 16; 
Weakened: 1; 
Neither: 9; 
Not applicable: 2. 

[End of figure] 

IG Control over Budget Requests: 

The responses to the survey question on IG control over budget requests
for their own offices were clearly divided between Presidential IG and 
DFE IG responses. Eighteen IGs (17 Presidential and 4 DFE) indicated 
that control could be strengthened by consolidation, while 20 IGs (14 
DFE and 6 Presidential) indicated that there would be no impact on IG 
control of budget requests. Eight IGs (6 DFE and 2 Presidential) 
indicated that consolidation could weaken IG control over budget 
requests, and the remaining six IGs indicated that the question was not 
applicable. One IG did not respond to the survey question. (See figure 
21.) One DFE IG expressed doubt that resources of the consolidated IGs 
would be devoted to oversight of the DFE agencies; however, another DFE 
IG stated that consolidation could result in fewer IG budget cuts. 

Figure 21: Potential Effect of Consolidation on IG Control over Their 
Own Budget Requests for Oversight Activity: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 4; 
Weakened: 6; 
Neither: 14; 
Not applicable: 3. 

Presidential IGs (number of IG responses): 
Strengthened: 17; 
Weakened: 2; 
Neither: 6; 
Not applicable: 3. 

[End of figure] 

IG Ability to Absorb Budget Reductions: 

Twenty IGs (13 Presidential and 7 DFE) responded that consolidation
could strengthen the IGs’ ability to absorb resource reductions. Sixteen
IGs (8 Presidential and 8 DFE) indicated that consolidation would have 
no impact, and 12 IGs (9 DFE and 3 Presidential) indicated that this 
ability would be weakened. (See figure 22.) One DFE IG commented that 
the ability to absorb resource reductions is irrelevant because the DFE
agencies would be a low priority for the IGs after consolidation. Along 
the same lines, another DFE IG expressed doubt that resources would be
devoted to DFE agency oversight. 

Figure 22: Potential Effect of Consolidation on the IGs’ Ability to 
Absorb Resource Reductions: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 7; 
Weakened: 9; 
Neither: 8; 
Not applicable: 3. 

Presidential IGs (number of IG responses): 
Strengthened: 13; 
Weakened: 3; 
Neither: 8; 
Not applicable: 4. 

[End of figure] 

Availability of Investigative Resources: 

In other areas of IG resources, 28 IGs (18 Presidential and 10 DFE)
indicated that consolidation could strengthen the availability of
investigative resources for coverage of the DFE agencies and 17 IGs (13
DFE and 4 Presidential) indicated that it would be weakened. Seven IGs
(four Presidential and three DFE) indicated that consolidation would 
have no impact. One DFE IG commented that while more resources would be
available they would not be used for coverage of the DFEs. (See figure 
23.) 

Figure 23: Potential Effect of Consolidation on the Availability of IG 
Resources for Investigative Coverage: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 10; 
Weakened: 13; 
Neither: 3; 
Not applicable: 2. 

Presidential IGs (number of IG responses): 
Strengthened: 18; 
Weakened: 4; 
Neither: 4; 
Not applicable: 2. 

[End of figure] 

Minimization of Duplication across IGs: 

Thirty-three IGs (21 DFE and 12 Presidential) responded that 
consolidation would have no impact on the duplication of audit efforts 
by the IGs. However, 17 IGs (14 Presidential and 3 DFE) indicated that 
the ability to minimize duplication could be strengthened by 
consolidation. Two DFE IGs indicated that this ability could be 
weakened. (See figure 24.) There were no specific comments regarding 
the issue of audit duplication. 

Figure 24: Potential Effect of Consolidation on the IGs’ Ability to 
Minimize Duplication of Audit Efforts across the Federal Government: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 3; 
Weakened: 2; 
Neither: 21; 
Not applicable: 2. 

Presidential IGs (number of IG responses): 
Strengthened: 14; 
Weakened: 0; 
Neither: 12; 
Not applicable: 2. 

[End of figure] 

Quality of Audit Training: 

Continuing education and training for auditors improves their knowledge
and refines their skills, allowing them to better meet the challenges 
of the audit environment. Such education and training, since it 
enhances auditor proficiency, helps ensure the quality of audits. In 
addition, auditors working on audits in accordance with Government 
Auditing Standards must comply with specific continuing educational 
requirements specified by these standards. 

A majority of the IGs (21 DFE and 15 Presidential) indicated through our
survey that consolidation would have no impact on the quality of auditor
training. Thirteen IGs (11 Presidential and 2 DFE) responded that the
quality of training could be strengthened and 4 DFE IGs indicated that
training could be weakened. (See figure 25.) One DFE IG commented that
Presidential IGs and DFE IGs use the same training sources, and another
DFE IG stated concern that consolidation would reduce the quality of
training because DFE agency-related subjects may decline depending on
the work priorities of the consolidated IG. 

Figure 25: Potential Effect of Consolidation on the Quality of Training 
for IG Audit Work: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 2; 
Weakened: 4; 
Neither: 21; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 11; 
Weakened: 0; 
Neither: 15; 
Not applicable: 2. 

[End of figure] 

Ability to Share Methods: 

The ability of IGs to share methods and programs for audits and
investigations can enhance their use of government resources. Thirty IGs
(20 DFE and 10 Presidential) indicated that consolidation would have no
impact on this ability. However, 22 IGs (17 Presidential and 5 DFE)
indicated that this area could be strengthened through consolidation. 
(See figure 26.) 

Figure 26: Potential Effect of Consolidation on the IGs’ Ability to 
Share Methods and Programs for Audits and Investigations across the 
Federal Government: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 5; 
Weakened: 2; 
Neither: 20; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 17; 
Weakened: 0; 
Neither: 10; 
Not applicable: 1. 

[End of figure] 

Ability to Share Technology Specialists and Expertise: 

Twenty-six IGs (19 Presidential and 7 DFE) indicated that the IGs’ 
ability to share technology specialists and expertise could be 
strengthened by consolidation while 1 DFE IG indicated that it would be 
weakened. Twenty-seven IGs (19 DFE and 8 Presidential) indicated that 
consolidation would have no impact on this ability. (See figure 27.) 
One DFE IG commented that there is currently no difficulty obtaining 
needed specialists and expertise. Another DFE IG stated that the IGs 
already share such skills. 

Figure 27: Potential Effect of Consolidation on the IGs’ Ability to 
Share Technology Specialists and Expertise: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 7; 
Weakened: 1; 
Neither: 19; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 19; 
Weakened: 0; 
Neither: 8; 
Not applicable: 1. 

[End of figure] 

Efficient Use of Human Capital Skills: 

The survey results were also characteristically widespread between the
responses of the Presidential IGs and the DFE IGs regarding 
consolidation and the efficient use of human capital skills. Twenty-
four IGs (17 DFE and 7 Presidential) indicated that consolidation would 
have no impact. However, 22 IGs (18 Presidential and 4 DFE) indicated 
that consolidation could strengthen the efficient use of human capital 
skills. In addition, 3 DFE IGs indicated that this could be weakened. 
(See figure 28.) 

Figure 28: Potential Effect of Consolidation on the IGs’ Efficient Use 
of Human Capital Skills and Resources across the Federal Government: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 4; 
Weakened: 3; 
Neither: 17; 
Not applicable: 4. 

Presidential IGs (number of IG responses): 
Strengthened: 18; 
Weakened: 0; 
Neither: 7; 
Not applicable: 3. 

[End of figure] 

Availability of Adequate IG Resources: 

The availability of adequate IG resources could be weakened by
consolidation according to the responses of 20 DFE IGs and 7 
Presidential IGs. At the same time, 12 IGs (9 Presidential and 3 DFE) 
indicated that the availability of resources could be strengthened. 
Nine IGs (seven Presidential and two DFE) responded that consolidation 
would have no impact. (See figure 29.) 

Figure 29: Potential Effect of Consolidation on the Availability of 
Adequate IG Resources: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 3; 
Weakened: 20; 
Neither: 2; 
Not applicable: 3. 

Presidential IGs (number of IG responses): 
Strengthened: 9; 
Weakened: 7; 
Neither: 7; 
Not applicable: 5. 

[End of figure] 

Availability of IG Resources to Cover DFE Issues: 

Similar to their concerns about the potential for the lack of audit 
coverage of DFE agency issues if the DFE IGs were consolidated, 38 IGs 
(26 DFE and 12 Presidential) responded that resources available to 
cover DFE issues would be weakened by consolidation. Nevertheless, 7 
Presidential IGs indicated that consolidation could strengthen the 
coverage of DFE agencies. Six IGs (five Presidential and one DFE) 
indicated that consolidation would have no effect. (See figure 30.) 

Figure 30: Potential Effect of Consolidation on the Availability of 
Resources to Cover DFE Agency Issues: 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Strengthened: 0; 
Weakened: 26; 
Neither: 1; 
Not applicable: 1. 

Presidential IGs (number of IG responses): 
Strengthened: 7; 
Weakened: 12; 
Neither: 5; 
Not applicable: 4. 

[End of figure] 

Strengthening the PCIE and ECIE: 

Our survey addressed issues that would affect the PCIE and ECIE. The
survey responses indicated that the PCIE and ECIE could be strengthened
by establishing an alternative council under statute with specified 
funding sources and defined roles and responsibilities. It was 
generally viewed that statutory authority with stated roles, 
responsibilities, and funding sources would provide an alternative to 
the PCIE and ECIE with a permanent, institutional footing that would 
allow the IGs to reach their full potential and better serve the needs 
of the administration and the Congress. 

We asked the IGs how establishing the PCIE and ECIE by statute rather
than executive order would affect the effectiveness of these councils.
Thirty-four IGs (18 DFE and 16 Presidential) indicated that it was
important for the PCIE and ECIE to be established under statute. 
Nineteen IGs (12 Presidential and 7 DFE) believe such statutory 
councils would be of little or no importance. (See figure 31.) 

Figure 31: How Important Is It to Establish a Statutory PCIE/ECIE 
Organization for Improving Their Operations? 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Important: 18; 
Not important: 7; 
No opinion: 3. 

Presidential IGs (number of IG responses): 
Important: 16; 
Not important: 12; 
No opinion: 0. 

[End of figure] 

We also asked the IGs whether having designated funding sources for the
PCIE and ECIE would be of importance. Forty-six IGs (24 DFE and 22
Presidential) believe that a designated funding source for the 
operation of these councils would be of importance, and seven IGs (five 
Presidential and two DFE) believe such funding is of little or no 
importance. (See figure 32.) In addition, we asked the IGs whether 
stated roles and responsibilities of the PCIE and ECIE in statute would 
be of importance. Thirty-seven IGs (21 DFE and 16 Presidential) 
responded that such statutory roles and responsibilities would be of 
importance, and 16 (11 Presidential and 5 DFE) indicated that they 
would be of little or no importance. (See figure 33.) 

Figure 32: How Important Is It to Provide Designated Funding Sources to 
the PCIE/ECIE Organization for Improving Their Operations? 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Important: 24; 
Not important: 2; 
No opinion: 2. 

Presidential IGs (number of IG responses): 
Important: 22; 
Not important: 5; 
No opinion: 1. 

[End of figure] 

Figure 33: How Important Is It to Establish Stated Roles and 
Responsibilities of an Alternative PCIE/ECIE Organization in Order to 
Improve Operations? 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Important: 21; 
Not important: 5; 
No opinion: 2. 

Presidential IGs (number of IG responses): 
Important: 16; 
Not important: 11; 
No opinion: 1. 

[End of figure] 

Comments from individual IGs indicate that appropriate statutory powers
could provide some improvements to the PCIE and ECIE. One IG stated
that such a statute would give shape, direction, and a mission to the 
PCIE. Another IG commented that, once under statute, there would be a 
wider base of support for the PCIE and ECIE by those sponsoring the 
legislation. In other comments, some IGs stated that this would 
facilitate getting the IG message to the Congress and the 
administration, would provide visibility and clout to the councils, 
eliminate the appearance of conflict between IGs and the chair of the 
councils, and provide the appearance that the PCIE stands independently 
rather than as a subgroup of the Office of Management and Budget. 
Perhaps most significantly, one IG stated that having these councils 
established through legislation would provide permanent and 
institutional footing. 

