Civil Penalties: Certain Federal Agencies Need to Improve Efforts to Comply with Inflation Adjustment Requirements
Highlights
What GAO Found
The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended (the IAA) calls for federal agencies to (1) adjust civil monetary penalties for inflation with an initial catch-up inflation adjustment published in the Federal Register and (2) report in the 2016 agency financial reports (AFR) civil monetary penalty information, including the catch-up inflation adjustment. The act also requires the Office of Management and Budget (OMB) to issue implementation guidance.
Most federal agencies subject to the IAA complied with the provisions of the act to publish their initial catch-up inflation adjustments in the Federal Register no later than July 1, 2016. However, certain federal agencies with civil monetary penalties covered by the IAA did not comply with the statutory requirement. GAO found that six federal agencies did not publish their civil monetary penalty initial catch-up inflation adjustment amounts by December 31, 2016. As a result of GAO inquiries, three of these six subsequently published their catch-up adjustments for inflation in the Federal Register.
In addition, most federal agencies subject to the IAA complied with the provisions of the act to report civil monetary penalty information in the 2016 AFRs, including the catch-up inflation adjustment. However, certain federal agencies with civil monetary penalties covered by the IAA did not comply with the statutory requirements. Specifically, three federal agencies did not report, in the 2016 AFRs, required information about the civil monetary penalty catch-up inflation adjustment in the 2016 AFRs.
Agency Compliance with Inflation Adjustment Requirements for Civil Monetary Penalties
GAO also found that OMB had not provided clear guidance regarding federal agencies' reporting on civil monetary penalty information in the AFRs. As a result, officials from federal agencies had different interpretations, which could result in inconsistent AFR reporting of such information.
Why GAO Did This Study
The IAA includes a provision for GAO to annually submit to Congress a report assessing the compliance of agencies with the inflation adjustments required by the act. Specifically, GAO’s objectives were to determine to what extent federal agencies subject to the IAA have complied with the requirements to (1) publish in the Federal Register their initial catch-up inflation adjustments and (2) report in the 2016 AFRs information about civil monetary penalties, including the catch-up inflation adjustment of the civil monetary penalty amounts. GAO obtained the population of 52 federal agencies identified by OMB that could be subject to the applicable provisions of the IAA and, for those subject to the requirements, electronically searched the Federal Register and reviewed the 2016 AFRs.
Recommendations
GAO recommends that (1) six federal agencies take the necessary actions to meet IAA requirements and (2) OMB clarify its guidance regarding federal agencies' reporting on civil monetary penalties in AFRs. Two of the agencies did not comment on their respective recommendations, while the remaining four all indicated that they were taking actions to address the recommendations made to them. OMB generally agreed with the recommendation addressed to it but suggested a revision to use more broad terms. GAO modified the recommendation accordingly to allow OMB flexibility to meet the intent of the recommendation.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| General Services Administration | To help ensure that agencies' civil monetary penalties are adjusted timely and keep pace with inflation, the Acting Administrator of the General Services Administration (GSA) should publish the initial catch-up inflation adjustment in the Federal Register. |
Closed – Implemented
GSA has taken the necessary corrective actions to address this recommendation and, as a result, this recommendation is closed. Specifically, in August 2017, GSA published the catch-up inflation adjustment amounts in the Federal Register.
|
| National Transportation Safety Board | To help ensure that agencies' civil monetary penalties are adjusted timely and keep pace with inflation, the Acting Chairman of the National Transportation Safety Board (NTSB) should publish the initial catch-up inflation adjustment in the Federal Register. |
Closed – Implemented
NTSB has taken the necessary corrective actions to address this recommendation and, as a result, this recommendation is closed. Specifically, in October 2017, NTSB published the catch-up inflation adjustment amounts in the Federal Register.
|
| Department of Agriculture | To help ensure that agencies' civil monetary penalties are adjusted timely and keep pace with inflation, the Secretary of Agriculture (USDA) should publish the initial catch-up inflation adjustment in the Federal Register. |
Closed – Implemented
USDA has taken the necessary corrective actions to address this recommendation and, as a result, this recommendation is closed. Specifically, in December 2017, USDA published the catch-up inflation adjustment amounts in the Federal Register.
|
| Federal Election Commission | To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Chairman of the Federal Election Commission (FEC) should publish civil monetary penalties within its jurisdiction, including any penalty adjustments, in FEC's 2017 AFR. |
Closed – Implemented
FEC has taken the necessary corrective actions to address this recommendation and, as a result, this recommendation is closed. Specifically, in November 2017, FEC published information related to the civil monetary penalties within its jurisdiction, including any penalty adjustments, in its 2017 AFR.
|
| Federal Maritime Commission | To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Acting Chairman of the Federal Maritime Commission (FMC) should publish civil monetary penalties within its jurisdiction, including any penalty adjustments, in FMC's 2017 AFR. |
Closed – Implemented
FMC has taken the necessary corrective actions to address this recommendation and, as a result, this recommendation is closed. Specifically, in November 2017, FMC published information related to the civil monetary penalties within its jurisdiction, including any penalty adjustments, in its 2017 performance and accountability report.
|
| National Indian Gaming Commission | To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Chairman of the National Indian Gaming Commission (NIGC) should publish civil monetary penalties within its jurisdiction, including any penalty adjustments, in the Department of the Interior's 2017 AFR. |
Closed – Implemented
NIGC has taken the necessary corrective actions to address this recommendation and, as a result, this recommendation is closed. Specifically, in November 2017, NIGC published information related to the civil monetary penalties within its jurisdiction, including any penalty adjustments, in the Department of the Interior's 2017 AFR.
|
| Office of Management and Budget | To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Director of OMB should clarify its guidance related to civil monetary penalty inflation adjustment information that agencies are required to report in the AFRs. |
Closed – Implemented
OMB has taken the necessary corrective actions to address this recommendation and, as a result, this recommendation is closed. Specifically, in August 2017, OMB clarified its guidance related to civil monetary penalty inflation adjustment information that agencies must report in their AFRs by requiring that all agencies following OMB's AFR reporting guidance include information about the civil monetary penalties within the agencies' jurisdictions and the annual inflation adjustments.
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