WASHINGTON – Senator Chuck Grassley has introduced legislation to clarify the impact the Paperwork Reduction Act has on official audits, evaluations, inspections, and investigations conducted by inspectors general. This legislation would ensure that inspectors general are not subject to bureaucratic hurdles erected by the Office of Management and Budget.
“Inspectors general are on the front line against waste, fraud and abuse. It’s a tough job because for them to be effective, they must be independent and often side against the agencies they oversee,” Grassley said. “We need to give them the tools they need so the federal bureaucracy can’t limit their independence and authority and, most importantly, information that we can garner through their work.”
Grassley’s legislation states that the Paperwork Reduction Act shall not apply to the collection of information “during the conduct of any investigation, audit, inspection, evaluation, or other review conducted by” any federal office of inspector general. It further defines the definition of inspector general to include: statutory inspectors general, federal entity inspectors general, and any special inspector general.
Grassley has been a longtime advocate for inspectors general and their primary mission to ferret out fraud, waste and abuse in the federal government. He was a cosponsor of the Inspector General Reform Act of 2008.
Here is a copy of the text of Grassley’s statement upon introduction of the bill.
Prepared Statement of Senator Chuck Grassley
Introduction of Legislation Amending the Paperwork Reduction Act
Tuesday, May 5, 2009
Mr./Madam President, the federal inspectors general are the frontline of protection for taxpayer dollars, ensuring that federal agencies spend taxpayer dollars in an effective, efficient, economical manner that is in accordance with all applicable law. The inspectors general root out fraud, waste, and abuse in government programs by auditing, evaluating, and investigating how federal agencies spend taxpayer dollars and how government programs utilize funds. The inspectors general occupy a unique position within our government. Created by the Inspector General Act of 1978 and by various subsequent statutes, the inspectors general at executive branch agencies also report directly to the legislative branch. They were created to keep tabs on the government bureaucracy to make sure that agencies follow the spirit and intent of the laws while protecting taxpayer dollars.
I have been an outspoken advocate for inspectors general during my time in the Senate and I was proud to be a cosponsor of the Inspector General Reform Act of 2008, which was signed into law by President Bush last year. That legislation ensures that inspectors general are truly independent of the federal agencies they oversee. The independence of inspectors general is a critical requirement to their ability to get the job done. If inspectors general lack independence from the agency they oversee, the quality of their work is impacted negatively and their reputation as independent watchdogs is tarnished.
Over the years, I’ve seen a number of inspectors general come and go. It is a tough job to be an inspector general. You can’t go along to get along. You must buck the system, dig deep into the books of the agency, find where the secrets are hidden, and then report the truth to Congress, the president, and the American people. Unfortunately, inspectors general must do all this with the agencies that often fight their every move. These entrenched bureaucracies have an interest in not seeing inspectors general succeed—they don’t want egg on their face. That is why we in Congress must make sure they have all the tools they need to get the job done and ensure that there is accountability for the billions in taxpayer dollars that are spent annually on the operation of the executive branch.
One growing area of concern I’ve seen over the years is procedural roadblocks being placed before inspectors general to limit or prohibit their ability to do their job of protecting taxpayer dollars. One recent example relates to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Neil Barofsky. Inspector General Barofsky notified me on January 22, 2009, that he intended to begin an oversight initiative that would have improved the transparency of the Troubled Asset Relief Program (TARP). Inspector General Barofsky’s plan was to collect data from TARP recipients asking them for a response outlining the use of TARP funds, copies of support documents, a description of plans to comply with executive compensation restrictions, and certification by a senior executive officer of the accuracy of the statements they make. This sounded like a legitimate plan from the inspector general tasked by Congress with ensuring that the $700 billion handed out by the TARP program wasn’t lost to fraud or abuse. However, it was shortly after this letter that Mr. Barofsky ran into procedural hurdles erected by the Office of Management and Budget (OMB).
On January 30, 2009, I asked the inspector general for an update on his initiative when he informed me that OMB had advised the SIGTARP that he could not initiate his effort due to the restrictions in the Paperwork Reduction Act of 1980 (PRA). As a result, SIGTARP requested “emergency processing” by OMB to consider the impact of its letter to TARP recipients. It is my understanding that OMB initially responded favorably finding that SIGTARP would not be limited by the PRA. However, OMB reversed course and withdrew the emergency approval right after it was granted.