Agency Budgets are Not the Sole Criteria for Establishing IGs: 

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) established offices of inspectors general in 33 
designated federal entities and GPO. One of the criteria used by the 
Congress to determine where to establish these new IGs offices was a 
budget threshold of $100 million for the designated federal entities. 
Specifically, those agencies with an annual budget of $100 million or 
greater were considered for inclusion in the IG Act Amendments of 1988. 
Other agencies below this budget threshold were also included for 
specific reasons. 

In preparation for our survey, we calculated that the $100 million 
threshold from 1988 would have been about $134 million in fiscal year 
2000, if adjusted for inflation. [Footnote 10] If this budget threshold 
were applied to the current agencies that have statutory IGs, 12 
agencies would no longer meet this budget criteria to justify an IG 
office. (See appendix VI.) In response to our survey, 46 IGs (26 DFE 
and 20 Presidential) indicated that dollar thresholds of agency budgets 
should not be the primary factor determining which agencies should have 
IGs. However, nine IGs (eight Presidential and one DFE) indicated that 
budget dollar thresholds should be the primary factor. (See figure 34.) 
One IG stated that the primary factor for determining which agencies 
should have IGs should be the level of oversight that the Congress 
desires. Additional IGs responded that other factors, such as the 
importance of the agency’s mission and the associated risks, should be 
considered. Also, eight IGs (17 DFE and 11 Presidential) responded that 
agencies with budgets below the $134 million threshold should have IGs. 
However, 14 IGs (13 Presidential and 1 DFE) indicated that an IG is not 
necessary for those agencies. (See figure 35.) In their comments, the 
IGs stated that dollar thresholds are not meaningful by themselves and 
that the budgets may be just one factor in making such a determination. 
Another IG stated that the impact on public services should be 
considered, including vulnerable groups and overseas missions. 

Figure 34: Should Dollar Thresholds of Agency Budgets Be the Primary 
Factor in Determining Which Agencies Have an IG? 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Yes: 1; 
No: 26; 
No opinion: 0. 

Presidential IGs (number of IG responses): 
Yes: 8; 
No: 20; 
No opinion: 0. 

[End of figure] 

Figure 35: Are Statutory IGs Needed for Agencies with Budgets Below 
$134 Million? 

[See PDF for image] 

This figure is a vertical bar graph depicting the following data: 

Designated federal entity IGs (number of IG responses): 
Needed: 17; 
Not needed: 1; 
No opinion: 7. 

Presidential IGs (number of IG responses): 
Yes: 11; 
No: 13; 
No opinion: 4. 

[End of figure] 

Survey Conclusions and GAO Views Regarding Conversion and 
Consolidation: 

We believe that if properly structured and implemented, the conversion
and/or consolidation of selected DFE IG offices could serve to enhance 
the overall independence, economy, efficiency, and effectiveness of the 
IG community. We recognize that there are potential weaknesses resulting
from consolidation, as indicated by the DFE IGs’ responses, that would
have to be mitigated through proactive and targeted actions in order 
for the benefits of consolidation to be realized without adversely 
affecting DFE agency audit coverage. One of the most important of these 
targeted areas would be communication between the IG and the agency 
head as well as agency management officials where the IG is responsible 
for oversight. The lack of an IG at the DFE agency should be mitigated 
by the physical presence of at least one of the consolidated IG’s 
staff. 

Also, we agree with the IGs’ responses that indicate a legislative
underpinning for the PCIE and ECIE could strengthen the effectiveness of
these or alternative councils of IGs. In addition, we believe that any
legislative underpinning should include a requirement for coordinating 
the efforts of these organizations with other oversight organizations, 
such as GAO. Regarding the use of agency budgets as the criteria for 
establishing IG offices in federal agencies, we agree with the IG 
responses that indicate other factors, such as the risk and mission of 
the agency, must be considered in addition to their budgets. 

Independence: 

The Presidential IGs mostly indicated that conversion could strengthen
DFE IG independence while the DFE IGs’ generally indicated that there
would be no effect on their independence. Likewise, in their responses
regarding the impact of consolidation on independence, the IGs were
predictably different in their responses with Presidential IGs 
indicating a strengthening of independence and the DFE IGs indicating 
either a weakness or no impact. 

DFE IGs are established in legislation in a manner that makes them
independent external auditors under Government Auditing Standards.
The IG Act provides the DFE IGs with statutory protections, that among
others, prevent the audited entity from interfering with the initiation,
scope, timing, and completion of any audit and provide the IGs access to
records and documents that relate to the agency, program, or function
being audited. On the other hand, having IGs appointed by the President
with Senate confirmation provides a higher level of appearance of
independence. At the same time, given the number and relatively small 
size of all but a few of the DFE IG offices and the organizations they 
are responsible for auditing, it is not practical for all of them to be 
converted to Presidential appointment and we do not favor the wholesale 
conversion of DFE IGs to Presidential IGs. Therefore, the consolidation 
of some DFE IG offices with Presidential IG offices would also serve to 
increase the perceived independence of the IGs where conversion is not 
practical. 

IG Quality of Work: 

The Presidential IGs also generally indicated that consolidation could
strengthen the IGs’ quality of work, while the DFE IGs indicated that
consolidation would either have no impact or would weaken quality as
related to (1) the ability to issue hard-hitting reports when necessary,
(2) the ability to review issues that cross agencies, (3) the ability 
to get attention to IG audit recommendations, (4) the ability to audit 
issues of high risk and priority, (5) the presence of the IG as a 
preventative measure, and (6) the ability to plan work. 

We believe that consolidation could serve to strengthen the IGs’ 
ability to issue hard-hitting reports, to issue reports on cross-agency 
issues, to get attention to their audit recommendations, and to address 
high-risk and priority areas because IGs of consolidated offices could 
use their broader range of resources in the context of a governmentwide 
perspective rather than in the context of a single, relatively small 
agency. In addition, consolidation per se does not have to result in 
any material reduction on the IGs’ day-to-day contact and communication 
with the agency head and ability to report on DFE agency performance as 
long as IGs maintain some physical presence at the DFE agencies or take 
other proactive steps to mitigate any potential reduction in 
communication and audit coverage. Finally, in our view, consolidation 
could enable IG offices to better target overall resources in planning 
their work to areas of greatest value and risk. 

Use of IG Resources: 

The Presidential and DFE IGs also had differences in their responses
regarding the impact that consolidation could have on the use of IG
resources. The DFE IGs responded that consolidation would weaken or
have no impact, while the Presidential IG responses indicated that
consolidation could strengthen (1) the ability to control spending, (2) 
the ability to control budget requests, (3) the ability to absorb budget
reductions, (4) the availability of investigative resources, (5) the 
ability to minimize duplication of audit efforts across IGs, (6) the 
ability to share methods, (7) the ability to share technology 
specialists, (8) the efficient use of human capital skills, and (9) the 
availability of adequate resources. 

We believe that consolidation would serve to strengthen the ability of 
IGs to improve the allocation of human and financial resources within 
their offices and to attract and retain a workforce with the talents,
multidisciplinary knowledge, and up-to-date skills to ensure the IG 
office is equipped to achieve its mission. For the majority of DFE IG 
offices, we view consolidation not only as a means to achieve economies 
of scale but more importantly as providing an enhanced critical mass of 
skills, particularly given the emergence of technology and the ever 
increasing need for technical staff with specialized skills. This is 
especially appropriate given the limited resources in most DFE IG 
offices where 12 DFE IGs had five or fewer full time equivalent staff 
and another five had less than 10 staff. In addition, consolidation 
should serve to increase the availability of investigative resources 
through economies of scale and other efficiencies and reduce the 
potential for duplication of work across IGs through enhancement of a 
value and risk approach to the investment and allocation of IG 
resources. Likewise, consolidation would serve to increase the ability 
of IGs to share methods and to leverage overall IG resources to 
increase the ability of IGs to properly use IG personnel in technical 
areas, including information systems and forensic audits. 

Potential Weaknesses and Mitigation of Risks: 

The survey responses from both the Presidential and DFE IGs did indicate
agreement that certain elements of effectiveness could be weakened
through consolidation. These include potential weaknesses in (1) the 
day-to-day contact of IGs and DFE agency officials, (2) knowledge of 
the DFE agency missions, (3) knowledge of DFE agency priorities, and 
(4) the availability of resources to cover DFE agency issues. 
Additional potential weaknesses were identified by the DFE IGs while 
the Presidential IGs’ answers to the same questions were inconclusive 
due to their relatively even distribution across the possible 
responses. The potential weaknesses cited by the DFE IGs were in (1) 
communication between the DFE agency head and the IG, (2) the ability 
of the DFE agency head to get the attention of the IG, (3) the 
timeliness of IG reporting, and (4) oversight coverage of the DFE 
agencies. 

We agree that if appropriate actions were not taken to mitigate 
potential weaknesses, consolidation could weaken (1) the ability of the 
DFE IGs to have day-to-day contact with senior DFE agency officials, (2)
communication between the DFE head and the IG, (3) the ability of the
DFE agency head to get the attention of the IG, (4) the knowledge of DFE
agency missions, (5) the knowledge of DFE agency priorities, and (6) the
resources to cover DFE issues. However, we believe that for the areas of
potential weaknesses indicated by the IGs, proactive steps could be 
taken to reduce the related risks and mitigate their impact on IG 
effectiveness to an acceptable level. For example, where appropriate a 
consolidated IG could maintain onsite facilities at DFE agencies with 
one or more dedicated staff to foster day-to-day communication with 
agency officials and communication with the DFE head. To facilitate 
oversight planning and to provide adequate oversight coverage, the IGs 
could leverage the detailed knowledge of the DFE agencies’ missions and 
priorities by obtaining information from existing DFE IG personnel. In 
addition, the current DFE IG staff would be available to provide the 
necessary information for the proper planning and oversight of the DFE 
agencies. An additional concern by the DFE IGs, the timeliness of 
reports, could be addressed by having the IG establish priorities for 
reports on selected DFE agency issues based on risk. Finally, if 
congressional attention were given to mitigating the potential 
weaknesses identified by the IG responses to our survey, consolidation 
would not necessarily result in a loss of IG effectiveness in these 
areas. 

For about 90 percent of the DFE IGs, many of their additional comments
indicated concern about the potential loss of adequate audit coverage of
the DFE agencies that could result from consolidation. About 28 percent 
of the Presidential IGs also had the view that audit coverage of the 
DFEs would be weakened. While there may be a fewer number of audits or 
even less coverage of those issues currently audited at the DFE 
agencies, the survey responses of the Presidential IGs indicate that 
coverage by a consolidated IG could address areas of higher risk, 
value, and priority, resulting in potentially a more efficient and 
effective use of overall IG resources. 

Strengthening the PCIE and ECIE: 

The survey results indicate a general agreement among both the
Presidential and DFE IGs that a statutory alternative to the PCIE and 
ECIE along with a specified funding source and stated roles and 
responsibilities would be beneficial. In our view, providing a 
statutory basis for the roles and responsibilities of IG councils would 
help ensure permanence of the councils and further enhance the 
appearance of the councils’ independence. Further, if adequately funded 
the councils’ capability to be more effective and proactive by taking 
on a broader scope and more sensitive issues would also be enhanced. In 
addition, the PCIE and ECIE or any alternative statutory council should 
have a mechanism in place that would ensure the coordination and 
sharing of information among these councils and other federal oversight 
organizations, including our office. This should include developing 
strategic and annual plans and addressing ongoing areas of mutual 
interest, such as methodologies, tools, and training. Through this 
increased coordination, the efficient and effective use of all federal 
oversight resources, as well as the overall effectiveness of the IGs, 
can be greatly enhanced. 

