Auditors Say Feds Needlessly Wasted $43 Billion

Every year, tens of billions of tax dollars are lost to waste, fraud and abuse within the federal government. But much more could be lost if it wasn't for a team of federal watchdogs tasked with flagging any inefficiencies or wrongdoing within all government programs and projects.

That's according to the Special Council of the Inspectors General on Integrity and Efficiency (CIGIE)—the group in charge of overseeing the 15 presidentially appointed IG's. The group consistently reminds lawmakers of out how the auditors' work saves the federal government billions of dollars each year—despite their annual collective operating budget of over $1 billion. 

This year, CIGIE said that taken together, all of the auditors' recommendations this year would result in about $32 billion in savings, The Washington Examiner first reported. Recommendations typically include telling agencies to ramp up their oversight or come up with a new policy that will help them run more efficiently.

The investigations this year have already resulted in $11 billion that was returned to the Treasury. 

The IG's total operating budget for 2014 was about $1.6 billion, according to CIGIE's financial audit for 2014.

-Brianna Ehley, CNBC.com
READ MORE...

OMB to Alter Guidance for Reducing Improper Payments

Inspectors general are the “best friends” of program managers and the White House budget office when it comes to catching fraud and reducing agency improper payments, the deputy U.S. controller said on Wednesday.

Mark Reger, now in his third month as the No. 2 at the Office of Federal Financial Management, said his team is reworking  Circular A-123 guidance on controlling for financial integrity “to make it less prescriptive and to rely on the people on the ground,” particularly inspectors general.

Reger, a former Maryland State Treasury official, noted that the rate of bad payments has dropped steadily over the past four years, thanks in part to Congress’s enactment of the 2012 Credit Card Fraud Prevention Act and the 2012 Improper Payments Elimination and Recovery Act. “The most important tool is the education of agency enforcers in the field,” he said, praising the watchdogs for gathering better data, working together and sharing information. “I don’t know a single inspector general who isn’t thrilled to find additional money.”

The increasing use of data analytics has allowed progress in such areas as federal employee misuse of credit orthat it’s not okay to steal from federal government, it’s not sexy,” Reger said. purchasing cards, the deputy controller said. “The data is now generated back to the agencies every day,” he said. “Employees found to have committed fraud have had their cards cancelled, or been fired, or disciplined in some fashion.”

Coming changes to the financial controls circular will include requiring fewer reports and more-detailed categories of fraud, or “bucketing,” to distinguish, for example, between an unmerited payment and a claim lacking proper documentation, he said.

Reger urged IGs, program managers and vendors to report fraud to the Government Accountability Office’s fraud line at fraudnet@gao.net, and to peruse their own Medicare bills in search of bad charges.  “Please reinforce that it’s not okay to steal from federal government, it’s not sexy,” Reger said.

- Charles S. Clark, GovExec.com
READ MORE...

IGs overburdened by congressional mandates, survey finds

Few agencies host blow-out conference extravaganzas. And few feds swipe their government charge cards when paying for personal stuff. But all federal inspectors general spend more of their time worrying about that sort of wrongdoing, thanks to new congressional mandates.

IGs say those must-do's are distracting them from enterprising work that could shed light on riskier agency behavior.

A new survey of 28 inspectors general by the Association of Government Accountants and Kearney & Company P.C. shows IGs are concerned about their effectiveness, as they balance work requirements against tight budgets and difficulties in getting needed information.

Along with the online survey, conducted in June, the researchers interviewed a mix of staff at federal IG offices. The researchers delved more deeply into problems uncovered in a similar survey done a year ago.

-Emily Kopp, FederalNewsRadio.com
READ MORE...

IGs warn of potential threats to all inspectors general

Inspectors general from 47 agencies are backing three fellow auditors from the Justice Department, the Environmental Protection Agency and the Peace Corps over what they say are limits on access to information put on them by agency senior officials.