OMB then informed SIGTARP that the PRA required he post his proposed letter online for TARP recipients to review for 15 days, wait for comments from the recipients, and then require that the SIGTARP justify to OMB that it has taken into account all the public comments. This was a significant, unnecessary roadblock that was erected at a time when American taxpayers were asking everyone “where did the money go.” This type of procedural hurdle to an audit and investigation by the SIGTARP is unacceptable. Can you imagine what the very corporations that took taxpayer money would write during the comment period? It is my view that corporations that took government money should be subjected to oversight by inspectors general and they shouldn’t have a say in drafting or amending a letter from the inspector general that they must respond to. This is exactly what OMB was asking of the SIGTARP.
I’m glad to report that later that same week SIGTARP Barofsky was given approval from OMB to send the letter requests to the TARP recipients without delay. However, around the same time that the letters were approved and sent, the Department of Treasury posted a comment request in the Federal Register about the SIGTARP request. Those responses were due to Treasury by April 13, 2009. While SIGTARP Barofsky was ultimately able to send his request, this uncertainty about the application of the PRA to audits, evaluations, inspections, or investigations by inspectors general remains a significant question. This whole saga was a wakeup call for many inspectors general. As a result, many inspectors general have reached out to my office about this issue and the dangers the PRA could pose to their audits and investigations.
That is why I’m here today to introduce legislation that will clarify the impact the PRA has on official audits, evaluations, inspections, and investigations conducted by inspectors general. This legislation is narrowly tailored to ensure that inspectors general are not subject to bureaucratic hurdles erected by OMB, which could be used to limit the independence and authority of inspectors general, and most importantly information that we can garner through their work.
Specifically, the PRA currently states that agencies must receive approval for each collection request before it is implemented. Failure to get this approval provides the recipient of the request the protection to not comply with the request without penalty. The current PRA does not apply to criminal investigations, administrative actions, or investigations involving an agency against a specific individual or entities. However, it does apply to “general” investigations. The PRA is also silent as to whether it was intended to apply to inspectors general and defines agency as any “executive department, military department, government corporation, government controlled corporation, or other establishment in the executive branch of the government (including the Executive Office of the President,” or any independent regulatory agency. The PRA does expressly exclude the Government Accountability Office and the Federal Election Commission, but not the inspectors general.
The PRA was passed with the noble goal of reducing the impact federal government regulatory agencies have on small businesses and other private individuals. However, over the years the investigative and audit roles of the inspectors general have expanded to ensure that taxpayer dollars are not lost to fraud, waste, or abuse. As a result, the important work of the inspectors general may run directly into the PRA resulting in a slower process for audits, evaluations, and investigations, as well as potentially tipping off those being investigated by the inspectors general and providing them time to, for example cover-up potential wrong doing.
The legislation I’m introducing today is designed to protect the PRA as well as the inspectors general by trying to head off a potential conflict among the two statutes before it has to be decided by the courts. It simply states that the PRA shall not apply to the collection of information “during the conduct of any investigation, audit, inspection, evaluation, or other review conducted by” any federal office of inspector general. It further defines the definition of inspector general to include: statutory inspectors general, federal entity inspectors general, and any special inspector general. This definition also includes the Council of the Inspectors General on Integrity and Efficiency (CIGIE) created by the Inspector General Reform Act, and the Recovery, Accountability, and Transparency Board created by the stimulus bill signed into law earlier this year. These two entities have some audit and evaluation roles provided to them and should also not face procedural hurdles under the PRA when they are overseeing the various inspectors general or recovery programs.
All in all, this is a simple piece of legislation that I encourage all my colleagues to support. It picks up on the great work of the Inspector General Reform Act to ensure that inspectors general are independent and free from any undue influence—procedural or substantive—when conducting audits, evaluations, inspections, or audits on behalf of the American people. I hope this legislation will receive expedited consideration and swift passage.
I yield the floor.
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