By Brianna Ehley

Federal Waste, Fraud and Abuse – No One Pays the Price Without real enforcement, wasteful spending will persist and the nation will lose the money it needs to invest and grow.

Federal Waste, Fraud and Abuse – by Brianna Ehley

February 24th, 2015

For nearly 40 years, American taxpayers have been relying on inspectors general to monitor how the federal government spends taxpayers’ hard-earned money. The watchdogs do a relatively good job of identifying inefficiencies and ferretting out wrongdoing at the federal agencies they oversee.

Yet their enforcement authority is severely limited – raising the question of just how much power they actually have to make sure their recommendations are implemented. Acting IGs are typically hired from within the agency and don’t have the independence that an appointed IG has. Regardless of how they get the job, these watchdogs are paper tigers—they make recommendations that some take seriously but none has to implement.

More than 70 inspectors general across all federal agencies flag hundreds of billions of dollars a year that are lost to waste, fraud and abuse. They conduct lengthy probes into the operations of the agencies and issue myriad reports detailing problems, such as failed third-party contracts costing billions, acquisition of unnecessary equipment, federal worker abuse of government credit cards or excessive amounts spent on lavish parties and extravagant conferences.

Unfortunately, the watchdogs’ bark has had far too little bite.

IGs at the Department of Homeland Security, for example, have issued numerous reports about the widespread problem of unearned overtime collected by employees – “overtime” that sometimes boosts employees’ base salary by 24 percent. The problem has existed for at least a decade and is entrenched in the agency’s culture.

Lawmakers have held hearings that involve publicly shaming agency officials for the widespread abuse at the taxpayers’ expense. Yet up until last January, when the agency froze overtime pay for some employees – nothing had been done.

Auditors say the abuse is still happening, just on a smaller scale. The IG did its part in identifying the problem, tallying the cost and offering recommendations – but it has to stop short of actually forcing the agency to fix the problem because it doesn’t have that authority.  By law, the agencies aren’t required to take up IG recommendations, and in many cases, they never do. Since there is nothing requiring implementation – the IG reports are merely toothless suggestions.

A recent House Oversight and Government Reform Committee report noted that nearly 17,000 IG recommendations are not being fully implemented. If they were, the government could save upwards of $67 billion a year The IG-suggested fixes include more oversight of federal programs or streamlining of duplicate projects.

If the nearly 17,000 IG recommendations were fully implemented, the government could save upwards of $67 billion a year.

Lawmakers have tried to reform and strengthen the IG program. In 2008, Congress passed the IG Reform Act, which created the Council of Inspectors General on Integrity and Efficiency, the IG’s own advisory board intended to deal with any internal IG issues – for example, if an auditor is accused of wrongdoing. The reform law also required all federal agencies to include a link to their IG’s page on their websites so audits could be more accessible to the public.

The House Oversight Committee recently approved a measure to extend the IGs’ subpoena power to government contractors and former federal employees. That bill came after a handful of IGs from major agencies sent a letter to Congress accusing their agencies of denying them access to documents in a timely manner, blocking or delaying their investigations.

“Under this administration, inspectors general have encountered unprecedented hindrance to their oversight efforts. This important legislation will ensure that IGs, who provide impartial insight into the conduct and management of federal agencies, will not be politically stonewalled,” Rep. Mark Meadows (R-NC) said.

Little, however, has been done to give agencies more incentive to listen to their auditors and take up recommendations. The reports also often go unnoticed by members of Congress – and IG reports can only be effective if they’re noted by the media or Congress.

Retiring Sen. Tom Coburn (R-OK), a fiscal conservative for his entire career, faulted fellow lawmakers for not paying closer attention to the thousands of IG reports issued each year. Coburn’s annual Waste Book highlights what he believes are the most egregious examples of government waste.

“IG reports and their finding are invaluable and I’ve offered hundreds of amendments to improve government programs based on [them],” Coburn said by email. “The IGs are doing great oversight work, but many members of Congress do not take the time to read their reports and act on the findings.”

Even when lawmakers do pay attention to auditors’ findings, results don’t always follow. Often an agency will get nothing more than a slap on the wrist during a congressional hearing.

THE SOLUTION

Government reformers say one simple solution is to give the watchdogs some teeth.

Requiring IGs to keep track of whether agencies implemented their recommendations is a starting point. The Project on Government Oversight (POGO) has proposed this idea to Congress, calling on lawmakers to revamp reporting requirements of the Inspector General Act of 1978. The IGs would also be required to evaluate whether implementing the recommendations actually achieved the predicted results.

“IGs should also report how much of ‘questioned costs’ and ‘funds to be put to better use’ are actually recovered or put to better use,” POGO said in a statement on its website.

Sens. Jeanne Shaheen (D-NH) and John Boozman (R-AR) sponsored bipartisan legislation last year that would require agencies to explain when they decline to take up IG recommendations. The measure was specifically intended to address the Defense Department’s decision not to take action against poorly performing federal contractors in Afghanistan.

Under the bill, the department would have to explain its reasoning for disregarding the Special Inspector General for Afghanistan Reconstruction’s recommendation of trying to recoup money from London-based AMEC Earth and Environmental, which SIGAR blamed for electrical failures that cost $4.3 million to repair. The Air Force rejected the auditor’s recommendation without saying why.

“The United States government has an obligation to the American people to ensure that our resources are used in a cost-effective manner,” Shaheen said in a statement after the Air Force changed its mind and decided AMEC should reimburse the government for the repairs. “Government contractors must be held accountable when they cut corners.”

This begs the question of how contracts are issued, written and approved. Case in point—the failed launch of Healthcare.gov in 2013, which demonstrated how a tech company charged with designing and coding the site was paid well over $600 million for a venture that not only failed, but also nearly brought down the president’s signature health care law. In a new absurd move, the IRS has recently hired that same company to work on its software and is paying $300 million—for starters.

Another solution, though more complicated, would be to penalize or reward agencies that ignore IG recommendations through Congressional appropriations. Withholding bonuses from agencies and their employees is an obvious way to enforce the role of the IG. Another, as POGO’s Adam Zagorin said in an interview, is to make sure that IG vacancies are filled, since agencies without permanent IGs have a higher number of open or unimplemented recommendations. There are currently 10 IG vacancies in the federal government, including the Department of the Interior, which hasn’t had an appointed IG in nearly 6 years according to POGO’s Watchdog Vacancy Tracker.

One way to think of the entire process is this: The $4 trillion federal government works for its investors, otherwise known as American taxpayers and residents. Every branch, including every agency, should have a huge poster in their break room reminding managers and employees of these points:

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