Agency Budgets as Criteria for Establishing IG Offices: 

The Presidential and DFE IGs were in general agreement that the use of 
an agency budget threshold as sole criteria for establishing IG offices 
would not be appropriate. In our view, the determination of whether an 
agency should have its own IG should be based on a range of issues to 
include (1) the nature of the agency, (2) the risk and value of the 
agency’s operations and activities, (3) the significance of the 
financial amounts involved, and (4) critical mass and economies of 
scale considerations. 

Approaches to IG Conversion and Consolidation: 

As you requested, we are providing a discussion on conversion and
consolidation options. Specific conversions, consolidations, and changes
to the structure of the IG community should be a process of continuing
dialogue among the PCIE, ECIE, affected agencies, and the Congress. We
do not believe the wholesale conversion of all DFE IGs to Presidential
appointment with Senate confirmation would be beneficial, nor do we
believe that all DFE IGs should be consolidated with Presidential IGs. 
For example, we do not include the Government Printing Office (GPO) IG 
as an option for consolidation because it is a legislative branch 
office and therefore not a candidate for either conversion or 
consolidation with an executive branch office. Various approaches exist 
to reorganize the IGs based on the resulting effectiveness of 
conversion and consolidation. The following options are intended to 
foster discussion among interested parties should the Congress decide 
to pursue such changes, and are not specifically recommended for 
implementation without consideration of input from the affected 
agencies, the IGs, congressional committees, and other interested 
parties. 

Options for Conversion: 

In terms of budget size, the DFE IGs at the U.S. Postal Service (USPS),
National Science Foundation (NSF), Amtrak, Federal Reserve Board
(FRB), and GPO have staff and budgets comparable to Presidential IGs,
and, in the case of USPS, much larger than most Presidential IGs. On 
that basis, these IGs could be considered for conversion to appointment 
by the President with Senate confirmation with the exception of the GPO 
IG, which is a legislative branch office and therefore not a candidate 
for conversion or consolidation. Specifically, the USPS IG was the 
fifth largest IG office in terms of all fiscal year 2000 IG budget 
resources. The NSF IG had fiscal year 2000 budget resources that were 
larger than two Presidential IGs. Also, while the Amtrak IG has budget 
resources comparable to some Presidential IGs, the oversight of Amtrak 
is closely related to the work of the Department of Transportation 
(DOT) IG. Moreover, the DOT IG currently provides some oversight of 
various Amtrak programs. Therefore, the consolidation of the Amtrak IG 
with the DOT IG could be considered, rather than conversion to 
Presidential appointment with Senate confirmation. 

Assuming that USPS, NSF, and FRB IGs were converted to Presidential
appointment, the Amtrak IG were consolidated with the DOT IG, and the
GPO IG had no changes, the remaining 23 DFE IGs had total fiscal year
2000 budgets of about $21 million, or about 1 percent of all IG 
budgets, and total staff of about 172. Staff sizes at these remaining 
23 DFE IGs ranged from a low of one at the Federal Labor Relations 
Authority IG to a high of 20 at the Smithsonian Institution IG. 
Therefore, we do not view these remaining 23 IGs, 17 of which had less 
than 10 full time equivalent staff, as candidates for conversion. 

Illustrative Potential Option for Consolidation: 

Presented in appendix II is one option for consolidating the Amtrak and
DOT IGs and many of the remaining 23 IGs with other Presidential IG
offices if the USPS, NSF, and FRB IGs were converted to Presidential
appointment and the GPO IG remained the same. This option indicates
how agency missions may suggest consolidation of DFE IGs with
Presidential IGs to provide oversight of DFE agencies. For example, the
consolidation of the IGs at the Legal Services Corporation, Equal
Employment Opportunity Commission, and the Federal Trade Commission
with the Department of Justice IG would bring together those DFE IGs 
with a Presidential IG to address law enforcement and legal issues. In 
another example, the consolidation of IGs at Amtrak and the Federal 
Maritime Commission with the Department of Transportation IG would 
combine those IG offices that focus on transportation-related issues. 

Matters for Congressional Consideration: 

Our survey results did not provide a clear cut agreement from the
combined IGs’ responses regarding the impact of conversion and
consolidation on the effectiveness of DFE IG offices. However, the
Presidential IGs did indicate that elements of effectiveness could be
strengthened and we generally agree. In our view, the conversion and
consolidation of selected DFE IG offices would, if implemented properly,
serve to enhance the overall independence, economy, efficiency, and
effectiveness of the IG community. Therefore, based on these IG 
responses and our views, we are providing the following matters for 
congressional consideration intended as a starting point for a dialogue 
among the PCIE, the ECIE, the affected agencies, and the Congress. 
These matters are that the Congress consider: 

(1) amending the IG Act to elevate the IGs at USPS, NSF, and FRB to
Presidential status; 
(2) amending the IG Act to consolidate DFE IGs with Presidential IGs
based on related agency missions or where potential benefits to IG
effectiveness can be shown, and; 
(3) establishing an IG council by statute that includes stated roles and
responsibilities, designated funding sources, and provisions for the
coordination of annual, strategic, and ongoing plans with other federal
oversight organizations, such as our office. 

Agency Comments and Our Response: 

We received comments on a draft of this report from the PCIE and ECIE,
both of which had consolidated comments from the responding IGs within
their respective councils. Similar to the survey results discussed in 
the body of this report, there was a clear divergence in views between 
the comments received from the Presidential IGs in the PCIE’s response 
and the DFE IGs in the ECIE’s response. The difference is not 
surprising given the potential impact of consolidating the DFE IGs with 
the Presidentially appointed IGs compared to the related interests of 
the two groups of IGs. We believe that this difference in perspective 
between the two groups of IGs, more than any other factor, helps to 
explain the significant divergence in the responses to the survey as 
well as in the comments on our draft report. The PCIE and ECIE IGs’ 
comments also included technical changes that have been incorporated in 
our report. 

The consolidated PCIE response did not take exception to the information
or conclusions presented in our draft report. The response specifically
stated that none of the PCIE IGs objected to our conclusion that
establishing an IG council by statute with defined roles and designated
funding sources could strengthen the effectiveness of these councils and
points out that in July 2000 the Vice Chair of the PCIE testified in 
support of legislation to codify the PCIE and ECIE. 

According to the PCIE comment letter, of the 25 IGs responding to the
request for input to the PCIE response, 16 had no comments. The
remaining nine Presidential IGs discussed issues of concern or technical
corrections, with eight IGs commenting on the depth with which our 
report discusses certain implementation issues surrounding 
consolidation or conversion. Among the implementation issues discussed 
by the Presidential IGs are funding, staff resources, areas of 
expertise, and criteria for consolidation. One particular 
implementation issue involved an IG office being subject to supervision 
by more than one agency head, assuming that a consolidation initiative 
would be approached from a functional perspective, such as having one 
IG provide audit services for all grant-making agencies. 

We understand and appreciate the desire for additional detail on how any
such changes or realignments might be accomplished. Likewise, we fully
agree that the implementation issues raised by the Presidential IGs 
would be key to the success and effectiveness of such an endeavor. In 
this regard, it was not our objective to identify or recommend a 
specific strategy or approach for accomplishing this. As stated in our 
report, any specific conversions, consolidations, and changes to the 
structure of the IG community should be a process of continuing 
dialogue among the PCIE, ECIE, affected agencies, and the Congress. 

Clearly, various approaches exist to reorganize the IGs based on the
resulting effectiveness of conversion or consolidation. The scenarios we
offer are intended to foster discussion among interested parties should 
the Congress decide to purse such changes, and are not specifically
recommended for implementation without consideration of input from the
affected agencies, the IGs, congressional committees, and other 
interested parties. 

In contrast with the PCIE’s general agreement with our report, the ECIE
raised broad concerns with our report conclusions and methodology.
Specifically, the ECIE stated its belief that (1) our report draws 
conclusions that are inconsistent with the preponderance of the survey 
responses and lacks supporting evidence, (2) the consolidation of IG 
offices presents certain implementation problems, and (3) the effect of 
recent revisions to auditor independence standards after our survey was 
conducted could have changed the survey results. In addition, the ECIE 
cited a prior GAO survey of IGs where the IGs indicated that they had 
the resources and expertise necessary to carry out their 
responsibilities. 

Specifically, in commenting on our survey results, the ECIE stated that,
“The DFE IGs do not believe the report shows that the IG structure 
created by the IG Act and 1988 amendments is broken and in need of a 
‘fix’ as complex and substantive as consolidation.” Our report does not 
include, nor was it the objective of our survey, to identify problems 
that must be corrected in order for DFE IGs to be effective. As clearly 
stated in our report, the objective of our survey was to obtain the 
views of the IGs on how independence, quality of work, and use of 
resources might be affected by conversion or consolidation of DFE IGs 
with Presidentially appointed IGs. 

The ECIE also commented that, “GAO draws conclusions that are
inconsistent with the preponderance of the survey responses.” As a 
basis for this comment, the ECIE recast the results of our survey 
without distinguishing between the Presidential IGs and the DFE IGs, 
and also combined the “no impact” responses with the “weakened” 
responses. The ECIE’s recasting of the survey results by combining all 
the IG responses is inappropriate given the widely differing 
perspectives and interests between the Presidential IGs and the DFE 
IGs, which are clearly demonstrated by the survey results. It is 
misleading to disregard these differences by relying on a simple 
majority of responses when analyzing the survey results. To do so would 
have resulted in a report that lacks contextual sophistication and that 
would have been of little value to the Congress and other readers. 
Instead, we provided a more detailed analysis of survey responses by
Presidential IG and DFE IG categories that clearly showed where
differences and a lack of consensus exist. In addition, to provide a
balanced, objective analysis, we showed the IGs’ “no impact” responses 
as a separate category. By their separate definitions, it is 
inappropriate to combine the “no impact” responses with either the 
“strengthened” or “weakened” responses for purposes of analyzing or 
presenting the survey results. Finally, due to the widely divergent 
views of the ECIE and PCIE IGs, we chose to add our own views on the 
potential impact of conversion and consolidation, which represent our 
independent, objective and professional opinion on these matters. 

In comments about the implementation of IG consolidation, the ECIE
states that “GAO’s proposed consolidation scenarios are overly 
simplistic given the diverse missions of the agencies involved; the 
various types of funding, administrative, and personnel authorities and 
practices; the differences in congressional oversight and 
appropriations processes; and the separate governance and oversight 
structures of the regulatory entities, state and/or federal 
commissions, independent corporations and boards, and unique agencies 
that comprise the DFE IG agencies.” The options presented in our report 
are intended to illustrate several possible ways of conversion and 
consolidation of specific IG offices. As mentioned previously, our 
report clearly states that any specific conversions or consolidations 
of IG offices should be a process of continuing dialogue among the 
PCIE, ECIE, affected agencies, and Congress. For instance, the examples 
of possible IG consolidations provided by our report are intended as a 
starting point for discussions on where the most appropriate 
consolidations might occur and are based on similarities in the basic
missions of the agencies. We fully agree that other options for 
conversions and consolidations may be appropriate in that the missions 
of all the IGs as defined by the IG Act are the same regardless of 
their agencies’ missions. 

Regarding the implementation of IG consolidations, the ECIE’s comments
state that: “The DFE IGs also emphasized that consolidation sacrifices
providing a local preventive presence, oversight, and focus at 
individual agencies or entities in favor of potentially fragmenting the 
attention of a larger IG office across a broad and diverse spectrum of 
programs and operations.” The ECIE further points out that “... 
legitimate questions could be raised regarding whether priorities at 
the DFE agencies would be considered “areas of greatest value and risk 
...” and “ ... consolidation would probably result in fewer resources 
to cover DFE agencies.” 

