The FIFA Scandal: Five Lessons for Internal Audit
June 1, 2015No Internal Audit Function? Investors Beware!
June 15, 2015It’s not clear when the label of watchdog was first attached to the U.S. federal Inspectors General, but it has become a welcomed term for these hard-working public servants and their staffs over the nearly 37 years since the passage of the Inspector General Act of 1978.
It is commonly accepted that the IGs’ mission to ferret out waste, abuse, and corruption in government is important, and there is generally glowing praise for these watchdogs. The same is often expected of government audit organizations around the world. However, in far too many instances, when one of these watchdogs has to report that there is inefficiency, ineffectiveness, fraud, waste, or mismanagement, suddenly not everyone is happy to have them around.
Indeed, the love affair with watchdogs at all levels of government, as well as their capable corporate counterparts, has not been without a few spats. Over the years, legitimate and timely work by IGs and other government audit bodies has been stalled, disrupted, or otherwise maligned by targets of queries, their supporters, or others who fear getting caught up in those investigations or called out by audit reports.
Reactions by government officials vary when the watchdogs bark, including stonewalling investigations and spinning the facts in the media ahead of the release of findings. In some instances, the response is simply to try to muzzle the watchdog.
Just last year, purse strings and politics were the focus of a legislative battle to adequately fund Delaware’s state auditor’s office. The dispute was over whether to allocate previously approved funding to make auditor pay scales more competitive. In this example, withholding resources was essentially an attempt to starve the watchdog.
Another way to quiet the watchdogs is to replace them with friendlier breeds or to delay replacing them at all.
On June 3, the U.S. Senate’s Homeland Security & Governmental Affairs Committee held a hearing on the issue of extended IG vacancies title “Watchdogs Needed: Top Government Investigator Positions Left Unfilled for Years,”
The hearing addressed the question of whether the success of the IG system has brought about a tendency by the executive branch in the U.S. to delay the appointment of qualified replacements when vacancies occur.
The Institute of Internal Auditors submitted a written statement for the hearing in which I made clear that a permanent IG brings additional independence and credibility to the office. As a former IG for the Tennessee Valley Authority, I can personally attest that a fully qualified IG makes a material difference in the effective operation of a federal agency or program.
I also warned about the dangers of filling vacancies with temporary administrators.
The IIA’s statement to the Senate hearing captures this point: “All too often, acting Inspectors General may be reluctant to be as aggressive as the statute allows and contemplates, especially if they aspire to hold the position themselves and do not want to jeopardize their chances by doing something that might be viewed negatively by the Administration.”
As one witness at the hearing aptly noted, temporary IGs often view their interim position as an audition for the permanent job, and that is a recipe for eroding independence. IGs are in place to provide a lens for the world into the efficiencies, effectiveness and economies of government operations. That important mission is undermined when temporary or acting IGs are appointed.
Independence, objectivity and free and unfettered access to agency operations and records will only the strengthen credibility of IGs and will enhance and bolster public confidence in our system of government.
The federal IG system is not perfect, but it remains one of the strongest system of oversight in the world in terms of its ability to monitor and gain insight into government agencies. Our message to public officials should be crystal clear: While you may not always like what IGs have to say, their presence adds value and credibility to everything government does.
I welcome your comments via LinkedIn or Twitter (@rfchambers).