In a letter to the leaders of the House Oversight and Government Reform Committee and the Senate Homeland Security and Governmental Affairs Committee, the IGs say auditors from those three agencies recently faced restrictions on their access to certain records.

"In each of these instances, we understand that lawyers in these agencies construed other statutes and law applicable to privilege in a manner that would override the express authorization contained in the IG Act," the IGs wrote. "These restrictive readings of the IG Act represent potentially serious challenges to the authority of every Inspector General and our ability to conduct our work thoroughly, independently, and in a timely manner."

In the letter to the oversight committees, the IGs detail their concerns for each of the three agencies.

The IGs asked for members of Congress to provide a strong reaffirmation of the powers granted them under the IG Act.

Sen. Charles Grassley (R-Iowa) released the letter as part of his long-standing support of IG independence.

Congress has sought to empower IGs even more over the last few years. Sen. Claire McCaskill (D-Mo.) is drafting a bill to give small agency auditors more power.

At a hearing January before the House Oversight and Government Reform Committee, three agency IGs &mash; Justice, Peace Corps and the Small Business Administration — told lawmakers that slashed budgets and dwindling staff sizes are hindering their ability to conduct robust oversight.

Additionally, the Council of the Inspectors General on Integrity and Efficiency (CIGIE) wants Congress to give IGs more authority to use computer matching programs to root out waste, fraud and abuse.

IGs as a group last received a boost in 2008 when Congress passed and then- President George W. Bush signed into law the Inspectors General Reform Act.

-Jason Miller, FederalNewsRadio.com
READ MORE...

Government made $100B in improper payments

WASHINGTON (AP) -- By its own estimate, the government made about $100 billion in payments last year to people who may not have been entitled to receive them -- tax credits to families that didn't qualify, unemployment benefits to people who had jobs and medical payments for treatments that might not have been necessary.

Congressional investigators say the figure could be even higher.

The Obama administration has reduced the amount of improper payments since they peaked in 2010. Still, estimates from federal agencies show that some are wasting big money at a time when Congress is squeezing agency budgets and looking to save more.

Some improper payments are the result of fraud, while others are unintentional, caused by clerical errors or mistakes in awarding benefits without proper verification.

In 2013, federal agencies made $97 billion in overpayments, according to agency estimates. Underpayments totaled $9 billion.

The amount of improper payments has steadily dropped since 2010, when it peaked at $121 billion.

The Obama administration has stepped up efforts to measure improper payments, identify the cause and develop plans to reduce them, said Beth Cobert, deputy director of the White House budget office. 

Agencies recovered more than $22 billion in overpayments last year.

-Stephen Ohlemacher, Associated Press/FederalNewsRadio.com
READ MORE...

Senate poised to confirm first DoD IG in nearly two years

The Senate Armed Services Committee took the next step to fill four vacancies in the Defense Department, including one that has been vacant for almost two years.

The department has been without a Senate-confirmed inspector general since December 2011.

President Barack Obama nominated current Federal Deposit Insurance Corporation IG Jon Rymer for the job. Rymer made his case Thursday during his confirmation hearing before the committee. Rymer has been the FDIC IG since 2006. He recently retired from the Army Reserve with more than 30 years of service between his active and reserve duty. He is a graduate of the Army's Inspector General School. His experience in the private sector includes seven years in consulting and interval auditing at a major accounting firm and 15 years as a senior manager in the banking industry.

While very familiar with the Army's prevention programs, Rymer said he believed the role of the IG is to provide oversight for the effectiveness of the programs in place and an analysis of the money spent by each of the services.

-Lauren Larson, FederalNewsRadio.com
READ MORE...

Fed watchdogs in their own catfight

The federal government’s inspector generals are usually seen as the watchdogs who investigate allegations of mismanagement, waste, fraud and abuse by government agencies and then demand the agencies shape up.

The IG’s also periodically review each other’s work to ensure that everyone’s following appropriate procedures in conducting agency audits.

