GSA chief at odds with agency auditors

A move by the head of the General Services Administration to slash a proposed budget increase for the agency's inspector general office threatens to undermine the independence of the agency's investigative arm, the IG's office and congressional sources charged Monday.

A recommendation from GSA Administrator Lurita Doan that the agency's inspector general perform only half of proposed fiscal 2007 audits is "just an extraordinary effort to reduce serious scrutiny of the agency," said Robert Samuels, a spokesman for the IG's office.

Doan refused to grant the IG office's full fiscal 2008 budget request, critics said. The GSA chief cut a request for a 30 percent increase down to 7 percent.

In a set of internal notes from the IG's office obtained by Government Executive, officials said that the office's fiscal 2008 budget request "has been revised by the administrator for the first time in memory of agency officials, and the revision[s] to both language and dollar amounts are extensive." GSA's fiscal 2008 budget request "includes a backdoor, de facto amendment of the IG Act to give [Doan] the ability to cut the OIG's investigative actions," the notes said.

In a speech Monday morning before an industry audience, Doan defended her actions, saying some people at GSA "are wedded to old inefficiencies [and] protecting turf, and [see] no need to cut costs, much less [reduce] the yearly increases." Previous agency administrators "were unwilling to apply common budget discipline" to the IG's office, she added.

Congress approved almost $43 million for the IG's office in fiscal 2006, and both the House and Senate have approved a budget of $44.3 million for fiscal 2007, though the appropriations bill has yet to be finalized.

Doan also has gone forward with a plan to stop reimbursing the inspector general $5 million annually for scrutinizing the prices offered by vendors with multiple award schedules contracts, sources said. During the past two-and-a-half years, IG pre-award scrutiny has saved the agency about $2 billion, according to the auditors' office.

GSA's decision to stop using the IG for pre-award audits will take effect in the second half of fiscal 2007, Samuels said. Doan has said small businesses will take over the work.

"Your office is essentially removing the IG's independence and preventing the initiation of those audits and investigations," said Senate Finance Committee Chairman Charles Grassley, R-Iowa, in an Oct. 20 letter to Doan. "The IG should be viewed as an integral -- but independent -- part of your staff, not an enemy in your camp."

Doan referred to inspectors as terrorists during an Aug. 18 meeting, according to Samuels, who said he was present at the time. He said she made no reference to anyone in particular, but instead was referring to "the general mission of the office." According to IG internal notes of the meeting, Doan said there were "two kinds of terrorism in the [United States]: the external kind and, internally, the IGs [who] have terrorized the [GSA] regional administrations."

Doan also singled out the inspector general for criticism in the agency's annual performance statement, noting that "there is undue pressure and intimidation from the OIG."

In her speech Monday, Doan sought to distance herself from the remarks about terrorists, first reported Saturday in The Washington Post. "A couple of days ago, I learned the important news that an employee of GSA, who had once been assigned to the OIG, had been arrested for assault," Doan said. "My concern was that someone, in an obvious position of power, could have perhaps been using that position to create a hostile work environment and terrorize our employees."

"Maybe I should pick and choose my words a little more carefully," she added.

Speaking to reporters, Doan said recommendations to the inspector general regarding fiscal 2007 audits came out of a task force formed at her request and chaired by GSA Deputy Administrator David Bibb. "We actually increased the number [of audits], but there was a decision on their part to ignore our recommendations," she said.

David Drabkin, GSA's deputy chief acquisition officer and a task force member, said some of the proposed audits were premature. A number of them focused on the recently finalized merger of GSA's two procurement organizations. "What are they going to review, three months of operations? How does that really help us to do business better or save money?" he asked.

Eugene Waszily, GSA's acting deputy inspector general, said the task force's recommendations came as a surprise, especially because its members were consulted as inspectors drew up audit plans. An audit plan review task force at the administrator level is without precedent, he said.

"There was a second review team, but those folks were the same folks we had been talking to for the past five months," Waszily said.

As for reviewing the new acquisition organization, Waszily said the inspector general's office intended to do so from a conceptual, rather than operational, level. But, he argued, the review was needed sooner rather than later. "We don't want a program to go running for three years and then all of a sudden say, well, 'Big mistakes were made along the way,'" he said.

Asked about blocking additional reimbursable work by the IG on pre-contract awards, Doan said, "I really don't want to get into this topic, one way or another." Sources in the IG's office have said the inspectors charge between $50 and $60 an hour for their pre-contract services. GSA spokeswoman Katie Uhre said the amount is $100.44 an hour.

Casting the debate over who performs the pre-award auditing as a budget issue is misleading, according to Samuels. "That is not a question of reducing government expenditure, that is a question of who will be funded to do pre-award audits," he said. Inspector general auditors have said it's likely that their office does a better job than any small business could. "We're more tenacious.... We know what we're looking for, we know the lay of the land, we know basically when we're getting a snow job," Waszily has said.

Some congressional sources are worried that Doan's actions are part of a trend of agency heads attempting to co-opt their inspector generals. "There's a fine line between working together in a constructive way -- and you can certainly do that -- and maintaining independence," a House source said. Doan "is clearly way out there on this," the source added.

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