Senator: Even Small Agencies Need Watchdogs

. “I don’t know how you can be independent… if you owe your job to the head of the agency,” Sen. Claire McCaskill, D-Mo., said. . “I don’t know how you can be independent… if you owe your job to the head of the agency,” Sen. Claire McCaskill, D-Mo., said. Pablo Martinez Monsivais/AP

The 41 small federal agencies with no statutory inspector general are placing at risk more than $1 billion a year in budget authority, said Sen. Claire McCaskill, D-Mo., on Thursday.

In convening a hearing to lay the groundwork for a bill to add watchdogs, the chairwoman of the Homeland Security and Governmental Affairs Subcommittee on Financial and Contracting Oversight said, “When there is no oversight and no accountability, money gets wasted and mismanagement goes unaddressed.”

A bill McCaskill is preparing would consolidate the IG offices that have five or fewer full-time employees and assign larger IG offices to oversee other agencies that do not currently receive independent oversight.

McCaskill also suggested that agencies that occasionally hire an outside IG present a conflict of interest. “I don’t know how you can be independent… if you owe your job to the head of the agency,” she said. “It never made sense to me that you’d have an IG hired by the person they’re supposed to be overseeing.”

Witnesses appeared divided over the extent to which a full-time IG is worth the cost. Beryl Davis, director of financial management and assurance at the Government Accountability Office, said in prepared testimony that while “significant federal programs and agencies” need IG oversight, small IG offices “with limited resources might not have the ability to obtain the technical skills and expertise needed to provide adequate, cost-effective oversight.” GAO has recommended a case-by-case approach of hiring outside IGs from agencies with similar missions.

Hubert Sparks, IG for the Appalachian Regional Commission, said he didn’t believe “a full-time OIG presence at very small agencies is cost effective or necessary. Intermittent/part time presence by another OIG or one OIG responsible for several small entities can be effective and cost beneficial with the degree of service or need based on assessment of risk based on entity size, budget, programs and mandated audit requirements.”

The Overseas Private Investment Corp. has borrowed an IG, and the set-up is not ideal, said Michael Carroll, acting IG for the U.S. Agency for International Development, which has provided OPIC with services.

“OPIC has regarded oversight as negotiable,” he testified. “It has delayed related discussions with the predictable effect of limiting the amount of time available to perform oversight activities and possibly also increasing the costs of those activities….In addition to delaying the execution of agreements, OPIC has sought to limit the scope of those activities, sometimes ruling out support for oversight activities without understanding the requirements associated with them or consulting with our office.”

Osvaldo Gratacós, inspector general at the Export-Import Bank of the United States, said it is difficult to find a “one-size-fits-all” solution.

He suggested several options, including creating one IG office to provide oversight services to agencies with similar missions; developing shared services agreements between IG offices; centralizing administrative support services for different small agency IGs through larger IG offices and the Office of Personnel Management or the Council of the Inspectors General on Integrity and Efficiency; or placing small agencies that lack IGs “under the purview” of larger IG offices.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.