It seems a most unusual — in fact, downright nasty — catfight erupted last week between two inspector generals when the Special Inspector General for Afghanistan Reconstruction (SIGAR) reviewed some work of the Pension Benefit Guaranty Corporation IG (PBGC- OIG).

Obviously we’re not going to get involved in the gory details, save to say that the battle is over proper compliance with government accounting standards (GAGAS).

The SIGAR team reviewed two of the PBGC team’s audits and graded them in a report on May 15 with a “pass with deficiencies.”

That sparked what became a bench-clearing brawl, most of which is laid out here.

-Al Kamen, WashingtonPost.com
READ MORE...

IRS issued billions in improper refunds, report says

The Internal Revenue Service issued more than $11 billion in improper payments through its Earned Income Tax Credit program last year, according to an inspector general’s report released this week.

Treasury Department deputy inspector general Michael McKenney found that the IRS has failed to comply for two consecutive years with the Improper Payments Elimination Act, which President Obama signed in 2010. The law requires federal agencies to reduce erroneous payments to a rate of less than 10 percent.

The IRS estimates that at least 21 percent of its EITC payments in 2012 were faulty. That rate showed a decline compared to the previous nine years, but improper payments over the same period increased about 22 percent, rising to at least $11.6 billion, according to the inspector general’s report.

-Josh Hicks, WashingtonPost.com
READ MORE...

As sequestration cuts loom, unimplemented IG recommendations could save billions

Over the past few years, unimplemented agency inspector general recommendations that could potentially save the government billions of dollars have piled up.

Now, with $85 billion in automatic budget cuts kicking in, lawmakers on the House Oversight and Government Reform Committee are telling agencies there's no excuse for them to further delay implementing the cost-saving measures and best practices identified by their IGs.

In 2009, there were 10,894 open IG recommendations, according to a report released by the oversight committee ahead of a hearing Tuesday. But by 2012, that number had grown to 16,906, representing a potential $67 billion in savings.

And if agencies won't act on those recommendations, Rep. Darrell Issa (R-Calif.), chairman of the oversight committee, said he will.

Issa's committee has sought to forge close ties with agency watchdogs. In January, a letter from both the House and Senate oversight committees called on the Obama administration to fill persistent vacancies in the IG ranks.

The IG community is also beset by a spate of longstanding vacancies including those at six large agencies: the departments of Defense, Homeland Security, Interior, Labor and the U.S. Agency for International Development.

According to the committee, there's a connection between vacancies and unimplemented recommendations. Among the agencies with most unfulfilled recommendations are those with long-term vacancies in their IG offices.

Long-term vacancies "weaken the office of the Inspector General," the report stated. "A permanent IG has the ability to set a long-term strategic plan for the office, including setting investigative and audit priorities. An acting official, on the other hand, is known by all OIG staff to be temporary."



-Jack Moore, FederalNewsRadio.com
READ MORE...

Lawmakers call on President to fill widespread IG vacancies

House and Senate lawmakers have called on President Barack Obama to fill inspector general vacancies at six large agencies, including open spots at the departments of Homeland Security and State.

"The value of the inspectors general goes beyond dollars; these offices also help reveal and prosecute wrongdoing, and promote the integrity of government," Sens. Tom Carper (D-Del.) and Tom Coburn (R-Okla.), the chairman and ranking member, respectively, of the Senate Homeland Security and Governmental Affairs Committee wrote in a Jan. 24 letter to the president. "They provide invaluable support to Congressional budgeting and oversight work. Inspectors General are an essential component of government oversight."

"Inspectors General occupy a unique role — tasked with 'speaking truth to power' and with dual reporting obligations to their agency head and to Congress," the letter stated. "Those unique pressures may be especially challenging for an acting inspector general, serving without the endorsement of presidential selection and Senate confirmation."

The letter also pointed to vacancies at the departments of Interior, Labor and State. The latter has not had a permanent leader since January 2008 — the longest vacancy among the 73 IG positions across the federal government, according to the Council on Inspectors General on Integrity and Efficiency (CIGIE).

