Responding to growing concern about waste, fraud, and abuse in government, Congress passed the Inspector General Act in 1978. This act and subsequent amendments created the 60 Inspectors General offices that today employ 15,000 federal workers, including postal inspectors.
The act was broad in scope, requiring IGs to promote the efficiency, economy and integrity of federal programs with auditing program expenditures, and investigating possible fraud and abuse.
The inspectors general, who are independent of the agencies in which they operate, report to Congress twice a year. These reports detail how much money IG audits have recovered or put to better use and the number of convictions resulting from their criminal investigations. The IGs also send the audit reports to the heads of their agencies and forward investigations for criminal prosecution to the U.S. attorney general. The Inspector General Act's two central mandates, combined with the last two administrations' eagerness to highlight "waste, fraud and abuse," have shaped the evolution of the IG offices. The standard by which they are evaluated is finding error or fraud: The more frequently they find mistakes, the more successful they are judged to be. As a result, the IG staffs often develop adversarial relations with agency managers--who, in trying to do things better, may break rules.
At virtually every agency he visited, the Vice President heard federal employees complain that the IGs' basic approach inhibits innovation and risk taking. Heavy-handed enforcement--with the IG watchfulness compelling employees to follow every rule, document every decision, and fill out every form--has had a negative effect in some agencies.
Many IGs have already begun to help their agencies this way. At the Justice Department, for example some offices were inefficient in completing background and security clearances. The Inspector General's office examined the problem, then recommended setting up a central database to manage the clearance process and warn officials automatically when they are about to miss deadlines for completing investigations. Similarly, the Inspector General of the Department of Health and Human Services has long been engaged in program evaluations to help agencies uncover inefficiencies. While the Inspector General's office retains the right to conduct formal audits and criminal investigations, it also uses its role as a neutral observer to collaborate on making programs work better.
Congress need pass no legislation to make this happen. Promoting the efficiency and integrity of government programs was part of the IGs' original mandate. But such change will require a cultural revolution within many IG offices, and we recommend two steps to help guide such a change. First-line managers, who are the IG front-line customers, should be surveyed periodically to see whether they believe the IGs are helping them improve performance. Second, criteria should be established for judging IG performance.