Summary: The 34 federal entities designated by a 1988 law have made progress in establishing offices of inspectors general (IG) during the past three years. The IGs have established policies and procedures for doing independent audits and investigations; have developed working relationships with their entity heads; and have reported potential recoveries, cost efficiencies, civil fines, and forfeitures from their audits and investigations. Several problems did arise during the implementation, however. GAO found that seven IGs were supervised by officials other than their entity heads, which is prohibited by law. In 14 of the 16 entities whose budget processes GAO reviewed, entity officials who competed with the IGs for resources--and whose programs and operations were subject to IG audits or investigations--made decisions affecting the IGs' budgets. Two entity heads did not adequately disclose the reasons for dismissing or transferring their IGs in their required written notification to Congress. GAO also discusses the ability of the IGs to ensure audit coverage of entity programs and operations, especially through the development and use of strategic plans.