In a separate letter, the House Oversight and Government Reform Committee urged the president to appoint a permanent IG at State.

"During your entire first term as President, you did not nominate anyone to serve in this critical position," Chairman Darrell Issa (R-Calif.) and Ranking Member Elijah Cummings (D-Md.) wrote in the letter. "This failure evidences a clear disregard for the Inspector General Act and the will of Congress. It is particularly troubling given that, in addition to combating waste, fraud, abuse and mismanagement, the State Department inspector general is required by the Foreign Service Act of 1980 to perform inspections of the department's bureaus and posts around the world."



-Jack Moore, FederalNewsRadio.com
READ MORE...

Senators seek to remove special inspector general for Afghanistan

Four senators have asked President Obama to remove Arnold Fields as the special inspector general for Afghanistan reconstruction, saying a recent government review had found major deficiencies in audits carried out by Fields's office.


Twice in the past 18 months "we have repeatedly raised concerns regarding performance of the SIGAR," wrote Sen. Claire McCaskill (D-Mo.), chairman of the homeland security subcommittee on contracting oversight. She was joined in the letter by Sens. Tom Coburn (R-Okla.), Susan Collins (R-Maine) and Charles E. Grassley (R-Iowa). SIGAR is the abbreviation for Fields's office.


SIGAR spokeswoman Susan Phelan said that Fields was en route to Afghanistan and that she had no direct comment on the senators' letter. Phelan said Fields had welcomed recommendations made by the Council of Inspectors General on Integrity and Efficiency, an independent government organization that carried out the review, and had vowed to implement them by Sept. 30.


In February of this year, the Council of Inspectors General began its review, which Fields initiated, according to SIGAR's Web site. That review "found multiple major deficiencies in SIGAR audits including failure to meet minimum standards for quality control," the senators wrote.


McCaskill and others have in the past recommended that the office of the special inspector general for Iraq reconstruction, a parallel organization run by Stuart W. Bowen Jr., a figure popular on Capitol Hill, be merged with SIGAR so that there is only one inspector general for work in both countries.

-Walter Pincus, WashingtonPost.com
READ MORE...

New IG council focuses on training, interagency efforts

The nation’s inspectors general are forming a new council that will focus on cross-cutting projects and improved training for IG staffers.

Congress called for creation of the new council in the 2008 Inspector General Reform Act passed last month. The bill has a number of provisions to strengthen inspectors general: It makes them harder to remove, for instance, and adds more transparency to their budgets.

But the council, to be called the Council of Inspectors General on Integrity and Efficiency, is the centerpiece of the bill. It will combine two existing IG councils — the President’s Council on Integrity and Efficiency (PCIE), and the Executive Council on Integrity and Efficiency, both of which were created by executive order — and give the council statutory authority.

“We want to focus on uniform training for the 12,000 people in the IG community, and make that more effective than it’s been in the past,” said Greg Friedman, the Energy Department inspector general and vice president of the PCIE. “And we’ll focus on more interagency projects … on a horizontal basis, looking at the same issues in different agencies.”

Friedman said the council’s exact priorities would be set after it selects a chairman within the next 30 days. One priority sure to be high on the list, he said, is contract management.

“That seems to be a problem at many agencies,” he said. The council will also likely coordinate reports on cybersecurity, financial management and human capital management.

“It’s great that it has the capacity to provide lessons learned governmentwide,” said Danielle Brian, executive director of the Project on Government Oversight, which advocated for the bill.

“There are so many problems that occur across agencies, and that aren’t addressed by the current structure [of IG councils].”

A group of inspectors general met last week with Clay Johnson, deputy director for management at the Office of Management and Budget and the chairman of the two existing IG councils.

Friedman said the council would probably also work on programs that cut across agencies. Good-government groups have criticized the IGs for focusing their efforts on management issues in recent years.

-Gregg Carlstrom, FederalTimes.com
READ MORE...