These examples of possible negative impact resulting from consolidation 
provided by the ECIE’s comments are clearly identified in our draft 
report, which concludes that these weaknesses would need to be 
mitigated for the benefits of consolidation to be fully realized. Our 
report also states that these weaknesses can be mitigated by providing 
an IG presence at each DFE agency, using the expertise of current IG 
staff for planning required oversight, and by providing adequate audit 
coverage. Our report concludes that consolidation could strengthen the 
ability of IGs to improve the allocation of human and financial 
resources within their offices and to attract and retain a workforce 
with the talents, multidisciplinary knowledge, and up-to-date skills to 
ensure that the IG office is equipped to achieve its mission. DFE IG 
offices are generally very small - 11 have 5 or fewer staff - compared 
to the Presidential IG offices where 23 have over 100 staff. Basically, 
for the vast majority of DFE IG offices, consolidation is not only a 
means to achieve economies of scale and greater independence but, more 
importantly, a way to provide an enhanced critical mass and range of 
skills, particularly given the rapidly evolving emergence of technology 
and the ever-increasing need for technical staff with specialized 
skills. 

Regarding the potential impact of recent changes in standards [Footnote 
11] for auditor independence on our survey results, the ECIE states 
that “The DFE IGs strongly believe that, contrary to GAO’s assertion in 
the report, the survey results may have been materially affected by 
this amendment. The revised standards, for the first time, recognize 
specifically that Presidential appointment with Senate confirmation is 
but one way of achieving organizational independence and that other 
organizational structures can provide independence if a detailed list 
of safeguards are met.” We disagree with the implication of the DFE 
IGs’ comments that the revised auditor independence standard [Footnote 
12] may have materially affected our survey results. Under Government 
Auditing Standards, which are issued by the Comptroller General, the 
DFE IGs were previously recognized as being independent. What the new 
standard does is to more fully articulate the rationale for this 
recognition by explicitly stating the criteria that is used in the 
independence provisions of the IG Act. The DFE IGs have been considered 
independent under Government Auditing Standards since they were 
established by the 1988 IG Act amendments. Therefore, the independence 
of the DFE IGs both before and after the revised standards is the same. 
Moreover, the survey questions focused on the relative impact of 
conversion and consolidation on IG independence, which are valid 
questions regardless of the revised standards. 

Finally, the ECIE’s comments cited a prior GAO report [Footnote 13] 
which concluded that “... the IGs’ work covers a broad spectrum of 
agency programs and operations and, in general, the IGs indicated that 
they have the expertise and resources necessary to assemble the teams 
of staff needed to perform the major types of work for which they are 
responsible.” The ECIE also noted that this previous report also 
indicated that “IGs have the capability to obtain contractors or 
consultants, as needed, to provide supplementary expertise in certain 
areas.” In this regard, our prior report and our current report need to 
be considered within the context of their different purposes, scope, 
and objectives, the major difference being that the objectives of our
prior report did not extend to obtaining and analyzing the IGs’ views 
as to whether the ability to obtain necessary resources could be 
strengthened or weakened by the conversion or consolidation of DFE IGs 
and Presidential IGs. The survey responses of the Presidential IGs 
point to a significant difference in the inherent ability of a large 
audit organization versus a very small organization to address the need 
for specialized expertise and skills, which is our view as well. 

As agreed with your office, unless you announce its contents earlier, we
plan no further distribution of this report until 30 days after its 
issuance date. At that time, we will send copies to the Ranking 
Minority Member of the House Committee on Government Reform, the 
Chairman and Ranking Member of the Senate Committee on Governmental 
Affairs, the Deputy Director for Management of the Office of Management 
and Budget, and the federal offices of inspectors general. After our 
final distribution this report will be available at no charge on the 
GAO Web site at [hyperlink, http://www.gao.gov]. 

If you have any questions or would like to discuss this report, please
contact Jeanette M. Franzel, Director, at (202) 512 9471, or by e-mail 
at franzelj@gao.gov; or Jackson Hufnagle, Assistant Director, at (202) 
512 9470, or by e-mail at hufnaglej@gao.gov. 

Sincerely yours, 

David M. Walker: 
Comptroller General of the United States: 

[End of section] 

Appendix I: Summary of IG Survey Responses Regarding Conversion and 
Consolidation: 

IG effectiveness category: 1. IG independence; 
Elements of IG effectiveness: Conversion, Independence resulting from 
conversion; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 2; 
Elements of IG effectiveness: Conversion, Actual independence; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 3; 
Elements of IG effectiveness: Appearance of independence; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 4, IG quality of work; 
Elements of IG effectiveness: Ability to issue hard-hitting reports; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 5; 
Elements of IG effectiveness: Ability to review issues crossing DFEs; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 6; 
Elements of IG effectiveness: Attention to IG recommendations; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 7; 
Elements of IG effectiveness: Ability to audit issues of high risk; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 8; 
Elements of IG effectiveness: Ability to uniformly measure performance; 
Summary of survey responses with GAO views, Presidential IGs: No 
impact; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: No impact. 

IG effectiveness category: 9; 
Elements of IG effectiveness: Day-to-day contact with DFE officials; 
Summary of survey responses with GAO views, Presidential IGs: Weakened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Weakened. 

IG effectiveness category: 10; 
Elements of IG effectiveness: Communication - DFE head and the IG; 
Summary of survey responses with GAO views, Presidential IGs: 
Inconclusive[A]; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Weakened. 

IG effectiveness category: 11; 
Elements of IG effectiveness: Ability of DFE head get attention of the 
IG; 
Summary of survey responses with GAO views, Presidential IGs: 
Inconclusive[A]; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Weakened. 

IG effectiveness category: 12; 
Elements of IG effectiveness: Presence of IG as a prevention measure; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: No impact. 

IG effectiveness category: 13; 
Elements of IG effectiveness: Knowledge of DFE missions; 
Summary of survey responses with GAO views, Presidential IGs: Weakened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Weakened. 

IG effectiveness category: 14; 
Elements of IG effectiveness: Knowledge of DFE priorities and issues; 
Summary of survey responses with GAO views, Presidential IGs: Weakened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Weakened. 

IG effectiveness category: 15; 
Elements of IG effectiveness: Planning for IG oversight; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 16; 
Elements of IG effectiveness: Timeliness of reports; 
Summary of survey responses with GAO views, Presidential IGs: 
Inconclusive[A]; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: No impact. 

IG effectiveness category: 17; 
Elements of IG effectiveness: Oversight coverage of the DFEs; 
Summary of survey responses with GAO views, Presidential IGs: 
Inconclusive[A]; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: No impact. 

IG effectiveness category: 18, IG resources; 
Elements of IG effectiveness: Control over spending; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact. 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 19; 
Elements of IG effectiveness: Control over budget requests; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact. 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 20; 
Elements of IG effectiveness: Ability to absorb resource reductions; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: Inconclusive[A]; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 21; 
Elements of IG effectiveness: Resources for investigative coverage; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 22; 
Elements of IG effectiveness: Ability to minimize audit duplication; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 23; 
Elements of IG effectiveness: Quality of audit training; 
Summary of survey responses with GAO views, Presidential IGs: No 
impact; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: No impact. 

IG effectiveness category: 24; 
Elements of IG effectiveness: Ability share methods
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 25; 
Elements of IG effectiveness: Ability to share technology specialists; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 26; 
Elements of IG effectiveness: Efficient use of human capital skills; 
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: No impact; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 27; 
Elements of IG effectiveness: Availability of adequate resources
Summary of survey responses with GAO views, Presidential IGs: 
Strengthened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Strengthened. 

IG effectiveness category: 28; 
Elements of IG effectiveness: Resources to cover DFE issues; 
Summary of survey responses with GAO views, Presidential IGs: Weakened; 
Summary of survey responses with GAO views, DFE IGs: Weakened; 
Summary of survey responses with GAO views, GAO: Weakened. 

[A] The IG responses were generally evenly divided among possible 
answers. 

[End of section] 

Appendix II: Potential IG Consolidations and Related Agency Missions: 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of Agriculture; 
Primary agency missions: Enhance the quality of life by supporting the
production of agriculture. 

Illustrative examples of agencies that could consolidate IG oversight: 
Farm Credit Administration; 
Primary agency missions: Promote a safe and sound competitive Farm 
Credit System. 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of Commerce; 
Primary agency missions: Promote job creation, economic growth, and 
sustain development and improved living standards. 

Illustrative examples of agencies that could consolidate IG oversight: 
Federal Communications Commission; 
Primary agency missions: Regulation of communications by radio, 
television, mire satellite, and cable. 

Illustrative examples of agencies that could consolidate IG oversight: 
Corporation for Public Broadcasting; 
Primary agency missions: Provide grants to qualified public television 
and radio stations to be used primarily for program production or 
acquisition. 

Illustrative examples of agencies that could consolidate IG oversight: 
Appalachian Regional Commission; 
Primary agency missions: Support economic and social development in the 
Appalachian region. 

Illustrative examples of agencies that could consolidate IG oversight: 
U.S. International Trade Commission; 
Primary agency missions: Administer U.S. trade laws and provide 
information on trade matters. 

Illustrative examples of agencies that could consolidate IG oversight: 
Consumer Product Safety Commission; 
Primary agency missions: Reduce the risk of injuries and deaths from 
consumer products. 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of Housing and Urban Development; 
Primary agency missions: Promote a decent, safe, and sanitary home and 
living environment for all. 

Illustrative examples of agencies that could consolidate IG oversight: 
Federal Housing Finance Board; 
Primary agency missions: Regulate banks that help finance community 
development needs. 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of Justice; 
Primary agency missions: Enforcement of laws in the public interest. 

Illustrative examples of agencies that could consolidate IG oversight: 
Legal Services Corporation; 
Primary agency missions: Ensure equal access to justice under the law. 

Illustrative examples of agencies that could consolidate IG oversight: 
Equal Employment Opportunity Commission; 
Primary agency missions: Enforce federal statutes prohibiting 
discrimination. 

Illustrative examples of agencies that could consolidate IG oversight: 
Federal Trade Commission; 
Primary agency missions: Prevent monopolies, restraints, and unfair and 
deceptive practices that affect free enterprise. 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of the Treasury; 
Primary agency missions: Responsible for financial, economic, and tax 
policy, as well as financial law enforcement and the manufacturing of 
coins and currency. 

Illustrative examples of agencies that could consolidate IG oversight: 
Securities and Exchange Commission; 
Primary agency missions: Administer federal securities laws that seek 
to provide protection for investors, to ensure that securities markets 
are fair and honest, and to provide the means to enforce securities 
laws through sanctions. 

Illustrative examples of agencies that could consolidate IG oversight: 
Commodity Futures Trading Commission; 
Primary agency missions: Protect market participants against 
manipulation, abusive trade practices, and fraud. 

Illustrative examples of agencies that could consolidate IG oversight: 
Federal Deposit Insurance Corporation; 
Primary agency missions: Contribute to the stability of and confidence 
in the nation’s financial system. 

Illustrative examples of agencies that could consolidate IG oversight: 
National Credit Union Administration; 
Primary agency missions: Regulate and insure federal credit unions and 
insure state-chartered credit unions. 

Illustrative examples of agencies that could consolidate IG oversight: 
General Services Administration; 
Primary agency missions: Provide quality services, space, and products 
at competitive cost to enable federal employees to accomplish their 
missions. 

Illustrative examples of agencies that could consolidate IG oversight: 
Smithsonian Institution; 
Primary agency missions: Hold artifacts and specimens for the increase 
and diffusion of knowledge. 

Illustrative examples of agencies that could consolidate IG oversight: 
National Archives and Records Administration; 
Primary agency missions: Preserve the nation’s history by overseeing 
and managing federal records. 

Illustrative examples of agencies that could consolidate IG oversight: 
National Endowment for the Arts; 
Primary agency missions: Nurture human creativity and foster 
appreciation of artistic accomplishments. 

Illustrative examples of agencies that could consolidate IG oversight: 
National Endowment for the Humanities; 
Primary agency missions: Support research, education, and public 
programs in the humanities. 

