Inspectors General:

Continued Actions Needed to Strengthen IG Oversight of the United States International Trade Commission

GAO-11-5: Published: Oct 22, 2010. Publicly Released: Oct 29, 2010.

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Inspectors general (IG) are to provide independent and objective oversight; however, the United States International Trade Commission (USITC) has relied on acting and temporary IGs for an extended period of time. GAO was asked to determine (1) the extent of oversight provided by the USITC IG, (2) the budget and staffing resources available for oversight, and (3) how the role of the IG is addressed in the governance of USITC. To accomplish these objectives, GAO reviewed USITC IG reports and budgets for fiscal years 2005 through 2009, and relevant policies and procedures regarding governance and accountability. GAO also interviewed the USITC Chairman, Commissioners, current and former acting and temporary IGs, and office directors.

The IG Act of 1978, as amended (IG Act), requires IGs to provide independent audits and investigations of the programs, offices, and activities in their respective federal entities. However, during the 5-year period reviewed, the USITC IG office conducted no audits and had no investigative case files or investigative reports of USITC. The IG office's oversight activities consisted primarily of monitoring and reviewing the work of independent public accountants (IPA) who conducted annual mandatory audits of USITC's financial statements and information security programs and practices. The most recent peer review of the USITC IG office's audit quality concluded that an opinion could not be rendered on the audit organization because no audits had been conducted by the IG in the past 5 years. The IG Act requires the designated federal entity heads to appoint an IG and provide adequate budgetary resources and sufficient staff. Both the lack of an appointed IG and constrained IG office budgets and staffing resources contributed to the limited oversight of USITC. From November 1, 2005, through December 5, 2009, USITC relied on acting IGs and a temporary IG to provide oversight. During this period the IG position was vacant for 17 months with no acting or temporary IG while USITC relied on the Assistant IG for Audits to provide oversight. Between fiscal years 2005 and 2009, the USITC budget increased about 23 percent, but the IG office budget resources remained relatively flat with funds only available for IPA-conducted audits and two staff during the last 4 years reviewed. The lack of comprehensive audit plans by the acting and temporary IGs to fully communicate their resource needs to USITC contributed to inadequate IG office resources and resulted in limited oversight. In fiscal year 2010, USITC appointed a Senior Executive Service-level IG to address requirements of the IG Reform Act of 2008. Also, consistent with the act, USITC provided a fiscal year 2010 IG office budget based on discussions with the current IG, which increased staffing and was certified by the IG as adequate. The IG stated that future oversight may require additional resources, which we believe can be communicated and justified by a staffing analysis as part of IG audit planning. The IG Act provides each IG with protections of independence including the authority for access to all entity documents and records. In addition, the IG is required to refer cases with potential violations of federal criminal law to the Attorney General. We found instances where the governance structure did not fully support the temporary USITC IG's responsibilities. Specifically, during 2009, the temporary IG was unable to obtain timely access to sensitive contract documents because USITC's policies and procedures did not clearly provide for IG access to such documents. The orientation book for the Commissioners, who may not have prior federal service, does not contain information about the USITC IG's authorities and responsibilities. In another instance, due to the lack of a formal policy or other agreement with the IG office, the Chairman referred the results of a possible criminal investigation to the Department of Justice (DOJ) without coordinating with the temporary IG, resulting in the potential for duplication of investigative efforts. GAO is making a recommendation to the USITC IG to prepare a staffing analysis as part of audit planning to determine the resources needed for effective oversight of USITC. GAO is also making recommendations to the USITC Chairman aimed at clarifying and communicating the authorities and responsibilities of the IG. In comments on a draft of the report, the USITC Chairman concurred with GAO's recommendations and stated corrective actions had been implemented. GAO agrees that one recommendation was fully implemented; however, additional actions are required to implement the remaining recommendations.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Chairman of USITC should revise the formal written orientation information provided to the Commissioners to include sections on (1) the overall authorities and responsibilities of the IG; (2) the IG's authority and USITC's policies for IG access to USITC documents, records, and information; and (3) the responsibilities of the Chairman to maintain an appointed IG.

    Agency Affected: United States International Trade Commission

    Status: Closed - Implemented

    Comments: USITC's (Commission) Chairman added information to the orientation information for Commissioners that provides an overview and authorities of the OIG. This document provides the policy directives and links that relate to the OIG's authorities and responsibilities under the IG Act. Also, the orientation information contains a section on the USITC Inspector General's appointment, stating the IG Act of 1978 requires the Commission to appoint an Inspector General in accordance with applicable laws and regulations. Furthermore, the Chairman issued two Memorandum of Understanding (MOU) between the Inspector General and the Commission that address Office of Inspector General (OIG) access and custody of Commission records; and OIG notification of possible criminal violations.

    Recommendation: The Chairman of USITC should revise the policies and procedures for all offices and programs to recognize the authorities and responsibilities of the IG under the IG Act, including procedures for recognizing the IG's authority for access to USITC documents, records, and information.

    Agency Affected: United States International Trade Commission

    Status: Closed - Implemented

    Comments: USITC's (Commission) Chairman issued two Memorandum of Understanding (MOU) between the Inspector General and the Commission that address Office of Inspector General (OIG) access and custody of Commission records; and OIG notification of possible criminal violations. Also, the Chairman added information to the orientation information for Commissioners that provides an overview and authorities of the OIG. This document provides the policy directives and links that relate to the OIG's authorities and responsibilities under the IG Act.

    Recommendation: The USITC IG should prepare a staffing analysis to determine the level of budget and staff resources needed to conduct the audits identified in audit plans, including audits required by statutes; audits of management challenges identified by the IG; and performance audits of economy, efficiency, and effectiveness of USITC's programs, offices, and activities.

    Agency Affected: United States International Trade Commission: Office of the Inspector General

    Status: Closed - Implemented

    Comments: USITC's (Commission) Inspector General (IG) developed and issued a five-year strategic plan to guide the activities of the OIG for fiscal years 2011-2015. The strategic plan describes the Commission's strategic goals, performance goals, and the OIG's audit strategy for reviewing areas that are critical to the Commission's success. Included in the plan are audit strategies for determining effective and efficient operations, including discussion of audits required by statutes and audits of USITC's management challenges. The OIG's FY 2013 annual audit plan addresses mandatory reviews (financial statement and federal information security management act reviews), planned reviews of the Commission's strategic operation reviews, internal control reviews, and information technology reviews. These reviews are intended to promote and preserve the efficiency, effectiveness, and integrity of the USITC. The IG also developed a staffing plan and budget analysis to support the activities identified in the strategic plan. The process identified the need for additional staff, and a fifth OIG staff member was hired.

    Recommendation: The Chairman of USITC should work with the IG to establish a memorandum of understanding (MOU) or similar mechanism to ensure that all USITC investigative matters that may cover areas also investigated by the IG are coordinated with the IG's office.

    Agency Affected: United States International Trade Commission

    Status: Closed - Implemented

    Comments: USITC's (Commission) Chairman issued a Memorandum of Understanding (MOU) between the Inspector General and the Commission that address notification to the Office of Inspector General (OIG) of possible violations of criminal law. The MOU states that if the Chairman has reason to believe that a violation of criminal law may have occurred related to Commission operations, the Chairman will promptly notify the OIG of the possible violation.

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