The IG Act also provides protections to the independence of  the IGs while keeping both their agency heads and the Congress fully and  currently informed about particularly flagrant problems and deficiencies  within their agencies through a 7-day process specified by the act. In addition, the Dodd-Frank Act amended the IG Act with provisions to  enhance the independence of IGs in DFEs with boards or commissions. The Reform Act also included a provision intended to provide additional  IG independence through the transparent reporting of their budgets. Also, the IG Act includes a provision addressing the qualifications and  expertise of the IGs by specifying that each IG appointment is to be  without regard to political affiliation and solely on the basis of integrity and  demonstrated ability in accounting, auditing, financial analysis, law,  management analysis, public administration, or investigation. For our discussion of the independence of the IGs, we summarized  information from the responses to our survey questions about the  implementation of selected provisions in the Reform Act, the IG Act, and  the Dodd-Frank Act that are intended to enhance IG independence. Regarding the effect of Dodd-Frank Act provisions to enhance  independence, we obtained the views of the 26 DFE IGs with boards or  commissions on whether their independence was enhanced by these  provisions designating their boards and commissions as DFE heads  rather than individual chairmen, and the requirement for the concurrence  of a two-thirds majority of the board or commission for removal of an IG. We requested comments on a draft of this report from the IG Council. The IGs  reported    pay that was at the specified levels required by the Reform Act for IGs  appointed by the President and consistent with those of other senior- level officials as required for DFE IGs, thus helping to maintain IG  independence and enhance their relative stature within their agencies  by increasing their fixed compensation and eliminating discretionary  compensation that could create a conflict of interest;    having access to independent legal counsel reporting to an IG instead  of an agency management official, thus helping to ensure the  independence of legal advice available to the IG; and  rarely using 7-day letters as a way to independently inform agency  heads and the Congress of serious problems concerning agency  operations because such issues were resolved without the need for  such a letter. The results from our survey show that all the IGs established by the IG  Act reported having access to a legal counsel that is organizationally  independent, and none of the IGs rely on the general counsel offices of  their agencies. IGs in DFEs with Boards and Commissions Generally Responded That the Dodd-Frank Act Provisions Enhance Independence

Provisions of the Dodd-Frank Act amending the IG Act are intended to  provide an additional degree of independence to those IGs in DFEs with  boards or commissions. IG Budget Amounts Are Not Always Identified in the President’s Budget Submissions

The Reform Act amended the IG Act to require that IG budget requests  include certain information and be separately identified in the President’s  budget submission to the Congress. In addition, IG effectiveness was demonstrated in their  efforts to help prevent fraud, waste, and abuse. IGs Reported Significant Measurable Accomplishments

In their annual report to the President, the IGs established by the IG Act  identified billions of dollars in savings and cost recoveries and other  accomplishments resulting from their work in fiscal year 2009. As part of  this report for fiscal year 2009, these IGs identified $43.3 billion in  potential savings from audits and investigations; and reported over 5,900  criminal actions, 1,100 civil actions, 4,460 suspensions or debarments,  and over 6,100 indictments resulted from their work. Based on this  information, the potential dollar savings reported by these IGs represent a  return on investment of approximately $18 for every IG dollar spent when  compared to total IG fiscal year 2009 budget appropriations of   $2.3 billion. For example, the IGs assisted in the  oversight of expenditures authorized by the Recovery Act by reporting on  preventive measures taken to help reduce the vulnerability of Recovery  Act disbursements to fraud, waste, and abuse. As of June 2011, the Recovery Board reported that the IGs received over  7,000 complaints of wrongdoing associated with Recovery funds, opened  over 1,500 investigations, and completed over 1,400 reviews of activities  intended to improve the use of Recovery Act funds. Expertise

The 62 federal IGs responding to our survey reported information on their  expertise and qualifications including the backgrounds, academic  degrees, and professional certifications. The council commented that the draft provided  useful information on the independence, activities, and accomplishments  of the federal inspectors general and, as such, will contribute to a greater  understanding of the work of the IGs in providing oversight to a wide  range of government programs. Appendix II: Designated Federal Agencies with Inspectors General1