Illustrative examples of agencies that could consolidate IG oversight: 
Federal Election Commission; 
Primary agency missions: Disclose campaign finance information, enforce 
provisions of the Federal Campaign Act, and oversee public funding of 
Presidential Elections. 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of Labor; 
Primary agency missions: Foster, promote, and develop the welfare of 
U.S. wage earners. 

Illustrative examples of agencies that could consolidate IG oversight: 
Federal Labor Relations Authority; 
Primary agency missions: Provide leadership and resolve disputes 
relating to federal labor-management. 

Illustrative examples of agencies that could consolidate IG oversight: 
National Labor Relations Board; 
Primary agency missions: Enforce the laws governing relations between 
unions and employees. 

Illustrative examples of agencies that could consolidate IG oversight: 
Pension Benefit Guaranty Corporation; 
Primary agency missions: Encourage the growth and operations of defined 
benefit pension plans. 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of State; 
Primary agency missions: Promote U.S. interests and the President’s 
foreign policy in shaping a free, secure, and prosperous world. 

Illustrative examples of agencies that could consolidate IG oversight: 
Peace Corps; 
Primary agency missions: Promote world peace and friendship. 

Illustrative examples of agencies that could consolidate IG oversight: 
Department of Transportation; 
Primary agency missions: Develop policies for the national 
transportation system with regard for need, the environment, and 
national defense. 

Illustrative examples of agencies that could consolidate IG oversight: 
Amtrak; 
Primary agency missions: Develop modern rail service in meeting inter-
city passenger transportation needs. 

Illustrative examples of agencies that could consolidate IG oversight: 
Federal Maritime Commission; 
Primary agency missions: Regulate shipping in foreign U.S. trade. 

DFE IG offices for possible conversion: United States Postal Service; 
Primary agency missions: Appointment by the President. 

DFE IG offices for possible conversion: National Science Foundation; 
Primary agency missions: Appointment by the President. 

DFE IG offices for possible conversion: Federal Reserve Board; 
Primary agency missions: Appointment by the President. 

IG office not a candidate for conversion or consolidation: Government 
Printing Office; 
Primary agency missions: Legislative branch agency. 

[End of section] 

Appendix III: Designated Federal Entity Inspectors General: Fiscal Year 
2000 Budgets and Full-time Equivalents (FTEs): 

DFE IGs: United States Postal Service[A]; 
Budgets: $72,000,000; 
Total FTEs: 629. 

DFE IGs: Amtrak; 
Budgets: $6,300,000; 
Total FTEs: 64. 

DFE IGs: National Science Foundation; 
Budgets: $5,450,000; 
Total FTEs: 50. 

DFE IGs: Federal Reserve Board; 
Budgets: $3,312,661; 
Total FTEs: 29. 

DFE IGs: Government Printing Office; 27
Budgets: $3,198,555; 
Total FTEs: 27. 

DFE IGs: Pension Benefit Guaranty Corporation; 
Budgets: $2,512,000; 
Total FTEs: 13. 

DFE IGs: Legal Services Corporation[B]; 
Budgets: $2,300,000; 
Total FTEs: 17. 

DFE IGs: Smithsonian Institution[C]; 20
Budgets: $1,844,000; 
Total FTEs: 20. 

DFE IGs: Peace Corps; 
Budgets: $1,678,400; 
Total FTEs: 15. 

DFE IGs: Securities and Exchange Commission; 
Budgets: $1,416,200; 
Total FTEs: 9. 

DFE IGs: National Archives and Records Administration; 
Budgets: $1,170,000; 
Total FTEs: 12.5. 

DFE IGs: Federal Communications Commission; 
Budgets: $1,128,000; 
Total FTEs: 8. 

DFE IGs: Equal Employment Opportunity Commission; 
Budgets: $1,086,662; 
Total FTEs: 11. 

DFE IGs: National Credit Union Administration; 
Budgets: $1,050,883; 
Total FTEs: 7. 

DFE IGs: Farm Credit Administration; 
Budgets: $802,852; 
Total FTEs: 4.8. 

DFE IGs: National Labor Relations Board; 
Budgets: $775,800; 
Total FTEs: 7. 

DFE IGs: Corporation for Public Broadcasting; 
Budgets: $715,000; 
Total FTEs: 8.5. 

DFE IGs: Federal Trade Commission; 
Budgets: $607,500; 
Total FTEs: 5. 

DFE IGs: Commodity Futures Trading Commission; 
Budgets: $474,000; 
Total FTEs: 4. 

DFE IGs: Federal Housing Finance Board; 
Budgets: $473,475; 
Total FTEs: 5. 

DFE IGs: Appalachian Regional Commission; 
Budgets: $468,000; 
Total FTEs: 3. 

DFE IGs: National Endowment for the Humanities; 
Budgets: $449,000; 
Total FTEs: 5. 

DFE IGs: United States International Trade Commission[A]; 
Budgets: $383,000; 
Total FTEs: 3.5. 

DFE IGs: National Endowment for the Arts; 
Budgets: $365,000; 
Total FTEs: 4. 

DFE IGs: Federal Election Commission; 
Budgets: $348,773; 
Total FTEs: 4. 

DFE IGs: Federal Maritime Commission; 
Budgets: $345,000; 
Total FTEs: 3. 

DFE IGs: Federal Labor Relations Authority; 
Budgets: $214,000; 
Total FTEs: 1. 

DFE IGs: Consumer Product Safety Commission; 
Budgets: $187,000; 
Total FTEs: 2. 

DFE IG totals: 
Budgets: $111,055,761; 
Total FTEs: 971.3. 

[A] Estimates provided by the ECIE. 

[B] Staff on board. 

[C] Includes $419,000 in nonappropriated funds. 

Source: As reported by the DFE IGs. 

[End of section] 

Appendix IV: Inspectors General Appointed by the President: Fiscal Year 
2000 Budgets and Fulltime Equivalents (FTEs): 

Departments/agencies IGs: Department of Health and Human Services[B]; 
Fiscal year 2000[A], Budgets: $208,000,000; 
Fiscal year 2000[A], FTEs: 1,432. 

Departments/agencies IGs: Department of Defense; 
Fiscal year 2000[A], Budgets: $137,000,000; 
Fiscal year 2000[A], FTEs: 1,212. 

Departments/agencies IGs: Treasury’s IG for Tax Administration; 
Fiscal year 2000[A], Budgets: $114,000,000; 
Fiscal year 2000[A], FTEs: 1,020. 

Departments/agencies IGs: Department of Housing and Urban Development; 
Fiscal year 2000[A], Budgets: $83,000,000; 
Fiscal year 2000[A], FTEs: 705. 

Departments/agencies IGs: Department of Agriculture; 
Fiscal year 2000[A], Budgets: $68,000,000; 
Fiscal year 2000[A], FTEs: 753. 

Departments/agencies IGs: Social Security Administration; 
Fiscal year 2000[A], Budgets: $66,000,000
Fiscal year 2000[A], FTEs: 536. 

Departments/agencies IGs: Department of Labor; 
Fiscal year 2000[A], Budgets: $52,000,000; 
Fiscal year 2000[A], FTEs: 428. 

Departments/agencies IGs: Department of Justice; 
Fiscal year 2000[A], Budgets: $51,000,000; 
Fiscal year 2000[A], FTEs: 380. 

Departments/agencies IGs: Department of Transportation; 
Fiscal year 2000[A], Budgets: $48,000,000; 
Fiscal year 2000[A], FTEs: 455. 

Departments/agencies IGs: Department of Veterans Affairs; 
Fiscal year 2000[A], Budgets: $46,000,000; 
Fiscal year 2000[A], FTEs: 384. 

Departments/agencies IGs: Environmental Protection Agency; 
Fiscal year 2000[A], Budgets: $43,000,000; 
Fiscal year 2000[A], FTEs: 374. 

Departments/agencies IGs: Department of Education; 
Fiscal year 2000[A], Budgets: $34,000,000; 
Fiscal year 2000[A], FTEs: 285. 

Departments/agencies IGs: Federal Deposit Insurance Corporation; 
Fiscal year 2000[A], Budgets: $34,000,000; 
Fiscal year 2000[A], FTEs: 231. 

Departments/agencies IGs: General Services Administration; 
Fiscal year 2000[A], Budgets: $33,000,000; 
Fiscal year 2000[A], FTEs: 297. 

Departments/agencies IGs: Department of the Treasury; 
Fiscal year 2000[A], Budgets: $31,000,000; 
Fiscal year 2000[A], FTEs: 282. 

Departments/agencies IGs: Department of Energy; 
Fiscal year 2000[A], Budgets: $30,000,000; 
Fiscal year 2000[A], FTEs: 265. 

Departments/agencies IGs: Department of the Interior; 
Fiscal year 2000[A], Budgets: $29,000,000; 
Fiscal year 2000[A], FTEs: 265. 

Departments/agencies IGs: Department of State; 
Fiscal year 2000[A], Budgets: $27,000,000; 
Fiscal year 2000[A], FTEs: 277. 

Departments/agencies IGs: Agency for International Development; 
Fiscal year 2000[A], Budgets: $25,000,000; 
Fiscal year 2000[A], FTEs: 165. 

Departments/agencies IGs: Department of Commerce; 
Fiscal year 2000[A], Budgets: $20,000,000; 
Fiscal year 2000[A], FTEs: 200. 

Departments/agencies IGs: National Aeronautics and Space 
Administration; 
Fiscal year 2000[A], Budgets: $20,000,000; 
Fiscal year 2000[A], FTEs: 210. 

Departments/agencies IGs: Office of Personnel Management; 
Fiscal year 2000[A], Budgets: $11,000,000; 
Fiscal year 2000[A], FTEs: 107. 

Departments/agencies IGs: Small Business Administration; 
Fiscal year 2000[A], Budgets: $11,000,000; 
Fiscal year 2000[A], FTEs: 117. 

Departments/agencies IGs: Federal Emergency Management Agency; 
Fiscal year 2000[A], Budgets: $8,000,000; 
Fiscal year 2000[A], FTEs: 80. 

Departments/agencies IGs: Tennessee Valley Authority[C]; 
Fiscal year 2000[A], Budgets: $7,154,000; 
Fiscal year 2000[A], FTEs: 74. 

Departments/agencies IGs: Nuclear Regulatory Commission; 
Fiscal year 2000[A], Budgets: $6,000,000; 
Fiscal year 2000[A], FTEs: 44. 

Departments/agencies IGs: Railroad Retirement Board; 
Fiscal year 2000[A], Budgets: $5,000,000; 
Fiscal year 2000[A], FTEs: 58. 

Departments/agencies IGs: Corporation for National Service; 
Fiscal year 2000[A], Budgets: $4,000,000; 
Fiscal year 2000[A], FTEs: 18. 

Departments/agencies IGs: Central Intelligence Agency; 
Fiscal year 2000[A], Budgets: na[D]; 
Fiscal year 2000[A], FTEs: na[D]. 

Departments/agencies IGs: Totals; 
Fiscal year 2000[A], Budgets: $1,251,154,000; 
Fiscal year 2000[A], FTEs: 10,654. 

[A] Budget authority and FTE estimates from the Fiscal Year 2001 
President’s Budget. 

[B] Includes budget authority of $155 million to combat Medicare fraud. 

[C] Tennessee Valley Authority IG to be appointed by the President 
under Public Law 106-422. 

[D] Budget and FTE information not available. 

[End of section] 

Appendix V: Presidential IGs with Five Comparable DFE IGs: Fiscal Year 
2000 Budgets: 

Department/agency IGs: Department of Health and Human Services[B]; 
Fiscal year 2000[A] budgets: $208,000,000. 

Department/agency IGs: Department of Defense; 
Fiscal year 2000[A] budgets: $137,000,000. 

Department/agency IGs: Treasury’s IG for Tax Administration; 
Fiscal year 2000[A] budgets: $114,000,000. 

Department/agency IGs: Department of Housing and Urban Development; 
Fiscal year 2000[A] budgets: $83,000,000. 

