A new study by the Project on Government Oversight (POGO) found that many Inspector General (IG) offices do not have sufficient independence to effectively discharge their responsibilities to investigate agencies for possible mismanagement, waste, fraud, or abuse.

Congress established the modern IG system with the Inspector General Act of 1978 in reaction to Watergate and other governmental scandals of the time. The IG offices have served as a vital check and balance against many of government's biggest reoccurring problems — excessive spending, abuse of power, and misleading the public. Currently, there are 64 IGs, 30 of which are appointed by the president, while the remaining 34, mostly at smaller agencies, are appointed by the heads of their respective agencies.

POGO surveyed IG offices throughout the federal government, receiving replies from 49 of the 64 offices. The report, Inspectors General: Many Lack Essential Tools for Independence, highlights patterns and issues contained in the responses and offers recommendations to improve the IG process.

The study reviewed several key factors that affect the level of independence of an IG office including:

• IG Candidate Selection
• Budget Line Items and Authority
• Staffing and Spending Authority
• In-House Counsel
• Ease of Website Access and Use
• Unfettered Investigative Authority

The responses from agencies revealed troubling trends among the IG offices. POGO concluded that many IG offices lacked the resources, staff, and money necessary to operate effectively. Some must even receive agency approval before spending funds, creating a potential conflict of interest when permission for investigations could lead to embarrassments for the agency. Similarly, few IG offices have their own in-house counsel and are required instead to use the general counsel of the agency, whose responsibility it is to protect the agency.

Another pattern noted in the report was the greater difficulties faced by the 34 IGs not appointed by the president. For instance, based on legislation, the fund for the 30 presidential appointed IGs must be separated out in the agency budgets and overseen by Congress. The agency-appointed IG funds are not listed separately and therefore are subject to administrators of those agencies. Since agency-appointed IGs are mostly at smaller agencies, commissions, and boards, the lack of funding and staff are more pronounced and many are unable to bring in contract help or post reports of their findings to agency websites.

The POGO study offered a number of recommendations for all IG offices to improve the level of independence and effectiveness. The recommendations included the idea of creating a council of all IGs to encourage greater coordination and sharing of resources, such as a pool of professional employees for smaller IG offices or consultation with IG counsel of another agency for those offices that lack their own in-house counsel. POGO also urged that the internal vetting process previously used by the IG community be revived to help ensure that only well qualified candidates are granted IG positions. Additionally, each IG office should have separate budget authority and transparent public budgets and should be allowed to spend the funds without additional agency approval. The POGO report also included several recommendations specific to individual agencies based upon unique issues indicated in their responses.

Congress is currently considering several bills that seek to improve the IG system. On Oct. 3, 2007, the House passed the Improving Government Accountability Act (H.R. 928), sponsored by Rep. Jim Cooper (D-TN), which seeks to enhance the independence of the Inspectors General and create a Council of the Inspectors General on Integrity and Efficiency. The bill now moves on to the Senate for consideration. The Senate also has another bill, the Inspector General Reform Act of 2007 (S. 2324), introduced by Sen. Claire McCaskill (D-MO), that seeks to address many of the same Inspector General issues. On Nov. 14, 2007, the Senate Committee on Homeland Security and Governmental Affairs passed S. 2324 by unanimous voice vote, and the bill has been scheduled for debate.

In the last several months, OMB Watch has on several occasions reported troubling activities concerning IG offices in federal agencies, including the Central Intelligence Agency conducting an investigation of its own IG while that office reviewed the agency's detention practices; the General Services Administration dramatically cutting its IG office's budget; and the IG for NASA destroying documents and interfering in a federal investigation. These ongoing problems across several agencies serve to reinforce the problems outlined in the POGO report. Many of the recommendations contained in the POGO report, as well as the improvements sought by the pending legislation, would directly address many of these problems.

POGO plans to release another study that will address questions of IG accountability, performance, and effectiveness.