IGs established by the IG Act of 1978, as amended, with appointment by the agency  head.
Why GAO Did This Study

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) required GAO to report on the relative independence, effectiveness, and expertise of the inspectors general (IG) established by the IG Act of 1978, as amended (IG Act), including IGs appointed by the President with Senate confirmation and those appointed by their agency heads in designated federal entities (DFE). GAO was also required to report on the effect that provisions in the Dodd-Frank Act have on IG independence. The objectives of this report are to provide information as reported by the IGs on (1) the implementation of provisions intended to enhance their independence in the IG Reform Act of 2008 (Reform Act), the IG Act, and the Dodd-Frank Act; (2) their measures of effectiveness, including oversight of American Recovery and Reinvestment Act of 2009 (Recovery Act) funds; and (3) their expertise and qualifications in areas specified by the IG Act. GAO relied primarily on responses to its survey received from 62 IGs established by the IG Act. GAO also obtained information from the President's fiscal year 2011 budget, the IGs' annual report to the President for fiscal year 2009, and the IGs' semiannual reports to the Congress. GAO is not making any recommendations in this report. In comments on a draft of this report, the Council of the Inspectors General on Integrity and Efficiency (IG Council) stated the report contributes to a greater understanding of the work of the IGs in providing oversight to a wide range of government programs..

What GAO Found

Information from the 62 IGs in offices established by the IG Act and GAO's analysis showed that the IGs had (1) taken actions to implement statutory provisions intended to enhance their independence; (2) reported billions of dollars in potential savings and other measures of effectiveness, including actions taken to help prevent fraud in the distribution of Recovery Act funds; and (3) a range of expertise and qualifications in the areas specified by the IG Act. With respect to independence, the IGs reported that (1) statutory provisions regarding IG compensation have been implemented where applicable, thereby maintaining the independence of their work and enhancing their relative stature within their agencies; (2) they had access to independent legal counsel who reports to an IG instead of an agency management official; (3) only one IG used a statutory provision for IGs to report particularly flagrant problems through the agency head to the Congress in 7 days because issues are generally resolved before the report is needed; and (4) of the affected 26 DFE IGs, 14 responded that their independence was enhanced by the Dodd-Frank Act provision that changed the designation of agency head from the chair to the entire board or commission, and 20 responded that their independence was enhanced by the provision requiring a two-thirds majority vote for IG removal. Also, the IGs' budgets were not always identified separately in the President's fiscal year 2011 budget submission as required by the Reform Act provision intended to enhance the IGs' budget independence through transparent reporting. The IG Council is currently reviewing the matter. The IGs reported various measures of effectiveness. The IGs reported potential savings of about $43.3 billion resulting from their fiscal year 2009 audits and investigations. Given the IGs' fiscal year 2009 budget authority of about $2.3 billion, these potential savings represent about an $18 return on every dollar invested in the IGs. The IGs also reported about 5,900 criminal actions, 1,100 civil actions, 4,400 suspensions and debarments, and 6,100 indictments as a result of their work. In addition, the IGs reported enhanced effectiveness through additional actions taken to help prevent fraud in their agencies. For example, in fiscal year 2009 the Recovery Act created a requirement for the IGs to provide oversight of the economic stimulus funds disbursed by their agencies, and established the Recovery Accountability and Transparency Board of IG members to help carry out this oversight. As of June 2011, the IGs reported over 1,500 investigations opened, over 1,400 reviews completed, and over 2,000 training sessions provided to detect and prevent fraud, waste, abuse, and mismanagement in the use of Recovery Act funds. With respect to expertise, the IGs reported having backgrounds, academic degrees, and certifications in a range of areas related to their statutory responsibilities. The IGs reported backgrounds and academic degrees in accounting, auditing, financial analysis, law, management analysis, public administration, and investigations. In addition, the IGs, particularly the DFE IGs, reported numerous professional certifications related to their responsibilities.