Department/agency IGs: United States Postal Service[C]; 
Fiscal year 2000[A] budgets: $72,000,000. 

Department/agency IGs: Department of Agriculture; 
Fiscal year 2000[A] budgets: $68,000,000. 

Department/agency IGs: Social Security Administration; 
Fiscal year 2000[A] budgets: $66,000,000. 

Department/agency IGs: Department of Labor; 
Fiscal year 2000[A] budgets: $52,000,000. 

Department/agency IGs: Department of Justice; 
Fiscal year 2000[A] budgets: $51,000,000. 

Department/agency IGs: Department of Transportation; 
Fiscal year 2000[A] budgets: $48,000,000. 

Department/agency IGs: Department of Veterans Affairs; 
Fiscal year 2000[A] budgets: $46,000,000. 

Department/agency IGs: Environmental Protection Agency; 
Fiscal year 2000[A] budgets: $43,000,000. 

Department/agency IGs: Department of Education; 
Fiscal year 2000[A] budgets: $34,000,000. 

Department/agency IGs: Federal Deposit Insurance Corporation; 
Fiscal year 2000[A] budgets: $34,000,000. 

Department/agency IGs: General Services Administration
Fiscal year 2000[A] budgets: $33,000,000. 

Department/agency IGs: Department of the Treasury; 
Fiscal year 2000[A] budgets: $31,000,000. 

Department/agency IGs: Department of Energy; 
Fiscal year 2000[A] budgets: $30,000,000. 

Department/agency IGs: Department of the Interior; 
Fiscal year 2000[A] budgets: $29,000,000. 

Department/agency IGs: Department of State; 
Fiscal year 2000[A] budgets: $27,000,000. 

Department/agency IGs: Agency for International Development; 
Fiscal year 2000[A] budgets: $25,000,000. 

Department/agency IGs: Department of Commerce; 
Fiscal year 2000[A] budgets: $20,000,000. 

Department/agency IGs: National Aeronautics and Space Administration; 
Fiscal year 2000[A] budgets: $20,000,000. 

Department/agency IGs: Office of Personnel Management; 
Fiscal year 2000[A] budgets: $11,000,000. 

Department/agency IGs: Small Business Administration; 
Fiscal year 2000[A] budgets: $11,000,000. 

Department/agency IGs: Federal Emergency Management Agency; 
Fiscal year 2000[A] budgets: $8,000,000. 

Department/agency IGs: Tennessee Valley Authority[D]; 
Fiscal year 2000[A] budgets: $7,154,000. 

Department/agency IGs: Amtrak[E]; 
Fiscal year 2000[A] budgets: $6,300,000. 

Department/agency IGs: Nuclear Regulatory Commission; 
Fiscal year 2000[A] budgets: $6,000,000. 

Department/agency IGs: National Science Foundation[E]; 
Fiscal year 2000[A] budgets: $5,450,000. 

Department/agency IGs: Railroad Retirement Board; 
Fiscal year 2000[A] budgets: $5,000,000. 

Department/agency IGs: Corporation for National Service; 
Fiscal year 2000[A] budgets: $4,000,000. 

Department/agency IGs: Central Intelligence Agency; 
Fiscal year 2000[A] budgets: na[F]. 

Department/agency IGs: Federal Reserve Board[E]; 
Fiscal year 2000[A] budgets: $3,312,661. 

Department/agency IGs: Government Printing Office[E]; 
Fiscal year 2000[A] budgets: $3,198,555. 

Department/agency IGs: Totals; 
Fiscal year 2000[A] budgets: $1,341,415,216. 

[A] Budget authority estimates from the Fiscal Year 2001 President’s 
Budget. 

[B] Includes budget authority of $155 million to combat Medicare fraud. 

[C] Information supplied by the ECIE. 

[D] Tennessee Valley Authority IG to be appointed by the President 
under Public Law 106-422. 

[E] Information provided by the IG. 

[F] Budget information not available. 

[End of section] 

Appendix VI: Designated Federal Entities: Fiscal Year 2000 Budgets with 
$134 Million Threshold (dollars in millions): 

Designated federal entities: United States Postal Service; 
Fiscal year 2000 budgets[A]: $68,393. 

Designated federal entities: Federal Communications Commission; 
Fiscal year 2000 budgets[A]: $6,795. 

Designated federal entities: Tennessee Valley Authority[B]; 
Fiscal year 2000 budgets[A]: $6,562. 

Designated federal entities: National Science Foundation; 
Fiscal year 2000 budgets[A]: $4,085. 

Designated federal entities: Amtrak[C]; 
Fiscal year 2000 budgets[A]: $2,771. 

Designated federal entities: Pension Benefit Guaranty Corporation; 
Fiscal year 2000 budgets[A]: $2,510. 

Designated federal entities: Government Printing Office; 
Fiscal year 2000 budgets[A]: $892. 

Designated federal entities: National Credit Union Administration; 
Fiscal year 2000 budgets[A]: $823. 

Designated federal entities: Smithsonian Institution; 
Fiscal year 2000 budgets[A]: $546. 

Designated federal entities: Securities and Exchange Commission; 
Fiscal year 2000 budgets[A]: $378. 

Designated federal entities: National Archives and Records 
Administration; 
Fiscal year 2000 budgets[A]: $341. 

Designated federal entities: Corporation for Public Broadcasting; 
Fiscal year 2000 budgets[A]: $316. 

Designated federal entities: Legal Services Corporation; 
Fiscal year 2000 budgets[A]: $305. 

Designated federal entities: Equal Employment Opportunity Commission; 
Fiscal year 2000 budgets[A]: $284. 

Designated federal entities: Peace Corps; 
Fiscal year 2000 budgets[A]: $249. 

Designated federal entities: National Labor Relations Board; 
Fiscal year 2000 budgets[A]: $205. 

Designated federal entities: Federal Reserve Board (operations); 
Fiscal year 2000 budgets[A]: $205. 

Budget threshold: $134. 

Designated federal entities: Federal Trade Commission; 
Fiscal year 2000 budgets[A]: $126. 

Designated federal entities: National Endowment for the Humanities; 
Fiscal year 2000 budgets[A]: $118. 

Designated federal entities: National Endowment for the Arts; 
Fiscal year 2000 budgets[A]: $102. 

Designated federal entities: Appalachian Regional Commission; 
Fiscal year 2000 budgets[A]: $72. 

Designated federal entities: Commodity Futures Trading Commission; 
Fiscal year 2000 budgets[A]: $63. 

Designated federal entities: Consumer Product Safety Commission; 
Fiscal year 2000 budgets[A]: $52. 

Designated federal entities: United States International Trade 
Commission; 
Fiscal year 2000 budgets[A]: $44. 

Designated federal entities: Federal Election Commission; 
Fiscal year 2000 budgets[A]: $38. 

Designated federal entities: Farm Credit Administration; 
Fiscal year 2000 budgets[A]: $36. 

Designated federal entities: Federal Labor Relations Authority; 
Fiscal year 2000 budgets[A]: $24. 

Designated federal entities: Federal Housing Finance Board; 
Fiscal year 2000 budgets[A]: $19. 

Designated federal entities: Federal Maritime Commission; 
Fiscal year 2000 budgets[A]: $15. 

Designated federal entities: Totals; 
Fiscal year 2000 budgets[A]: $96,364. 

Note: $134 million is the present value of the $100 million threshold 
used by the Congress to establish IG offices in 1988. The present value 
is adjusted for inflation using the U.S. Department of Commerce, Bureau 
of Economic Analysis’s Gross Domestic Product (GDP) Price Index. 

[A] Budget amounts are from the Fiscal Year 2002 President’s Budget. 

[B] Tennessee Valley Authority IG to be appointed by the President 
under Public Law 106-422. 

[C] Amount provided by the IG. 

[End of section] 

Appendix VII: Comments from the President’s Council on Integrity and 
Efficiency: 

President's Council On Integrity & Efficiency: 

June 20, 2002: 

Ms. Jeanette M. Franzel: 
Acting Director: 
Financial Management and Assurance: 
U.S. General Accounting Office: 
Washington, D.C. 20548: 

Dear Ms. Franzel: 

Thank you for the opportunity to comment on GAO's draft report, 
Inspectors General: Issues Related to the Consolidation of IG Offices, 
regarding your survey on the potential impact of consolidation and 
other changes to the offices of inspectors general (OIGs). In your 
letter of May 23, 2002, you requested that the President's Council on 
Integrity and Efficiency (PCIE) consolidate its comments into a single 
response. As the PCIE Vice Chair, I have collected the report comments 
from my colleagues and consolidated them below. 

Overall, 25 of the 29 PCIE OIGs responded to the request for comments. 
Of the 25 responding, 16 OIGs did not have any comments on the report. 
The comments detailed below represent the issues, concerns, or 
technical corrections raised by the 9 OIGs responding with written 
comments. For your convenience, we have organized our comments along 
the three main issues of the report—consolidation/conversion of 
designated federal entity (DFE) OIGs, statutory alternative to the 
PCIE, and application of a budget level threshold. 

Consolidation/Conversion of DFE OIGs: 

The PCIE is primarily composed of the 29 Inspectors General (IGs) who 
are appointed by the President and confirmed by the Senate. These IGs 
are referred to as PAS IGs. The other 28 federal IGs are appointed by 
their agency head and are referred to as DFE IGs. As discussed in the 
draft report, the PAS IGs generally responded that independence, 
quality, and use of resources could be strengthened by conversion or 
consolidation. We did not receive any additional comments on this 
matter during the comment period of this draft report. However, eight 
of the IGs offering written comments expressed concern that significant 
issues surrounding consolidation were not more thoroughly explored and 
addressed in the report. 

These issues included funding and staffing resources, organizational 
supervision, independence, areas of expertise, and criteria for 
consolidation. Several of the OIGs noted that any benefits that 
consolidation could potentially provide would be lost if these issues 
were not appropriately addressed. 

Nearly all the OIGs providing written comments expressed concern about 
how the funding and staffing issues would be resolved. One OIG pointed 
out the inherent complications of being under the general supervision 
of more than one agency head. Another OIG commented that
while the report notes differences between the PAS and OFF IGs over the 
issue of independence, it does not provide any analysis or follow-up 
interviews to determine why the divergence of opinions exist. 

Several of the OIGs offering their comments suggested that the report 
should note other consolidation options and consolidation criteria to 
broaden the discussion and highlight the issues needing attention. For 
example, the General Services Administration OIG pointed out that the 
benefits of consolidation might best be achieved by consolidating OIGs 
from agencies with similar responsibilities and expertise (i.e., grant-
making agencies with other grant-making agencies). The U.S. Agency for 
International Development (AID) OIG noted that because the Peace Corps 
has a similar mission and field operations structure and comes under 
the jurisdiction of the same congressional committees as AID, such 
criteria should be considered when evaluating consolidation decisions. 

Statutory Alternative to the PCIE: 

Two OIGs specifically concurred with the GAO's conclusion that 
establishing an IG council by statute with defined roles and designated 
funding sources could strengthen the effectiveness of these councils. 
None of the PCIE OIGs expressed concern about this conclusion or GAO's 
offering this issue as a matter of consideration by the Congress. In 
July 2000, I testified, in my capacity as the PCIE Vice Chair, in 
support of codifying the two councils. 

Application of a Budget-Level Threshold: 

None of the PCIE members specifically commented on this issue. 

Technical Comments: 

One OIG raised a concern about the report presentation and suggested a 
reordering of the report. Specifically, the OIG advised presenting a 
more detailed examination of the issues and legislative proposals first 
and then use the survey as an appendix to show the divergence of views 
in the OIG community. Additional technical comments are enclosed. 

On behalf of the PCIE, I appreciate the opportunity to share our 
comments on this report. Please contact me at (202) 4I6-2026, if you 
have any questions or need additional information. 

Sincerely, 

Signed by: 

Gaston L. Gianni, Jr. 
Vice Chair: 

Enclosure: 

cc: PCIE Members: 
Mr. Barry Snyder, ECIE Vice Chair: 

[End of section] 

Appendix VIII: Comments from the Executive Council on Integrity and 
Efficiency: 

Executive Council on Integrity and Efficiency: 

June 26, 2002: 

Ms. Jeanette M. Franzel: 
Acting Director: 
Financial Management and Assurance: 
U.S. General Accounting Office: 
44I G Street, NW: 
Washington, DC 20548: 

Dear Ms. Franzel: 

Thank you for the opportunity to comment on the draft report, 
Inspectors General: Issues Related to the Consolidation of IG Offices. 
Your May 23, 2002, transmittal letter requests that the Vice Chair of 
the Executive Council on Integrity and Efficiency (ECIE) incorporate 
comments from the council's Inspectors General (IGs) into a single ECIE 
response. While each IG has a unique perspective on the draft report, 
this letter incorporates the general comments and feedback from twenty-
six of the twenty-eight ECIE IGs regarding the conclusions and matters 
for consideration presented in GAO's draft report. 

The draft report essentially summarizes the responses to an opinion 
survey, conducted more than a year ago, regarding the potential impact 
of consolidation and other changes to federal IGs. Survey opinions were 
obtained from twenty-eight IGs who are appointed by the President and 
confirmed by the Senate (PAS IGs) and twenty-eight IGs who are 
appointed by the agency heads in designated federal entities (DFE IGs). 
The draft report also includes GAO's opinion regarding the issues 
surveyed. 

Overall, the DFE IGs commented that GAO's analysis and resulting 
conclusions and opinions are not fully supported by the data gathered, 
are contradictory in places, and are insufficient given the importance 
of effective oversight of federal agencies' programs and operations. As 
such, the DFE IGs disagree with GAO that conversion of a few DFE IGs to 
PAS IGs and, more importantly, consolidation of the majority of DFE IGs 
with PAS IGs, would serve to further enhance the overall independence, 
efficiency, and effectiveness of the IG community. 

The DFE IGs expressed concern that GAO proposes significant and far-
reaching changes to the IG Act and to IG organizations based largely on 
subjective responses to an opinion survey, without providing credible 
supporting evidence that indicates changes to the current IG structure 
are truly warranted. Views of DFE agency management, customers, and 
stakeholders are missing, as is any supporting analysis of the results 
of DFE IG operations over the past fifteen years. While a survey 
instrument can be a useful tool to gauge opinions and flag items for 
further analyses, the DFE IGs commented that the design and validity of 
the survey instrument used on this review and the overall study 
construct was inappropriate to support the type of cause and effect 
relationships and conclusions presented. In addition, DFE IGs expressed 
concern that GAO did not independently verify the survey results or 
assess specific reasons for differences between the PAS and DFE IGs on 
key issues. Instead, GAO appears to give more credence to the responses 
of PAS IGs than to those of DFE IGs, even though DFE IGs have the most 
direct experience with the issues that were surveyed. Absent factual or 
evaluative information regarding the existence and magnitude of 
problems with the current structure, the DFE IGs question whether 
conversion or consolidation would bring more cost-effective, value-
added IG operations and results. 

The majority of the DFE IGs commented that GAO draws conclusions that 
are inconsistent with the preponderance of the survey responses. For 
example, GAO's conclusion that, "... the conversion and consolidation 
of selected DFE IG offices would serve to further enhance the overall 
independence, efficiency, and effectiveness of the IG community," is 
not supported by the majority of IG survey responses, regardless of 
type of IG appointment. As shown in the following tables, the majority 
of IGs (50 percent or more), when viewed in total, responded that 
consolidation would weaken or have no impact on IG effectiveness in 
twenty-two of the twenty-eight (over 75 percent) of GAO's survey 
elements, particularly those elements in the categories of IG quality 
of work and IG use of resources. The majority of IGs expressed their 
opinion that consolidation would strengthen IG effectiveness in only 
three of the twenty-eight survey elements: independence resulting from 
conversion to PAS IGs (53 percent), the appearance (emphasis added) 
of IG independence at the DFEs (70 percent), and resources for 
investigative coverage (50 percent). 

The DFE IGs do not believe that the report shows that the IG structure 
created by the IG Act and I988 amendments is broken and in need of a 
"fix" as complex and substantive as consolidation. Almost all of the 
DFE IGs commented that GAO's proposed consolidation scenarios are 
overly simplistic given the diverse missions of the agencies involved; 
the various types of funding, administrative, and personnel authorities 
and practices; the differences in congressional oversight and 
appropriations processes; and the separate governance and oversight 
structures of the regulatory entities, state and/or federal 
commissions, independent corporations and boards, and unique agencies 
that comprise the DFE IG agencies. The DFE IGs also emphasized that 
consolidation sacrifices providing a local preventive presence, 
oversight, and focus at individual agencies or entities in favor of 
potentially fragmenting the attention of a larger IG office across a 
broad and diverse spectrum of programs and operations. Furthermore, the 
proposed mitigation strategies to overcome the deficiencies created by 
consolidation would, in the opinion of the DFE IGs that commented, make 
the resulting IG operations less efficient and economical (maintaining 
a few staff at separate, multiple locations) and would likely prove to 
be ineffective over time (DFE staff would lose their detailed knowledge 
base if they do not perform ongoing work in the DFE). 

More specific comments are provided below in alignment with the 
report's context of independence, quality of work, and use of IG 
resources. Where applicable, viable alternatives to conversion or 
consolidation that warrant future consideration are presented. The DFE 
IGs do agree with GAO that, "Any specific conversions or consolidations 
of IG offices should be a process of continuing dialogue among the 
PCIE, ECIE, affected agencies, and the Congress." They also agree with 
GAO on providing a statutory basis for the IG councils and on not using 
budget information as the sole criteria for establishing IGs in federal 
agencies. 

Independence: 

In January 2002, subsequent to the survey period for this draft report, 
GAO issued Government Auditing Standards, Amendment No. 3, 
Independence. Under the revised standard, both PAS and DFE IGs are 
considered organizationally independent to report externally. This 
amendment to the standards clarified this issue, which heretofore had a 
degree of ambiguity given that the DFE IGs were established after GAO's 
last update of the independence provision in the standards. The DFE IGs 
strongly believe that, contrary to GAO's assertion in the report, the 
survey results may have been materially affected by this amendment. The 
revised standards, for the first time, recognize specifically that 
Presidential appointment with Senate confirmation is but one way of 
achieving organizational independence and that other organizational 
structures can provide independence if a detailed list of safeguards 
are met. These safeguards match the provisions in the IG Act that cover 
all IGs, thus all can be considered to be organizationally independent. 

As shown in table I below, 53 percent of the IGs responded that 
converting DFE IGs to PAS IGs would strengthen independence, and 70 
percent IGs responded that consolidating DFE IGs with PAS IGs would 
strengthen the appearance of independence at the DFE IG. These results 
could he considerably different now that the organizational 
independence definition has been clarified by the audit standards 
revision. It should be noted, however, that less than half (47 percent) 
of those IGs that responded to the survey believed that consolidation 
would strengthen the IGs actual independence. 

Table 1: ECIE Analysis of IG Responses to GAO's Survey Regarding 
Independence: 
			
IG Effectiveness Category: 1, IG Independence; 
Elements Of IG Effectiveness: Conversion, IG Independence; 	
Independence resulting from conversion; 
Survey Responses, Strengthen, No./Percent: 29/53%; 
Survey Responses, Weaken Or No Impact, No./Percent: 23/42%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
3/5%. 

IG Effectiveness Category: 2; 
Elements Of IG Effectiveness: Consolidation, Actual independence; 
Survey Responses, Strengthen, No./Percent: 26/47%; 
Survey Responses, Weaken Or No Impact, No./Percent: 27/49%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
2/4%. 

IG Effectiveness Category: 3; 
Elements Of IG Effectiveness: Appearance of independence; 
Survey Responses, Strengthen, No./Percent: 39/70%; 
Survey Responses, Weaken Or No Impact, No./Percent: 17/30%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
0/0%. 

IG Effectiveness Category: 
Elements Of IG Effectiveness: 
Survey Responses, Strengthen, No./Percent: 
Survey Responses, Weaken Or No Impact, No./Percent: 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 

[End of table] 

The DFE IGs commented that strengthening the appearance of DFE, IG 
independence is desirable, but other alternatives should first be 
considered before moving forward with conversion or consolidation. For 
example, additional statutory protections could be enacted, where 
applicable, to require DFE IGs to submit their budget requests as 
either a separate line item in their agencies' budget submissions or to 
submit their requests directly to OMB and/or the Congress rather than 
going through the agency review process. Additional controls could also 
be implemented to further strengthen overall IG independence, 
regardless of the type of appointment. These additional controls could 
include providing a statutory provision that removal of an IG is only 
for cause; clarifying the general supervision clause of the IG Act, 
particularly with respect to the salary administration of IGs; and 
establishing term limits for IG positions. 

Quality of Work: 

In this category, the DFE IGs commented that GAO draws conclusions that 
are largely contradicted by the survey response data when taken as a 
whole and reflect a bias toward consolidation. As discussed below, the 
DFE IG's analysis of the GAO survey data shows that in all but one of 
the fourteen elements in the IG Quality of Work category, the majority 
of survey responses indicated that consolidation would weaken or have 
no impact on IG effectiveness. However, GAO concludes that, "... 
consolidation could serve to strengthen the IG's ability to issue hard-
hitting reports, to issue reports on cross-agency issues, to get 
attention to their audit recommendations, and to address high risk and 
priority areas because IGs of consolidated offices could use their 
broader range of resources in the context of a government-wide 
perspective rather than in the context of a single relatively small 
agency." 

DFE IGs emphasized that GAO draws these conclusions without providing 
evidence that DFE IGs have not issued so called hard-hitting reports, 
have not addressed high-risk areas of their agencies, or have provided 
recommendations to DFE agencies that are going unheeded. Additionally, 
in recent years, DFE and PAS IGs have worked together through the 
President's Council on Integrity and Efficiency (PCIE) and the ECIE to 
effectively and efficiently address cross-cutting or government-wide 
challenges in a variety of areas, including information technology, 
debt collection, compliance and accountability, and financial 
management. The annual report, A Progress Report to the President, 
issued jointly by the PCIE and ECIE, not only highlights the 
accomplishments of the individual DFE and PAS IGs, but also focuses 
attention on cross-cutting initiatives that the IG community has 
addressed as a whole. 

DFE IGs' analysis shows that, in each of the areas cited in GAO's 
conclusions, the majority of IGs surveyed (50 percent or more) viewed 
the proposed consolidation as having no impact upon the DFE IGs' 
quality of work or having a negative impact (see table 2). Furthermore, 
over 70 percent of IGs responded that consolidation would weaken or 
have no impact on the working relationship between the IGs and DFE 
agency heads. Both the PAS and the DFE IGs agreed that day-to-day 
contact with DFE officials will be diminished; knowledge of agency 
missions, priorities and issues will be weaker; and most importantly, 
consolidation would probably result in fewer resources to cover DFE 
agencies. According to the DFE IGs, legitimate questions could be 
raised regarding whether priorities at the DFE agencies would be 
considered "areas of greatest value and risk" to PAS IGs who are often 
stretching already scarce resources to cover high-dollar programs in 
cabinet level departments. 
 

Table 2: ECIE Analysis of IG Responses to GAO's Survey Regarding IG 
Quality of Work: 

IG Effectiveness Category: 4, IG Quality of Work; 
Elements Of IG Effectiveness: Ability to issue hard-hitting reports; 	
Independence resulting from conversion; 
Survey Responses, Strengthen, No./Percent: 26/46%; 
Survey Responses, Weaken Or No Impact, No./Percent: 28/50%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
2/4%. 

IG Effectiveness Category: 5; 
Elements Of IG Effectiveness: Ability to review issues crossing DFEs; 
Survey Responses, Strengthen, No./Percent: 22/39%; 
Survey Responses, Weaken Or No Impact, No./Percent: 22/39%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
12/21%. 

IG Effectiveness Category: 6; 
Elements Of IG Effectiveness: Attention to IG recommendations; 
Survey Responses, Strengthen, No./Percent: 19/34%; 
Survey Responses, Weaken Or No Impact, No./Percent: 29/52%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
8/14%. 

IG Effectiveness Category: 7; 
Elements Of IG Effectiveness: Ability to audit issues of high risk; 
Survey Responses, Strengthen, No./Percent: 21/38%; 
Survey Responses, Weaken Or No Impact, No./Percent: 29/52%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
6/11%. 

IG Effectiveness Category: 8; 
Elements Of IG Effectiveness: Ability to uniformly measure performance; 
Survey Responses, Strengthen, No./Percent: 14/25%; 
Survey Responses, Weaken Or No Impact, No./Percent: 29/52%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
13/23%. 

IG Effectiveness Category: 9; 
Elements Of IG Effectiveness: Day-to-day contact with DFE officials; 
Survey Responses, Strengthen, No./Percent: 5/9%; 
Survey Responses, Weaken Or No Impact, No./Percent: 45/80%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
6/11%. 

IG Effectiveness Category: 10; 
Elements Of IG Effectiveness: Communication - DFE head and the IG; 
Survey Responses, Strengthen, No./Percent: 8/14%; 
Survey Responses, Weaken Or No Impact, No./Percent: 42/75%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
6/11%. 

IG Effectiveness Category: 11; 
Elements Of IG Effectiveness: Ability of DFE head get attention of the 
IG; 
Survey Responses, Strengthen, No./Percent: 7/13%; 
Survey Responses, Weaken Or No Impact, No./Percent: 43/77%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
6/11%. 

IG Effectiveness Category: 12; 
Elements Of IG Effectiveness: Presence of IG as a prevention measure; 
Survey Responses, Strengthen, No./Percent: 13/23%; 
Survey Responses, Weaken Or No Impact, No./Percent: 37/66%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
6/11%. 

IG Effectiveness Category: 13; 
Elements Of IG Effectiveness: Knowledge of DFE missions; 
Survey Responses, Strengthen, No./Percent: 8/14%; 
Survey Responses, Weaken Or No Impact, No./Percent: 45/80%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
3/5%. 

IG Effectiveness Category: 14; 
Elements Of IG Effectiveness: Knowledge of DFE priorities and issues; 
Survey Responses, Strengthen, No./Percent: 8/14%; 
Survey Responses, Weaken Or No Impact, No./Percent: 45/80%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
3/5%. 

IG Effectiveness Category: 15; 
Elements Of IG Effectiveness: Planning for IG oversight; 
Survey Responses, Strengthen, No./Percent: 13/23%; 
Survey Responses, Weaken Or No Impact, No./Percent: 35/63%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
8/14%. 

IG Effectiveness Category: 16; 
Elements Of IG Effectiveness: Timeliness of reports; 
Survey Responses, Strengthen, No./Percent: 6/11%; 
Survey Responses, Weaken Or No Impact, No./Percent: 40/71%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
10/18%. 

IG Effectiveness Category: 17; 
Elements Of IG Effectiveness: Oversight coverage of the DFEs; 
Survey Responses, Strengthen, No./Percent: 9/16%; 
Survey Responses, Weaken Or No Impact, No./Percent: 39/70%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
8/14%. 

[End of table] 

DFE IGs commented that, in considering the 1988 IG Act amendments, 
Congress studied issues such as independence, audit and investigative 
coverage, and the presence of an IG as a prevention measure, and 
ultimately decided to create the DFE IGs to address the need for 
independent and objective audits, investigations, and other reviews at 
certain designated agencies. Prior to the I988 amendments, these 
agencies historically had received limited oversight by the Congress, 
the media, or the public. Congress recognized the value of an on-site 
IG as a visible deterrent to potential fraud, waste, and abuse and as 
an objective evaluator of the economy, efficiency, and effectiveness of 
programs and operations in these agencies. 

Use of IG Resources: 

GAO concluded that consolidation would serve to strengthen the ability 
of IGs to improve the allocation of human and financial resources 
within their offices and to attract and retain a multi-disciplinary 
workforce, even though the survey results and past GAO work reflect a 
different conclusion. As shown in table 3 below, the majority of IGs 
responded that consolidation would strengthen the use of IG resources 
in just one of the eleven elements in this category — resources for 
investigative coverage. Furthermore, only I3 percent of IGs (both PAS 
and DFE) replied that consolidation would strengthen resources to cover 
DFE issues, and only 2I percent replied that the availability of 
adequate resources would be strengthened. On this latter issue, 
however, GAO concluded that consolidation would strengthen the 
availability of adequate resources even though survey responses from 
thirty-six IGs (fourteen PAS IGs and twenty-two DFE IGs) expressed a 
different opinion. 

Table 3: ECIE Analysis of IG Responses to GAO's Survey Regarding IG 
Resources: 

IG Effectiveness Category: 18, IG Resources; 
Elements Of IG Effectiveness: Control over spending; 
Survey Responses, Strengthen, No./Percent: 18/33%; 
Survey Responses, Weaken Or No Impact, No./Percent: 34/62%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
3/5%. 

IG Effectiveness Category: 19; 
Elements Of IG Effectiveness: Control over budget requests; 
Survey Responses, Strengthen, No./Percent: 21/38%; 
Survey Responses, Weaken Or No Impact, No./Percent: 28/51%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
6/11%. 

IG Effectiveness Category: 20; 
Elements Of IG Effectiveness: Ability to absorb resource reductions; 
Survey Responses, Strengthen, No./Percent: 20/36%; 
Survey Responses, Weaken Or No Impact, No./Percent: 28/51%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
7/13%. 

IG Effectiveness Category: 21; 
Elements Of IG Effectiveness: Resources for investigative coverage; 
Survey Responses, Strengthen, No./Percent: 28/50%; 
Survey Responses, Weaken Or No Impact, No./Percent: 24/43%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
4/7%. 

IG Effectiveness Category: 22; 
Elements Of IG Effectiveness: Ability to minimize audit duplication; 
Survey Responses, Strengthen, No./Percent: 17/30%; 
Survey Responses, Weaken Or No Impact, No./Percent: 35/63%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
4/7%. 

IG Effectiveness Category: 23; 
Elements Of IG Effectiveness: Quality of audit training; 
Survey Responses, Strengthen, No./Percent: 13/23%; 
Survey Responses, Weaken Or No Impact, No./Percent: 40/71%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
3/5%. 

IG Effectiveness Category: 24; 
Elements Of IG Effectiveness: Ability share methods; 
Survey Responses, Strengthen, No./Percent: 22/39%; 
Survey Responses, Weaken Or No Impact, No./Percent: 32/57%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
2/4%. 

IG Effectiveness Category: 25; 
Elements Of IG Effectiveness: Ability to share technology specialists; 
Survey Responses, Strengthen, No./Percent: 26/46%; 
Survey Responses, Weaken Or No Impact, No./Percent: 28/50%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
2/4%. 

IG Effectiveness Category: 26; 
Elements Of IG Effectiveness: Efficient use of human capital skills; 
Survey Responses, Strengthen, No./Percent: 22/39%; 
Survey Responses, Weaken Or No Impact, No./Percent: 27/48%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
7/13%. 

IG Effectiveness Category: 27; 
Elements Of IG Effectiveness: Availability of adequate resources; 
Survey Responses, Strengthen, No./Percent: 12/21%; 
Survey Responses, Weaken Or No Impact, No./Percent: 36/64%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
8/14%. 

IG Effectiveness Category: 28; 
Elements Of IG Effectiveness: Resources to cover DFE issues; 
Survey Responses, Strengthen, No./Percent: 7/13%; 
Survey Responses, Weaken Or No Impact, No./Percent: 44/79%; 
Survey Responses, Not Applicable Or No Basis To Judge, No./Percent: 
5/9%. 

[End of table] 

DFE IGs referred to a I999 report, Inspectors General: Information on 
Operational and Staffing Issues (GAO/AIMD-99-29), where GAO reported 
that the IGs' work covers a broad spectrum of agency programs and 
operations and, in general, the IGs indicated that they have the 
expertise and resources necessary to assemble the teams of staff needed 
to perform the major types of work for which they are responsible. The 
report also indicated that IGs have the capability to obtain 
contractors or consultants, as needed, to provide supplementary 
expertise in certain areas. According to the report, the DFE IGs use 
contractors and/or consultants primarily for financial statement audits 
and, to a lesser extent, for computer security, other information 
technology work, and statistical analyses. DFE IGs commented that 
alternatives to consolidation — such as use of consultants and 
memoranda of understanding with other IGs that have developed 
specialized expertise — have been used successfully in the past to 
augment scarce resources and may offer a way to further strengthen use 
of resources across all IGs. 

Again, the DFE IGs appreciate the opportunity to comment on this draft 
report. Please contact me at (202) 973-5003 if you have any questions 
concerning these comments. 

Sincerely, 

Signed by: 

Barry R. Snyder: 
Vice Chair:
Executive Council on Integrity and Efficiency: 

cc: ECIE Members: 
Mr. Gaston Gianni, PCIE Vice Chair: 
Ms. Karen Shaffer, OMB PCIE/ECIE Liaison: 

[End of section] 

Footnotes: 

[1] The PCIE is an interagency council comprised principally of the 
presidentially appointed and Senate-confirmed IGs, which 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 is comprised primarily of statutory IGs appointed by 
the heads of designated federal entities. The Deputy Director for 
Management in the Office of Management and Budget serves as the chair 
of both organizations. 

[2] President’s Council on Integrity and Efficiency, State of the 
Inspector General Community, PCIE Survey on S. 2167, for the Senate 
Committee on Governmental Affairs (Washington, D.C.: Sept. 9, 1998). 

[3] President’s Council on Integrity and Efficiency and the Executive 
Council on Integrity and Efficiency, Inspectors General Vision and 
Strategies to Apply Our Reinvention Principles (Washington, D.C.: 
January 1994). 

[4] U.S. General Accounting Office, Inspectors General: Information on 
Operational and Staffing Issues, GAO/AIMD-99-29 (Washington, D.C.: Jan. 
4, 1999). 

[5] U.S. General Accounting Office, Government Auditing Standards, 
Amendment No. 3, Independence, GAO-02-388G (Washington, D.C.: January 
2002). 

[6] The IG Act provides the DFE IGs appointed by their agency heads 
with all the statutory safeguards listed in the revised standards for 
organizational independence. However, these IGs must document that the 
specific statutory safeguards are applicable and have them reviewed by 
an independent quality control review at least once every 3 years. 

[7] Government Auditing Standards, 1994 revision, as amended, was 
issued by the Comptroller General of the United States. IGs are 
required to follow these standards in their audit work. 

[8] U.S. Government Printing Office, Establishment of Offices of 
Inspector and Auditor General in Certain Executive Departments and 
Agencies, Report of the Committee on Governmental Affairs United States 
Senate, Report No. 95-1071 (Washington, D.C.: Aug. 8, 1978). 

[9] U.S. General Accounting Office, Inspectors General: Action Needed 
to Strengthen OIGs at Designated Federal Entities, GAO/AIMD-94-39 
(Washington, D.C.: Nov. 30, 1993). 

[10] From the U.S. Department of Commerce, Bureau of Economic 
Analysis’s Gross Domestic Product (GDP) Price Index. 

[11] U.S. General Accounting Office, Government Auditing Standards, 
1994 revision, as amended. 

[12] U.S. General Accounting Office, Government Auditing Standards, 
Answers to Independence Standard Questions, GAO-02-870G (Washington, 
D.C.: July 2002). 

[13] U.S. General Accounting Office, Inspectors General: Information on 
Operational and Staffing Issues, GAO/AIMD-99-29, (Washington, D.C.: 
Jan. 4, 1999). 

[End of section] 

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